Retailers' new tactics to take on e-commerce

2014 may well have been the year of e-tailers. But concerned about their eroding bottomline, offline retailers have come up with personalized tactics to draw new and old customers. With white good products also taking the online route, brick and mortar firms have taken a heavy beating this year. “It’s never a fight between online and offline. But the disruptive pricing strategy of e-tailers is the most worrisome trend,” said B.A. Kothandaraman, chairman and MD of southern retail giant Viveks Ltd. “When online folks offer huge discounts below cost price, how can offline retailers sustain,” he asked.

Though online is only 10 per cent of the total $500 billion retail market in India, the new stream has had a free run in 2014 and pegged to touch $16 billion by 2018. Unfazed by the onslaught, retailers are trying to encash their biggest asset – human resource. “The biggest advantage and disadvantage of e-commerce is its impersonal experience. We are trying encash this by investing on sales force training and Big data,” said D. Sathish Babu, MD of Univercell.

“We spend a considerable amount in doing data analytics about the customer’s buying preference so that when he walks in to the shop, the front office salesman is able to suggest suitable products for him,” he added. In fact, Retailers Association of India has launched free 4-6-week training programmes to hone etiquette, communication and computer skills of shop floor assistants.

Adopting the FMCG retail strategy, as Spencers, Reliance Fresh and More, white good retailers too are looking to garner a share of the market with own labels. “We have launched flat panel televisions this year and hoping to get into air conditioners next year. This way we want to hold a section of customers who go for durability than brand name,” said B.A. Srinivasa, CEO of Viveks Ltd. Further, retailers are also trying to value-add services apart from offering products to engage with customers. For example, while most apparel retailers already have their customized tailoring services, retailer Viveks has come up with a plan to offer servicing solution across all product brands.

Flush with Wall Street funding, Snapdeal and Myntra kick off 2015 with big sales

Flush with new rounds of investor funding, e-commerce companies, Snapdeal and Myntra, have kicked off their first sales of 2015, as they look to grab a larger slice of the Indian consumers' wallets.
Snapdeal, which is the country's largest online marketplace, kicked off its "End of Season Sale" last week, with the company already claiming to see a 150% jump in sales, compared to its overall GMV figures in the last week of December.

"We expect to touch lives of about 5 million shoppers during winter EOSS 2015 from 8,000 cities and towns across India with more than 20,000 sellers participating in the sale," said Amit Maheshwari, vice-president, Fashion at Snapdeal, in an email statement to ET.
Company representatives, while refusing to disclose the average daily sales it records during non-sales periods, however confirmed that Snapdeal expects to cross $1 billion in GMV from its fashion and apparel category alone, by the end of the current fiscal.
"There has been a massive movement of shoppers from offline market to online market and overall figures for EOSS 2015 are expected to sky rise as compared to previous years," Maheshwari said.
In October, Snapdeal claimed to have sold goods worth Rs 600 crore during its Diwali sales
The Delhi-based e-commerce company is not alone in its endeavour to stamp its presence among India's growing digital population.
Fashion e-tailer Myntra, too, held its "End of Reason" sale that closed on January 4, as it attempts to hit the $1 billion (Rs 6,000 crore) in gross merchandise value mark in the coming fifteen months, a three-fold growth.
Questions, however, continue to be asked of the country's e-commerce firms of their ability to handle large order volumes, their technology infrastructure and backend systems.
In June last year, Flipkart's much-hyped Big Billion discount sale was marred by technical glitches and recriminations from swarms of buyers angry and disappointed with pricing and availability of products.
"Most of our shipments 80% take less than 3 days. Service is becoming hygiene," said Ganesh Subramanian, chief operating officer, Myntra, adding, "About 70% of Myntra's deliveries are handled in-house."
In order to hedge customer traffic and prevent technical glitches, the Bengaluru-based company allowed only a limited number of users on its website at each time, which led to the delay.
"Our store is full of shoppers and our systems are operating at maximum capacity. We are trying our best to sneak you in. Please check back in a few minutes to shop at India's biggest fashion sale!" Myntra's web page said when a customer tried to access the website.
Needless to say, irate consumers soon took to social media to air their grievances, complaining about a 30 minute delay in login, order summaries not being acknowledged by the website after payment for at least a couple of hours.

