IAMAI: Online and offline retail complement each other

By Ashwini Gangal , afaqs!, Mumbai | In Digital | September 27, 2010
At the IAMAI - 13th Media Marketing Roundtable Conference, the issues of online advertising, e-commerce and the online version of in-store advertising were discussed

eBay, along with IAMAI (Internet and Mobile Association of India), conducted an event on the occasion of its 13th Media Marketing Roundtable Conference. Held on September 24 at Mumbai, the centre of the event was a lively panel discussion on 'In-Store Advertising: The Online Avatar'.

The panel consisted of Tanguy Peers, vice-president, global advertising, eBay; Ashutosh Tiwari, executive vice-president, strategic marketing, Godrej Industries; Jasmeet Gandhi, head, devices, OPM and services marketing, Nokia, India; and Peshwa Acharya, vice-president and head, marketing and consumer experience, Reliance Retail. The panel discussion was moderated by Ambareesh Murty, country manager, eBay India.

The event drew on the fact that advertising in a retail environment, which targets consumers at the point of purchase (PoP), has been a key strategy for most consumer brands for a long time. Given this, the panel explored the more recent and relevant topic of how today, there are several opportunities for brands to connect with their audiences while they shop in virtual stores as well.

The issue of how brands may interact with other brands on an online platform was also addressed.

Before the panel started its discussion, Peers addressed the delegates and delivered a brief yet enlightening keynote address. He started his talk by speaking about two big global trends, namely e-commerce and online advertising. "When these two trends overlap, a new media platform is created," stated Peers. He went on to share that e-commerce is a growing field and stated some global figures as well. "This area grew by 5 per cent in 2009 and saw a 17 per cent growth in 2010. We can expect double digit figures in the next five years," he shared.

"Advertising spends are being rapidly shifted from print to online but the amount is still not at par with the amount of time people spend online," he explained. Peers revealed that e-commerce (with a YOY growth of more than 17 per cent) and online advertising (with a YOY growth of more than 10 per cent) overlap and give birth to online in-store advertising, the stakeholders for which comprise three pillars - Internet users, e-commerce publishers and online advertisers/media agencies.

Peers went on to share the results of a UK based study, which showed that consumers pay maximum attention to advertisements at the point of sales (PoS). "This is a big ecosystem - online advertising is a huge market and is bound to get bigger in the future," he said.

The discussion was then taken forward by the panel and Tiwari raised an important point regarding how the mental block surrounding online purchases has dropped significantly over the years. "Online buying is increasing; this platform was first used for information dissemination, then for interaction via instant messenger and more recently, for providing consumers with online buying experiences. With the advent of online ticketing, the concept of air travel via online transactions is an acceptable phenomenon in India today, with a disruptive value proposition," said Tiwari.

Gandhi then took over by concurring and adding the point that some categories tend to lend themselves to online buying (such as books and airline tickets) as these do not require the 'touch and feel' aspect that certain other categories (say, groceries) do.

Interestingly, he went on to reveal that digital/mobile buying had an ASP (average selling price) of Rs 49, as opposed to Rs 1,000 via online (via a computer screen) buying.

Acharya then categorically placed three points for analysis on the table. "We are increasingly becoming time-starved customers; in a metro context, online buying gives people time-convenience as travel time is cut short by a huge margin," he began.

He added, "There is a big dearth of offline retail in several towns in India; organised retail probably prevails in just 100 odd cities. This is where the scope and need for online retail lies," he exclaimed. He went on to reiterate the point regarding online ticketing and opined that whether one purchases a ticket as a retail customer or through a travel agency, in his opinion, 100 per cent of this booking is now done online. "A spurious correlation worth making note of is that there are 50-55 million Internet users and the same number of air travellers exist, too," he mused. He added that the M-voucher has tremendous potential in the times to come.

Peers added that the transparency of online advertising is a 'dream for marketers' and Tiwari added, "The online platform is selling itself to marketers as it has both great reach as well as the potential to provide experiential brand communication. A brand can benefit a lot by going virtual as this medium is becoming segmented, sophisticated and has developed immersive interaction," he offered.

Towards the end, Gandhi stated that though the number of Internet users is very high, traditional web-based browsing has been on the decline during the recent past as contextual applications/application-based experiences are on the rise. The reality of declining website/portal-based and search engine marketing was also discussed by the panel.

In conclusion, the panel reached the consensus that the future will see a collaboration between the two platforms, offline and online retailing, and that a consumer will be willing to pay a premium for 'customised online buying experiences'.

"There is a requirement for a possible tango between the two," enthused Acharya. At this point, Murty shared the fascinating example of refrigerators in Korea that could 'sense' depletion of their contents and automatically intimate a website; the required food is then delivered to the homes.

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