Marketing Insights - Consumer Insights - Business Tools-Marketing Tools-Branding Tools-Startup Tools-Entreprenuership-Cost of marketing-cost of Technology.
If you like any of the blog. Do comment and share your experience and feedback.
I have come across following interesting article on 'Business Line'. I thought it is worth sharing with you all guys. Here is the complete article from Business Line's on line section:
Not so long ago, trying on outfits - one after another - for ‘that' perfect fit, was sheer joy for the fashion-conscious consumer. Then suddenly, with rising traffic and choked roads, mall hopping was not fun anymore. As shoppers looked around for alternatives, they discovered cool couture and prêt just a click away.
E-retailing has evolved in the last few years with more categories, beyond books, flowers and electronics, finding takers. Sensing an opportunity, fashion retailers took the plunge. And it seems to be paying off today.
According to the Internet and Mobile Association of India, there has been a huge spurt in e-tailing of branded apparel, with sites registering five million visits in April this year compared to 2.54 million visits last April. This is followed by footwear, designer labels, jewellery and spas and restaurants. The data for these categories has been collected from 15 e-commerce sites. It indicates an almost 100 per cent annual growth in the fashion e-tailing space.
The nascent fashion e-tailing industry already has an established base of players such as FashionandYou, Myntra, Yebhi and Jabong. Recently, the lifestyle space saw additions with Rock.In, Fashionara, ShopNineteen and Outletwise joining the fray.
Fashionandyou, which sells a host of fashion apparel and home artefacts on discounts, claims a customer base of 3.5 million members, and says it ships over 10,000 products every day. While Zovi, which sells fashion products designed in-house, gets around 70,000-1,00,000 visitors a day.
Well, it wasn't an instant click. Sceptics and shopaholics questioned the very model. Can online shopping come anywhere close to the kind of experience brick-and-mortar stores provide, especially for apparel? BrandLine discovers how fashion retailers went about perfecting the online retail model with interesting innovations to win over these customers.
ONLINE STYLISTS AND MORE
The most obvious concern for any shopper looking for clothes online is that of touch-and-feel. This is certainly a big handicap, but there are ways to get around this, say online retailers.
Apart from close-to-accurate product descriptions and detailed size charts, retailers are also paying a lot of attention to the visual aspects. Retailers such as Rock.in and Fashionara have built in features that let customers zoom into products so that they can even see the fibre and thread.
“For dressy garments, Fashionara has videos with models on the ramp to showcase the drape and fall,” says Arun Sirdeshmukh, Co-Founder of Fashionara, which sells around 20 brands such as Lee, Wrangler, Benetton, Forever New and W for men, women and kids. Sirdeshmukh was earlier with Reliance Trends and Madura before that and knows the kind of details consumers are looking for.
Fashionara also has online “stylists”, much like shop floor assistants, to guide people through certain fits and categories. For instance, if it's a slim fit T-shirt, the style guide alerts you that if you generally wear an ‘M' sized tee, you are better off wearing an ‘L'.
Retailers are also toying with virtual fitting rooms
Myntra, which sells sports apparel and shoes, already has a virtual fitting room. So does Zovi which recently launched ‘Zovi Eye', an application that shows how the garment would look on you. All you have to do is stand in front of your webcam and let the garment be “fitted” on to your body, says Zovi. You can even co-ordinate your outfits with shoes, bag, hat and hairstyle. Zovi, which retails in-house products, also has a ‘try-before-you-buy' option for shoes in select cities.
“A virtual fitting room is an interesting option but it must not be gimmicky. It has to be done intuitively,” says Sirdeshmukh. Most options today have a mere drag-and-drop option to see how a top combines with a pair of trousers. “We want to go beyond that,” he says.
Fashionara is talking to tech companies to get the right fitting room. Fashionandyou's ‘R&D lab' is looking at augmented reality, while Rock.in is developing a 3D wardrobe.
Rock.in retails premium European brands generally not available in other Indian portals. It has created virtual shop-in-shops for each brand. “Each brand has been marked a distinct space with unique imagery and branding so that it is not cluttered and is easy to navigate,” says Suraj Sharma, CEO.
Other non-core but useful value-added innovations are also emerging. For instance, Fashionandyou has launched an e-magazine that can be viewed online and also on smart devices such as the iPad, iPhone and Blackberry. The digital magazine offers hi-fashion editorials, interviews and bloggers' sections. Fashionara has integrated its whole store experience with Facebook, wherein users can shop without getting out of the social media site.
