Online to Offline- a lateral approach to growing your business

From brick and mortar stores, shopping websites and mobile applications, focus of retail has shifted from hard-selling to creating a holistic customer experience. Retailers have started prioritizing customer convenience, and the Online-to-Offline (O2O) model does just that, by providing a seamless shopping experience irrespective of the medium of delivery. This has encouraged retailers across the country to expand their online presence, and Pepperfry, India’s leading online furniture company, was among the early movers.

Engaging with customers on their turf(s):

“She could be on a mobile phone at one point, then on a laptop at another. She could be walking down the high street or going to a mall on some other day, but essentially she is still the same customer! Therefore, it’s my duty, as a brand, to interact with her across all mediums.”

For Ambareesh Murthy, Co-founder and CEO of Pepperfry, opening their pilot store in Mumbai was a no brainer. In a candid conversation on the latest episode of Building It Up with Bertelsmann, he walked us through the critical decisions about their O2O model that made Pepperfry India’s most preferred brand for furniture.

Here are some excerpts from the episode that we think you will find helpful in navigating your own O2O journey, especially while planning inventory, managing logistics and building customer loyalty.

Launching a pilot store:

Pepperfry launched its first physical studio in 2014, when most e-commerce companies still shied away from the thought. As their first customers rolled in, they realized that people wanted to see the product and explore it in a physical environment before they placed an order online. Launching “experience studios” was another step towards building trust with the consumer, by substituting the once popular tagline “as seen on TV” with “as seen in our store.”

Snail your scale- From zero to hero:

Ambareesh claims that the key to their success was a light inventory- comfortable delivery time model. He insists that although furniture isn’t a high frequency category, it demands the maintenance of a large variety, to keep the customer happy. This allowed Pepperfry to offer its customers more variety and by consequence do away with the need to customize.

“Customers were darlings, but they didn’t really know what they wanted. Even if the product was manufactured to fit their description to the T, it never matched their expectations”, says Ambareesh.

Show Third Party Logistics the door:

With 90% of the furniture retail market parked firmly in the unorganized sector, Pepperfry had to deal with their own set of Supply Chain Management issues. They were operating with a third party logistics provider until 2012, to soon realize that they couldn’t deliver on Pepperfry’s promises. Hauling a couch up ten floors doesn’t just burn the customer’s back but your relationship with them too!

To meet challenges like quality assurance and specialized delivery they started maintaining in-house logistics from 2013.

Specialization is the key:

Competition from e-commerce aggregators like Amazon and Flipkart doesn’t faze the Pepperfry team. Ambareesh believes that customers value specialists especially in high involvement categories like home decor. Specialists like Pepperfry, not only give them a wider variety at better prices, they also proffer immense product knowledge. For someone building a home, nothing less than that would suffice.

Tune in to the podcast here, to hear more on how Ambaresh and his team at Pepperfry navigated critical omni-channel strategy decisions.

Tickle your brain cells with these interesting reads:

Paytm’s foray into O2O mirrors Alibaba’s success in China
Consumer behaviour in omni-channel models
How does Pepperfry get that couch to your door?

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