However, the deep discount sales will continue for the foreseeable future as India's three major e-commerce companies - Bengaluru-based Flipkart, Snapdeal and Amazon - duke it out for top honours in an industry that is expected to touch $23 billion, according to a Nomura report, by 2019.
While Snapdeal raised $627 million from Japanese media, telecom and internet giant SoftBank in October last year, Flipkart, which owns and operates Myntra, raised a whopping $700 million from investors in December.
The online e-tailers could, reportedly, end up spending up to $1 billion on discounting products and marketing, as they try and out manoeuvre each other in a high-stakes game.
Snapdeal, which saw a 5X rise in revenue to Rs 168.1 crore for the financial year ending March 2014, however, saw its losses widen to Rs 264.6 crore over the same period, compared to FY 2012-13, according to documents filed with the Registrar of Companies.
Correspondingly, Myntra, which was bought by Flipkart in May 2013 for an estimated $370 million, reported revenue of Rs 441 crore, but saw losses shoot up to Rs 173 crore in the same period, compared to the year ago fiscal.

Snapdeal targets 50 pct women sellerbase by year-end

Focused on expanding its seller base, online marketplace Snapdeal plans to bring in more women to its platform and expects them to account for about half of its merchant base by the end of this year.
Currently, about 30 per cent of Snapdeal’s sellers are women entrepreneurs.
“A big focus for us this year would be to bring more women on board our platform. The online medium offers flexibility of working from home and also working hours. Many of these entrepreneurs are balancing their businesses and family life easily,” Snapdeal co-founder and CEO Kunal Bahl told PTI.
He added that women sellers are operating across categories like jewellery, apparel and home decoration and furnishing.
“Currently, about 30 per cent of our base is women entrepreneurs. We would want this number to grow to about half (of the total base) by end of the year,” he said.
Snapdeal has over 60,000 sellers on board and expects to cross the one million mark soon.
The firm currently houses over 5 million products across 500 diverse categories. Snapdeal reached more than 40 million people.
One of the biggest online marketplaces in the country, its competitors includes homegrown firm Flipkart and global giant Amazon.
eCommerce has taken India by a storm and has shown potential to grow further with the Indian government, firms and investors trying to capitalise on its popularity.
A report by consulting firm Technopak pegs the USD 2.3 billion e-tailing market to reach $32 billion by 2020.
Another report by consultancy firm PwC and industry body Assocham suggests that eCommerce firms are expected to spend up to USD 1.9 billion by 2017-2020 on infrastructure, logistics and warehousing.

Beauty startup Purplle.com gets funding from IvyCap

Purplle.com, an online beauty and personal care site, has raised its first round of institutional funding from IvyCap Ventures as the startup looks to scale up its services business and tap the international markets. Purplle's earlier investors include networks like the Mumbai Angels, the Chennai Angels and early-stage investment fund Blume Ventures.

Founded by IIT-Delhi alumnus Manish Taneja and IIM-Ahmedabad graduate Rahul Dash, the three-year-old Mumbai-based startup competes with the likes of Nykaa, another beauty e-commerce portal owned by investment banker-turned-entrepreneur Falguni Nayar, which had raised $3.4 million last year.

Talking to TOI, Taneja said the undisclosed amount of funds will be used to create a TripAdvisor-like marketplace for discovery of beauty and grooming products and services. "Our plan is to stay in the beauty vertical, stick to online and not diversify into offline and make our international foray soon. The focus going forward is to establish a hyper local beauty community, the discovery process will further lead to purchase of product and services," Taneja said.

Purplle has tied up with more than 7,000 salons, spas, skin care and hair care chains across Mumbai and plans to take that number up to 50,000 across 30 cities by the end of this year. "We hope to close 2015 with annualized sales of $30-40 million," Taneja said.

Besides specialized players, subscription-based discovery commerce players like Fab Bag inspired by US-based startup Birchbox also operate in the online beauty space.

