tug of war between online and offline retail

A Study on:Tug of War

Between On and Offline in retail

Authored by Prof. Prakash Singh

Area and Title Selection Criteria

• Subject Area of the Case: E-Commerce

• Title Selection Criteria: There is a war between offline and online retail giants and since everything is fair in war and business and hence it has been titled as

“TUG OF WAR”

Protagonist Selection Criteria• Online Retail is the Protagonist of the

case.• The reason for this is that as a Hero they

are showering the market with attractive product and price offers to the customers.

Data Source and Story Development for Case

Construction• Information available at

www.rediff.com/business/report/online-retailers-are-here-to-stay-despite-odds/20141106.htm

• Online available at www.bigbazaar.com• www2.deloitte.com/us/en/pages/consumer-business/

articles/2015-retail-outlook.html• Information accessed from www.pwc.in • http://inc42.com/resources/what-does-the-future-hold-

online-vs-offline/• http://www.forbes.com/forbes/welcome/

Short Term and Long Term Issues

SHORT TERM ISSUES LONG TERM ISSUES

Price War Footfalls & LoginTaxation Availability Quality LogisticsOperating cost Convenience

Study Analysis The line “Everything is fair in love and war” is

very suitable for the tug of war between online and offline in retail sector as both players of on and off are adopting various marketing strategies to attract and retain the customers and there are clashes of marketing offerings which is making the king of the market-customer delighted.

There are some identified gaps between both of and on line retailers which lead to tug of war among them. These are mentioned as below:-

1. Online vs. Offline-Online has no any geographical limitation while offline has limited geographical boundary.

2. Impersonal vs. Personal-Customers are unknown to online and they even don’t visit the company while in offline, customers are known as many of them are regular visitors and they know about the company.

3. Limited choices vs. Much more choice-Customers have limited choice on online and have much more choice available at offline.

4. Reverse Logistics vs. No return.

5. Login vs. Footfall6. Quality vs. Cost-Quality may

be good in online retail while price of product are higher in offline than online.

7. No Renting vs. Renting8. No VAT vs. VAT9. No Stocking vs. Stocking10.24/7 vs. Fixed Duration

• For sustaining and surviving in this global competitive business world, all are in the hurry to differentiate themselves from others by hook or crook and only that would be the market leader who will be the fittest among all.

• From Big Billion Day Sale on Flipkart to Big Bazaar’s Saal ka Sabse Sasta Din, the war is on to acquire more and more customers in a short span of time are the current marketing strategies adopted by companies of marketplaces and market spaces.

48%

39%Lower prices/better deals than offline

Shop 24/7 online46%

46%

No need to travel to a physical store* 38%

Easier to compare and research products/offers than offline36%

33%

Wider variety of products than offline

Customer reviews of products available online Better product information than offline

27%

23%

24%

21%

21%

19%

Wider variety of return options* 13%

2014

2013

Receiving a promotion via email or text/SMS message (e.g.

coupons/vouchers) Looking for a particular brand/product

Some products only available online

13%

11%

12%

15%

12%

11%

Social media interactions via Facebook, Twitter, etc. (e.g. sharing a 6%

link, liking a brand, or posting a comment) 6%

Other 2%

1%

23%

77%

Due to the above factors, 77%

customers have visited offline

store only to browse products but

decided to purchase online while

23 % have visited to buy from

there.

•Whether the sale happens over the counter or through a click will depend on the customer. •Indian retail sector is in the phase of transformation from offline to online and this is a good sign for the market as it is beneficial for the customers. •The tug of war between the retail industries have created a new history as there is price war and showering of offers in the market and make the customer delighted. •Once the retailers understand their customers in a better way, once they know what makes them tick, they will be able to put the right package before them, whether that’s online or offline.

Contact Number- 8888884030E-mail Id- phdpsingh@gmail.com Website- www.prakashsingh.co.in