Until a few years back we were very happy with the way things were: go to the mall & buy your things, stand in bank queue and transfer funds etc. But these basics started changing with the arrival of smart phones and deeper internet penetration. In a short passage of time, a lot of things that required us to physically engage, like shopping etc, started happening through our laptops and mobile phones. And the rest as they say is history. Now there are countless startups that are offering you services at the click of your phone. A lot of our convenience today is because of technology. Today your phone is your bank, grocery store, your travel agent, your property agent and what not. These technology based services are enabling better customer engagement, creating new revenue streams and delivering data driven business insights. But are these reasons enough for you to set up an online business?
The Offline To Online Journey
Yes, technology and mobile based internet penetration are redefining the business dynamics across sectors. But should you be in the rat race to start an online business? The answer to the question is that, while taking any business or process online you should not be merely digitizing the process. Your process of digitization should also remove an inefficiency in the existing system. This was primarily the premise of starting up NoBroker.com. We did not want to become an eBroker like the existing real estate portals. We wanted to address a major customer pain point and address the information asymmetry in the sector with the help of technology. And because of this problem solving approach, customer acceptance was very high.
So while you are planning to move any business or process online, it’s important to remember that you should be addressing a customer pain point in the existing system. A famous case in point here is that of Amazon. It started the concept of selling ‘long tail products’ like books online. This made sense as books are standardised products with large enough SKUs which can not fit in a typical bookshop. So the idea of storing them in low cost warehouses in the city outskirts and delivering them to home-order made perfect sense.
But Can Offline And Online Segments Co-Exist?
When ecommerce sites made shopping for us as easy as a click, we all thought that there is no looking back. Well not always. The ecommerce giant Aamzon ran into trouble with a high-end kitchen knife manufacturer, Wüsthof. It stopped selling through Amazon because it realized that price-cutting at Amazon can give a short term jump in sales, but in long term it may mean erosion of margins and closure of retail shops which drive the sales process of new line of products. What this tells us is that things are not just black and white. If we look at the retail sector, both the offline and online spheres are now beginning to intersect. It’s no longer a question of online vs. offline; consumers want to be able to shop in-store or online, whenever they want, wherever they are. They want to experience products as well as have the comfort of ordering them sitting at home. It’s all about what they want.
Many online startups are realizing the benefits of having an offline presence. Both online startups and brick and mortar stores are looking at ways to give customers a seamless shopping experience. Also, online players are creating offline experience zones where customers can have a look and feel of the product. All of us have seen Urban Ladder and Pepperfry furniture displayed at Indian airports. For certain type of product categories it makes sense to have a strategy where the customer experiences the product, especially the newly launched sub-product line at a physical store and then places order by browsing through a digital catalogue in the same store. This presents a scenario where both the customer and the brand experience best of both the worlds: Online & Offline.
The point of purchase is losing its significance in this omni-channel environment. The focus is on showcasing your product to the customer in the best possible way and selling it at a competitive price. Whether the sale happens over the counter or through a click will depend on the customer.
In conclusion I would like to say that technology is changing the way we did a lot of basic things like shop, eat, entertain etc. The biggest factor driving this change is the digital move is increased internet penetration through mobiles. Whatever you are doing is correct to begin with if the technology is helping solve a customer pain point or serve a latent customer demand.