Vertical e-commerce ventures in the beauty and grooming space haven't been able to scale up in size as horizontal biggies Flipkart, Snapdeal and Amazon have dominated the market by offering huge discounts and a vast selection. Urban Touch, one of the first startups in this category, which was acquired by Fashion and You for $30 million in 2012, was shut down a year later.

Vikram Gupta, managing partner of IvyCap Ventures, said, "We still believe several e-commerce verticals remain relatively untapped in India, and that niche players with rich content and in-built intelligent discovery features are going to be the next wave of value creation. Purplle is looking to be become the one-stop shop for beauty and grooming."

The Mumbai-based IvyCap is in the midst of closing its new Rs 900-crore fund and counts IIT deans, and IIT, IIM and BITS alumni as its anchor investors. It has deployed Rs 250 crore from its first fund across six startups that are mostly in the tech space.

20 ecommerce trends and predictions for 2015

Just before Christmas I asked our expert panel of ecommerce professionals to look into their crystal balls and predict the trends that are likely to shape ecommerce in 2015. 

Here are 20 such predictions, from mobile to multichannel...

The expert panel

• Matthew Curry, Head of Ecommerce at Lovehoney. 
• Dan Barker, e-business consultant
• Stuart McMillan, Deputy Head of Ecommerce at Schuh
• James Gurd, Owner of Digital Juggler 

Let's start with Dan Barker's predictions... 

Magento

Magento 2, which was first announced more than 1,500 days ago, will shake things up and even more medium-and-above sites will switch across to it.

Big phones

The era of giant phones arrived in 2014, and will finally bump up conversion rates on mobile a little more, and they'll become a real buying device for a lot more people.

It’s hard to split out the different iphone versions in Google Analytics, but this helps for iPhone 6+ Safari:bit.ly/sixplus .

The '6' is quite a lot like Samsung's S4 was. If you look at the numbers in Google Analytics for that device & the subsequent versions, you'll see they usually converts better than most other phones.

Social shopping

In 2015 someone will finally launch a social shopping platform that takes hold. Like Tumblr or Wordpress.com where your little blog forms part of a much broader ecosystem, and users can buy across multiple seemingly standalone sites through a unified basket or payment system.

But maybe that's just me hoping: there's been a strange situation over the last few years where many ecommerce platform changes have benefitted very small sites (eg. you can launch a website for almost nothing now), but  most digital marketing changes have benefitted really large sites.

Apps

Apps will resurge a bit further next year I think. A few years ago everyone launched an ecommerce app; a few took hold but most did not.

Quite a few of the bigger sites (mostly high street retailers) have relaunched much enhanced versions of theirs over the last couple of years, and eBay are constantly touting the phenomenal percentage of their sales that go through phones, I therefore think that these will come back again for smaller sites - especially those doing lots around content too.

Apple Pay

I'm still holding out on the idea that Apple will eventually launch a method of buying through any device using them as a payment provider.

I think they'll eventually launch something so that you can buy across any device using them as a payment provider. 

Enhanced Ecommerce

Google Analytics 'enhanced ecommerce' will be simplified and start to properly take off.

We're in a strange situation where Google has launched this - an incredible add-on that lets you see clickthrough rates on products in search & category pages, lets you compare add to bag rates within and across categories, lets you properly take care of returns and promotions - and yet it's too fiddly for most to get working right and so it's not used. I hope that will be fixed.

Cross-device tracking

Cross-device tracking will become more accepted and make a big difference. I’ve got my own cross-device tracking tool running on some sites, and it’s very interesting looking in particular how regular customers dot between devices, some buying across all three device types.

There are some patterns within it, the three most obvious being ‘time of day’, ‘first purchase’, and ‘size of basket’ all having an effect on which device users seem more likely to use.

#VATMOSS / EU

From a legal point of view things are a bit of a mess for small retailers selling digital goods. It seems once every two years an EU directive gets introduces that messes things up. #VATMOSS is the current instance of this, but I’m sure more will come in the UK.

