Why Brands Should Go Beyond Discounts for e-Shoppers
Posted on Wednesday, Jul 14, 2016, 07.53 am by AdvertisingAge India
In just the last 12 months, consumer interest in shopping online has almost doubled, and surprisingly, 60% of online shoppers come from non-metros. By 2020, the number of online shoppers in India is expected to increase from 50 million, to 175 million.
E-commerce is a sector that has seen phenomenal growth in India in the recent past. In part this is due to the fact that online shopping is convenient, but predominantly, the growth can be attributed to the e-commerce discounts offered by online stores.
From Flipkart to Ola and Amazon, every e-commerce platform has offered e-discounts, discount vouchers, sales, and other cash back offers to drive traffic to their websites. More often than not, we wake up to e-mails notifying us about a promotion that one or more online shopping websites are currently running. They offer us exclusive online promo codes to use if we purchase certain items from their mobile app, or their flashy website.
But is that really what online shoppers want? Are we ready to wait for online shopping promo codes to come in day-after-day, to purchase what we're looking for? According to a Google survey, almost 90% of online shoppers claim that discounts aren't the motivating factor behind them favouring online shopping over regular shopping. In fact, they are willing to shell out a little extra, if required, for a variety of value-added services like extended warranty periods, quicker deliveries, and hassle-free returns.
Unfortunately, for a few years now, the discounts and online promotions have run the e-commerce sector, and a few good start ups like Food Hotline and Taxi for Sure were unable to prosper in the competitive market. Even though the service offered by these smaller start ups was better, they didn't offer reduced prices, and were unable to raise the funding they required to continue providing high-quality services. Food Hot Line was forced to shut because of the cash burn tactics used by bigger brands like Food Panda and Yumist, while Taxi For Sure was bought by Ola Cabs.
Fortunately, the Centre has passed a new law preventing e-commerce companies from using predatory pricing strategies, stopping them from offering discounts that influence the market price of goods. Does this mean that now fair play will come into picture? Or can e-tailers sustain themselves without the discounts?
With the government's new policy in place though, e-commerce platforms are being forced to rethink their strategy. They can no longer offer slashed prices. Instead, they'll have to work on their service offerings, and hope that their service will be enough to retain long-term clients. Taxi services can look at discounting their surcharge costs for loyal customers at peak times, while other e-tailers can think about reducing their delivery charges on repetitive orders, or on orders by regular customers.
At the end of the day, e-commerce is all about convenience. Most online shoppers have said that they prefer shopping online, as it gives them more time at home, allowing them to focus on their families after a long day at work. It also makes buying surprise gifts for loved ones easier, and the wide collections offer more options than their local stores.
E-commerce is a sector that has seen phenomenal growth in India in the recent past. In part this is due to the fact that online shopping is convenient, but predominantly, the growth can be attributed to the e-commerce discounts offered by online stores.
From Flipkart to Ola and Amazon, every e-commerce platform has offered e-discounts, discount vouchers, sales, and other cash back offers to drive traffic to their websites. More often than not, we wake up to e-mails notifying us about a promotion that one or more online shopping websites are currently running. They offer us exclusive online promo codes to use if we purchase certain items from their mobile app, or their flashy website.
But is that really what online shoppers want? Are we ready to wait for online shopping promo codes to come in day-after-day, to purchase what we're looking for? According to a Google survey, almost 90% of online shoppers claim that discounts aren't the motivating factor behind them favouring online shopping over regular shopping. In fact, they are willing to shell out a little extra, if required, for a variety of value-added services like extended warranty periods, quicker deliveries, and hassle-free returns.
Unfortunately, for a few years now, the discounts and online promotions have run the e-commerce sector, and a few good start ups like Food Hotline and Taxi for Sure were unable to prosper in the competitive market. Even though the service offered by these smaller start ups was better, they didn't offer reduced prices, and were unable to raise the funding they required to continue providing high-quality services. Food Hot Line was forced to shut because of the cash burn tactics used by bigger brands like Food Panda and Yumist, while Taxi For Sure was bought by Ola Cabs.
Fortunately, the Centre has passed a new law preventing e-commerce companies from using predatory pricing strategies, stopping them from offering discounts that influence the market price of goods. Does this mean that now fair play will come into picture? Or can e-tailers sustain themselves without the discounts?
With the government's new policy in place though, e-commerce platforms are being forced to rethink their strategy. They can no longer offer slashed prices. Instead, they'll have to work on their service offerings, and hope that their service will be enough to retain long-term clients. Taxi services can look at discounting their surcharge costs for loyal customers at peak times, while other e-tailers can think about reducing their delivery charges on repetitive orders, or on orders by regular customers.
At the end of the day, e-commerce is all about convenience. Most online shoppers have said that they prefer shopping online, as it gives them more time at home, allowing them to focus on their families after a long day at work. It also makes buying surprise gifts for loved ones easier, and the wide collections offer more options than their local stores.
