Phygital format key to enhancing consumer experience
Tata CLiQ is Tata Group's multi-brand e-commerce platform offering consumers a new shopping experience in apparel, electronics and footwear categories at launch and adding more product categories over the next few months. Prathyusha Agarwal, Head- Marketing, speaks about Tata CLiQ's unique phygital experience and discusses the philosophy behind it.
How would you describe the Indian e-commerce market? At what rate is it growing?
At one end there are conversations about over-valuation of businesses and on the other is robust growth in consumer demand. The latter is good news for businesses operating in this space. A significant number of Indians are experiencing the Internet for the first time in their lives on a smartphone. This directly increases expectations from mobile apps for shopping.
A considerable number of consumers in India are also used to have a look and feel of products they buy. While there are consumers who have not yet migrated to the online space, digitisation is penetrating in India at a very rapid pace, with connectivity in Tier II and III cities improving day-by-day. This year, India overtook the United States of America in terms of active mobile users (220 million active users), and is currently at second place behind China. Mobile penetration is increasing exponentially and India is the leader in terms of switch from e-commerce to m-commerce. About 41 per cent of total e-commerce sales in India are from mobile. Thus, that user-base is large and growing by the minute. We believe the larger opportunities for Tata CLiQ are the next 100 million netizens who are currently not shopping online because of mistrust. The brick and mortar format, if supplemented by the web, has immense potential to grow beyond what is currently projected. Enhancing the customer experience is key and the phygital (seamless integration of physical and digital) format holds the key to this enhancement.
What is the Tata CLiQ USP?
We are looking at three pillars to differentiate ourselves:
- We are for brand forward consumers who are looking for a unique brand experience backed by authenticity and quality of the brand. We clearly differentiate ourselves by offering our consumers a curated brand experience. It's not a product catalogue but brands, brand merchandise and the brand proposition that brings the brand story and authenticity of brands to consumers.
- Consumers are moving from physical to digital across all walks of life. A consumer now likes to shop across website, app and in store as per his convenience. We at Tata CLiQ deliver a phygital offering i.e. seamless integration of online and offline stores to provide consumer a unique shopping experience.
- In e-space, consumers don't have that human touch and feel that they get by walking into a store. We as Tata CLiQ aim to be a true brand partner where we will not try and dis-intermediate and we get the e-commerce consumer to the physical brand and get the physical retail brands to the e-consumer. This translates itself by how we create the brand store fronts, integration with sellers and control on promotion and pricing
As a company, we are only focused on trying to perfect the customer experience. The platform is new and there will always be a few ups and downs. Our effort is only to perfect that. As a team if we deliver the good stuff to customers, they have a nice simple experience online and deliveries are faster, we have managed to do what we had set out to do.
Tata CLiQ very recently launched lingerie. Do you plan to add any more product categories in the near future? If yes, please share a few details with us.
Tata CLiQ currently offers 1000+ brands across the categories of apparel, electronics and footwear. We are aiming to scale up to 3000+ brands through the addition of further categories such as accessories, jewellery and home furnishings by September 2016, home products in the month of October and luxury on the 1st of November. This is our immediate roadmap, but we have still a lot of categories to cover. Even our group companies have a lot of categories which we aim to cover, for instance, jewellery is another thing in our pipeline which we aim to have soon and many other categories like toys and stationery.
Moving forward Tata CLiQ's alliance with Genesis Luxury Fashion Pvt. Ltd will enable us to soon offer 12 luxury international brands, like Burberry, Michael Kors, Armani, Canali, Furla, Jimmy Choo, Hugo Boss, Coach etc. Consumers will also be introduced to several high street international brands by November this year. We will also add many other brands over the next five or six months in the luxury category.
What kind of growth can be expected in the apparel and fashion category online?
During the year 2013, the Indian e-commerce market was worth US$ 13 billion with online travel business contributing 70-75 per cent of it. Out of the total US$ 13 billion, the e-commerce industry summed up US$ 3 billion in the same year due to increased Internet penetration and easy-to-use payment mechanisms. Further, the overall e-commerce market is expected to increase to US$ 50 billion by 2020.
In e-commerce, fashion as a category is seeing a lot of traction from consumers and the sales in this category have doubled to reach US$ 559 million from last year when compared with top categories like electronics and books, with an estimated growth rate of 20 per cent per year. The fashion segment is projected to reach US$ 2.9 billion by 2016. A lot of budding e-commerce companies are now heavily investing in this category because the margins are higher as compared to other categories.
