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Firstandsecond.com launched in June 2000. Then it was one among a gaggle of e-commerce initiatives in India. Today it makes the few who are still standing after the dotcom bust. The site sells books and music. Books are in a category that is most difficult to push online in India, which is largely illiterate. Yet, despite all the doomsaying, firstandsecond.com has managed to sell enough books to call itself 'India's biggest book stop'.
Like all e-commerce in the country, firstandsecond.com too is not out of the woods. E-commerce has been slowing down and online shops are steadily encroaching into the real world, trying to sell offline. As CEO G B S Bindra explains, "The Internet world is not growing at the rate at which we presumed it would."
This week, firstandsecond.com opened two plush bookshops in Gurgaon and New Delhi and announced that it would be opening a chain of these shops across the country!
Whatever happened to e-commerce where a fortune was to be made by savings on the overheads of a real world shop! Is this the end of online shopping and are more going to follow Bindra into building brick and mortar businesses?
Nidhi Taparia Rathi spoke to Bindra about his new chain of bookstores and the future of the Web site. Excerpts:
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What prompted this shift to the offline world?
The Internet world is not growing at the rate at which we presumed it would. The high rate of PC penetration when we set up firstandsecond.com two years ago has slowed down. The drop in PC sales is a strong indicator of that. Unlike, amazon.com that could not get into the retail business because Barnes & Noble exists all over the United States, we do have the opportunity to be a part of the retail business.
Besides, the kind of experiential buying that we provide (at our offline bookstores) to our consumer is something not experienced at any existing bookstore around the country. If one were to draw comparisons, I would rate Crossword (the Bombay bookshop) as a four-star hotel and First & Second stores in Delhi and Gurgaon as five-star deluxe hotels.
What is different about our store and the way we retail our books is our bookselling ambience. A comfortable reading area, tea or coffee service, soft music, storytelling for kids and a wide variety of events that we plan to host. Also differentiating us is the usage of the data analysis that goes into selling books online. When we began firstandsecond.com, the online industry didn't exist. We learnt and created the rules and now use our expertise to selling books and music offline. Unlike a regular store which analyses volumes to figure the top ten books, we analyse which books are bought when, what age profile, what prompted the buy, was it a gift or a personal buy etc, when we sell these books online. This ability to use IT even in retail selling is coming in handy, which no regular bookstore around the country chooses to do.
Where will the next few stores open?
We plan to open two more within Delhi and then move southwards to Bangalore in the next quarter. We plan to open eight more stores in the coming financial year with Chandigarh, Hyderabad, Chennai being the next few stops. But it will be a while before we move to Mumbai and Calcutta.
The locations of the stores are being decided also on the basis of the demands and the recommendations put forth by our online customers. We are moving to areas where we already have a huge customer base, brand loyalty and awareness to convert the online user into a multi-channel user along with tapping the first-time buyer. They are the ones who demand physical retail stores from us. We are the first bookshop to have opened our doors in Gurgaon and one of a kind in Connaught place, one of the busiest areas in Delhi.
Is there a difference between what books and music people buy in an offline and online store?
From our experience, I would say no. We are tapping a slightly bigger market of the 40+ users who have not been our customers online. But on the whole, it is a similar selling and buying experience. In fact, the team that built firstandsecond.com is the team behind these stores. We are leveraging that very expertise to build our stores. We have not added a single new person to our team.
There are books that do not lend themselves to an online medium. For instance, coffee-table books or books for kids that are visually rich and have a strong sound and look-feel to it. These books move quicker in a bookstore.
There is also no denying that impulse buying in a store is huge. A simple movement of stock can make the biggest difference. For instance, biographies of the last century find no takers online and offline. However, once moved near the billing counter Hitler's biography has been selling off the shelves every hour.
On the Internet, while people come looking for 'a' title or 'new titles'. They have a preconceived notion of what to buy. But our data shows that price is not the deciding factor. Our average bill online is usually around 800+.
While in a store, they only have 15,000 titles to choose from; online they can choose over a million titles. But even our stores have a very premium look feel to it. They do not lend themselves to the price-sensitive customers. We do not offer any discounts in the store as opposed to that online. We play the loyalty factor online and offline with our 'Sizzler' program.
How do you plan to integrate the online and offline stores?
With the use of technology, we are trying to eliminate e-commerce's biggest disadvantage: the lack of the instant gratification. Our Web site displays whether the book is available in our stores so that we can push a surfer or a hesitant buyer into walking to the store and buying our wares.
Can these attempts at online-offline integration enrich the online and offline buyer's experience?
Definitely. While we are still ironing out minor issues, we have services like Club One, which will offer discounts and benefits at First & Second stores and at firstandsecond.com. For Rs 199 annual membership fee, participating customers will enjoy guaranteed 45 per cent or more discount on all books featured at Club One. Club One targets bargain hunters, book lovers and those who own libraries of their own.
For our customers who are not Net savvy, we have installed Web service counters powered by firstandsecond.com in our stores. The new counters will enable customers to order any title unavailable within the store with the option of paying by cash, draft or credit card and have these books delivered to their homes, offices or even picked up from the store. Once they have tried it, more customers will even order books from the comfort of their home via PCs.
Online, we are usually the last resort for our buyers who have scoured all bookshops in the city. So we usually get the toughest books to procure (laughs). Buying online is a forced reaction. We would like to use our complementary experience to make it a natural impulse reaction.
Does this shift to selling music and books offline mean that the online initiative cannot stand on its feet?
It can. It just needs more time, which we cannot afford. Which is why we have adjusted our business plans to fulfill our growth objectives and fulfill our required numbers.
Does this venture mean you are building a mix model that Wall Street loves so much after the dotcom bust?
All we have done is readjusted our business plans to fulfill our growth objectives and the numbers as required by our shareholders.
Do you think that with the branding you have achieved, First & Second stores will do better than the site?
Yes and No. Yes, because when a customer walks into a store, he is engulfed by 1,500 square feet of branding within the shop, besides the experiential shopping. Internet branding has to work harder - in terms of logistics, customer service, a few buys - before the customer is satisfied.
No, because the books available within the store are limited to 6,000 unique titles available across any other store. One can find a bigger selection online, over a wide variety of books. Say, for example a script of Lord of the Rings. I may not stock it in the store but the site can definitely procure it for you.
The branding gains will be mutually complementary, because the customers we are targeting are multi-channel users who buy online and offline.
Will the books be priced differently in the online and offline shops?
Mostly no. But, we do offer a 10 per cent discount on bestsellers on the Net, which is not available in physical stores. While, promotions like a free book on the purchase of three within the store will not be available online. There are a few promotions which cannot be interlinked.
If I buy books on firstandsecond.com, can I return it to First and Second Stores? Will the price differential and shipping charges be refunded too?
Yes one can return books purchased from the site to the store. However, our return policy is applicable only if the goods are damaged or the wrong book has been shipped. In which case, they will be refunded anyway.
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