Online retailers betting on offline expansion
2 min read . Updated: 19 Aug 2020, 06:41 AM IST
PremiumCompanies are spreading their offline footprint to build base in categories where touch-and-feel experience is key
BENGALURU : Bengaluru: Etailers are betting big on expanding their physical presence despite the disruption in offline retail, following the covid-led lockdown and beyond, to cater to the demand from smaller cities, and as experience centres to further extend their reach using the omni-channel model.
Beauty retailer Nykaa has opened 3 stores in recent weeks and looks to open 10-15 more depending on how the market evolves.
Founder and CEO Falguni Nayar said offline play is essential, especially for luxury and premium categories, as customers like to experience the product before buying. The startup retails premium beauty products through its offline stores.
Furniture e-tailer Pepperfry currently has over 60 studios across 20 cities and plans to expand to Tier-2 and Tier-3 markets through its franchise-owned and franchise-operated model. It will open around 20 more studios by next March, seven of which are underway in Guwahati, Agra, Raipur, Patna and Kozhikode among others.
Ashish Shah, co-founder and COO, Pepperfry said the studios or stores are a significant consumer touchpoint for the brand and are witnessing a revival in footfalls after unlocking.
“The studios are already contributing to around 20% (compared to 38% pre-pandemic) of the overall business. This is due to our exceptional marketplace model which allows consumers to choose from the portfolio of products available coupled with the consultation services at our studios and convenience of online order placement," Shah added.
While bulk of e-commerce volumes come from top 30 cities, more than 60% of e-commerce volumes are likely to come from smaller cities in the next five years, as per estimates by management consultancy Alvarez and Marshall. Hence, it is an imperative for e-commerce businesses to build their seller base and delivery reach in smaller towns.
"While offline retailers have to embrace online as a bid to survive the disruption that retail industry is witnessing globally, e-commerce firms are spreading their offline footprint to build customer connect especially in categories like food and grocery where consumers like the touch and feel experience, build their own sourcing channels/ private label brands and enter into B2B e-commerce channel which is under-developed," Manish Saigal, MD, Alvarez & Marsal India.
Meat and fish delivery portal Licious, which has two offline experience centres in Bengaluru and Gurugram is also looking at ramping up its offline capabilities significantly in the near future, said co-founders Abhay Hanjura and Vivek Gupta.
Jaipur-based online custom furniture startup WoodenStreet, which recently raised $3 million in funding, has opened 2 new stores in Hyderabad this year and plans to open new stores in Kolkata and Kochi this month. It is also planning to open a store in Mysuru and Coimbatore each by the year-end.
WoodenStreet has expanded its offline presence to more than 25 experience stores over the last 5 years.
“The stores serve an important role where customers can visit and get that much-needed ‘touch-and-feel’ experience that helps them get a clear picture of what they are getting in terms of material and quality. The stores also help in cresting and brand presence in a city while increasing visibility," said Lokendra Ranawat, founder & CEO, WoodenStreet.
Ayushi Gudwani, founder, FableStreet, which currently has one store at DLF Promenade in Delhi said said it intends to go offline over the next few years with an overall strong omnichannel strategy (online to offline).