Tata CLiQ offers its consumers lifestyle forward brand which includes top notch national and international brands, some of which are exclusively available on our portal. We have witnessed the numbers multiply across fashion and footwear categories.
In the coming months we will on-board exclusive international luxury brands in order to provide consumers with an authentic brand forward shopping experience.
Any synergies between your physical stores like Collective and that of your standalone brands?
Tata CLiQ does not have any standalone brands or physical stores of its own. We are a handpicked curated market place and here to seamlessly integrate the offline and the online spaces and provide ease to our consumers. Since we are a brand forward e-commerce player, we directly partner with brands and their proposition is directly shared with our consumers.
How has been the response to Tata CLiQ since its launch this May?
Our attempt with Tata CLiQ was to create the first of its kind unique phygital offering that combines online commerce with store inventory mapping and logistics management, giving sellers/ brands an interface and complete control to manage their brand. This multiplayer multi-channel model is complex and requires a bespoke technology platform eventually providing the end users a.k.a. the customers, the best of two worlds in one place.
We have received remarkable amount of love and support from customers. From launch day till date, customers have been looking up to us, which gives us a great deal of joy and satisfaction that we are building something for the future. Within the first week of launch, we received orders from every Indian state and 50 per cent of our customers are from metros and the rest from smaller cities. We have also seen overwhelming response in terms of building traffic to the website. From where we set out during launch till date, we are witnessing a 3X growth. That comes to about 30 per cent week-on-week growth in sales since launch, with a 15 per cent repeat rate amongst customers.
Customers love the extra convenience provided by Tata CLiQ with phygital benefits, where we have seen outstanding orders between the apparel and electronics categories alone. The exchange and return to stores benefits are becoming more convenient and time efficient for the consumers and hence increasing their preferences for shopping with us.
What advantages and challenges do home-grown start-up e-commerce platforms have in comparison to Tata CLiQ?
Home grown start-ups have a lot of challenges to cater to the potential online shoppers. The major challenge is to perfect supply chain, logistics/ last mile delivery plus offer authentic and genuine products given they are a marketplace wherein product quality cannot be directly controlled by them. We as Tata CLiQ aim to be a true brand partner where we will not try and dis-intermediate and we get the e-commerce consumer to the physical brand and get the physical retail brands to the e-consumer. This translates itself by how we create the brand store fronts, integration with sellers and control on promotion and pricing. This is our biggest advantage over other players.
What is the ethos and consumer behaviour in India when it comes to shopping online?
Google studies show that 51 per cent customers research online and shop offline. 44 per cent customers research online and buy products online. This will not add up to a 100 per cent because the same customer is doing multiple stuff. For example, 32 per cent of the people researching online visit stores, and then come back online whereas only a meagre 17 per cent visit the store first and then purchase online! Thus, consumer behaviour currently shows multiple convoluted ways to purchase. People think showroom is a big business whereas web rooming is probably the larger part of the pie.
While the current shopping journey is converging across digital and physical channels, another fact that stands out is that India is an aspirational society and thus, we are always shopping for brands. We also believe that consumers have always had an on-going demand to experience international brands from across the globe. They are well-travelled and aware of global fashion trends and have the purchasing power to own several of these brands. The only barrier preventing them from buying these products is unavailability of these brands in India and the mistrust and the lack of authenticity.
Digitisation is penetrating in India at a very rapid pace, with connectivity in tier II and III cities improving day-by-day. Mobile penetration is increasing exponentially and India is the leader in terms of switch from e-commerce to m-commerce. The e-commerce we are experiencing now is just e-retail 1.0. As we go along, e-retail 2.0 is going to bring revolutionary change to the way we are doing e-commerce. The two identities of a consumer - one who shops online and one who buys at physical stores will merge.
Which category - womenswear, menswear, footwear, or electronics -- is faring well at Tata CLiQ?
According to a report released by Google India and A T Kearney, a consulting firm, the consumer electronics segment currently dominates the sales of Indian e-commerce industry but soon fashion and lifestyle will take over electronics and will be the largest e-tail category generating about 35 per cent of the overall gross merchandise value (GMV) by 2020. We are also witnessing a similar trend and are working towards providing a lifestyle forward experience to our consumers. During the first week of Festober also fashion as a category witnessed a significant jump.
Which international and Indian apparel brands can consumers expect at Tata CLiQ?
