e-Retailing - The Vogue Apparent

Alok Bharadwaj
Senior Vice-President
Canon India

Online retailing provides shopping experience at one's own convenience. This is the primary reason of its rising popularity and consumer acceptance. Access to internet, propelled by more tablets, smartphones, cutting-edge technology that gives 3D view of products, busy consumers, increasing costs of real estate have all lead to a shift to electronic commerce. 

“Electronic retailing is a powerful marketing technique which is used by almost every brand nowadays as it provides benefits to both consumers and marketers. According to IMAI, internet users in India has grown 70% in 2011 w.r.t. 2010 and going forward it is expected to grow at a much higher rate. Electronic retailing is among the top five contributors as far as the total e- commerce market size in India is concerned. Some of the Panasonic imaging products are available for purchasing through online portals,” says Manish Sharma, Managing Director- Panasonic India, Consumer Division. 

E-Retailing Ecstasy...

There is so much of activity happening in the web. The technology has made it so simple for payment as well as for people to get a good online virtual buying experience. “The enabling is also happening through enhanced infrastructure. Today, the telecom network, the broadband, in fact the entire internet platform, are good enough to make that happen. Canon is enabling e-retailing, and the momentum is increasing, as more and more young people are using smart devices and when young people use devices they begin to try out newer things. Therefore, adoption of online purchase has become a lot faster with the younger generation than it would happen with the older folk. The products which we offer through this platform are mainly digital cameras and inkjet printers,” explains Alok Bharadwaj, Senior Vice-President, Canon India.

Out of the 100% consumers who visit the websites, only 10% of them do the actual buying. The remaining 90% of the customers surf to research about the product and to gain information. Thus, the vendors feel that if they are available in the major websites, whether they get sold or not, it is still beneficial for them as it adds to their visibility. As they become visible, it builds the market for them. This is the first payoff. The second advantage is, of course, that more and more people are resorting to buying on the web which creates additional market for the vendors. Alok Bharadwaj confirms that within this year about 5% of Canon camera business will move to e-retailing platform. He further says that 20% of our inkjet printers are sold through television. 

“We are already working with some e-commerce retailers. And, we are doing pretty well. Going to the next level, we are going to have our own team to target the e-retailers. We are coming up with our own portal and are only waiting for the final approval from the headquarters. Even our distributors have their own portals,” asserts Unaez Quraishi, Sales & Distribution Director, System Business Group, ASUS (India).

e-Retailing vis-a-vis VARs...

Looking from a broader perspective, any alternate medium would pose a threat to the VARs. There exists a competition across all channels and there is competition among all brands. “It is a question of where a person would buy from, he can buy it from a Large Format Retail store or from any multi-brand retail outlet or a speciality store or thorough an online portal. In such a case, everything competes with everything,” opines Alok Bharadwaj. 

Emphasizing on this, Unaez Quraishi says that e-retailing will not affect the VARs. The pie is increasing and in the next three years the market will be five times bigger. So everybody will have his own share and everybody's share will increase. He further adds, “ASUS has a big portfolio and we can play with placing of the models wherever we want it, be it e-commerce or the channel or the LFRs. I can also focus on three different sites, giving three different prices for three different models.”

Trends...

Online shopping is more of a social event nowadays. For instance, various e-commerce sites are using friends' preferences to help you make better purchasing decisions. Secondly, with the explosive growth of real-time platforms like Twitter and Facebook, shopping is happening on a real-time basis which was not the case earlier. “The social media is certainly playing a major role in the online retailing scenario and retailers are increasingly engaging their customers on social networking sites like Facebook and Twitter. One additional advantage that these sites offer is that the customers can not only shop from these sites but can also share their purchase with their friends as soon as they make it, thus widening the network of the brand immediately. Moreover, the consumers can even like or follow their favourite retailer or brand. In case of buying consumer electronics, software and other items (such as a car), users rely heavily on online reviews and opinions,” says Manish Sharma. 

Advantages for Retailers

No Real Estate Costs: The infrastructural costs including real estate costs are totally eliminated and ultimately reducing the operating cost also.

Enhanced Customer Service: With online retailing, retailers can connect to the consumers in a better way as they can directly address the customer through e-mails or online alerts, thus improving the overall customer service.

Mass Customization: In e-retailing, mass customization is possible as customized or consumer-specific products or services can be easily made available to them through this channel.

Global Reach: It is, undoubtedly, the most important advantage of e-retailing. This benefit is the same as of the internet itself that it has the capacity to reach customers round the globe. No other medium has this kind of reach and it has certainly made the market “glocal”.

Advantage for Consumers

Convenience: e-retailing cuts down the long hours of roaming around for the right product that are there in traditional shopping, thus saving a lot of time and energy.

Early Access: As there are no middlemen involved, the products or services are more easily accessible.

Innovative or Unique Products: Getting a new, innovative product to market through traditional channels is expensive and time-consuming, and it requires some luck on the part of the product's developer. Electronic retailing allows a product's developer to bypass this process and sell directly to end-users

Better Salesmanship: The only fact that somebody has logged on to a website or switched on a certain television channel makes it clear that the rime purpose of the retailer is solved which is to grab the attention of the customer and retain it. So, it involves a better salesmanship and eventually increases sales.

Finally...

In a conversation with people across various age groups, it has been found that there still exists a sense of insecurity when it comes to the aged gentry - age group of 40-50 years. Consumers who want to buy products while having a touch-and-feel experience cannot have satisfaction on online. Most of the consumers are willing to buy the same product online of which they already have an experience. Most of them are eager to buy when they find a deal on the web portals. Of course, confidence in the brand entails online purchase. Some of them dismiss it as they feel there is no scope for bargaining. And some are apprehensive whether the product they buy and get a home delivery may be of substandard quality. Thus, even though there exists some amount of hesitancy, e-retailing is definitely gathering momentum over a period of time.

For more contact:
Moumita Deb Chaudhury
moumita@varindia.com