Digital buyers in India have not much changed the frequency with which they shop digitally or in-store, according to longitudinal research.

2015 research from Retailers Association of India (RAI) and PricewaterhouseCoopers (PwC) found that 12% of digital buyers in the country shopped via digital channels on a daily basis. That was up 3 points from 2013, for an increase of 33%.

Weekly digital shopping enjoyed a similar jump, from 31% of respondents in 2013 to 39% in 2015, or an increase of about 26% over two years.

Monthly rates of digital buying held steady over the same period, at around a third of digital buyers.

But store shopping habits had barely budged: 16% of digital buyers made in-store purchases daily last year, compared to 15% in 2013. Weekly in-store shopping was flat at 32% in 2015, and monthly shopping habits had dropped slightly, from 32% to 28% over two years.

eMarketer estimates that 82.3 million people in India made at least one purchase in 2015 via digital channels, up 52.0% over 2014. That’s still a tiny figure in the country of more than 1 billion, however, and amounted to just 37.3% of internet users in 2015. By 2019, the end of eMarketer’s forecast period, nearly a quarter of a billion people in India will make purchases digitally.

Article Published by: http://www.emarketer.com/Article/How-Often-Do-Indias-Digital-Buyers-Shop/1013666

The distinguished panellists discussing on the subject were:

Kishore Biyani, Group CEO, Future Group

Mohit Pande, Country Head – South East Asia and India, Google for Work

Rakesh Jhunjhunwala, ACE Equity Investor

Ramanathan Hariharan, Group Director & Board Member, Landmark Group

Sachin Bansal, Co-Founder & Executive Chairman, Flipkart

As Nagesh welcomed the panellists, the session commenced with Mohit Pande stating categorically that Google had always believed in investing in things that people think is crazy and that is the main intent of their foray into promoting e-commerce at a time when it seemed impossible.

Ace equity investor Rakesh Jhunjhunwala was very vocal in his approach while stating that success is the ability to accept change. However, he cautioned that we should not get overwhelmed. According to him, too much is being made out of the disruptions by technology. To his mind, the real disruption has come in only one area and that is communication.

On being asked whether online has created a huge impact in this country and about the whole story about online, Sachin Bansal, Co-founder & Executive Chairman, Flipkart said that everything that we do on a regular basis is changing due to internet, from how you take a taxi to how you book a hotel room and now even how you shop. All these has made normal humans to super humans due to the access to internet. He felt that people are finding value in internet and as long as they find value, they will adopt it.

However, Sachin cautioned that today we have just 8-10% share of the total retail as e-commerce and it needs to grow at 60%-70% y-o-y. Unfortunately, infrastructure in India yet is not matured enough to support e-commerce and hence massive investment is required.

Kishore Biyani, Group CEO, Future Group, was quizzed that when he had started off with Isse sasta kahi nahi, when he launched the large format brick and mortar store. He was quite categorical in his opinion that though times are changing with customers wanting to shop 24X7 and even though technology reduces time, space and improves connectivity, it’s still a long way for e-retailers to catch up with physical retailers since brick and mortar works on 14% cost of doing business while e-retailers are doing it at 50-60%. He expressed concern that if this continues, it may not be too long before most e-retailers will be forced to close shop.

Ramnathan Hariharan, Group Director & Board Member, Landmark Group, said that he definitely sees change coming with consumers becoming tech savvy. It is therefore important that we realise and accept the change. According to him, the earlier kirana stores were more connected with consumers and then came large format stores. Technology has provided us the platform where large format retailers can also connect personally with the customer. This is where technology can help.

Ace equity investor Rakesh Jhunjhunwala was vocal in expressing his doubts on the feasibility of the business models of online retail. He believes that successful companies are built by cash flows and profits and not by investor’s money. History tells us that there can be first round or second round of investor’s money but there will never be a third round.

Sachin Bansal was asked how he sees the offline and online merging. He gave the example of Myntra where he said that the cost of operating is already becoming profitable if the cost of technology is removed, and he sees signs of such profits in all e-commerce operations. He feels that when sales go up by 10x, technology cost and investment cost is certainly not going to increase 10x and that is where the turnaround will happen. He felt that lot of influence from offline will come to online. He remarked that Flipkart has seen Chinese and American brands tapping the Indian market through online channels without investment in India.

The discussion took the turn of a stimulating debate on the viability of operating models and confluence of online and offline.

Kishore Biyani accepted that one cannot stop an idea whose time has come from booming and hence offline players have to learn from online players.

While the esteemed panellists had their unique points of view on operating models and on offline and online, all agreed with Mohit Pande of Google for Work when he said that one cannot take away the impact of technology on retail and on people’s lives.

Post by: Sanjay Thampy, http://sanjaythampy.blogspot.in

Mobile wallets work on the basis of transferring money from an existing bank or credit card into the online wallet – and using that to pay online at the merchant site.  The consumer creates an account with a m-wallet app or website, adds money to the wallet by debiting his bank account through Net banking or through a credit card, and then to make payments or transfers money. It uses the mobile phone as the go-in-between.  The m-wallet uses Bluetooth, QR codes, NFC (Near Field Communication), WiFi, 2G or 3G to communicate with the merchant’s billing POS machine.

This brings me to consumer experience.  I was at a suburban restaurant in Mumbai – Smoke-house deli, where I saw an interesting promotion. It promised me Rs 200 off, if I used my mobile phone to pay.  I looked at it and thoughts of high tech-queue busting solutions ran through my mind.

