You are on page 1of 48

E-TAILING

E-tailing

is the selling of retail goods on the

Internet.
research

predicted that e-tailing would grow to $37

billion by 2002.
E-tailing

has

e-tailware

--

resulted

software

in
tools

the
for

development
creating

of

online

catalogs and managing the business connected with


doing e-tailing.

The word E-tail has its roots in the word retail.


E stands for electronic since the shopping process

happens through the electronic media (internet).


With the use of a web-space a virtual shop is
created and the products are displayed through
images in this space with the features and price tags.
By accessing this shopping site a customer can
choose his/her products into a cart.
The payment to this product can be done in various
modes as mentioned by the shopping site.
The product would be delivered to the address
specified by the customer.

Steps involved in E-tailing:The shopping process through internet media happens


in 5 steps generally.
1.Customer visit: The customer accesses the website of
the e-tailer through his/her mobile or PC or laptop.
2.Choice of product: customer visits the site he/she
would choose a product based on the image and valid
information available on the web page.
3.Payment online: Payments to the product can be made
online through credit or debit card or even cash on
delivery basis where the customer pays the e-tailer
when the product is delivered to him/her.
4.Product delivery: The delivery of the product would be
based on the availability of the product in the inventory
closest to the customers delivery address. This process
may also involve shipment of the product.
5.Customer feedback: The experience of the customer
can be accessed through proper customer service for
feed backs and the problems faced by the customer
should be corrected by the e-tailer. Late delivery, wrong

Benefits of e-tailing:
Less

Space: It reduces the space occupied by retail


outlets in the real world.
Easy

Access: It gives quick and easy access to a


shopping space at any time and from any place where
there is access to internet.
Saves

time: It saves time of the customer that is


spent on travelling to a shopping place in real world.
Platform

for various goods: It creates a new


platform for goods from different parts of the world
which could be imported by placing an order.

E-tailers in India:
Yebhi.com
Flipkart.com
Infibeam.com
Myntra.com
E-bay.com
Indiatimeshopping.com

There are certain essential ingredients for an


electronic retailing business to be successful:
Attractive business-to-consumer (B2C) e-commerce
portal
Right revenue model
Penetration of the Internet
E-Catalog: It is a database of products with prices
and available stock.
Shopping Cart: The customers select their goodies
and fill shopping cart. Finally, as in a real store, at
the time of checkout, the system calculates the price
to be paid for the products.

A payment gateway: Customer makes payments


through his/her credit card or e-cash. The payment

Support Services in E-Retailing:

The electronic retail business requires support


services, as a prerequisite for successful operations.
These services are required to support the business,
online
or
offline,
throughout
the
complete
transaction-processing phases.
The following are the essential support services:

Communication backbone
Payment mechanism
Order fulfillment
Logistics

MULTI-CHANNEL RETAILING
Multi-channel

retailing is a marketing strategy that


offers your customers a choice of ways to buy
products.
A true multi-channel strategy covers purchases
from a store, purchases from a website, telephone
ordering, mail orders, interactive television, catalog
ordering and comparison shopping sites.
Objective of Multi-Channel Retailing:
The aim of a multi-channel retailing strategy is to
maximize revenue and loyalty by offering your
customers choice and convenience.

Multichannel retailing is the merging of retail


operations in such a manner that enables the
transacting of a customer via many connected
channels.
Channels include: retail stores, online stores, mobile
stores, mobile app stores, telephone sales and any
other method of transacting with a customer.

Experience:
A successful multi-channel strategy offers your
customers a consistent quality of experience,
whichever channel they use. The customer's
experience in buying a product influences her
perception of your brand. You must ensure that all
customer-facing staff in your contact centers, retail
outlets, order processing departments and website
development understand and comply with your
company's customer service standards. Policies such
as returns and delivery charges should also be
consistent across each channel.

Integrate:
You can use the data available from multi-channel
strategies to identify customer preferences and
maximize lifetime revenue. The risk in a multichannel strategy is that customers' information and
profiles can become fragmented as they use a
number of channels. In an integrated strategy,
purchasing data is consolidated into a single
database so you get a 360-degree view of your
customer.

Research:
A high proportion of shoppers conduct their prepurchase research on the Internet, although they
may use other channels to make the final purchase.
The definition of multi-channel retailing must
therefore take account of each stage of the
purchasing process.

Pricing:
When you operate a multi-channel strategy, you have
the option of charging the same price for a product
across all channels, or offering your customers
different prices, depending on their channel choice.
Offering customers website prices that are lower
than store prices is common practice and reflects the
lower overheads in website operations. Your
customers also have a choice between lower online
prices and personal service in the store.

Reach:
A multi-channel strategy gives you the ability to
expand your business on a national or global scale
without investing in further physical stores. An ecommerce website can be designed to operate in
multiple currencies and with local content to attract
customers in many countries. You can also conduct
business across multiple time zones with no
restrictions on opening or closing times.

Successful Organizations with E-tailing:


Marks & Spencer's
Fairmont Hotels

There are five key factors that retailers should be


addressing now, if theyre to stay ahead of the game.
1.With shoppers consolidating their spending on
fewer retailers, the winners will be those who ensure
they make it onto the most favoured list for their
target customers.

