Economy

Value proposition, differentiation will be the selling point for e-tailers this festival season

Sangeetha Chengappa Bengaluru | Updated on January 16, 2018 Published on September 13, 2016

E-tailers are spending huge sums on advertising campaigns, shoring upwarehousing infrastructure, hiring thousands of temporary staff for logistics/delivery, and launching seller financing schemes.

Addressing delays in delivery, unavailability of products is the key to customer satisfaction

As the country’s top three e-tailers – Flipkart, Amazon and Snapdeal – prepare to slug it out to win customers during the upcoming festival season, largely by doling out deep discounts across product categories, the winning edge can only be wrested by the player that offers a clearly differentiated value proposition, caters to location specific demand, and ensures top-of-the-line service metrics in terms of delivery and easy returns, say industry experts.

Snapdeal has unveiled its new brand identity, ‘Unbox Zindagi’, aimed to connect with the shopping aspirations of the next 100 million shoppers, while Flipkart has launched a TV campaign, Flipkart Assured, preparing the ground for first time online shoppers to try Flipkart, with the promise of a product selection that is put through six stringent quality checks.

Amazon has introduced Amazon Connect, a platform for sellers to interact with the e-tailer’s senior leadership, with the objective of enabling sellers on its platform to reap profits during this festival season.

Create value proposition

In addition, the e-tailers are spending huge sums on advertising campaigns, beefing up warehousing infrastructure, hiring thousands of temporary staff for logistics/delivery and launching seller financing schemes for the sale.

“The e-tailer that offers the most exclusive deals in mobile phones, electronics and large consumer durables, will have the winning edge as these product categories are the biggest GMV grosser for e-tailers,” observed Anil Kumar, founder-CEO of market research and advisory firm RedSeer Consulting.

He added that steep discounts on select products and ensuring timely delivery with easy returns – a huge pain point for online shoppers – will garner huge customer traction.

E-tailers that can grab customers first with bundled offers of complementary products, will stand to gain from the first mover advantage, because customers are more likely to loosen their purse-strings during the festival season, noted Harish HV, Partner at Grant Thornton.

Assisted e-commerce

It is time for e-tailers to try something new, instead of chasing the ‘mirage customer,’ feels Jessie Paul, founder-CEO of brand and marketing advisory firm Paul Writer Strategic Advisory.

“There is too much of money being wasted on marketing to a very small online customer base. To attract first time online shoppers, e-tailers must look at setting up assisted e-commerce kiosks in local kirana or mobile recharge stores in localities where consumers are not online savvy.

“On attracting repeat business from customers who were frustrated with extended delays in delivery schedules without any intimation last Diwali season, e-tailers will have to promise assured delivery times or else compensate the customer with a reward/offer,” she said.

Demand mapping

While customer sentiment analysis is important for e-tailers to gauge customer satisfaction levels, demand mapping metrics that allow e-tailers to offer region-specific products that are not readily available in Tier-2 and Tier-3 cities like fashion apparel for instance is crucial for good sales, said Sandeep Ladda, Leader of E-commerce Practice at PwC India.

As per a RedSeer estimate, the e-tailers will incur a cashburn of $35 million, which could go higher as the festival season peaks, compared to last year’s cashburn of $70-80 million.

Published on September 13, 2016
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