- 93% place trust as main motivator for choice of retailer
- 86% go by loyalty programmes offered by retailer
Online shoppers
in India are almost at par with their global peers in their shopping habits,
despite online shopping being a recent phenomenon in India. This is owing to
the growing popularity of technologies such as social media, smart-phones and
tablets. Out of a total of 1,006 respondents surveyed as part of the PwC study
from India, 34% opt for making purchases through the internet on a monthly
basis, with the global average being 33%.
While clothing,
footwear, consumer electronics, household appliances, books, DVDs are the top
product categories for online shopping, buyers in India are now increasingly
opting to purchase product categories such as furniture, homeware, grocery and
do-it-yourself or improvement items through the online medium, which
traditionally were purchased in-store. This is different from their global
counterparts who still have not opened to buying grocery or sports equipment
items through the online medium.
These findings
are part of a PwC report titled ‘Total retail: A change is underway’ that gives
insights into buying behaviour of shoppers in the retail space, the key factors
that influence the medium of purchase (online vs. brick-and-mortar).
Rachna Nath,
Retail and Consumer leader, PwC India said, “For too long, the customer has
been of interest only to Sales and Marketing department. Today, that is
changing. Consumers empowered by technology are now making sure that their
shopping experience is not what companies want to give but what the consumer
wants. This changing behaviour is driving a change in the business models. It
is no longer about having multiple channels but about making them work across
seamlessly, where a consumer browses online and buys in-store or vice versa.
This again has to be supported by a strong supply chain, the strategy for which
needs to be built into the business model. This concept of ‘Total Retail’ will
drive buyer behaviour going forward.”
Indian online
shoppers believe in choosing from abundance. The number of e-commerce retailers
that Indians shopped from within the last one year is more than ten. This
figure is way above the developed economies, where people restrict themselves
to two to five retailers.
The report
states that the main reason for buyers
to opt for online shopping vis-a-vis traditional brick-and-mortar stores
are lower price, full range or more
choices, stock availability, better warranty / guarantee and better service.
Driving customer
stickiness
Although
technology has helped in making online shopping popular, it is trust that will
drive the business. Ninety-three percent respondents placed trust as the
primary reason for shopping from their favourite retailer or brand in-store.
This was closely followed by price, merchandising and the location of their
stores. A great loyalty programme was sixth in the list, with 86% placing this
factor as the reason why they shopped from their favourite retailer. However,
what made them come back or loyalty in its true sense, developed only when
retailers were able to build an element of trust.
Around 36 %
buyers said they do not trust the delivery process and hence do not make online
purchases.
Some of the key
factors apart from trust & loyalty programmes that influence the choice of
retailer are proximity, price-points, product spread, in-store assistance,
friendly returns policy and social media presence.
Evolving
eco-system
Buyers are now
increasingly expecting online retailers to cater to consumer requirements as
well as preferences by customisation, making customer analytics a key area of
focus for retailers. Consumers are also expecting retailers and brands to
engage, comment as well as affect change through social media.
Kumar
Rajagopalan, CEO, Retailers Association of India said, “Are customers leading
and creating new trends for retailers to follow or are retailers changing the
way customers consume? This question worries many retailers. Retailers get
impacted with new technology, new infrastructure and competing products for
share of wallet.”
Customers are no
longer reticent about their feedback and the total retailer must have a robust
mechanism of constantly interacting with the customers, making responsiveness
coupled with agility will be crucial in order to create the differentiation.
“While online
retailers has been able to overcome the barriers of physical infrastructure and
real estate, issues such as logistics and supply chain continue to be an issue
and should be addressed to keep buyers coming back for more”, Nath added.
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