Advancements in technology, logistics, payments, and confidence, combined with increased internet and mobile connectivity and customer demand for convenience, have generated a massive global online shopping arena, where millions of customers no longer ‘go' shopping, but literally ‘are' shopping - at any time and from any place. Hyperlocal Market Model, Business-to-Business (B2B), Business-to-Consumer (B2C), Consumer-to-Consumer (C2C), Consumer-to-Business (C2B), Peer-to-Peer (P2P), and so on are all examples of eCommerce.
Technology is transforming the retail climate, as online sales are rising ten times faster than offline sales. However, physical stores are still important for sales and brand management; in fact, a number of online-only startups, such as Rent the Runway, Bonobos, and Birchbox, have expanded into retail in recent years. In this ‘customer-centric' world, startup founders must be acutely aware of when and where their future consumers make purchasing choices (both consciously and subconsciously) during their ‘always on' shopping trip.
The continued year-over-year growth in online shopping has been fuelled by a new generation of customers who want more convenience, value, and choices, which has been enabled by technology. Consumers today shop whenever and wherever they want, and in a truly global online marketplace, goods can be bought from retailers and suppliers all over the world—or from those with no physical retail locations at all. On the other hand, as retailers aim to compete on all fronts, we are constantly seeing creative marketing campaigns, as well as emerging technology such as smart shelves, robotics, self-checkout, and immersive and virtual reality, being introduced in stores.
One of the most important decisions a startup founder can make is whether to operate a retail offline business, a modern online business, or a combination of the two.
To survive, it is said, one must adapt. COVID-19 and lockdowns over the last few months have forced various startups overnight to digitally transform their operations in order to avoid business operations collapse. Numerous industries have adapted online modes of activity, including
Healthcare: Where web-based health services such as the use of telehealth have soared in popularity; real estate-where real estate agents have been selling property using virtual tours; and education.
Education: Online education has been widely accepted across all age groups
Entertainment: Pandemic closures compelled the entertainment industry to adapt;
Financial services: Customers have embraced banks' and financial institutions' digital offerings;
Fitness: Personal trainers have developed home workout schedules and begun offering 1:1 virtual video coaching sessions through platforms such as Zoom;
Restaurants: Delivery apps such as Zomato, Swiggy, and alternative local delivery services have stepped up their game in order to entice restaurants to use their service.
Trust is a major factor in online business
Customers dealing with solely online companies are often unaware of who they're dealing with, making them more hesitant to be a first-time customer with an unknown company. To be honest, there are thousands of scam sites out there, and unscrupulous online merchants defraud people every day. Serious online businesses must invest in establishing customer trust in order to build long-term relationships.
Some businesses simply don't work online
Being online has the benefit of massively expanding your market, as you can enter a global audience of billions. While all companies should advertise and have an online presence, some percentage require physical presence. Any business that needs you to be physically present in a specific geographic location at specific times on a regular basis is not ideal for being run entirely online.
The scenario of online channels wiping out offline ones seem to be difficult since the retail industry has shifted into the concept of Online to Offline (O2O). Online and offline channels are complementary for achieving success. Amazon’s Whole Foods deal action to strengthen its O2O strategy and major online adoption by retailers during pandemic shows the interest of the e-commerce giants and offline business respectively in moving to a business combining online & offline channels. Using online marketing and advertising, retailers find potential customers online. Their awareness of products and services rise and as a result they make purchases in brick-and-mortar stores.
Increasing influence of social media
The rise of mobile shopping, the influence of style bloggers, and the omnipresence of social media like Instagram and Pinterest has dramatically changed the way consumers make purchasing decisions, and how they affect those around them. Retailers, constantly faced with new purchasing dilemmas to invest on in-store innovations and online platforms, are feeling the pressure to incorporate technology and social media strategies into their stores to continuously track and influence the customer journey.
Customer loyalty is key
The founders of startups have to cover the basics first to build loyalty with millennials. This means epic customer support and rapid individual responses across various channels, such as social media and messages. Enjoyable and insightful communication elements may function well or exclusively. For instance, some of the footwear brands use limited editions to build brand and product. Millennials line up physically and digitally to get their hands on these exclusive products. Online element plays a big part in the customer journey or ROPO (research online, purchase offline).
Creating technology-enhanced online purchase experiences such as augmented and virtual reality or 3D mode can be as essential for customers as providing convenient and personalized ordering, payment and delivery options. Hence, the question is no longer about online vs. offline, but how to create a memorable brand and experience for customers across all channels, including their phones.
(Disha Singla is Co founder, Supreme Incubator-a seed stage startup incubation programme)