Offline retailers do better than online; reduced discounts cited as a factor

This sales season, the tables seem to have turned in favour of offline stores. In a situation that could cause worry for online sellers, reports say that offline stores have recorded a higher sales percentage compared to their online counterparts. Brick and mortar stores have recorded a double figure increase in their sales.

This season, online stores have refrained from handing out the huge discounts that they have given in the past. This could be one of the factors that have tilted the scale in favour of offline stores. Most online sales have been giving limited discounts this year. The deals have been limited to companies’ own fashion labels and older models of mobiles and gadgets.

Offline retailers confident of good sales

Most offline retailers are upbeat on their sales.

Kishore Biyani of Future Group says, “Ecommerce is still a minuscule of the entire market, except a few categories like mobile phones, so there is not any impact on business.”

According to J Suresh, CEO of Arvind Lifestyle Brands (that sells Gap, Calvin Klein, Wrangler etc.), “With fewer discounts by ecommerce and new season merchandise offered by physical retailers, we are seeing same-store sales growth of 8-15%.”

A study by Ipsos has shown that nearly 81% buyers would head to a physical store during festive sales.

Offline brands began their promotion earlier, to offset online competition. While most retailers are certainly affected by online sellers, the impact seems to have reduced.

Indian online sales is only 1% of total retail sale in Asia

In a study conducted by Gartner, it shows that Indian online sale contributes only 1% to the total online sale in Asia. Low internet penetration is ensuring that mobile transactions are slowly racing ahead of the conventional desktop. In 2014, 40% of ecommerce came through mobile. This figure is set to hit 50% in 2015, said the study.

What will help online sellers

The Gartner study suggests five things that online sellers should follow to improve their performance. They include – customer experience, product range, delivery, payment and after sales service. It wouldn’t hurt to offer reasonable discounts as well.