Retailers need to foster an experience where customers are engaged from the beginning to the end of their visit.
Indian consumers continue to pursue shopping as a recreational activity. A recent BCG report concluded that although 70% of nearly 90 million shoppers in India are influenced by information from the internet and e-commerce, only 16% of them make actual online purchases. This means that more than 50% of retail sales are still done offline either through direct sales or bricks-and-mortar stores. Hence, in order to stay ahead of the competition, brands need to deliver the best of both worlds where they converge online and in-store advantages.
Key factors affecting consumer buying behaviour
Touch and feel experiences: Research confirms that more than 85% of consumers prefer to touch and feel a product before buying it. In the consumer durables space, it is observed that 69-72% of products are purchased through the cash-on-delivery option (CoD) — precisely because people like to see and feel what they are buying. Taking this into consideration and to create a satisfying shopping experience, even e-tailers like Nykaa, Lenskart, Firstcry, Flipkart, etc have taken the offline route to showcase their products and offer value added services to their customers.
Brand trust: According to Nielsen, 92% consumers trust recommendations from people they know. McKinsey adds that word of mouth recommendations are the primary factor behind 20-50% of all purchasing decisions. Anyone can hunt for a product online, but it is the salesperson’s understanding of your need, her advice and assurance that closes the deal and ensures a purchase of better quality. In addition, trust is a major factor, which leads to a preference for offline purchase. Many people are still hesitant about exploring the virtual market and revealing their personal information on e-commerce websites due to mounting cases of hacking, cyber crime, etc.
Greater convenience and seamless product delivery: Consumers today
want to opt for services and products that help in saving both time and money. They do not want to wait for days to have the product delivered for which they have already paid. Customers either prefer to take the product home as and when purchased or get it delivered within a short span of time. Also, in case of defects or returns, people feel comfortable in getting the product changed at the store instead of going through several channels to make the return or exchange happen as in the case of an online purchase.
Personalised experiences: Currently, millennials make up the largest segment of shoppers, and they are the ones who crave for more meaningful brand experiences rather than material products and experiences that provide value beyond the product that they are buying. Therefore, retailers need to foster an experience where customers are engaged from the beginning to the end of their visit and retail experiences are personalised to match diverse consumer needs. Making the shopping experience stand out in their minds is what will make them come back to your store.
Over the next decade, as new models multiply in the online space, e-commerce will continue to grow. However, offline sales will still continue to exist with an evolved value proposition for consumers. Brands will need to place more emphasis on personalised services and offer dynamic interactions to customers.
Marzin R Shroff is MD & CEO, Eureka Forbes