Google

Google's stranglehold generally will continue. People think of it largely in terms of search, but of course its display network is huge, they pretty much own the web analytics market up to enterprise, and Gmail and the new tool ‘inbox’ are growing nicely.

Inbox and Gmail in particular changed things over the last year. Bundling of promotional emails seems to have had a little bit of an effect, and that is only likely to increase; they changed the way ‘opens’ are tracked in Gmail too which meddled about with things. Alongside all of that, whey will of course push even more heavily into ecommerce with search and do it all very well as they always do.

People have started to get a bit smarter around retargeting: using it purely for new customer acquisition, instead of blanketing everyone, or using it to win back customers rather than targeting those who were probably going to buy anyway.

Email

On email a bit more broadly: Email seems to have come to the fore again in 2014, with more and more sites adopting those 'Sign up for our newsletter!' pop-overs as soon as you land on the site.

I think that will continue in two different strands: Firstly people will get a bit cleverer with email as a customer acquisition channel; Secondly I think people will start using those overlays a little bit more creatively (or at least I hope so).

Matthew Curry's predictions for 2015...

Stripped-back ecommerce

I think we're going to start seeing some more stripped back experiences, built for speed, driven by tremendous search functions.

Content and commerce

I can expect to see less of the 'content ghetto' where editorial and product are distinct areas of the site.

Microcontent-ey user signals are already a mainstay of Product Listing Pages, such as 'New Arrival' or 'Exclusive', but I would expect to see product and content merge in these places, with guides, looks, and editorial combined with products on a single "listing" page.

Customer journeys 

There's a realisation coming that the customer journey does not start and end on their site, but is a much more fluid multi-site journey, not just ROBO but including social, blogs, offline media and yes, competitors. It's a flip from the old omnichannel thinking of "The customer comes to me in these ways" to 'here's how I am in the places my customer is'.

Finally, I would expect to see a wake up from the complacency of 2014. We've all got a bit too familiar and happy with the status quo this year, but if even the mighty ASOS can take a tumble by taking it's audience for granted, so can everyone else.

Complacency is a disease of the successful, we need to regain our hunger!

James Gurd on ecommerce in 2015...

In-house expertise

I predict a continued increase in investment in in-house capability, reducing the dependency on third party agencies and consultants to adopt a stronger gamekeeper policy. 

In-house analytics 

We'll see a growth of in-house analytical and optimisation teams in recognition that data is the key to success.

2014 has seen C-level decision-makers recognise the value of senior optimisation experts and put budget into recruitment, rather than spending big on an enterprise tool and using it only for reporting. 

Indeed, according to Econsultancy's Measurement and Analytics Report 2014, more than a quarter of client-side respondents say they have more than five employees dedicated to data analysis.

This is double the proportion in the 2013 survey.

 

Shift in mobile focus from apps to mobile web 

We'll see a shift in mobile focus from apps to mobile web, making sure the UX of web browsing on mobile devices is as good as possible, taking advantage of the latest tech capabilities so that the need for a pure native app becomes harder to justify.

The caveat here is that brands with an established existing app will continue to tap the app market until they see a seismic shift to their mobile site. Apps can still play a key role but I think we’ll see them as differentiated services rather than ‘our website in an app store'.

Stuart McMillan from Schuh: 

Smartphone traffic

I expect smartphone traffic to be 50% of our mix by peak trade next year and desktop to only be 25%. So, for us that means a continual push towards mobile excellence.

On the subject of mobile, I expect the number of native app downloads to reduce, certainly in the retail sector.

Multichannel integration

I expect further multichannel integration, with a continued rise of Click and Collect type services, although many retailers will struggle with legacy systems and unable to fully realise a single view of stock and fulfil immediately from any location.

Those that can, will start to make better use of products such as Google’s Local Inventory Ads.

Delivery

Delivery services will also improve; deliveries taking longer than three days will become more unacceptable.

Testing and CRO 

Lastly, I expect that there will be a widening gap between those that test their websites effectively and those that don’t, there are going to be many good and bad examples for Econsultancy to talk about!