November 3, 2015
Indian economy has transformed from an extensive controlled economy to a liberal market driven economy. High-income opportunities, changing attitude, international exposure and changing lifestyles are the key drivers for fast evolving Indian consumer behavior. Indian retail industry is witnessing a paradigm shift as the sector is getting organized and consumers are seeking a one-stop shopping place with convenience and entertainment, from the cozy beds at homes to shopping on the go with mobile applications. Professionally managed and separately owned retail organizations are the face of today’s retail sector, which has further advanced into e-commerce business. India is stepping into a new era of ‘Retail Chains’ and e-stores, from the traditional neighborhood ‘Kirana Stores’.
Economic growth, changing lifestyles, urbanization, women’s participation in economic activities and the spread of IT and widespread use of technology by Prime Ministers, Digital India push are the some of the key factors for the growth of the retail sector and e-commerce sector. With Liberalization, Privatization, Globalization and modernization, a modern competitive business is based on understanding the mind of the consumer and providing the consumer the products and services that he wants. A consumer has multiple choices from unorganized retail to modern shopping experience to logging on to a website and placing an order. This is said that “the customer is the king”, but he is not king, he is God, because king can die but a customer never dies in a business. Hence, it becomes important to know why customer prefers to buy. How does a customer buy it? When does a customer buy it? If retailer is able to match the customer expectations, then he can improve his business.
E-commerce is booming in India. Internet users are also increasing rapidly, especially mobile internet users. In rural areas people are starting to use internet for online shopping. These factors are driving force for e-commerce giants. Different age group consumers are showing different attitude towards online shopping, Indian youth showing positive attitude towards online shopping. Females are more interested for online shopping, the general shift is happening and so retailers should understand changing consumer behavior and key factors which influence shopping behavior. With the help of technology retailers can enhance their sales of products through online mode.
There are various factors that are encouraging online shopping in India. Firstly, Internet users and mobile internet users are continuously increasing in India. Now Indians are spending more time on Internet. Consumers prefer online shopping because of busy lifestyle and complex traffic on road. Also with a click a consumer can find almost every product online. They can buy vegetables, pets, furniture, car etc from same website. To add, different online shopping websites give different offers to consumers so that they can attract consumer traffic towards their website. Example – recently Lenskart.com giving first frame free to consumers or the Big Billion sale of Flipkart. Sometime, products can be purchased at lesser price than the offline markets and not sacrificing the quality. Keeping in mind that in this age cyber security is of utmost important, online shopping websites are giving protected online banking services to consumers so consumers are less afraid to make payments online. Conveniences like cash on delivery (COD) feature are launched by online shopping websites for those consumers who are afraid to make online payments or for those who have no knowledge on how to pay online. Furthermore, some websites are giving coupons of different websites to the consumers. Consumers are able to get great discounts after redeeming such coupons.
According to various studies, online shoppers purchased clothes and accessories top most than electronics products. The frequencies of purchase of products are high for cloths & accessories, beauty & personal, books, hotel reservations. Electronics are searched most on internet but cloths & accessories are purchased the most by online shoppers. Because of high investment & risk involve in purchase of electronics, consumers are only searching for information about electronics but for purchase they are mainly relying on retail store. Online retailers should pay attention towards different factors like price, attractive website design, user friendly website, secure payment gateway options, refund, cash on delivery options, lucrative coupons & offers. Cloths & accessories, beauty products, hotel reservations, books and electronics as these are more profitable categories.
The idea of consumer behavior is changing is not new, what is different, however, is the way in which they are changing, ease of shopping has given a totally new direction to shopping experience. This presents a business with a substantial problem, as to whether they are to apply traditional business models, premised on size and scale or to move to a more complex and fragmented reality.
While Retailers, must meet the expectations of consumers accustomed to buying goods online at competitive prices and having them delivered quickly, they must do so while creating offerings that are distinct enough to address individual preferences while still meeting expected standards of social and environmental responsibility. For many, juggling these demands may seem like trying to square the circle, and business leaders might feel baffled by the challenge. The answer lies in responding to change with analytical skill, an adaptive mindset and an agile organization, successfully amalgamating the scale advantages of the large with tailored approach of the small, the traditional benefits of the old and cutting edge of the new.
By achieving the right balance between sets of extremes, businesses can turn consumer change to their advantage.