The week before Diwali, the cover page of my daily newspaper was carrying full page ads of Amazon or Snapdeal. When I opened my laptop, I simply couldn’t miss the pop-ups from Myntra or Flipkart. Surely, these online stores have a tremendous impact when we decide to shop for Diwali.
Buying clothes and gifts is an intrinsic part, and one of the high points, of Diwali. Just planning what to wear, taking time out with family, driving through the pre-Diwali busy roads that have families walking with bulging shopping bags, and discussing with neighbours where to shop, can get even the grumpiest family member excited. All these are an integral part of the celebration.
But the last couple of years have seen a shift in the way we shop. And we have e-commerce and m-commerce to blame for this — online shopping through mobile phones or other devices. What we do now is browse through various sites that throw offers at us and buy the product that catches our attention, from the site that has the best offer. Quite a departure from the traditional shopping behaviour, don’t you think?
Offer you can’t refuse
But how do these online stores manage to give such amazing offers and discounts? There are several reasons for this.
No real estate
First, online stores do not invest in real estate. This enables them to pass on at least part of the savings to the consumer. The biggest expense of a traditional retail outlet is the space, and the location of the store largely determines its clientele. This aspect is taken care of by making the online store location-neutral. Other related physical infrastructural problems such as parking space, and traffic are also eliminated.
No sales personnel
Second, online stores do not need sales personnel. There may be order taking and order tracking sales-force responsibilities within the system, but the numbers are far lower than a traditional store. This allows the online giants to factor in this advantage in their pricing.
Geographical reach
Third, the geographical radius of reach of an online store is much larger. In fact, it can be said that they are national (or even international) in scope. This means a far higher revenue possibility, which translates into economies of scale.
Online stores design and cater to consumers of different segments as well, covering gender, age, merchandise range, different activities (sports, swimming, or other similar activities).
Once you enter any one of these websites, you will realise that you can easily buy clothes, gifts, books, electronics, et al in the same site. This makes the process of shopping very convenient and hassle free. And of course it means huge business for the online portal.
The downside
The tough part, however, is building customer loyalty in these sites. I would be surprised if anyone has displayed a consistent purchase behaviour, in choosing one particular online store — for the last one year at least.
This is because there is very little differentiation across these sites. We still haven’t been able to conclude what one store stands for that is so significantly different from the other. Till these stores get it right, they will continue to woo customers only through ‘discounts’, and not through brand building efforts. This is not a sustainable proposition.
Nevertheless, online stores are here to stay and have transformed our shopping canvas in many ways.