- Brick and mortar retailers and wholesalers are getting worse hit by the e-commerce industries and so they are pressurizing various bands to support them for competing with ecommerce websites. Due to increasing growth of e-commerce industries, retail industry is lacking behind because the density of sales get reduced.
- Malls may become a thing of the past as stores start closing their doors - Macy’s, JC Penny and Sears have all announced they will be per mentally shuttering hundreds of stores combined. Are we witnessing the death of brick and mortar at the hands of online retailers? Maybe not thanks some clever tricks. Jimmy Rhoades and market researcher Pamela Danziger have three ways brick-and-mortar.
By Arvind Singhal About a year ago, many — that included some of India’s largest organized retailers — were in near denial that India would feel the impact of e-tailing in the near future. Today, the pendulum has swung to the other extreme. Some of India’s oldest and largest brick-and-mortar retailers believe that the newly arrived e-tailers are their biggest threat now.
By- Leo Shastri
The ongoing coronavirus pandemic has impacted every sector of our economy and the most prominent being retail. The work from home and social distancing measures has made every requirement of ours just a click away. As the situation is changing every now and then depending upon the surge in COVID cases, people are coming to terms with the new normal. Experts feel that the COVID-19 has accelerated the e-commerce growth to such an extent, which would have taken four to six years to achieve. It shows that just to fulfill their necessity; many more people have started shopping online. Companies who didn’t have their presence on e-commerce, too, have scrambled to rectify that. Covid-19, then, has begun what looks like a second boom in e-commerce.
Changed consumer preferences
In many nations including India, people will continue to adhere to social distancing measures and be avoiding crowded places for retail therapy post the Covid-19 pandemic. If we see the current condition when many businesses are open but the footfall to retail stores remains down. That’s due both to social distancing measures and changed consumer preferences. Customers have realized that with the advent of AI and chatbots, shopping online has become a more convenient and safer option. The popping online messages, getting an advanced shipping notice, and then taking delivery are the way to go. In fact, Covid-19 has resulted to a more permanent shift to online retailing over brick-and-mortar retail. Even many brands have announced store closures and a host of post-purchase surveys also show that consumers are more elated and satisfied with e-commerce experiences.
All the age-group migrated online
Will Diwali Ecommerce Boom Hurt Brick And Mortar Retailers Near Me
Gone are the days when millennials or youth opted for e-commerce. The pandemic has made every age group shop online not only in India but also in the world. In India, for instance, cash withdrawals have fallen sharply during the pandemic. Simultaneously, though, the use of the Indian online payment platform, UPI, has risen dramatically. A leading e-commerce website’s recent sales figures ably show the uptick in online shopping. In 2020’s second quarter, the e-commerce giant showed a 40% year-on-year increase in net sales. That equated to a financial boost of more than USD 88 billion. Removing Other Barriers to Purchase for stress free shopping
As people are losing jobs or going through major paycuts, finance will take little time to settle. Therefore, buying on finance – buy now, pay later – has been taking hold when it comes to online shopping. With a new range of goods expected by online shoppers, though, this seems likely to change. Brands that do have an online presence can also make changes for the post-Covid world. They can look to make e-commerce offerings more accessible to a greater number of people. That means removing barriers to purchase.
Conclusion
The intensity with which the crisis will change our world, the result will be witnessed in the coming years. For some businesses, though, Covid-19 has created opportunities as well as challenges. Ecommerce, in particular, looks set for a boom that will last far longer than the pandemic itself. Consumers – by necessity – have come further around to the benefits of shopping online. Forward-thinking firms, then, should be preparing now for the upcoming post-Covid era. That’s one that will be more digitalized than ever before.
The Author is Director – Operations & Strategy, Usha Exim Private Limited
Come Diwali, more shoppers than ever will turn to phones and laptops for their gift shopping, as India’s ecommerce growth powers on through the Covid-19 crisis. RedSeer Consulting’s latest report crunches the numbers.
The consulting firm expects festive sales in 2020 to grow by 50% compared to the 2019 festive season – considerably higher than the 30% jump over the previous year. Several factors will contribute to the boom this year, with most revolving around Covid-19 or its widespread repercussions.
“Covid-19 enabled massive growth in new shoppers as consumers now more than ever prefer to shop in a manner that is convenient, safe and hygienic and the e-commerce space meets these requirements,” explained Mrigank Gutgutia, Director of Ecommerce at RedSeer Consulting. According to Gutgutia, the pre-season survey has already shown signs of ecommerce dominance.
The result is that festive sales this year will likely amount to $4 billion – the highest ever for a festive period. The figures reflect a combination of strong fundamentals and favourable market conditions. Ecommerce in India has already been a bright spot for several years, particularly since 2015 when telecom giant Reliance launched its Jio network.
Through Jio’s cheap data packages, online commerce was suddenly activated among India’s consumer base of more than a billion people. Ecommerce grew at a compound annual growth rate (CAGR) of 25% over 2016 and 2017, and a further 30% over the last two years. By 2019, the market was worth more than $27 billion.
As mentioned, the biggest growth driver was the spread of internet accessibility, from the metropolitan Hindi/English speaking ranks known as India to Bharat – tier two cities and rural areas that commonly speak regional languages. RedSeer reports that the spread of ecommerce from India to Bharat is visible even in the festive sales this year.
In fact, the researchers note that for the first time ever retailers have also acted on this distinction, distributing a number of marketing campaigns and even their sales channels via WhatsApp or other video-based releases. Add to this the concerns around Covid-19 and visiting local shopping centres, and the ecommerce consumer base for this festive season gets a tremendous leg up.
The analysis suggests that up to 50 million people will shop online this festive season. To put this in perspective, that’s a 70% jump from the same time last year, when online shoppers amounted to just under 30 million. Testament to decentralisation efforts is that Tier 2 cities will account for 50% of all online shoppers.
Brick and mortar?
So retailers have been successful in reaching a wider consumer base, although this is a trend born more out of necessity than anything else. Where ecommerce is skyrocketing in India, sales from brick and mortar stores has all but stopped. Those elements within India’s retail sector that were organised have had no choice but to invest in online and omnichannel capabilities to meet consumer needs under Covid-19.
A financial burden in the short term; this scenario might just be a blessing in disguise for retailers in India, setting them up for the digitalised consumer model of the future. Going forth, having an established ecommerce and omnichannel infrastructure will help reach an ever-expanding consumer base in India that is increasingly digitalised.
In fact, the same is true for India's ecommerce landscape as a whole. Uncertainty looms on whether a second lockdown will be necessary in the short term, and if consumers will ever return to pre-pandemic consumption patterns even in the medium to long term. A strong ecommerce landscape will be crucial in this scenario, and the initial months of the pandemic have been a catalyst from this perspective.
Will Diwali Ecommerce Boom Hurt Brick And Mortar Retailers List
Such is the impetus given to ecommerce in India this year that RedSeer Consulting anticipates growth of 40% for the segment for the course of the 2020 commercial year. Online sales amounted to $27 billion by the end of last year, and will likely reach a value of $38 billion by the end of this year according to the report.
Year after year, RedSeer Consulting has been reporting growth in online festive sales, although few reports have portrayed the size and scale of growth as the latest one, which comes amid a bumper year for ecommerce in India and across the world.
Subscribe to our newsletter.
Will Diwali Ecommerce Boom Hurt Brick And Mortar Retailers Like