Bengaluru: Adidas Group India is planning to launch a mobile app for shopping by December, primarily to drive customer engagement through content and loyalty programmes, and boost its online sales.
The move is significant as it may be a harbinger of increasing fragmentation in online retail for fashion over the next few years. At present, most brands, including Adidas, do not have independent shopping apps and are available on online fashion portals, such as Myntra and Jabong, and marketplaces like Flipkart and Amazon, among others.
Adidas’s push towards strengthening its online presence is part of the efforts by brands and offline retailers to adopt a so-called omni-channel strategy, where customers have access to products across physical stores, on their mobile phones and on websites.
“Our engagement with consumers do not end in incremental sales or how many omni-channel stores are rolled out. Shopping is just a small fraction. For engaging, we are planning an app and rewards programme for loyal customers to increase their engagement with the brand. Engagement is what we are headed to,” said Abhishek Lal, senior e-commerce director for Adidas Group in India.
The company will roll out separate apps for Adidas and its subsidiary Reebok India.
The online channels on which Adidas currently retails contribute 10%-15% of the company’s overall sales, Lal said.
A few other brands are already building their own online stores to reduce their dependence on the likes of Myntra and Amazon.
Madura Fashion and Lifestyle, which owns brands such as Louis Philippe, Allen Solly and Peter England, operates online retail store Trendin.
By launching its own app, Adidas is also trying to tap into social commerce in online fashion stores. The social commerce refers to the strategy by firms of offering content and creating communities of users for fashion. It’s primarily an attempt to hook users using alternatives other than discounts.
“Social commerce is complementary to pure play e-commerce and also the way forward for us. There is no history of a single brand app yet; so, it is very difficult to assess what the outcome will be,” said Lal.
According to industry experts, with aspects such as logistics being handled by specialty third-party firms, the ease of launching online stores for brands has only increased. Besides, brands can leverage their network of retail outlets to enhance distribution and last-mile delivery.
“Even in the offline world, they sell through multi-brand stores, as well as have their own stores. Exactly the same will happen online. The online marketplaces may have multiple asks like listing fee, advertising fee etc. Especially, logistics, until some time ago, was seen as a very difficult task and now there are service providers who handle everything for you,” said Harminder Sahni, founder at Wazir Advisors, a consultancy firm.
Adidas has also expanded its omni-channel presence since the launch of the initiative in early 2015. By December, Adidas plans to bring about 400 stores under the omni-channel loop. The stores under the omni-channel strategy have witnessed about 3-5% increase in revenue and the number is expected to double in the next 12 months.
“There has been some impact on revenue because of omni-channel. There were a lot of sales lost because sizes were not there in stores, so a lot of them got converted. Also, a lot of cross selling happened. We have a brand called Neo which is available only online. So, a lot of people walked into the stores and bought Neo on the tab. That is an upsell opportunity,” said Lal.