Is Salesman no more required? Online v/s Brick & Mortar

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Times have changed and so are our methods. Having surrounded by technology all the time, we are now very much dependent on the machines around us and in return they have made our lives easier. India is now the fastest growing market in e-commerce, China being the 1st and US 2nd.  We have seen a tremendous growth in Internet connectivity in past one decade which has further improved our shopping experience. Now we buy all of it from our laptops ranging from daily groceries to furniture. But is the e-commerce limited to this only? The answer is a big NO. With the growth of e-commerce we have also witnessed the information base available to us on internet grow many folds and hence making us more informed consumer one click at a time.

The latest Forrester Research reports suggest that Indian market of retail through mobile channel only is expected to grow with a whooping CAGR of 31.2%. Amongst all this the one thing that we often ignore is what is happening to the brick and mortar retail of India. While many experts and market pundits suggest that it is slowly dying and may not survive but this is only a macro view. While it is true that the online channel is growing at a fast pace one has to take a closer look at the profitability as well.

There has been a lot of debate regarding this. When the creator of Netscape, Marc Andreesen was asked his views about this, he had something interesting to say. He said that though online retail gives us a better price still in the test of providing something like just in time purchase, it can’t fulfill that. Quoting him “Retail guys are going to go out of business and e commerce will become the place everyone buys. You are not going to have a choice. We’re still pre-death of retail, and we’re already seeing a huge wave of growth. The best in class are going to get better and better. We view this as a long term opportunity.”

So its out now. The glass is half full and half empty.

Online retail focuses more on volume and hence compromises on margins while the local shops and specially the sales man working have got something vital “native intelligence”. This helps them to have that common sense which is the basic understanding of the demographics they are working in. Online channels get this by various reviews that we as customers are putting online for them. Thus there is no doubt that the information base about the various products is much stronger online and is slowly taking over the brick and mortar. So all the busy souls out there which are all held up in conquering the world have resorted to this mode. However some local products that are specific to one geography still requires the touch and feel factor, thus they are sold more through physical shops.

Thus the physical retail is indeed in a danger and hence some amount of regulation is required in this so as to come at par with the fast growing e Commerce. However one cannot ignore the fact that online stores like Amazon are now moving in the physical shops thus establishing the fact that physical retail is here to stay.

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