We believe consumers have always had an on-going demand to experience international brands from across the globe. They are well-travelled and aware of global fashion trends and have the purchasing power to own several of these brands. The only barrier preventing them from buying these products is unavailability of these brands in India and the mistrust and the lack of authenticity. We have curated this list of brands, and offer products directly from them or their authorised sellers. At Tata CLiQ, we don't have an endless listing of products, we have brand-malls. We offer personalised brand-experience to our consumers, and aim to give them a delightful and engaging shopping experience of curated brands, rather than just a choose-and-pick purchase of products.
To achieve this, we have formed a strategic partnership with Genesis Luxury Fashion to offer a wide range of international luxury brands, exclusively. This significant alliance will make TataCLiQ.com the only authorised partner to offer several international luxury brands in India that the Genesis Group represents. Genesis is the marketing and distribution partner for more than 12 international brands that include Coach, Burberry, Furla, Tumi, Hugo BOSS, Jimmy Choo, Giorgio Armani, Emporio Armani, Armani Jeans, Bottega Veneta, Canali, G-Star RAW, Michael Kors, Paul Smith and Villeroy & Boch in India.
Consumers will also be introduced to several high street international brands by November this year and we are aiming to add many other brands over the next five-six months in the luxury category. Tata CLiQ has also brought on several other brands on board, such as Microsoft, international brands New Look, Warehouse, Oasis and handcrafted merchandise by Okhai.
How do you plan to get the phygital experience right in a country where consumers in lots of regions are still warming up to e-commerce?
At the Tata group, we have a rich heritage of pioneering initiatives where we have benefitted a lot by being visionary and getting in early in many sectors. Like Google for search and Facebook for social networking, the Tata CLiQ team envisioned a differentiated offering which delivered innovation and customer value. Tata Industries has been pursuing the digital theme for close to 5 years as they predicted a lot of transformation in digital and mobile. What stood out very strongly was e-commerce and after studying various e-commerce and retail models in India and across different international markets, analysing consumer pain points in the shopping journey we came up with a unique solution of phygital which marries the best of physical (store) shopping benefits and digital (online) shopping convenience. This was supported by bespoke technology platform that we believe in can usher in the next phase in the e-commerce story. We are in this business to play the long game and aim to delight our customers. What consumers have experienced so far is just e-retail 1.0, and the next wave of e-commerce will be e-retail 2.0, which we aim to lead. This is where a consumer's physical and digital world seamlessly amalgamates into one, giving them a unique shopping experience.
How did you come up with quirky idea of Certified Authentic Merchandise Everybody Loves (C.A.M.E.L.)?
As is evident from our digital campaign, Tata CLiQ wants to be a brand that engages and converses with consumers rather than one that broadcasts or communicates at the consumer. We took on board Cartwheel, a unique creative agency with interests in entertainment and advertising, who think beyond the 30 seconds commercial to truly bring alive the brand in its various forms to the consumers. They delivered a unique creative idea of C.A.M.E.L. that's Certified Authentic Merchandise Everybody Loves. The idea germinated from the USP of Tata CLiQ #Surething, in the sense that whatever you buy at Tata CLiQ is a Camel, as it symbolises and assures our consumers of authentic and exclusive goods and trustworthy service. We promise to deliver authentic and trustworthy products at honest price. The camel campaign was one that naturally belonged to the digital space and we have leveraged it quite well, it also went out in physical stores.
Do you plan to open fulfilment centres to run the phygital model?
We are a multi-brand curated marketplace and seamlessly integrate the offline and the online spaces and provide ease to our consumers. Since we are a brand forward e-commerce player we directly partner with brands and their proposition is directly shared with our consumers. Hence, we have no plans of opening up fulfilment centres. Our customers have an option to CLiQ and shop for a product at Tata CLiQ.com and PiQ from the nearest phygital partner.
Discounts and sales models have been adopted by many e-commerce platforms to get people shopping online? What is your take on it? What is different at Tata CLiQ?
Tata CLiQ is not just an e-commerce portal, we are a multi-brand phygital marketplace. We are exclusively pioneering this space in India, where our biggest differentiator is the concept of phygital . While discounting is a legitimate strategy for retailers, it creates problems at two levels in Tata CLiQ's view:
- It is not healthy for the business as the retailer will end up burning cash
- Any player relying on heavy discounting creates certain a type of customer expectation
Some of the websites today are already in this trap. Customers who are going to these portals are actually either buying discounted stuff or buying products at the end of value chain.
Tata CLiQ therefore uses discounting as a tactical tool, rather than as a strategic tool. Tata CLiQ will not make any decision in which discounts become the key determinant of a purchase. We at Tata CLiQ work with brands directly - starting from popular, premium, going right up to luxury - and hence use discounts more as a tactical rather than a strategic tool.
