For Indian consumers, ‘touch and feel’ factor continues to remain a crucial part of shopping: Manoj K. Agarwal, CEO, Viviana Mall

EE News Desk Nov 22, 2019

Evolving customer behavior, rapid urbanization and technological advancements are driving change in India’s retail landscape. With consumer aspirations hitting a new high, greater spending power, metropolitan cities are no longer the focus area, and almost all brands – from mass-market to luxury – are expanding to tier-II and III cities leading to demand for retail spaces.

Even e-commerce players, who have entered Indian markets in the last 10 years, are having a relook at their business strategies. Hungry to tap into a bigger pool of consumer base, they are rapidly adding new locations and services and several of them have also started opening brick-and-mortar outlets to provide ‘touch and feel’ experience to their customers.

“India is expected to see more than 10 million square-feet of additional retail real estate in 2019 – three times that of 2018 – as the sector continues its booming growth across the country,” read a JLL report released earlier this year.

The report on the retail sector went on to add that investors have poured $1.6 billion into retail real estate development across India in the past four years – a whopping 1094 percent increase from the four years previous.

In Mumbai, in the last two months, leasing activity was witnessed in select malls including Viviana Mall and certain high streets.

Recently, the Government of Telangana decided to convert more than 100 major residential roads into commercial in Hyderabad. This move is likely to boost new high-street retail spaces and commercial malls in Hyderabad, which will include online brands as well who are looking at a mix of online and brick-and-mortar strategy.

This omnichannel strategy helps brands not only in boosting sales but also allows to have a direct dialogue (and feedback) with their existing as well as new clientele.

“For e-tailers, having a showroom helps in increasing sales not only online but also offline. Having a store in a mall helps in enhancing brand recall value. Window shoppers, at times, end up purchasing products impulsively, which they may not do online. The purchase decision is also influenced by the fact that they can touch & feel and experience the product. In case of personal wear items, they can also see it how it looks on them which is a very important. We have many online players who have taken up space in our malls. Some of the prominent e-tailers that we have with us are Lenskart, Amazon (Alexa) Kiosk, Nykaa, Craftsvilla, Zivame, Prisma” Manoj K. Agarwal, Chief Executive Officer (Malls), Viviana Mall.

On the strategy, a recent KPMG report stated, “Omnichannel retailing is the new retailing and selling paradigm that has new touch-points for customers. It is about customer convenience and customer expectations. Retailers are opting for many channels to maximize sales.”

For Indian consumers,‘touch and feel’ factor prior to making a product purchase continues to remain a crucial part of shopping. Often, shoppers do product research online before stepping inside a store for offline purchase. Therefore, opening a chain of brick-and-mortar stores provides e-tailers the opportunity to bring their brands closer to shoppers in the form of ‘experience centers’.

Another reason for adopting the omnichannel strategy is that the e-tailers can see the market potential that remains locked due to the language barrier as websites and mobile apps are designed for English reading shoppers.

Some of the leading brands that have embarked on the brick-and-mortar or omnichannel path include Amazon, OnePlus, Zivame and IKEA.

After tasting success with the asset-light model of online sales, smartphone maker OnePlus launched its first experience store in Bengaluru around two years ago. Now, the Chinese company is planning to aggressively expand offline to capture a bigger pie of the market and also to offer other products like smart TVs. Even Xiaomi has made its offline entry in 15 Indian cities with over 1,000 sales points as it expects its online sales to dip in the years to come.

Likewise, Zivame has also adopted the omnichannel route and has about 31 outlets all over the country. In a year’s time, it is looking to take its store count to over 60 and have its footprint across all major malls and high streets, with a particular focus on tier-1 cities.

The increasing adoption of omnichannel route by e-tailers indicates that shopping centres and malls are still very relevant to the businesses and in the years to come, the demand for spaces at malls is unlikely to diminish. As per Anarock Retail data, nearly 13.6 million square feet of new mall space is likely to come up in the Mumbai Metropolitan Region alone by 2022.

All these data points, the research on omnichannel strategy and demand for new mall space are corroborated by KPMG in its report – E-commerce retail logistics in India. The report states that newer business models such as omnichannel retailing and delivery through local retailers are expected to become more prominent in the coming years.