The jury is still out, but the country’s physical retail shops are not dying out as predicted. Find out why.
With the advent and steady growth of e-commerce platforms over the last decade, scores of naysayers in have been predicting the demise of offline retail channels. Yet, such offline retail stores are very much around: some are even thriving in spite of the COVID-19 pandemic.
In a country like India, a major contributing factor to the survival of offline retail channels is that brands can turn to omnichannel marketing to enhance their visibility and offer a seamless experience to their customers.
Now, buyers can enjoy the option to shop from all kinds of sales channels, both online and off—such as online marketplaces, web stores, social media platforms, and brick-and-mortar stores. One champion of the latter is the co-founder of an omnichannel commerce platform for India’s fashion retailers Fynd: “Offline is not dying anytime soon. The experience offered by stores and malls is not only about buying or shopping, but also socializing,” said Farooq Adam. His business mission is to use AI, AR, VR, chatbots, IoT and other technologies to integrate digital with offline channels.
The firm also facilitate Online-to-Offline (O2O) commerce, a sub-domain of omnichannel marketing. “Due to the pandemic lockdowns, most physical retail stores were closed to the public, but due to integrated inventory and O2O enabled by technological platforms and solutions, retailers could utilize common warehouses and ship out products to customers,” Adam said, adding that the omnichannel approach helps brands utilize all their locations to move out stock while meeting the demands of online customers.
Integrating offline and online
Adding to the perspective of modernization offline retail channels to remain relevant, the president of Federation of all India IT Associations (FAIITA), Kaushik Pandya, commented that the past few years have seen offline retail suffering a huge impact due to online platforms penetrating India.
“Individual small retailers did not have the huge marketing budgets of the online platforms. It is crucial that offline channels understand that they will have to create a hybrid presence. Their stores shall not remain only physical, but also have a digital presence, which will, in turn, be marketed to existing and new sets of customers. The platform will let them know that a store in their neighborhood is also available 24 x 7 x 365 with a lot of additional offerings in terms of service and in terms of value addition,” emphasized Pandya.
According to some studies, 94% of marketers in India believe that providing an omnichannel experience is crucial to business success. One of them is S. Karthikeyan, the founder of Bloom Computers and Bloom Electronics, an IT solutions provider and computer hardware supplier: “We are witnessing a rise in the O2O business primarily because of the pandemic. The future of retail is also headed in that direction. Brick-and-mortar stores should start embracing digital technology to stay relevant and reach out to as many customers as possible. While a mix of physical and digital is here to stay, it is also evident that most buyers want to have touch and feel while purchasing a product.”
Omnichannel’s ever-growing potential
Another important omnichannel benefit involves strategic outreach. In the country’s premium, luxury and super luxury segments, 90% of the supply chain is focused on the top-eight cities, of which the top four garner almost 80% of the stores and stocks, according to Adam.
“For example, a well-known fashion apparel brand can have around 200 outlets in India, of which over 120 are in the top eight. It is not viable for such brands to venture into tier-3, -4, or -5 cities or towns and set up their exclusive outlets. Online catalogs and other digital channels, however, help them bridge the divide and serve customers from every nook and corner of the country,” Adam explained.
Other than increasing outreach, omnichannel strategies powered by Cloud technology have a strong potential to take root. According to one report by the National Association of Software and Services Companies, the premier trade body and chamber of commerce of India’s Tech industry, India’s revenue from software-as-a-service (SaaS) omnichannel solutions hit US$3.5bn in the last fiscal year. The report also revealed that the pure-play India SaaS industry has the potential to grow to US$13–15bn by 2025.
Such technology trends can continue to push omnichannel in India to the next level within this decade, said Adam, who is betting big on AI-based recommendation models, digital product catalogs and video commerce. “Also, retailers will begin rightsizing their physical stores as they start adopting digital channels more. AR will facilitate mixed-reality innovations; ‘buy now, pay later’ payment models will become common; and chatbots will continue to be used as support channels,” he predicted.