Momentum in online, app-based sales to stay for retailers

Many large brick and mortar retail chains that switched to online during the lockdown have reported spike in sales from digital channels, and expect the momentum to continue as consumers prefer to order digitally despite restrictions are being eased.

Several retailers, which earlier started selling essential items - like food and grocery only - via online and app-based channels, have now started offering several items in general merchandise such as apparels, appliances, and electronics through these platforms.

According to experts, now online channel has become “inevitable” for the traditional retailers and would have to push this channel further to compete with local kirana shops, which are also now getting smarter by adopting digital technologies during the lockdown period.

“I expect the retailers to continue with the momentum they have built for online business during the lockdown and extend to their wider categories in the future to build a truly omni channel business,” said EY Partner and National leader, Consumer Products and Retail Pinakiranjan Mishra.

Future Group President Food & FMCG Kamaldeep Singh said though the footfall at its hypermarts is still low and has not come to the pre-COVID level but the average ticket size is up significantly as buyers are ordering online.

“Frequency of shopping is still not back to normal and the ticket size is up significantly. Shoppers are opting for home delivery as a safe option,” he said, adding “Big Bazaar has seen a jump in orders for home delivery through bigbazaar.com, Whatsapp ordering and ordering through phone".

Home delivery of products would be a very important part and Future group has ramped up its infrastructure for the same, he added.

Similar trends were also witnessed by cash and carry retailers such as - Walmart, Metro Cash & Carry and Lots Wholesale.

According to Metro Cash & Carry India MD& CEO Arvind Mediratta, “what demonetisation did to digital payments, the lockdown has done to technology in retail".

Walmart India, which operates Best Price cash and carry stores, said its e-commerce sales have grown 4.5x after lockdown. It had launched a new e-commerce app which has seen half a million downloads.

“We are seeing customers sticking to ordering online even after easing in lockdown restrictions,” said Walmart India Chief Digital Officer Chandan Khaitan.

Its stores in Tier II & III cities like Karimnagar, Nizamabad, Aurangabad and Amravati have also shown high e-commerce mix, he said. “Customers are also seen making evolved use of e-commerce app such as saving their items in favourites and using the favourite list for re-ordering,” said Khaitan.

Metro Cash & Carry had launched its wholesale app in mid-April during the lockdown and had received a positive response from all our customer groups. It had recorded a lakh plus downloads of its app in less than three months, he said.

Customers are primarily buying staples, daily essentials, food and confectionery followed by home and personal hygiene, ready to eat, frozen and dairy products.

“We have seen Kiranas who are considered conservative also prefer ordering on our app. Speed of delivery clubbed with seamless ordering experience has helped us garner higher orders through our app,” said Mediratta adding, “adapting to technology is the need of the hour and future for the retail sector. If exercised rightly and blended well with offline, online channels are here to stay".

Similarly, LOTS Wholesale Solutions Managing Director Tanit Chearavanont said COVID outbreak has changed consumer buying behaviour and has reinforced new habits towards online channels. It has seen a “huge surge in demand coming through our e-commerce platform” during the lockdown period.

“Increased digital adoption during the lockdown phase has led to a faster acceptance of omni- channel ways of retailing. We foresee that the trend of consumers opting for online shopping is likely to continue with rapidly evolving consumer preferences and attitudes. Retailers and businesses are embracing the change and preparing for transformation in order to provide a seamless shopping experience to their consumers,” he said.

According to Chearavanont, LOTS Wholesale is “focusing on offline to online business strategy and have witnessed a healthy number of orders coming through the digital store which complements our physical presence.”