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E-commerce firms turning to offline stores for customer connect

LiveMint logoLiveMint 23-04-2017 Deepti Govind

A slew of e-commerce startups including Ratan Tata-backed Teabox, fashion retailer Myntra, cosmetics firm Nykaa—even names that are just over a year old, like custom-made men’s clothing brand Stylior— plan to experiment with offline stores in an attempt to establish a deeper customer connect and as part of their omni-channel strategies.

The offline strategies vary —Nykaa is looking to open 30 stores while Myntra, which opened its first physical store in Bengaluru in March, currently only plans to open a couple more.  “We are getting into our own experiential stores. The way we are looking at these is not from a sales perspective, but from a pure-play experience perspective. But the good thing we have seen is if 10 people come and try a product, four are pretty much instant converts,” said Kaushal Dugar, founder and chief executive officer of Teabox, a Bengaluru-based start-up that sells premium tea across the globe through its website. 

Teabox currently operates a physical shop-in-shop (leasing space in someone else’s store) in Cinnamon—a high-end destination for designer lifestyle products housed in a bungalow in central Bengaluru. The firm expects to open four of its own experiential stores over the next two years—one each in Bengaluru and Mumbai, and two in the National Capital Region (NCR). 

Myntra opened its first physical retail store in March for its private label, Roadster, in Bengaluru’s Indiranagar area. The firm plans to open stores for two of its other private labels—All About You and HRX—over the next year or two, and will take a call on whether it ought to open additional Roadster stores in six months. 

“As brands reach a certain scale, it’s important for them to have an offline presence so that you can start to touch and feel the product and you can give the consumer a 360 (degree) experience. In the first month we’ve had almost 35,000+ footfalls (in the Roadster store). Of the 35,000 people who showed up, a lot more people spent more time in the store,” said Myntra CEO Ananth Narayanan. 

Stylior, a bespoke men’s clothing brand that offers customised formals, has only been in operation since 2016 and is already getting into the offline world, with its first store set to open in Bengaluru next week.

The firm plans to open six stores by next year, and around 30-40 stores over the next five years said Riyas K., director and co-founder of Stylior. Offline presence will also offer more visibility to online retailers, who witnessed moderate growth last year as they brought down discounts and marketing spends.

Nykaa, which opened its first physical store in suburban Mumbai’s Infiniti Mall last week, is also contemplating an additional physical retail format, chief executive officer Falguni Nayar said. 

While the firm does not expect offline stores to contribute to a significant chunk of overall sales, just opening four or five stores will not provide a full omni-channel experience, considering 10-12 million people visit the firm online every month across India, she added. 

Ankur Bisen, senior vice-president at Technopak Advisors, takes a similar view.

“The premise with which online players are going to offline stores is that they see offline as an important part of the experience of the consumers,” Bisen said.

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