In May last year, Myntra, an Indian fashion e-retailer, announced that the customers could order goods only through its mobile-based app and shut down its web-based service. Flipkart, the e-retail giant that had recently acquired Myntra, also stated that it would follow suit, portraying the decision as another step toward offering personalised service. The other two Indian e-commerce rivals, Amazon and Snapdeal watched from the sidelines.
In early December, just about six months later, Myntra disclosed that it has reverted its previous decision, though partially, by reopening the website; after browsing the site, the shopper still has to place an order through its app only. Flipkart reinstated its website earlier, with banners requesting the customers to download the app.
Mobile internet traffic accounts for 65 per cent of the total internet traffic in the country, and mobile usage comprises 70% of e-commerce orders in India, much higher than in other countries. And the figures will only go higher.
The move was bold but reeked of bullying. It did not offer a choice, taking customers for granted, as if confining them to an app-cage. The companies had their own valid reasons for such a strategy: already three-fourths of their traffic and four-fifths of their sales were through mobile apps; conversion rate of visit to sales was higher on apps; repeat purchases would be more.
If granted a wish, all e-retailers having a sizeable base would choose an app-only model. Even otherwise, shopping through a mobile app has its relative advantages for both the seller and the shopper. The companies can record customers’ shopping habits and preferences better on an app as the click points are lesser and can guide them, unlike a desktop browser where consumers tend to compare more by opening many tabs. The seller can push notifications regarding products through apps, which fare better than emails and text messages, saving on advertising costs. Unlike a browser with cookies, other companies cannot access these data from apps. Most important, once people download an app for a particular service, they tend to stick to it due to switching costs, as psychologists tell us.
Of course, consumers carry their smartphones wherever they go and a lot many buy on impulse. Using an app fast-forwards the process. Apart from buying goods, they may order a taxi through an app, though many taxi aggregators have the option of hailing a cab through a website, and in a few cities in India, even order food. All this is understandable indeed.
But reducing a channel for customers is not fathomable when the world over, the trend in organised retail is toward omnichannel: multiple channels such as web, mobile, and store are available to a customer to interact with and buy from the retailer. Nowadays, brick-and-mortar retailers like Wal-Mart offer online sales and, by contrast, even quintessential e-retailers like Amazon opened a few physical stores, though only as an experiment. Again, the aim is providing all possible platforms, single or in combination, to customers for exploring and shopping, virtually and physically, wherever and whenever they want. In sum, the customer chooses his experience.
The supply chains of a brick-and-mortar retailer and an e-retailer have fundamental differences of design and flow. However, the app-only strategy, in hindsight a failed one, has nothing to do with supply chain complexities as some surmised wrongly; customer order on an app would still trigger the e-commerce supply chain.
But it would be the only trigger on a sole platform. And if the customer is unable to access it for any reason, then this results in lost sales. This is relevant because war between brick and click is yet far from over.
And e-commerce firms have always justified huge losses as a part of strategy for increasing their customer base and revenue growth; hence, closing down an alternative platform, even if it incurs costs, seems contradictory. In absence of a website, for instance, Google search cannot direct a shopper to the site, which again means fewer new customers.
Despite the large number of mobile users in India, smartphones with large screens are not so ubiquitous. Unless shoppers buy an item where the appearance does not matter or purchase known items, they prefer ordering on a desktop or a bigger screen, where they can view better images, check features and even read reviews without scrolling much.
The demon of poor connectivity strikes anytime, leaving shoppers frustrated and stressful, especially during payments. Moreover, Indian public spaces are crowded and many feel uncomfortable, unsafe in doing these transactions outside their homes. Besides, most of the apps are vulnerable to hacking.
While buying through an app, shoppers cannot compare prices with those of other sellers, a task easily accomplished by desktop or mobile browsing. To most Indian consumers, who are extremely price conscious and like a good bargain, this is unsettling.
The march of m-commerce is unstoppable but slower than the e-commerce companies want it to be. An app-only strategy, a vexed one, can succeed only when the number of loyal customers reaches past a tipping point and companies build an entire network around themselves. This may take time. Else, only a technological breakthrough that provides apps with more features, truly customises experience, or offers a better experience than website can accelerate the transition. Until then, the alternative is to be patient and pragmatic.
Prashant K Singh is a logistics and supply chain management professional with the Indian Air Force. The views are personal.
He tells how supply chains & logistics affect everything around us on his blog, Unshackled, a part of Business Standard's platform, Punditry.
He tweets as @ZenPK
