We the generation of 2020 have seen the transition between traditional businesses to digital businesses. Traditional businesses are always about brick and mortar stores which give us real time physical experiences. Whereas Digital businesses are about people sitting at one corner of the world and scrolling through the web to access any product and services at any point of time and anywhere in the globe and get it delivered at the door step. For the entrepreneurs, who are confused to decide between traditional and digital business must know the differences between them. Differences do not make one type superior but they can surely help one to decide. It is because different businesses are suited to different types of markets. Some may want local customer to attract while some wish international customers depending on the size and type of the organization.
These two differ in some points such as Overhead Cost; which is higher for the traditional business due to presence in offline & online service, Convenience to the customer; the competition is undoubtedly in the favor of e-commerce shopping because of customer’s reliability, Marketing Program; there is no matter of doubt in the fact that digital businesses need to have more budget to spend in their marketing programs where in traditional business do have limited budget and limited options, Reputation in front of the customer; much higher for the traditional business, time & reliability; when it comes to save time & money in this fast life, e-commerce business are all time favorites of the people.
Now coming to the recent situation in respect to the Covid-19 scenario, one third of the whole world is inside the home due to lock down. From NYSE to BSE everything is facing a turn-up situation that the mankind has not seen in the recent past. The corona virus outbreak is first and foremost a human tragedy, affecting hundreds of thousands of people. It is also having a growing impact on the global economy. This Covid-19 lock down creating a paradigm shift in the consumer behavior. The pandemic situation has changed the whole process of how people work, shop and communicate with people more than any other disruption (including technological ones) in the recent past. As more people start working from home, they are sticking to basics, stepping outside only to buy essentials and are constantly worried about the risks of getting infected in crowded places like malls and supermarkets. Pre- Covid-19 it was already estimated Indian eCommerce market is expected to grow to US$ 200 billion by 2026 due to a trifecta of smart phone penetration, cheaper 4G networks and increasing consumer wealth. But in the last two months both the business landscape and consumer behavior has altered beyond recognition and it is a clear indication that the eCommerce industry will hit the US$ 200 billion mark much sooner.
Some of the key consumer behavior changes, according to a survey by NRF
● 9 in 10 consumers have changed their traditional shopping habits.
● More than 50% of consumers have ordered products online that they would normally purchase at the store
● Nearly 6 in 10 consumers say they are worried about going to the store due to fear of being infected
Although some of these changes are no doubt temporary, others will be permanent along with two major shifts in customer behavior – the reluctance to mingle in crowded public places and higher propensity for digital adoption. Even according to one of the recent research by McKinsey consumers are likely to opt for online shopping even after the outbreak ends, especially for categories such as groceries and personal care. Now comes the question will the retail business be washed away or they can survive this huge storms. There will be a whole new world for the retail business,
·Retailers need to be agile in adapting to the situation
·The situation demands for a omni channel ecosystem and converge the operations of their online and offline stores. Not doing so, will mean suffering huge loss in revenues.
· Retailers should always think of innovative shopping experiences by analyzing new buying behavior.
·Retailers need to rethink in this scenario with mostly digitizing their whole business as the consumer behavior changes, retailers will witness an increasing dependency on online orders.
·Innovative with different store formats can become a differentiation for brands competing in similar categories.
·Retailers with an online presence, must capitalize on the recovery trends by introducing innovative ways of fulfilling orders – be it establishing an Online-to-Offline (O2O) platform or building sophisticated digital logistics and payment reconciliation capabilities to be in the lead in this race to recovery.