Guest post by Ranjith Pavithran - founder of web consulting firm Kapston

Written by: Madhur

On Nov 14th, 2007

On “web-to-store” shopping behavior

Research by Kapston.com, an Internet business consulting firm in association with GadgetsGuru.com and HolidayHangouts.com on products listed online and websites in India indicates that people spend 10 - 20% more on products they don’t research online.

Indian consumers are embracing Internet increasingly to research products, before making a visit to a local store; the response from various web-to-store operators in India during the past year shows web-to-store shopping behavior increasingly outpacing online buying.

Web-research before shopping was by far the most popular in comparison with word of mouth, newspaper ads, TV ads and various other means. This across the channel shopping demographic is comprised of younger, wealthier and more experienced online consumers. This group earns much more than other shoppers.

International research says that offline buying (any service / product) after an online search is $180 billion and online research leads to online buying around $160 Billion globally in 2006.

Majority of the Indian Internet users reported that there are a multitude of products they prefer to buy in person rather than using an online transaction. Most of these products, they research Internet before making the purchase. This mainly helps them save time and allow them to make informed choices before they actually hit the street.

The pioneer in this segment in India is OffersForShoppers, which started operating in early 2006, reported a sudden surge of activities from the smaller cities in India and noticed the trend is gaining momentum in Bangalore and Delhi. The CEO, Kumar Setu says Home decor and Appliances in couple of years will surpass Consumer Electronics and become the #1 category. www.offersforshoppers.com is planning to start operations in 5 more cities in India by the end of 2007.

Prem Kumar, the Director of HolidayHangouts.com says that he is getting a lot of queries from the Internet for his 2nd home and vacation home business in India. Internet is by far the most effective medium in his advertisement campaign. HolidayHangouts has sold its vacation villas in Kerala to customers from Germany, South Africa, United States, UK etc.
He also said he could garner international and national level customers by investing a fraction of traditional media.
The growth of the OffersForShoppers.com network is testimonial to customer demand for a local shopping tool. We are the first company to come up with the click and brick model in India” says Kumar Setu.
Key Takeaways

  • Buying a service or product after online search is $180 Billion
  • Online research leads to online buying around $160 Billion globally.
  • People in India spend 10 – 25% more on products they don’t research online
  • Use of the Internet for in store shopping grows 23% in 2007

Most of the web-to-store companies use coupons to track the conversion and effectiveness of online advertisement. With a one time set up charge and cost per sales or cost per leads model insulate them from potential technological pitfalls. Web-to-shop also allows them to reach certain cross sections of wealthy customers without big investment.

This is a welcoming trend for small and medium sized retailers who do not have online presence and necessary know-how to market their shop online. As for the not so Internet savvy reluctant Indian merchants, these web-to-store websites are a risk free investment. They are beginning to feel the potential of Internet as a sale promotion tool.

The biggest challenge associated with web to store in India is to reach the remote merchants who do not know how Internet works and how they can utilize it. The other challenge is in putting local offers online and to track them and update them regularly. The other difficulty is to change the mindset of merchants to re-allocate the advertisement budget to this new form. Success of a business largely depends on the marketing strategy. This holds well if your business is run completely online or it is an extension of an offline business. Internet presence and website marketing opens more avenues for merchants to sell their products and scale their business than most other media.

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Entry Filed under: Ranjith Pavithran, kapston

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