Omni-channel retail: Is combination of online and offline channels the next big thing for startups, small businesses and MSMES?
The recent digital upgradation changed the shopping experience of customers across the globe which got further accelerated by the outbreak of pandemic.
Presently, we have won access to buy things with a single tap or a click. From buying real estate properties to real life products like the car and home appliances, everything seems just a click away. The recent digital upgradation changed the shopping experience of customers across the globe which got further accelerated by the outbreak of pandemic. The measures on social distancing and lockdowns enabled more people to shop necessities online. With online shopping platforms, we no longer need to visit a store or a market physically as out tech devices like the smartphones are the new virtual market.
We have doorway to more than enough options to purchase goods and services regardless of if it is online, offline, or a combination of both. This combination of online and offline is called the omnichannel.
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E-Commerce has evidently altered the way consumers interact with retailers and brands throughout the purchasing process. The online channels developed by retailers introduced the idea of multi-faceted direct to consumer communication that are helping retailers to meet consumer demands. The introduction and adaptation of e-commerce during the past two decades has motivated retailers to accept the digital transition and incorporate online operations to their business.
The online operations have also become a key element in competitive strategy. Many retailers agree that the internet and smartphones have allowed them to reach larger and newer customer bases without negatively affecting the performance of their offline stores. Anuj Mundra, Chairman & MD, Nandani Creation Limited shares his knowledge on Omni-channel retail and cites details if combination of online and offline channels the next big thing for startups, small businesses and MSMES?
"Despite the copious amounts of research surrounding the proliferation of online shopping and its effect on the retail industry, there is a noticeable absence of a conclusive answer. Thus the question remains ultimately unanswered as to the exact impact that the rapid rise in e-commerce spending has had on the retail world. Using several different channels to market goods to consumers (multi-channel retailing) is a strategy that has been employed by retailers for an extensive period of time.
This business model treats each channel as separate business segments that are used to reach different groups of consumers. Multi-channel retailing has become a standard business model in the retail industry, as nearly all major firms have developed online operations to complement their existing stores.
Experts predict that the decline of physical-store is likely to accelerate, as physical retailers generally enjoy small profit margins. As such, shrinking instore purchases combined with high leverage will increase the likelihood that physical retailers will become unprofitable. Manley also notes that online retailers enjoy lower fixed costs, 24/7 operations and a larger product selection. These competitive advantages will likely fuel the expansion of internet retail, which will accelerate the demise of brick-and mortar retail.
E commerce is likely emerging as the demand among the population and likewise will contribute to the country’s revenue model too. In this current pandemic also when everything comes to standstill e commerce/ virtual shopping ensured continuity in the country’s economic operations confirming that the Omni channel presence is important and necessary.
As consumers and companies have become more sophisticated, the omni-channel retail system has emerged. This model is predicated on the idea that the new-age shopper interacts with retailers across multiple channels. Optimists have applauded this evolution, as traditional brick-and-mortar locations have benefited from consumers’ ability to shop from home. Skeptics have voiced concern over the emergence of showrooming behavior, in which consumers use brick-and-mortar locations to examine products before purchasing goods online. The answer to this controversy remains unanswered, and has resulted in widespread doubt regarding the future and current utility of brick-and-mortar retail.
The latest technologies like the AR VR are expected to take a prominent role in omnichannel retail. We can already see how some apps are giving their consumers an option to click a picture and virtually try their wearable products to check how those suits them well. Post this trial, the customer can either buy it online or can also visit the store.
Though showrooming behavior has been proven to not only be a prevalent component of omni-channel retail, market research suggests that this trend is not damaging physical stores. Instead, this behavior will serve to emphasize the importance of using physical store locations to drive web traffic. More concisely stated, the emergence of the omni-channel retail mindset will produce a synergistic return indicated by key performance metrics.
Firms that are actively investing in their physical locations are rewarded with greater web traffic, which this study establishes as a prerequisite for generating internet revenues. A larger amount of purchases online is also shown to correlate positively with gross profit margins, which indicates that a strong online and physical presence strengthens the retail brand."
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