e-tailer vs retailer

Few weeks ago Indian dealers threatened Samsung that they will boycott Samsung products unless Samsung narrows the price difference between their devices sold online and in brick and mortar stores. This week, many traders complained to government to create new policy to control the amount of discounts e-tailers can provide. On one side this looks like a jealous issue but if checked deeply, the ‘online only’ sales of some products and heavily discounted products available online are hurting traditional retailers in a big way. Among the last dozen electronic products I purchased, only two were from a local store and rest were purchased online. Even those two products that I purchased locally were from a multi brand multi chain retail store (Croma and Reliance Digital) and the last time I purchased a product in smaller single store outlet was way way back and I don’t think I will be going to any such store in the future. More and more friends/relatives of mine have shed their trust issues with e-tailers and are ordering products online and I have to thank Flipkart for that for providing quality service/delivery. At least for mobile phones, the traditional mobile phone shops may see the end of day sooner than we think and the only way forward is either e-commerce of multi-brand/multi-product retail chain. Stores like Croma are making good deal of money as we still buy wide range of home appliances and electronics from these stores (as we cannot pick a home appliance by look alone). Here are a few reasons why I may never buy electronics from a retail store.

Price

Brick and mortar stores cannot match the pricing of online stores, period! Add to that the flash sales, coupon codes, the margin goes much higher. Having a warehouse at a remote part of city and a handful of delivery agents costs far less than having couple of stores in expensive locations. The pay for in store personnel is also more than that for courier agents. Add to this the rent, electricity bills, higher tax etc etc and these stores end up getting far less profits. Also, these brick and mortar stores never offer a good exchange price for a use mobile phone. Take the ‘big billion day’ sale on Flipkart. Motorola offered Rs.8,000 discount on Moto X 2014 edition and this was valid for Motorola Defy. Which store will pay 8,000/- for a used Defy smartphone?

A major factor that made people start trusting these e-tailers was online-only policy of few phones (especially, Motorola and Xiaomi). These phones are truly VFM and the only way one can purchase is by ordering online. Thanks to incredible delivery service, this did change the way everyone thinks about online purchases.

Dummies

Few years ago, these retail stores used to stack fully functional demo units of mobile phones but now, most of them only stack dummy units for most of the smartphones (unless a unit was provided by the company for demo purpose). Stores like Croma, Reliance Digital (with big pockets) are able to keep fully functional units of ‘many’ smartphones and they do see good sales. Thanks to numerous unboxing and review videos availble online, I don’t have to go to a store, feel the smartphone before making a decision. Watch few videos, check specification and user reviews, check which e-tailer is giving better price and delivery options and place an order.

Sell for commission

Every single retail store I went to tries to shove the brand that gives them more ‘margin’, down my throat. Numerous times, I saw them utter wrong specs just to make a sale or get rid of product. Unfortunately, not every phone comes with full specification list printed on the carton. With e-tailers, I can check the full configuration detail, do a comparison with other products, check phones listed on ‘you may also like’ list that is generated based on our search and make a purchase decision. With retail store, even though you ask for a phone of your choice, the moment you say ‘any other phone like this?’, you end up seeing phones that ‘they’ want to sell, not products that match ‘your’ needs. With e-tailers, I get absolute clarity. With stores, I have to put my foot down and say ‘hold on, I need xyz phone so get it’. The ‘user reviews’ available in these e-tailer websites also helps immensely. Flipkart add tag ‘certified buyer’ to comments from those who bought the product from them and this add some authenticity.

Click of a button vs shoving around

Icing on the cake is that I can make a purchase without moving my leg and have the product delivered to my home. This itself is big enough reason to purchase products online. Compare this to the tiring process or going to the store on a weekend when these are usually crowded (by those who do window shopping), not able to get enough time to talk to the sales personnel, not having enough time to properly check the phone as someone else is waiting to try the same. The more crowded it is, the less the chance is for you to make a purchase with a clear head (unless you really did you home work and went for a particular model). Wait in line for sales personnel, make a choice, wait in line at billing, drive back home. Nah, not the way I want to buy a gadget!

To make it simple, the fall of retailers and greedy dealers has begun and this year truly belongs to e-tailers. Period!