If we compare today’s consumers with those of 10 years back, we would find one key difference: they are more informed, more empowered and definitely more connected to the world around them.
And the reason for this is quite well-known. Increasing internet penetration and cheaper smartphones have already played their part in enhancing this new generation digital values, with a cherry topping from wearable devices and Internet of Things (IoT).
In order to reach them, first thing every retailer requires is to understand them. At iamWire’s Internet Retail Expo 2014, Ireena Vittal, Former partner, Mckinsey put forward some latest trends and ways to deal with today’s consumer. With 1.8 Mn new internet users adding every year, the information was truly valuable for those looking forward to make a mark in this space.
According to a few facts shared by her, India has just started its journey in online retail as compared to other markets such as China and USA. Also, there are majorly 4 drivers of growth: Access-> Aspiration-> Availability->Emerging ecosystem.
“With less than 2Bn in size India’s e-tailing market is in its day zero. Even countries like Brazil stand out. Indian consumers are just starting to come online. 72% are online everyday, 1/3rd only access online on mobile. Almost 30% google and youtube come from mobile. 30% only access Facebook from mobile”, said Ms. Vittal.
She further added that looking at the present scenario, it would be really early to go for segmentation in this market. But still we can divide consumers in three categories viz. one who shop for convenience where utility is the driving factor. The second is the one who think going online is cool. These customers are the one’s you have to develop and move from cool to core. And others who are looking forward for the entertainment (e.g. Housewives).
In her presentation, she talked about four emerging business models viz. Multi-category Pure Online; Multi-channel category specific player; B to C marketplace and C to C marketplace (by far largest game in China).
When asked will India will be like China where the structure is B2C and C2C market place or like USA where the norm is follow a brand that is strong, she said that there is difference in stage of consumption which drives industry structure. “China is still in early days of consumption only 20% of consumption online. Whereas USA has deeper penetration levels and thus have already setup and achieved the online consumption,” said Ireena.
Currently, high cost of acquisition, high logistics costs and high costs of financing are the main challenges in the Indian online space, as said by Ms. Vittal. Thus, before going online, one must give a thought on majorly three factors viz. Defining the right platform; Thinking upon what you will offer and Focusing upon what you will learn.
Well, the above discussion clearly indicate that with technology evolving at a greater pace and world getting smaller, we can believe that connected consumers are definitely becoming the key to get success in the internet commerce.