The promotion card said that I needed to give my cell number to the billing counter and pay using the link that would be sent to my phone. So far so good. The SMS duly appeared and I was directed to a Qwik Wallet site, where I signed up and was sent a second code for authentication. Smooth sailing. The next screen asked me for my credit card details. I hesitated a bit, but reasoned that this was no different from shopping online, so entered the same.

The screen went into its ‘processing … please wait’ mode for about 5 minutes.  Noticing the confused look on my face, Anup, the restaurant manager told me that it would be faster if I download the app and made the payment.

A bit frustrated by now, but still driven by the thought of the 200 Rs off, I complied. The app duly downloaded (thank you 3G) I registered yet again, and was sent another validation code.  The app then asked for my credit card details to store the same. I baulked. Visions of the Uber-app floating in my mind, I decided to forego the Rs 200 of the promotion and paid. Using cash.

As a consumer my comfort zone stretches to giving credit card details online or typing them into my mobile phone for a transaction, but not where the card details will be stored.

When I dissect my reaction, I realize my fear is rooted by not knowing what happens to my profile details when I delete the app off the phone.  I have heard stories of apps being able to ‘snoop’ data and send back details including contact lists, photos and SMS’s to the server. Uber-scary that.

My experience was one-off of course.  I am of the Gen-Y segment; perhaps a Millennial would blithely provide credit card details.

To me, mobile wallets aren’t yet driven by User Experience (Ux) considerations – too much ‘technicalese’ in their design and not enough ‘consumerese’.  And retailers don’t seem to realize that wifi is not a precious commodity – it should be provided freely if they want adoption of m-wallets.

These are things that market share projections for mobile wallets probably haven’t considered.

How can traditional retailers fight Back?

Let us understand, what are the strengths brick-and-mortar retailers have

1)    Established Brand Name

2)    Customers

3)    Strong Relationship with suppliers

4)    Offline Retail touch points

Using the above strengths retailer can really innovate by making their stores in to extension of their online offering.  Retailers who have footprint across multiple locations can offer Web return in store, buy online and pick up at the stores, Store inventory mapped in the backend and Orders dispatched from the store where free shipping can be offered, payment booths and even drive-through customer service centers for online sales to their brick-and-mortar buildings.

The new connected customer wants convenience of Online as well as benefit of offline (instant delivery).

Let us consider Typical Shopper Mr. Sharma, an information technology specialist in Bangalore. He shops for items like clothes, electronics and even groceries online. But he also likes to receive his purchases as soon as possible. He placed his order on the eCommerce store of a food grocery retailer in the morning and picked up the order from a nearby branch during his 45-minute lunch break that day. And there were no expensive shipping fees.

In my opinion, this type of strategy will create disruption and will set be an offensive strategy against pure-play online retailers.

Unfortunately, stores have been portrayed as old school and an expensive-to-manage liability with several disadvantages. But the advantages of having a physical footprint are many.

One advantage is the ability to reach customers who pay with cash. As Cash on Delivery is perfected by online players and which is opted by many online customers.

Retailers can offer shoppers to order merchandise online and pay for it with cash at a store when they pick the item.

Another advantage Offline retailers hold over their online-only counterparts is same-day delivery and returns. If offline retailer offers store pickup for items bought on the Web, they can add a drive-through service that will allow customers to return or exchange purchases without leaving their cars.

Entire exchange process can be made fast and easy, when customer wishes to exchange certain products he fills the exchange form, selects new merchandise. Customers can meet an operations executive outside say Shoppers Stop store, He will provide a mobile phone receipt or printout, and the merchandise is exchanged.

The Store can push a drive-through service which is next of Buy Online and Pick up offline. Initially, we used to view the pick-up-in-store feature as a way to draw consumers into stores and encourage customers to buy more. Now, Stores would rather close the deal on an online order as soon as possible so shoppers do not go elsewhere or loose sales altogether.

Traditionally in mature markets the online orders for in-store pickup also tended to be much larger than typical in-store purchases, and that customers who picked up orders in the store visited about 50 percent more often than customers who shopped only in the stores.

Many retailers in the mature markets, let people place orders online and pick up items within a day at a selected location, forgoing shipping charges. The retailers say this option is especially popular with bulky items that do not qualify for free shipping, and for people in a rush.

Retailers can go even further by integrating the physical and online merchandise selections. They can combine offline and online inventory combined, which will increase the stock turn ratio. Customers can also be given an option to choose inventory from particular store for immediate purchase. If the product of a desired color and size is not available in that particular store or online inventory but available in the store which is in other city then order still can be fulfilled and customer is not lost.

If traditional retailers play to their strengths, I am sure we will definitely see Pure Play online players opening offline stores.

If you trace our evolution of mode of transport, from walking we moved to riding horses, to carts, to two wheelers, motorized four wheels and rails on land to ships with oars, then sails and motorized engines on sea and from monoplanes to biplanes and then jets in air! At each of these stages, was the other mode of travel threatened of extinction? Or does each still has its time and place? (More people I know walk these day for exercise rather than commuting, though. I relish doing Heritage walks in old Cities

We have had disruption from new formats like shopping centers / malls and even then there was call to announce the death of high streets. Each format / model / channel goes through its peak periods but will live as long as it’s valued by the consumer.

In British India, one could book a rail ticket from the Madras to Colombo, which included the last leg on a ship! If we remember, all that we are doing is providing a service and find the best way to do so, we are fine. The railroad millionaires of the US would have been way better off if they expanded to airlines. It is natural as long as you remember you are in the travel Business.

All this does not factor the PE impact on e-commerce though. The discounting due to this can mess up the scene if it persists, may even damage some brands beyond repair. But then, like in war times, casualties are a way of life.