The "gross margin negative business model".

The recent article in ET on "How success of e-commerce start-ups are making traditional retailers rethink their model" was interesting reading, however, what was more interesting was the view of Mr. Biyani. On this one (the two points he makes) I agree with him.

The darling of everybody at this point in time is "the great ecom experience", however, the business viability & margins on transactions are the elephants in the room that are getting ignored. The gross margin negative businesses are not sustainable and are completely dependent on the VC funds for survival - a fact validated by a number of business leaders who were unable to raise a 2nd or a 3rd round and ended up shutting the once 'viable ecom' business.

Another article worth reading on the subject is Issues with Inventory models .  

Looking forward to see how the category progresses and the models that will finally sustain.  

Related articles

• From the web to the consumers' doorstep; enabled commerce for FMCG brands.
• The changing profile of Indian retailers & AaramShop.
• The truth vs hype of big retail.
• The future of commerce is a hybrid model with (entertaining) showrooms + online fullfillment

India Independents' Day on 16th of August.

15th of August is the Independence Day & 16th of August is going to be the Indian Independents’ Day. 

Independents’ Day will fly the flag for local retailers across the country: the businesses and the people behind them, who help make our villages, towns and cities so diverse, colorful and so very special. It’s all about championing diversity and recognizing the skills, efforts & the free spirit behind the shop-front. 

The day will highlight the important role smaller, local, independent retailers play in our local communities they have been serving for generations, the local economy they contribute to, and in the retail sector as a whole. 

The focus of the campaign is multi-fold: 

Encouraging consumers to shop local, to celebrate their favorite independent retailers, to remind themselves of the fantastic shops within their neighborhoods, and to go out there and bring forth that love.

Encouraging independent retailers to create a buzz to increase consumer engagement, footfall and sales. To let everyone know that they are proud of the contribution their small business makes. 

Encouraging suppliers and all those who serve the independent retail sector to spread the word. To support the retailers in delivering experiences, to add to the excitement; remembering that Independent Retailers are often a critical route to market for a wide range of product designers and producers. 

My organization (AaramShop) will support this initiative in multiple ways and would like to welcome supporters of the Independents to come together in various ways to show our appreciation and support. 

To get involved in the initiative as an individual, corporate, government or association; please write to me.

How Web Traffic is Driving Brick and Mortar Expansion

People will always want to shop, and that’s not going to change, but the online experience has raised shoppers’ expectations and made them much more discerning, so it behooves all retailers to know their customer that much better.  The Web is providing a much broader, more accurate and real-time picture of exactly who they are and where they live, arming retailers with the information they need to make smarter decisions about physical expansion — the most capital-intensive of investments.

Read more of this insightful article on Forbes here. 

This hybrid retail opportunity creates opportunities not only for retailers but also for the  brands. Data & trends provided by online retailing is a reflection of the offline consumer behavior and is far more accurate and trust-worthy as against data based on surveys and focused groups. 

Related articles

• Brick-and-mortar's inherent advantage: In-store relevance.
• In-Store Insights Help Turn Browsers Into Buyers