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Whirlpool of India (Whirlpool) is foraying into e-commerce with an exclusive online store - W. The move is a significant one because for long the company kept e-commerce at an arm's length. Not long ago, Whirlpool along with few of its competitors was in the news for shunning e-commerce and refusing warranties to those buying products online.
So what explains the brand's new-found admiration for e-commerce, which currently accounts for less than 10 per cent of the total sales for consumer durable goods?
Whirlpool's move to get into the e-commerce space is an all-out attempt from the brand to safeguard its turf in the face of increasing competition from the top three market leaders - Samsung, Videocon and LG.
Currently, Whirlpool commands 25 per cent share in the consumer durables market in India - the brand's fifth largest market in the world. Despite enjoying strong brand equity, Whirlpool is fast losing ground to players like Samsung and LG which together command more than 40 per cent share in the consumer durables market.
According to industry experts, Whirlpool's foray into e-commerce is part of a larger management rejig and realignment of its business strategy under the company's new managing director, Sunil D'Souza who took over in June 2016.
Apart from getting its lost mojo back, Whirlpool's fresh focus on e-commerce under the new leadership signifies the brand's commitment to be future-ready.
According to Kapil Agarwal, vice-president, marketing, Whirlpool, "E-commerce is a space which is of interest to everybody around us, not just Whirlpool. It's going to be a competitive space. Online will emerge as an alternative channel to traditional trade but in the long term."
For Whirlpool, e-commerce is all about influence and action.
What this means is that today players across categories are seeing a lot of digital influence. The average propensity for searching a product online, comparing prices and getting a feel of the product has grown manifold, although people continue to prefer physical touch and feel, particularly when they are going for products with big ticket size.
However, with internet penetration going up, to be successful it's important for brands to control the influence and action that digital has on consumer behaviour and purchasing. And it's with this long-term view that Whirlpool is hedging its bets on e-commerce.
For Whirlpool, sale from e-commerce is anywhere between two to five per cent. The company wants to take this up to 10-15 per cent in the next three years.
Its online store, W, will pave the way for brand Whirlpool to be a part of the e-commerce world and offer customers a holistic brand experience since the company will have complete control over their purchase experience.
Since customers will be buying directly from the brand, the quality and trust factor will be higher and inherently guaranteed with every purchase, claims Agarwal.
Further, Whirlpool's move to debut with an online store is contrary and competitive in nature. Most of its competitors have their own brand shops and their own showroom spaces, unlike Whirlpool. It mainly deals in the brick and mortar world through multi-brand outlets. Therefore, the move to launch the W store, says Agarwal, "gives more exclusivity to the channel and more power to the brand to leverage online traffic influence and make the economic engine model work for Whirlpool".
In the run-up to unveiling the W store, Whirpool has adopted a differentiated strategy to get its online debut right.
To begin with, the assortment of products available online will be significantly different from what is available to consumers through brick-and-mortar stores. There will be a few exclusive deals available to buyers opting for the online sales channel.
For example, a buyer could be looking for a particular colour of a washing machine or a refrigerator which might not be available at that point with the retailer. That is something the W store can engineer easily. Apart from big-ticket customised products such as washing machine and refrigerator, W stores will offer buyers Whirlpool's entire range of small home appliances including water purifiers, slow juicers and mixer grinders, cooking products and dishwashers.
Through W store, the company will be bringing Whirlpool's global product categories online. "The store will offer high-end kitchen appliances to consumers, which are a notch above those of mass brands like Havells or Usha. Therefore, the products will be available at a premium," says Agarwal.
In the e-commerce space, in addition to assortment of products, payments and delivery are the other two crucial elements determining consumers' buying experience.
Like every other e-commerce player, Whirlpool recognises the importance of delivering a hassle-free and convenient consumer experience to buyers coming online. The company has made significant investments in its payment gateway and has set up a cart management system. From the consumer's point of view, the move will ensure a hassle-free and smooth transaction experience.
Next, Whirlpool has got on board multiple logistics partner to ensure it is equipped to deliver across a number of cities where it is going live. Currently, the company manufactures 95 per cent of its products in India - out of three plants in Faridabad, Pune and Pondicherry. It imports high-end products including front-load washing machines and large refrigerators from Europe, China and Latin America.
On the logistics front, the biggest challenge facing the company is to ensure that it brings down the delivery time of products from a seven-day business cycle to three to five days, particularly in case of big-ticket size products. This, according to Agarwal, will help the company in closing the delivery gap vis-a-vis brick and mortar shops, which depending on the availability of product deliver a product to a buyer in 24 hours or at best 48 hours.
Even with all the advantages that e-commerce offers, Agarwal is aware of its challenges. He says online presence allows the consumer to directly interact with Whirlpool in a way the brand wants her to. While a positive experience increases the possibilities of converting a conversation into sales, an unpleasant experience could result in the loss of a potential customer, impacting brand image. Therefore, the challenge is in keeping up the confidence of talking to customers directly and delivering on the brand promises of quality and trust.
EXPERT TAKE
Building from scratch
As Whirlpool gets into e-commerce it will find itself reinventing the wheel as it builds out payments and delivery system. Since existing e-commerce players already have expertise in these areas getting on board these platforms is an equally good option for a brand. Presence on these channels would also allow a brand to take advantage of the heavy footfalls enjoyed by them.
As Whirlpool opens its online store, the key question is how does it plan to bring in customers online? This calls for smart advertising and marketing activities.
