Brands defer offline expansion to focus on online channels

Increasing consumer engagement is compelling retailers to halt their offline expansion and focus on digital channels. Furniture e-commerce brand Pepperfry has halted plans to launch new stores while fashion retail brand FabAlley has opened only 200 of its 430 stores across India as its offline sales have picked up at a higher price. Cosmetic brand Nykaa has also shut down its brick and mortar stores and is focusing on online sales.

Business strategist and angel investor Lloyd Mathias believes shutting down brick and mortar stores impacts a brand’s business revenue in the short term while Viren Razdan, Managing Director, Brand-nomics opines it depends solely on the digital maturity of the product category and the role the brand has played up until now.

Retailers Association of India (RAI) has reported a decline in growth for malls and street retail shops in India. This decline is due to the touch-based factor which has forced brands like FabIndia to start a new category of ‘experimental zones’ for better engagement. Mathias feels that brick and mortar presence will continue to remain relevant for consumers who want the look and feel of real shopping. While the COVID-19 pandemic has been a set back to the offline stores – over time they will come back.

However, for many this period has broken the stranglehold of brick and mortar with increased adoption of digital payment options and the sheer number of first-time online shoppers. India will continue to operate at varying levels of sophistication in technology adoption which will give rise to a new phyigital reality.