Why are e-comm models going brick and mortar?

Myntra, an online fashion store has set up Myntra Fashion Store along with its sports wear stores HRX, supposedly to give its customers an immersive shopping experience. Lenskart, set up an exclusive online eyewear business, has its Eye Studios now. Pepperfry, an online furniture and home decor store, has opened a chain of “Studio Pepperfry” experience centres. Even Makemytrip, the original disruptor of travel business, has started its physical store!

The natural process would have been for a brick-and-mortar business to migrate to online but this new trend is baffling. What reasons could possibly be behind this shifting business models? Our research heralds the convergence of online and offline strategies.

Enhanced customer experience: While online shopping offers convenience – and some cost advantages – some customers still prefer the tactile and immersive experience of shopping in a physical store, especially after the boredom created by the pandemic isolation. By having a brick-and-mortar presence, e-commerce businesses can provide a hands-on experience, allowing customers to see, touch, feel, smell and try products before making a purchase.

Brand building and trust: A physical store normally serves as a tangible representation of a brand, helping to establish credibility and trust with customers. Having a physical presence makes the brand feel more authentic and reliable, especially for customers who are sceptical of online-only businesses.

Showcasing innovation: Some e-commerce enterprises use physical stores to showcase their technological innovations or unique products. For example, an online electronics retailer might use a physical store to let customers experience cutting-edge gadgets in person.

Returns and customer service: Physical stores can serve as return centres for online purchases. Having in-store customer service can address customer queries and concerns.

Behavioural data collection: Physical stores can provide valuable data on customer behaviour and preferences that might be challenging to capture online. This data is most helpful in refining the marketing and product strategies.

Competitive edge: In some cases, entering the brick-and-mortar space can help to differentiate itself from other online-only competitors.

Market saturation: In mature e-commerce markets, there might be a point of saturation where online growth slows down. In such cases, expanding into physical retail may provide new avenues for growth.

Muneer is a co-founder of the non-profit Medici Institute for Innovation

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