H S Bhatia
MD, Surpluss.in, and formerly CMO, Videocon Industries
So what explains the brand's new-found admiration for e-commerce, which currently accounts for less than 10 per cent of the total sales for consumer durable goods?
Whirlpool's move to get into the e-commerce space is an all-out attempt from the brand to safeguard its turf in the face of increasing competition from the top three market leaders - Samsung, Videocon and LG.
Currently, Whirlpool commands 25 per cent share in the consumer durables market in India - the brand's fifth largest market in the world. Despite enjoying strong brand equity, Whirlpool is fast losing ground to players like Samsung and LG which together command more than 40 per cent share in the consumer durables market.
According to industry experts, Whirlpool's foray into e-commerce is part of a larger management rejig and realignment of its business strategy under the company's new managing director, Sunil D'Souza who took over in June 2016.
Apart from getting its lost mojo back, Whirlpool's fresh focus on e-commerce under the new leadership signifies the brand's commitment to be future-ready.
According to Kapil Agarwal, vice-president, marketing, Whirlpool, "E-commerce is a space which is of interest to everybody around us, not just Whirlpool. It's going to be a competitive space. Online will emerge as an alternative channel to traditional trade but in the long term."
For Whirlpool, e-commerce is all about influence and action.
What this means is that today players across categories are seeing a lot of digital influence. The average propensity for searching a product online, comparing prices and getting a feel of the product has grown manifold, although people continue to prefer physical touch and feel, particularly when they are going for products with big ticket size.
However, with internet penetration going up, to be successful it's important for brands to control the influence and action that digital has on consumer behaviour and purchasing. And it's with this long-term view that Whirlpool is hedging its bets on e-commerce.
For Whirlpool, sale from e-commerce is anywhere between two to five per cent. The company wants to take this up to 10-15 per cent in the next three years.
Its online store, W, will pave the way for brand Whirlpool to be a part of the e-commerce world and offer customers a holistic brand experience since the company will have complete control over their purchase experience.
Since customers will be buying directly from the brand, the quality and trust factor will be higher and inherently guaranteed with every purchase, claims Agarwal.
Further, Whirlpool's move to debut with an online store is contrary and competitive in nature. Most of its competitors have their own brand shops and their own showroom spaces, unlike Whirlpool. It mainly deals in the brick and mortar world through multi-brand outlets. Therefore, the move to launch the W store, says Agarwal, "gives more exclusivity to the channel and more power to the brand to leverage online traffic influence and make the economic engine model work for Whirlpool".
In the run-up to unveiling the W store, Whirpool has adopted a differentiated strategy to get its online debut right.
To begin with, the assortment of products available online will be significantly different from what is available to consumers through brick-and-mortar stores. There will be a few exclusive deals available to buyers opting for the online sales channel.
For example, a buyer could be looking for a particular colour of a washing machine or a refrigerator which might not be available at that point with the retailer. That is something the W store can engineer easily. Apart from big-ticket customised products such as washing machine and refrigerator, W stores will offer buyers Whirlpool's entire range of small home appliances including water purifiers, slow juicers and mixer grinders, cooking products and dishwashers.
Through W store, the company will be bringing Whirlpool's global product categories online. "The store will offer high-end kitchen appliances to consumers, which are a notch above those of mass brands like Havells or Usha. Therefore, the products will be available at a premium," says Agarwal.
In the e-commerce space, in addition to assortment of products, payments and delivery are the other two crucial elements determining consumers' buying experience.
Like every other e-commerce player, Whirlpool recognises the importance of delivering a hassle-free and convenient consumer experience to buyers coming online. The company has made significant investments in its payment gateway and has set up a cart management system. From the consumer's point of view, the move will ensure a hassle-free and smooth transaction experience.
Next, Whirlpool has got on board multiple logistics partner to ensure it is equipped to deliver across a number of cities where it is going live. Currently, the company manufactures 95 per cent of its products in India - out of three plants in Faridabad, Pune and Pondicherry. It imports high-end products including front-load washing machines and large refrigerators from Europe, China and Latin America.
On the logistics front, the biggest challenge facing the company is to ensure that it brings down the delivery time of products from a seven-day business cycle to three to five days, particularly in case of big-ticket size products. This, according to Agarwal, will help the company in closing the delivery gap vis-a-vis brick and mortar shops, which depending on the availability of product deliver a product to a buyer in 24 hours or at best 48 hours.
Even with all the advantages that e-commerce offers, Agarwal is aware of its challenges. He says online presence allows the consumer to directly interact with Whirlpool in a way the brand wants her to. While a positive experience increases the possibilities of converting a conversation into sales, an unpleasant experience could result in the loss of a potential customer, impacting brand image. Therefore, the challenge is in keeping up the confidence of talking to customers directly and delivering on the brand promises of quality and trust.
EXPERT TAKE
Building from scratch
As Whirlpool gets into e-commerce it will find itself reinventing the wheel as it builds out payments and delivery system. Since existing e-commerce players already have expertise in these areas getting on board these platforms is an equally good option for a brand. Presence on these channels would also allow a brand to take advantage of the heavy footfalls enjoyed by them.
As Whirlpool opens its online store, the key question is how does it plan to bring in customers online? This calls for smart advertising and marketing activities.
H S Bhatia
MD, Surpluss.in, and formerly CMO, Videocon Industries