Amazon everywhere
The e-commerce giant expects its alliance with Shoppers Stop to strengthen its fashion credentials, wants customers to experience the brand offline
When Amazon announced its association with Shoppers Stop last week, many believed that it was doing in India what it has done globally: having established its dominion online, disrupting the offline retail market. Far from it says Amazon India, the Indian e-commerce market is still a drop in the ocean and there is a long way to go before it can turn its attention away to the glass and chrome corridors of offline retail. The alliance is an attempt to build an experience around Brand Amazon through experience centres in the real world and let consumers know that what they see is what they get online.
This is different from the way Amazon, the world’s fifth most valuable brand and the most valuable retail brand (Brand value: $64,796 million) according to Interbrand, operates globally. In the US and Europe, the retailer’s ofline forays are seen as an attempt to bring the same ruthless efficiency that it has done to ecommerce, to offline retail. Still in its nascent stages, this plan has already led to a $13.7 billion takeover of grocery chain Whole Foods and the opening of a bunch of flagship book and self-checkout grocery stores across the US.
In India, where the company has focused its attention on overtaking local rival Flipkart for which it has committed a $5 billion investment in the country, one might be fooled into thinking Amazon’s investment arm’s recent investment in Shoppers Stop is a similar step. But with online retail barely expected to scratch the $20 billion mark this year, Amazon says there’s still a lot of work to be done in Indian e-commerce.
What does its tie-up with one of the country’s oldest retail brands then indicate? It is a way to spread Amazon’s brand footprint and get customers to experience online shopping offline. Through this the company expects to build trust, let customers touch and feel the product before ordering online and bring down the invisible borders that separate the two worlds in consumers’ minds.
Amazon is not the first one to do this. In India, Lenskart, online furniture retailers Pepperfry and Urban Ladder among others have adopted a strategy that leverages an offline presence to sell products online. Amazon’s commercial agreement with Shoppers Stop becomes important here, giving it access to set up experience zones across the country. It gathers even more significance given that various customer surveys show that while fashion is among the fastest growing segments online, it also sees maximum returns and complaints from buyers over a range of issues from size to quality to colour variations.
The deal, which was announced last week, while it will definitely have a business impact, will be more about brand building among offline shoppers. “Brand Shoppers Stop carries a lot of trust and recognition, and we want to give a very clear view to customers that they are on Amazon. It’s not just about them listing products, it’s the whole experience we’ve put in place that we think will be game changing,” said Arun Sirdeshmukh, head of Amazon Fashion in India.
With Shoppers Stop’s entire portfolio of brands, including private labels, being made available the e-commerce site, Amazon says it can gain an edge with consumers who have purchased these brands earlier and those who may hesitate to pick them up online for the first time. Further, Amazon is confident that the experience centres will help put at ease the many trepidations that customers may have about online shopping. And once consumers are comfortable with the process, they’ll be hooked to the convenience of fast Prime deliveries and end up purchasing products from other portfolios.
Amazon has linked Shoppers Stop’s four large warehouses with its platform to ensure that the experience is available to a wide section of the offline retailer’s customers. This will allow it to not just keep a track of inventory, but also enable quick one and two day deliveries. Shoppers Stop’s warehouses will work much like Amazon’s own facilities.
“The second part of this initiative has to do with joint marketing. Not only are we going to promote all the product lines that Shoppers Stop brings, we will also be looking at marketing the brand. What we’ll say is ‘pretty much how you shop ARUN SIRDESHMUKH Head of Amazon Fashion, India offline at any of Shoppers Stop stores, you’ll be able to do the same online with us,” added Sirdeshmukh.
Apart from listing and marketing activities, the deal will also open the door for Amazon to market the fashion products available exclusively on its platform. The association, say experts, must be seen as part of a larger narrative around fashion purchases online. Amazon, for instance, has been steadily building its portfolio of products, working on the shopping experience and using data to target its products more effectively. Last month, it set up its first dedicated experience centre in Gurugram to showcase its fashion lines and private labels. “It’s an exciting thought because we’re able to connect with a group of customers in a very intimate manner and very much within their fashion journey in an offline store,” said Sirdeshmukh.
While the deal with Shoppers Stop is likely to give Amazon a foothold among offline shoppers for fashion, the company is exploring similar partnerships for other categories such as smartphones as well. When it comes to fashion, the e-tailer believes it will be one of the leading categories that helps improve repeat purchase behaviour among consumers.
“Not only are we going to promote all the product lines that Shoppers Stop brings, we will also be looking at marketing the brand”