Brick and mortar outlets are here for the long haul...

By Ayan Banik , Cheil, Mumbai | In Marketing | December 20, 2017
...despite the growth of e-commerce.

From a buzzword to a current day reality, the Indian e-commerce industry has been on a burgeoning curve with a sales prediction of USD 120 billion by 2020. In this buoyant scenario, it is only natural for big data analysts, retail consultants and industry stalwarts to announce the doomsday for traditional brick and mortar retail outlets. But is that what's truly going to happen?

Ayan Banik Ayan Banik

An alternative perspective purely basis the Indian history, culture and mindset:

Brick and mortar stores are here to stay for the long haul, against all the riding tides of e-commerce behemoths, albeit with some metamorphosis.

Historically, India has been ruled by kings and dynasties, marauders, invaders, local satraps and the Dutch, Portuguese, French, and the British. Even for the larger part of post-independent, democratic governance, India was largely ruled by a Gandhi-Nehru dynasty. This tryst with our historical destiny has hugely impacted our culture and societal fabric. Class distinction is an evident truth of the Indian culture born out of a massive imbalance between privileges and resources, vis-à-vis a teeming population. There has always been and always will be a stark divide between the classes and the masses, the privileged and those on the fringe, the rulers and the ruled... despite all noble intentions, market forces with a capitalist outlook will only widen this gap.

Limited economic and civic resources, coupled with an excess of human capital, have created one of the world's largest pools of uneducated, unskilled and therefore, unemployed labour forces. Mapping these two scenarios reveals uniquely differentiated job opportunities that are non-existent in any of the developed economies of the world where human capital comes at a premium.

In our part of the world, technology doesn't replace human capital; rather, it duplicates it.

If we go to a parking lot in any of the metros in India, we will see an automated parking ticket vending machine with a person standing next to it, whose only job is to press the button and hand over a ticket to the driver of the oncoming vehicle. From drivers and car washers to clothes washers and clothes ironers to dog strollers and professional mourners (Rudalis), in India, we have attendants for anything and everything.

And this psyche of 'babudom' (an Oriental addition to the English lexicon, which means 'I am entitled to royal treatment') works to the benefit of both the classes and the masses. While it creates employment and sustenance for the masses, it helps the classes lead the lives of Nawabs and Maharajas. The scale may be different, but the mindset remains the same.

The changing economic landscape

Just like a dog chasing its own tail, constant economic movement keeps happening. The more the masses try and ape the classes by gaining entry into their exclusive clubs (with lifestyle, infrastructure and economic development), the more the classes up the ante and invent newer markers of privilege and exclusivity. When outgoing and incoming calls cost Rs.16 and Rs.8 per minute, the mere ownership of a mobile phone was a symbol of class. But today, with a mobile phone in almost every pocket, the distinction is made by the appearance, features, brand, make, and model of the handset.

Similarly, as long as the access to smartphones, tablets, laptops and, most importantly, the internet, remained the exclusive terrain of the elite, shopping online was a hallmark of privilege. No standing in long queues brushing shoulders with others, no bargaining. They could do all that and more from the comforts of their ivory towers. Unfortunately, with technology being a big leveller, that is no longer the case. With the masses crowding e-commerce platforms, the classes are once again uncomfortable with brushing shoulders and shopping with them. Who shops for what doesn't matter; the very fact that your driver shops exactly the way you do is, in itself, discomforting.

Desperate need to create their next marker of exclusivity

And that is like going back to where it all started - good ole classic brick and mortar shops. The more the masses leave these stores and crowd e-commerce platforms, the more the reason for the classes to go right back to them... to retain their exclusive rights.

This is how it works - one doesn't have to worry about time because classes have leisure and time on their hands (because all their chores are taken care of by others). One doesn't have to worry about parking hassles because a driver takes care of that. In a store, one gets the privilege of being served and taken care of by human beings (mind you, not chatbots). And most importantly, in a store, one gets customised products, tailor-made to suit one's personal tastes; for example, a monogrammed handbag. It's reverse psychology; the harder the pursuit of acquisition, the sweeter the feeling.

That's why I say - brick and mortar stores are here to stay... for the long haul. That is as long as they can metamorphose and upscale their offerings to fan the ego of the classes.

(The author is head, brand strategy, Cheil India)

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