Why building trust in e-comm is a challenge

Consumers tend to be wary of shopping online because of trust issues as well as the inability to touch and feel a product before buying it. Moreover, examples abound of bricks and soaps arriving in packages instead of mobile phones ordered online.

Trust deficit

“Building trust in the virtual world is a tough business,” said N Chandramouli, CEO, TRA Research. “Several popular e-bazaars such as Uber, Ola, Amazon, Flipkart, eBay, Alibaba, and Oyo tend to encounter this problem in every transaction. The e-customer experience, many times, is far removed from the offering, and this much-in-demand, forever-exploring customer shifts preferences at the slightest disappointment,” he told BusinessLine .

Stating that the online retailer merely acts like a tech facilitator, Chandramouli said, “The product that the online service facilitates becomes the experience. No wonder Jack Ma asserts that the cancer for Alibaba, and therefore for all online marketplaces, is counterfeits.” Changing shopper behaviour, fickle consumer loyalties, and meeting the growing consumer demand for personalisation have necessitated that retail businesses reinvent themselves. While the trust quotient is a huge determining factor, experts point out that retailers should be interested in creating immersible, branding and engaging experiences for customers.

Brand value

Michael Rocha, Global Director, Brand Valuation, Interbrand, said most global organisations scaled up through acquisitions. Tech companies are an exception. Most companies would like to hold on to the strength of the brand that they acquired. “They don’t mess with it, since they have paid a premium for it in the first place,” Rocha said.

Walmart and e-commerce firm Flipkart will maintain distinct brands after the high-profile $16-billion deal, and move to leverage thestrengths of both companies.

Chandramouli maintains that customers trust experiences, expected outcomes repeated over and over again. “A brand must define to itself its raison d’etre , why it exists. An online transaction is not complete when the customer pays, but only when the customer experiences the product,” he said.

Commenting on the Flipkart-Walmart deal, Chandramouli said it is likely to lead to a substantial change in online retail, as it will bring three trust-enhancing features. “Not an easy deal, but the twosome will keep the lead easily for some time.”

“Firstly, Flipkart will have access to nearly 1,800 of Walmart’s SKUs (stock keeping units) sourced globally at low-cost and curated by Walmart, especially since counterfeits still cause significant trouble to e-retail.

‘‘Secondly, Walmart will bring its warehousing and sourcing strengths to Flipkart allowing them to expand to a range of areas, including the difficult areas of fresh grocery. ‘‘And, finally, the strengths of the duo will tilt trust in their favour due to online and on-ground synergies and the investing strength they bring through the deal,” Chandramouli said.

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