Leading online stores are realising the importance of having a physical presence in terra firma. In a surprising roundabout, online stores are establishing physical stores at different locations. Records have shown that the move is paying good dividends. Supam Maheshwari, CEO of baby products brand First Cry, says,
“We get significant revenues from our offline business and we are already EBITDA-positive (earnings before interest, taxes, depreciation, and amortization) collectively.”
Among the online brands that are focussing on putting up physical stores include furniture store Pepperfry, eyewear store Lenskart, jewellery store CaratLane and lingerie store Zivame. Zivame and CaratLane have basic stores, and stock a smaller number of products compared to the others.
Thinking ahead to keep up with the times
Lenskart might not be surprised with its good performance. The company had announced in November that it would be adding 250 physical stores per year to its arsenal. The company intelligently chose to focus on the offline zone as well, so as to not lose out customers who like the brands, but do not shop online for different reasons.
Richa Kar, Zivame’s founder said on the company’s move to open 100 physical stores in three years,
“Today, anyone can open an online store. Where is the quality audit? Physical stores will help us deal with the credibility issue.”
Likewise, Pepperfry and FirstCry had their plans for physical stores on track.
Pepperfry’s CEO Ambareesh Murty feels that the offline stores are their best marketing channel. He says,
“It helps us provide that reassurance to customers that we are a specialised player and translates to trust in the brand.”
Murty also admits that the possibility of purchase is higher in physical stores. The online brands also give out franchises to entrepreneurs for a fee to open physical stores.
Nod from experts
Analysts feel that it is important to have a physical presence apart from an online store. According to Devangshu Dutta, CEO of retail consultants Third Eyesight,
“The retail business is not divided in black-or-white between old-world physical retailers and the upstart online kids – at least the consumer doesn’t think so.”
TCM Sundaram, MD of IDG Ventures agrees.
“These players are already established leaders in online space. The question they are addressing is how you redefine the market to grow because only 5% of Indian customers have bought online,” says Sundaram, whose company has invested in Zivame, Lenskart and Firstcry.
The competition between online and offline is heating up. It looks like omni-channel will be the only saviour.