Retail goes viral – changing the rules of consumer engagement


April 13, 2014 | By RetailME Bureau

The growing use of the internet globally, as well as in the GCC, is seeing consumers availing of multiple channels to shop, a trend that will only grow bigger in the days to come. Omni-channel retailing leverages bricks-and-mortar, e-commerce, mobile commerce and even social media to enhance retail sales.

·  Online behemoth Amazon (valuation $100 billion, site visitors 133 million) is leveraging omni-channel retail through a partnership with 7-Eleven, the international chain of convenience stores, for installing delivery lockers.

·  Bricks-and-mortar giant Walmart (market cap $242.53 billion, sales $469.16 billion) is focusing on making its 4,200 stores accessible online and is also making its physical stores delivery centres for orders placed online.

·  Online retailers in Dubai, like their offline counterparts, are leveraging government-sponsored shopping festivals through the year to attract customers with promotional offers coupled with greater convenience.

 

 

It’s the new omni-channel world of retail that’s being kick-started by the smartphone.

“We are moving to a nomophobic – ‘no-mobile-phone phobia’ – world,” says Ashish Panjabi, COO of Jacky’s Electronics. “Research shows smartphone owners pick up and tap their phone screen at least 160 times a day to see what’s happening.”

“Unlike before, consumers now access retail differently through multiple touch-points,” adds Mona Ataya, founder and CEO of Mumzworld.com. “Apps conversion in the Middle East is the highest globally. That’s because consumers now feel highly empowered in accessing information through apps to make the correct purchase decision.”

Punjabi quotes a Wall Street Journal report that reveals the average US consumer spends 5 hours 16 minutes in front of a screen – not the television screen, but the smartphone, tablet or computer screen. He poses the question: How are retailers taking advantage of this by bringing them online or offline?”

Ayaz Maqbool, managing director of Tejuri.com, offers an answer. “When we first contemplated building Tejuri.com two-and-a-half years ago as an online platform to benefit retailers and consumers, we began with market research – understanding consumer behaviour as well as opportunities and challenges retailers face in fully embracing e-commerce. We realised online doesn’t compete with offline, they complement each other. However, offline continues to be the shopping channel of choice for consumers in this part of the world because they prefer a brick-and-mortar set-up and because of socio-cultural conditioning – people like visiting shopping malls to spend time socialising while shopping,” he explains.

“At the same time, we see consumers using social media and other platforms to research a product and seek feedback from family and friends before making a purchase decision – in other words, utilising online channels to buy offline. A lot of shoppers visit Tejuri.com to research and check reviews about products, spending around 60-to-90 days before actually making a purchase. Sometimes we also see a customer journey beginning online and ending offline – someone checks a garment online but finally buys it from a store, realising the need for alteration services,” Maqbool continues.

“Such customer buying behaviour makes multichannel retailing the way forward,” he concludes.

Panjabi feels what hangs heavily on the minds of online shoppers is the lack of the touch-and-feel element. “Consumers tend to feel uncertain if the exact product they ordered will be delivered to them, making the trust factor quite central to an online buying decision,” he says.

Omar Kassim, founder, JadoPado.com, believes retailers need to give many more good reasons to convince shoppers to buy online. “You have to give reasons for the price points you set. It could be immediate delivery, which leads to higher gratification, or better product quality or wider choice. It’s a mix of pricing and prompt delivery services that makes JadoPado.com unique,” he points out.

“True, the touch-and-feel element is missing online but there’s a great return policy. At JadoPado.com we offer something a customer may not even find at a physical store. Plus, using a credit card to buy products online is much safer than trying to get money back from a merchant for a product you want to return. A credit card holder can request the transaction be dropped for a period of up to six months. These reasons are definitely leading many people to adopt online transactions, a trend slowly trickling down into other elements of the economy,” Kassim explains.

“People aren’t even looking for that look-and-feel anymore,” he emphatically asserts.

Ataya agrees, while pointing to ways in which the divide between online and offline are being bridged. “Along with price points, consumers seek transparency and comprehensive access to information when faced with a proliferation of options. Retailers can no longer hide behind inflated prices and low quality because today’s consumer is smarter. Globally e-commerce is a $1.2 trillion industry that’s growing at a CAGR of around 29%, so something is definitely going right. The online world is perhaps becoming as real as traditional brick-and-mortar retail. At Mumzworld.com we provide a video clipping for a stroller that a mom may want to buy, highlighting every aspect and functionality – even to checking how a baby fits in it. Buyers also have access to customer reviews. That’s probably more than you can do or get in-store,” she observes.

Maqbool says consumers expect advantages to prod them to buy online. It could be by way of packaging, or promotional items and free samples, or a great return policy that includes product insurance. “Such best practices help instill greater faith in online retail among consumers while protecting their rights,” he points out.

According to Maqbool, Tejuri.com is leveraging its store infrastructure to reinforce its omni-channel credentials. “Most of our retailers have between 2-to-20 stores.  We are building system integration between them and the Tejuri.com platform to enable a customer to return, replace or alter a product bought online from a particular retailer at a physical store belonging to the retailer,” he explains.

Panjabi is curious to know how online retailers handle crisis management issues. Does remaining open 24/7 offer challenges as well as opportunities?

Maqbool has an answer to offer. “We believe in prevention with proactive management of data, trends and customer behaviour. We respond empathetically to disgruntled customers. This may even require us to deliver products directly at their doorsteps,” he points out.

Ataya says although products are available 24/7, customer service doesn’t have to be provided round-the-clock for an online concept like Mumzworld.com – at least not as of now in this region. “Nevertheless,  we are customer-obsessed when it comes to crisis management and have put in place the right supply chain, with trained staff to handle customer queries in the best possible manner,” she observes.

Kassim agrees. “It’s only certain elements of an online business that have to be 24X7 and fulfilment doesn’t necessarily figure in the equation yet, although we try to ensure complete satisfaction to avoid confrontation with a customer. However, some customer services have to be handled in a timely manner. For example, there’s no point is responding to a tweet after 12 hours. The response has to be immediate,” he says.

“People definitely want to explore a lot of things, although they aren’t particularly deep diving when it comes to online. Online retailers need to use social media to engage more closely with consumers, providing them greater amounts of information rather than simply cataloguing products and prices. Traditional retailers need to optimally leverage advanced technologies to encourage consumers passing by to enter their stores. For example, people flocking to malls constantly access their smartphones and tablets. Retailers need to think of innovative ways to bring such consumers into their stores,” Kassim concludes.

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