2.Operating

in a multi-channel world makes it even


more important to understand your most valuable
customers, and to be able to serve them when they
want, and how they want.
winning retailers will be those who rapidly
develop a single view of product - enabling them to
instantly locate available stock across all channels
and locations, and so serve more customers, more
often, and with a wider variety of products.

3.The

digital space provides a raft of new


opportunities to engage consumers, and to learn
from their comments and behaviors - from Twitter
and Facebook, to online campaigns and consumer
reviews, the opportunities to have conversations with
customers are growing every day.
The winners will be those who listen carefully
to their customers, becoming tuned to their needs;
and those who find creative opportunities to
encourage consumer contribution, making shoppers
feel like an integral part of the brand.

4.New

performance measures that reflect the realities


of this new multi-channel world are the next
essential building block to making profitable
decisions and choices.
Developing
the
KPIs
(Key
Performance
Indicators) to evaluate a stores effectiveness as a
showroom, compared to its effectiveness as a
transaction space, and capturing the value of
websites as a research tool and in driving footfall to
stores, are examples of areas that leading retailers
are beginning to focus on today.

5.The

winners will be those who can deliver a


sustainable advantage by developing new operating
models, designed to handle the realities of
multichannel retailing.
The current supply chain was built to get stuff
to stores - its not ideal for a system thats 10%
online and growing - and as direct channels continue
to gain scale, there will be opportunities to flex
operations to improve margins.
But its not just about the supply chain rethinking organization structures, roles, incentives
and governance are key to delivering a seamless
customer experience across channels - and to
achieving most favoured status with your most
valuable customers.

Shortcomings of e-retailing
1.It has no theatrical ambience which can be the
customer.
2.It lacks an emotional shopping experience that the
customer can get in a personal shopping store.
3.It being container of intangible merchandise (i.e.,
virtual display of merchandise) does not provide
sensory support to the customer, these the customer
cannot hold, small, feel, or try the product.
4.On line customers are reluctant to part with their
credit card details on net, fearing they may be
misused. It arises security issues. The customers are
not yet convinced about the foolproof status of this
method, especially in Indian environment.
5.It provides, to a large extent, impersonal services
which the Indian customers are not exposed to; they
are rather used to the tangible personalized services
which's they miss in online retailing services.
6.It is lacking in family shopping experience which
the Indian customers enjoy at the weekends, and

Success factors for e-retailing


Strong Branding
Unique Merchandising
Value Addition
Competitive Pricing: competitive pricing finds scope
from potential decrease in charges and expenditures
that he had to bear while in brick-and-mortar mode
of marketing.
Better CRM
Better Distribution Efficiency
Soothing Website Design
Transparency in Services.

Continued..
The

aesthetic and easy handling facilities are


two important terms in this relation. The aesthetic
provides initial attraction along with keeping the
visitor long held with the site.
The maneuvering easiness keeps the visitor
surfing it for long.
The aesthetics of the website must provide
soothing look and feel and clarity of objects or
scripts to the visitor along with sufficient
ergonomic considerations, so that the visitor does
not feel tired at the earliest.
The careful placement of buttons and links
provides ease in handling it.
Finally, the transparency of services creates
faith on the visitor of the site as well as on the
customer of the business.

Challenges of E-Retailing:
1. Unproven Business Models
Most of the businesses on the Net were experiments
in new areas and did not provide enduring sources of
profit. This was the primary reason behind closing
down of 90 per cent of the purely e-commerce
companies in the beginning of this century. Today,
dot-com businesses have matured a little. Still some
of the businesses are at experimental level and do
not guarantee regular revenue.

2. Requirement to Change Business Process:


The traditional business may require the goods to be
present at the warehouse and inspected before being
shipped to the customer, but in electronic retailing,
shipping of goods from one place to another to a
customer would not be possible. The retailer may
appoint a local supplier at the city where the
customer resides and instruct the supplier to deliver
the goods. This would require by passing certain
business rules and a lot of faith on the local supplier.
It would require business confidence that the
supplier would follow the instructions and deliver the
same product in good quantity and perfect quality.
Merchandise planning and demand analysis is also
difficult in e-retailing, as compared to traditional
retail businesses.

3. Channel Conflicts
Companies selling through the Internet as well as
through brick stores may find their interest
conflicting at many places. In electronic storefront
orders, the goods directly reach the end-consumer
and so the distributors and sellers may feel the
threat to their existence. Most of the time, it is seen
that retailers tend to reduce price over the Net. The
sale at the brick store may store may drop because
the retailer may tend to sell more through the
Internet as a result of reduction of prices.

4. Legal Issues:
Proper laws have not yet evolved for Internet base
transactions.E-mail and digital signatures are now
being recognized as valid for any legal purpose.
Value Added Tax (VAT) is yet another area that
creates problems.
Taxes on goods and services are still an issue. Since
the taxes are levied and shared by multiple
government agencies at local, state or federal level,
there are no clear rules to guide retailers on that.
In e-retailing, the place of billing, the place of
dispatch of goods and the place of delivery all differ.
If these three places fall in different jurisdictions of
governments, levy and submission of taxes would be a
problem.

