Delivering the goods

A year ago, online jewellery retailer Caratlane launched a virtual try-on app – the world’s first such in the business, it claims – which uses selfies from various angles to show customers how a pair of earrings would look on them. Caratlane plans to extend the facility to other pieces of jewellery. Meanwhile, its two-year-old try-at-home facility is becoming so popular that there is a 7-10-day backlog of requests in some cities, says Atul Sinha, Senior Vice-President (Marketing). The conversion rate is fairly high, he says, among customers who use this facility.

Not knowing how a certain outfit or accessory will look on them before they splash out on it is a barrier customers face shopping online. Try-and-buy facilities offer quick resolution – the customer can try on the goods as soon as she receives them and return them if they don’t suit her. They will also bring in more customers online as the customer doesn’t have to grapple with the burden of returning the goods later – from notifying the portal to packing it and sending it off. Make-it-easy moves are important for the growth of online retail.

According to eMarketer, retail e-commerce in India will account for just 2.5 per cent of total retail sales in 2016 and 5 per cent by 2020. That puts India well behind China, where retail e-commerce will touch 18.5 per cent of sales. It expects online retail sales to reach $23.39 billion (₹150,000 crore) this year, an increase of 75.8 per cent over 2015, and touch $79.41 billion (₹5,09,200 crore) in 2020.

Recently, e-commerce portal Myntra launched a Try & Buy feature it claimed will revolutionise the fashion industry. While this might be a significant move by Myntra which controls a large part of the fashion and accessories market since its acquisition of Jabong, other online businesses have been offering this facility for longer. Myntra’s press release mentions a study that says there are about 80 million online shoppers in India who shop for things other than fashion. The T&B feature is aimed at drawing these people into purchasing fashion too.

Myntra expects this feature will not only allow high-value purchases online, but also reduce product returns to a large extent. The 30-day return and exchange policy will continue to be in force on products purchased through T&B. The service does not come with any additional fees during the introductory phase and is valid on both prepaid and cash-on-delivery orders with a maximum of three items per request.

Bluestone, another online jeweller, formally launched trial services a year ago in 18 cities. It had been testing them for a couple of years. “The first decision is visual,” says Arvind Singhal, COO, about shopping online. Bluestone gives 3D views of the product from different angles, making it that much closer to real life. He adds that certification is another factor that helps overcome barriers. All of Bluestone’s jewellery is BIS-hallmarked. Earlier, industry practice was confined to hallmarking only diamonds, he says.

Manoj Gupta, co-Founder of ethnic wear e-commerce site Craftsvilla, says there are pros and cons to everything, including the try-and-buy facility. While it’s useful to customers, costs will go up for the retailer as the courier has to wait during the trials. He believes the key to easing blocks in customers’ minds is lots of information. “We list about 20-25 attributes of the product. There is more information than is available online,” he says. Myntra did not respond to cat.a.lyst’s questions for this report.

Baqar Naqvi, Business Director – Retail, Wazir Advisors, is unsure how the try-and-buy facility will work out for businesses trying it. It’s a question of costs vs benefits, he says. He cites the case of one business online which could not sustain the facility because it lost loads of money on it. “With the returns policy, only one product is sent back. With try-and-buy, customers will likely order the five products they are allowed to and send back four.” Also, trials of apparel and accessories take time, and time is money. From the courier firm’s perspective, having their agent wait at one place when he could be making three more deliveries in that time is a cost, which the online business will have to bear.

Instead, technology can be used better. “There are more and more immersive technologies coming up. Otherwise go omnichannel and open stores. A brand is not just product and price, if it was we’d never be talking about experience,” says Naqvi, pointing out that brand creation happens offline. Many online brands have been setting up stores/experience centres to ease customers further into buying online.

Craftsvilla is still evaluating the option but Caratlane has set up showrooms, scaling up to 13 across the metros and mini-metros from the three it had till 2015. Says Sinha, “For traditional jewellers, the discovery begins only after customers visit the store. In our case, the short list has been made. Customers can try more products when they go to the stores. At stores, the conversion rates are very high.” They are planning to open more.

Of course, while 4,000 products are listed online, only 400-1,000 pieces are stocked in the stores. Customers can call and wait for the items of their choice to be made available.

In Naqvi’s view, try-and-buy is more a cash-burning proposition than a profitable one. The economics and added advantage of this facility need to be understood well first. “The problem is that when you give the customer more, the customer never says no. It’s easy to go from 95 per cent to 99 per cent customer satisfaction but going to 99.5 per cent – you spend more money as the incremental costs go up,” he says.

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