Where online holds the true edge is in cataloguing based on size, fit, colour and categories, which aids in easy browsing. “Can you search for all turquoise items in a mall? It can be done on Fashionara,” says Sirdeshmukh.
Fashionandyou has an exhaustive catalogue of 10,000 products. Pearl Uppal, its CEO, says Fashionandyou scores over offline retailers because it is like a Flash Retailer — the product changes everyday, so a shopper can come and look everyday and find something new. “Around 2,000 new products get shot in our studio everyday.”
And even if one of the thousands of products falls short of expectation, no need to fret, say retailers.
Most online fashion retailers have a no-questions-asked robust return policy, usually within 30 days. While size exchanges are common, there are cases where customers are simply not happy with what they have bought.
“We don't want our customers to be unhappy and stuck with what they don't want,” says Uppal of Fashionandyou, which has a 2 per cent return rate.
Returns are easy, says Sirdeshmukh. “Just SMS ‘R' to us and we call you back. We let people return tees for shirts or even put their money in store credit that can be used later. Or else, we give you 100 per cent refund.”
Also, we provide service with a smile, say retailers. Says Ashish Puri, COO, Rock.in, “Our products come in a beautiful box wrapped in butter paper to give a gift-like experience.”
SERVICE AND DELIVERY
Behind the beautiful packaging lies a bumpy ride. Fashion retailers also face the problems associated with third-party delivery delays and cash-on-delivery collections. Though these retailers ship to almost any serviceable pincode, logistics issues exist in the far-flung cities and towns.
It boils down to who you tie up with and the partnership you strike with third-party service providers, say retail analysts.
Says Sirdeshmukh, “We don't mind paying more for a service provider, if he is reliable and delivers as promised.”
Retailers have also set up their own delivery teams to cover “troublesome” areas.
Usually, online retailers take 2-5 days to deliver. Some retailers also provide express delivery options. This is where own delivery teams come in handy. Fashionara, for instance, offers overnight shipping to six metros for a “small extra charge.”
Another challenge is that of distribution and supply chain, which even offline retailers are yet to master.
Uppal shares her secret. Fashionandyou works with over 700 vendors locally and globally. The inventory starts ticking only when the customer places the order. Once the order is placed, the retailer procures the product from the vendor, which then travels to the mother warehouse in Gurgaon and then to one of the eight distribution warehouses across India, before reaching the customer. This helps the retailer keep zero inventory.
MARGINS AND PAYMENTS
How do online retailers make margins? It is still early days for players such as Fashionara and Rock.in, but Uppal will tell you how each buck is hard to come by.
“Fashionandyou's average realisation per transaction is $30-40. But the average sale price globally for comparable discount retailers is $80-100,” says Uppal.
In order to be profitable, online retailers need scale and unit economy. “We are constantly striving to bring down logistics costs and keep inventory light. We also bet on volumes to drive profits,” says Uppal. Fashionandyou hopes to break even by the middle of next year.
The volumes are certainly on the rise, says Sharma of Rock.in. “Fashion players who were seeing single digit orders 18 months ago are now doing 1,000 orders a day. India is certainly the most exciting place for fashion e-retail.”
The bar is certainly higher in the US and Europe where online fashion accounts for 10-15 per cent of entire fashion retail. In India, it is a lot lower but growing fast, says Sharma.
Getting customers to pay is also a tricky issue. Although cash-on-delivery (COD) option is important to reach out to new customers, when customers simply change their mind at the last minute retailers take a big hit. Rock.in and Fashionara counter this through an SMS, e-mail and phone verification process to double-check if an order is genuine or not.
Fashionandyou, which has a two-year experience in this game, has gone a step ahead by doing a credit rating of customers. “If there is a long history of returned COD orders, we shut down the COD option for that customer,” says Uppal of Fashionandyou which gets 60 per cent of its business from COD.
Fashionandyou is also evolving other payment options. For instance, its delivery boys even bring with them card swiping machines to the customer's doorstep. Currently, this service covers the whole of Delhi and NCR. It has also been launched in Bangalore. The retailer is currently working on EMI and mobile wallet options.
Currently, the profile of fashion shoppers online has a female skew but retailers want to make it more attractive for men as well.
The real Indian consumption story has just evolved and the online marketplace is already threatening to shorten the queue outside fitting rooms. Can online retailers walk the whole ramp?