5. Security and Privacy:


Despite a lot of security arrangements, such as
passwords and firewalls, we come across the news of
website hacking and data pilferages.
The Internet being on public domain is more
susceptible to unauthorized peeping.
People are wary of revealing information regarding
their credit cards and personal details on the Net
because they can be misused.
Security of payment gateway is a major concern,
which has to be taken care of by the retailer by
putting up pro

Single channel e-tailing:


Retailers that sell products solely on the Internet,
benefit from their focus on reaching their consumer
targets, because they dont have to manage the
competition for company resources.
many e-retailers are doing well by taking advantage
of niche markets and connecting with their
customers. Web-only retailers are especially good at
being found by their potential customers, and many
of them are gaining expertise in marketing through
online social networks.
social media interaction has spread rapidly to older
users, it is younger consumers who interact on the
channels that drive sales growth at niche retailers
such as Nasty Gal Inc.

9 Characteristics
Websites

of

Well-Designed

E-Commerce

1. Ease of Navigation
When attempting to sell products to visitors, the first
requirement for selling a product is that the shopper
has to be able to find specifically what he or she is
looking for. Effective navigation is important to any
website, but its especially critical for e-commerce
sites. Lost visitors will result in lost sales, so every
effort should be made to have a site with clear,
logical navigation.
Examples:
Nikes online shop uses a vertical navigation menu.
When you glide over an item, such as Men, you will
then be presented with options for different product
types, brands, collections, and sports, making it
easier to narrow it down and find what you want
quickly.

2. The Design Does Not Overpower the Products:


A design that is excessive for no valid reason will
usually do more harm than good, as it will draw
attention to the design of the site and away from the
products. There sites have chosen to keep the design
simple so that the products dont have to compete for
the attention of visitors.
Examples:
Apple uses simplicity in the design of their products
as well as anyone. Their online store takes the same
approach with a clean, attractive design that does
not provide any distractions for shoppers.
Shoe Guru is another very well-designed site that
avoids anything excessive. The page shown below
lists the mens athletic shoes that are available. The
page simply provides a product photo, name, and
price, as well as a link to the product page for more
details and purchase options.

3. Easy Checkout:
If the checkout process involves too many steps or is
confusing, shoppers will wind up abandoning their
cart with items left unpurchased. Ideally, the
checkout should involve a minimal amount of steps
and should be as easy as possible for shoppers.
Examples:
Add an item to your cart at White and Warren and
you will immediately see the contents of your
shopping cart. You will be presented with the options
to continue shopping or to checkout. If you chose to
checkout, you can login as an existing customer or
create a new account.

Easy Check Out:

4. Branded:
Many shoppers are influenced in their purchasing
decisions by the brand, and so the need to establish a
strong brand is import for both online and offline
selling.
Examples:
Oakley is a well-established brand that is recognized
as a leader in their industry. Their website does an
effective job of working with their existing brand. It
is an attractive website that stands out from many of
the others that are selling sunglasses online.

Brand should be displayed:

5. The Design Style Matches the Products:


when designing an e-commerce site its important to
consider the style of the products that will be
available on the site. This is a little bit more relevant
for smaller stores with a specific type of product and
for websites of a particular brand or company that
has established a certain identity.
If the design style does not match very well with the
particular products that are for sale, there will be a
disconnect that exists and visitors may have a hard
time relating to products and determining if it is
right for them.
Examples:
Innovative Baby sells clothing, furniture and other
items for kids. The design and color scheme of their
website does a good job of matching up with their
products, but it still looks professional and appealing
to the adults who are likely to be the ones doing the
shopping.

Design of the website matches the product:

6. Showcases the Most Popular Products:


Many e-commerce sites make an effort to showcase
items that are likely to be of interest to visitors,
obviously with the intention of helping visitors to find
something that they will buy.
Examples:
Eddie Bauer uses a large portion of the homepage to
promote an end-of-season sale. There is a very large
image and links to sale items in several categories:
men, women, bags and gear, and white sale.

Showcases the most popular products:

7. Promotes Related Products:


promotion of related products that the customer may
also be interested in. Promoting the right products
that buyers are likely to be interested in is key
regardless of the approach that is used.
Examples:
The Company Store, visitors will be presented with
related products such as cleaning and storage
products.

Promotes related products:

8. Effective, Accurate Product Photos:


Providing quality photos that accurately portray the
product can help to overcome this challenge and can
make the buying decision easier on visitors.
Examples:
REI includes many different pictures of products. The
pictures show the product from several different
angles and stages, as well as packed up. Potential
buyers will be able to get a very good feel for the
product based on these photos, and not buying it
because of a fear of the unknown is much less likely
than would be the case without as many good photos.

Effective product photos:

9. Effective Site-Wide Search:


The type of search and the amount of options that
should be offered to narrow the search should be
based on the size of the site and the items that are
available.
Example:
At Lee, after choosing the type of product you would
like to look at, the left sidebar will include some
advanced search options that will narrow down the
products being displayed if you are having trouble
with the items that are shown.

Effective wide search:

You might also like