…Does it Make Business Sense for the e-Tailer?
On the May 15th of 2015, Myntra made a tremendous leap of faith. The fashion e-tailer decided to go app only. The release said it’s a strategic decision influenced by smart phone penetration and the changing trends in fashion shopping.
The rationale goes that fashion is something very personal. The style you choose, the brand you prefer and the trend you follow define you as a fashion consumer. Also, it’s a quirky world where trends change, evolve and revolve to come back to the starting point – see how bell flairs are in vogue again! Clearly, Myntra understands that the best fashion experience can be brought to you only through a device which is always close to you as your limb.
Until recently, Myntra had a popular retail portal for fashion and lifestyle products that was running quite successfully. However, Myntra visitors now have no option but to download the app on their smart phones. A bold, strategic move, I can bet my last dollar that Myntra must have dissected its market carefully to know where its leads came from, which platforms were giving the highest conversion, who was buying what etc. Additionally, smart phones present an easier way to communicate with friends on social media.
Therefore, besides giving Myntra good press on this move, it’s also going to significantly reduce the retailer’s operational costs on building and maintaining multiple platforms.
While cost-effectiveness could be the main reason for this model shift, there is big risk involved in Myntra’s new business model. For starters, e-commerce statistics put out by various stakeholders are not completely reliable. For instance Cleartrip maintains that 20% of its hotel bookings come from mobile web, 24% from iOS and 56% from Android. This 20% contribution is also a significant number. Already there are reports that Myntra has lost 10% in sales since the change.
There are still many customers, especially among fashion-conscious youth who land at websites through search engines. Comparing prices with other websites is something people are likely to miss in an app-only model. In India, where the market is very price-sensitive, this may not bode well for the e-tailer. Arguably, a website’s appeal is always greater than an app’s that is viewed on a small screen.
However since it doesn’t really matter to a customer whether she is shopping with a mobile app, mobile web or a desktop, all she looks out for is an irresistible deal that she can’t say no to. She may make this transition, if Myntra loads her with deals and discounts via coupons.
This is an opportunity that Myntra may have to look into if it wants to change the way its customers shop. Initially, there may be a slide in sales and Myntra may also lose some of its market share, but if it sits tight and holds out to its new turf, the tide may soon turn and that’s when the full picture will come in view.
Till then, your guess is as good as mine.