E-commerce vs. Brick and Motar

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E-commerce vs. Brick and Motar

#1 Postby ANKITSHAH » Mon Dec 15, 2014 5:07 pm

E-commerce firms such as Flipkart, Snapdeal, Myntra and Jabong are confronting resistance from all stakeholders of modern retail i.e from consumer goods makers and distributors to offline retailers—as they try and grab a larger share of the consumer’s wallet by showing attractive discounts. The brick-and-mortar retailers are the worst hit by the boom in online shopping, are putting pressure on brands to help them compete more effectively with e-commerce websites. The retailers are not happy with the enormous discounts offered online. Although e-commerce accounts for less than 1% of the total retail market in India, it is by far the fastest growing retail channel. Last week, Flipkart said it was on course to sell goods worth as much as $1 billion annually on its website in the year to 31 March, achieving its target a year in advance. A large supply chain and logistics network that does not require middlemen in most cases, online shopping sites have been enticing consumers with aggressive discounts thereby increasing the profitability. Fashion brands have already noticed Indians adopting the practice of showrooming in which consumers browsing merchandise at a store and then purchasing the goods online because of attractive discounts. When online was small, this whole thing wasn’t a big issue. Now, because of the fast growth, brands are fast realizing that prices and demand may be dictated by the online channel.
Ultimately we see that both brick and mortar stores and online merchants have certain pros and cons that differ based upon the types of products offered and the specific needs of the individual shopper.
Brick and mortar stores have their benefits, and certain product categories are better suited to traditional retail environments. A core benefit is the ability to touch and see objects in person. Online stores can provide the consumer with pictures and videos, but actually holding the product can provide some tactile impressions that simply cannot be matched online. Other benefits of Brick and motor involves instant buying of an item and getting it home immediately. Also there is no shipping cost associated. Besides this the buyer can always talk to the retailer for any problem in the product and get his grievances addressed immediately.
Coming to the benefits of the online shopping, we can majorly divide their benefits into pricing, convenience and availability of product.Because of less intrastucture cost, the online retailers are able to give heavy discounts on the products sold.Also additional proce discount is generally provided if the buyer finds discount coupons or coupons for free shipping through a reputable coupon site. Some sites/states do not charge sales tax. For many consumers online shopping removes the temptation to impulse buy or to be pressured into buying a more expensive item. Besides this, daily deal sites offer cheaper pricing through the leverage of group buying.
There are additional benefits of consumers in online shopping such as there is no boundaries of state or other geography since the shoppers can make purchases from stores based all over the world,online shoppers do not need to drive anywhere and use up gas or risk damage to their vehicle,items are delivered right to the door, in a day or two if desired, the purchasing process can be very quick, with some selections taking just seconds to order the goods.
Some frequently purchased items can be setup for automatic ordering at set intervals, further saving the consumer time and energy. Shopping can be made much convenient during bad weather. Certain items such as personal health items, medications, and other purchases can be done discretely; the shopping is free from the pressure of sales staff. Handicapped individuals and seniors who have trouble traveling appreciate the ease of online shopping.Since they are not constrained by any boundary, online stores can offer a nearly unlimited breadth of products. This massive amount of choice provides consumers with the ability to find any item and conduct fast price comparisons. The local store simply cannot compete with the scale of products offered around the globe, so smart brick and mortar stores focus on quality and adding value to the sales experience.
Online product comparisons allow consumers to gauge pros and cons and make more informed decisions. Consumer reviews and testimonials provide context to various items. Custom products are easier to manage and order online. Instant customer service tools such as live chat mean consumers’ questions can be answered immediately. Email alerts and other notifications can be setup to tell consumers when out of stock items are available.
The uncountable profit of online retailers clearly is a challenge for the brick and motar companies. However, this is nor true for all the retailers. Gaint retailers like Wal-Mart’s has many more items than online retailers and hence their sales are not going to get hampered because of this. But for small retailers the only way to survive is to make extraordinary good relationships with customers by providing good services. Even if the prices are on a higher side, the consumers may prefer brick and motar shops if they have a trust on the retailers.

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