India’s largest shopping season is just round the corner. 40 – 45% of the sales of consumer durables happen during the Diwali season.^
E-Commerce websites, payment gateways are sprucing up their infrastructure (hardware, networking, logistics and people) to cater to the shopping surge that is expected in the next few weeks.
How much of commerce is actually e-commerce?
According to the retail advisory, Technopark, Indian retail e-commerce is pegged at about USD 2.3 billion. This is a very nascent market accounting for only about 0.4% of the entire retail industry. Its potential to grow is immense and it is estimated to reach about USD 19 billion by 2019. ***
It is expected this Diwali season the online sales of smart phones is going to increase from 10% to 15% – That is 4 million plus smart phones moving off the retailer shelves to e-shopping!
It is estimated that Rs.2000 Crores is going to be spent on advertising, marketing and promotions, highest in the last 5 years*. Sure signs of revival of the festive, celebratory mood in the market.
Few of the major shifts that are visible and noticeable are:
1. Brick and mortar sales Vs. e-commerce, m-commerce
Major brands – Toshiba**, Lenovo++, Harman Audio+ (owners of JBL) have gone ahead and listed on their websites that they do not support purchases made at major online e-commerce portals.
The Brands have taken this measure to protect the margins of the brick and mortar retail outlets from the predatory pricing policies of online market places in India.
Will these brands be able to stay away from the major online market places forever and forego the opportunity in the online marketplaces?
Sony coexists in both the markets simultaneously, to let the customer choose their preferred marketplace for purchase. +++
2. Big Bang promotions – banking on change in Buyer Behavior
Amazon’s “Online Shopping Dhamaka” and Flipkart’s “The Big Billion Day” high voltage promotions are targeted to change one thing for sure – how people shop. There are market reports talking of Rs.200 Crores or more being spent by Amazon, Flipkart and Snap Deal for promotions.
The online market places are offering custom promotions tailor made to make the customers buy from their respective mobile app.
The online market places are offering custom promotions, bundled with loyalty offers (coupons, Gift Vouchers, discounts on next purchase) tailor made for the mobile app based buyers of the respective online store.
There was no time before, when the customers were spoilt of choice, best of the offers and payment methods backed by a reliable delivery mechanism – all at the convenience of shopping without leaving their seat.
3. Changing preferences of purchase, loyalty and purchase satisfaction
Now, customers compare various products, shopping sites through social media references; select the store of purchase across the multiple tabs of their browser in their phablet/tablet; and the purchase is made through the app. The new purchase is showcased in social media, with a click or two. The purchase satisfaction is reflective of the number of the Likes from the ‘me-society’.
4. Mobile apps for online purchases are making purchases of any good, of any value -impulsive
Mobile apps bring in a new definition for impulse purchase. There is little time to think and decide – basic questions to qualify whether the product is absolutely required or is it the best brand to buy.
Most of the online marketplaces have invested in technologies that store customer card information securely. With only limited information to be entered in the app, purchase process remains the same, irrespective of the value. With instant applications that support purchases 24×7, the me-commerce happens at the speed of thought.
5. Analytics drives sales. Sales drives analytics
Most of the online stores have shifted their focus to understand their customer behavioral patterns and what makes them (s) tick – using tools like Big data, data warehousing, business intelligence and analytics. Using all the tools at their disposal, online sites are bringing in new insights from the collective purchase patterns of customers, to arrive at predictable behaviour of customers.
New product bundles are created; new price points are experimented and the schemes are rolled out in the store front. The stores start to measure the customer feedback immediately – how many customers clicked, how many customers browsed which part of the website and how long the customer stayed in the site before checking out.
This Diwali season is bringing in change for everyone – consumers, marketers and technologists alike. The festival of light is indeed going to bring the light of awareness – what customers want.