E-retailing

Venkatesh G V
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 What is E-Retailing

E-RETAILING = ELECTRONIC RETAILING

 Electronic retailing (e-tailing)

E-Retailing is the use of technology
such as computers and the internet to sell a
range of products and services online to the
world.

 E-tailers
Retailers who sell over the Internet Page 2
 History
• The first recorded B2C online home shopping was
Gateshead SIS/Tesco in 1984.

• The world's first recorded online home shopper was

Mrs. Jane Snowball, 72, of Gateshead, England in
May 1984.

• In 1995 Amazon expanded its online shopping, and in

1996 eBay appeared.

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 Growth
• Findings by IAMAI (Internet and mobile association
of India)
• Rs.9000 crore worth of e-commerce was conducted
online in 2007-08 from Rs.7000 crore in 2006-07, an
estimated 29% plus growth.
• 55% of the visitors have adopted the Internet as a
shopping medium.
• In the year 2000, 77% users were from metros, whereas
in 2007, People from smaller cities have increased their
presence.

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Growth of e-retailing in US

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Size and Growth of the B2C Market

Reported amounts of online sales deviate

substantially based on how the numbers are derived
• Annual online 2004 sales were estimated to be over
$70 billion.
• The average online shopper spent over $350 per
quarter.
• Forrester Research estimates that e-tailing will reach
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$316 billion by 2010.
 E-tailing in India
• The E-commerce market had reached 9210 Crore
INR in 2007-08,
• The top E-tailers in India are indiatimes.com,
fabmart.com, rediffshopping.com.
• E-tailers have developed many innovative promotions
to lure customers and there by growing the market.
• As per the survey conducted by Internet and Mobile
Association of India and Indian Market Research
Bureau (IMRB).
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Size of the B2C Market

Page 8
Growth of E-retailing in India

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 Barriers to Growth

• Most Indian’s are not comfortable using their

credit cards for shopping and there is always a
fear of “what you see may not be what you
get”.

• There may be a problem with complaint

resolution, especially after receipt of wrong
goods or delayed delivery.
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Touch points to focus on

 Customer is the King

 Supply Chain
 New Business Models
 Comparison Shopping and
 Customer Reviews
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 What Sells Well on the Internet?

 Computer hardware & software  Health and beauty

 Consumer electronics  Apparel and clothing

 Office supplies  Jewelry

 Sporting goods  Cars

 Books and music  Services

 Toys  Others

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 Factors to consider in Internet
Retailing

• Goodwill of retailer
• Merchandise characteristics
• Website effectiveness
• Ease to access the website
• Consumer access towards Internet buying

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 How to Sell On-line?

• Design a website
• Website should be hosted with a reputable source,
with little downtime and reliable technical support.
• The website must also be secure as it will need to
collect personal and financial information from
customers.
• First define the purpose and goals for the site
• Develop a strategic plan

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 Information load

• Designers of online shops should consider the

effects of information load
• Complexity-number of different elements or
features of a site, which can be the result of
increased information diversity
• Novelty-Novelty involves the unexpected,
suppressing, new, or unfamiliar aspects of the
site.
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 Special features of e-tailing

• Online Store Look

• Visual Density
• On-line Merchandising
• On-line Pricing
• Logistics and supply chain
• Promotions on-line

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 Modes of payment
Online shoppers commonly use credit card to make
payments, however some systems enable users to create
accounts and pay by alternative means, such as:

•Debit card
•Internet Banking
•Cash on delivery (offered by very few online
stores)
•Cheque
•Wire transfer/delivery on payment
•Postal money order Page 17
 Product delivery

• Download
• Shipping
• Drop shipping
• In-store pickup: The customer orders online,
finds a local store using locator software and
picks the product up at the closest store. This
is the method often used in the bricks and
clicks business model.
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 Shopping cart systems

• Shopping cart software allows the consumer to

accumulate multiple items and to adjust quantities,

• Provides online services to help small businesses

get online store, improve you way to increase
sales, and provide better customer service.

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 Contd.,
• Open source shopping cart packages include
advanced platforms such as Interchange, and off the
shelf solutions as Avactis, Satchmo, osCommerce.

• It is usually installed on the company's own web

server and may integrate into the existing
supply chain so that ordering, payment, delivery,
accounting and warehousing can be automated to a
large extent.

• Shopping Cart System v6.0.lnk

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Page 21
 Strategy for Online Marketing

• Larger amount of content

• Increase the proportion of customers
• Geo location or geo targeting
• Promoting business through related websites
Google and Facebook
• Email newsletters are also used by a number
of companies who are trying to find new
clients
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 Search Engine Optimization
Preservation of Position
A number of the things to be kept in mind for
Website positioning are

• Key phrases
• Website link Popularity
• Superior Content
• Appropriate Name Tags

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E-Retailing Business Models
Classification by Distribution Channel

1. Mail-order retailers that go online

2. Direct marketing from manufacturers
3. Pure-play e-tailers
4. Click-and-mortar retailers
5. Internet (online) malls

24
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 E-Retailing Business Models

Virtual (pure-play) e-tailers

• Firms that sell directly to consumers over the internet
without maintaining a physical store sales channel.

Multichannel business model

• A business model where a company sells in multiple
marketing channels simultaneously (e.g., both
physical and online stores)

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 Intermediation

• There was speculation that the Internet would

eliminate intermediaries in the supply chain.
• The process of shortening the supply chain is known
as disintermediation
• New intermediaries often arise to facilitate the
shortened supply chain. This is known as re-
intermediation
• Re-intermediation means that the intermediary
function is shifted rather than completely eliminated.
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 Manufacturer Manufacturer Manufacturer

Wholesaler

Disintermediation Electronic
Distributor Intermediaries

Retailer

Consumers Consumers Consumers

Traditional distribution system Direct Marketing through Internet Electronic Intermediaries

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 The E-retail Mix- 7Cs
  
Customer value & benefits Convenience
  
Customer franchise 7Cs Cost

Communication & CRM Customer care & service

Computing and category Management

Page 28
 Consumer Issues
There are a number of consumer issues that are
important to Internet retailers.
Technical issues are important as they replace the
conventional retail store ambience:

• Access speed
• Speed of navigation and downloading
• Network security issues
• Bandwidth
• Access restrictions
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 Online Purchase-Decision Aids

Shopping portals
• Gateways to e-storefronts and e-malls; may be
comprehensive or niche oriented

Shopping robots (shopping agents or shopbots)

• Tools that scout the Web on behalf of consumers who
specify search criteria

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 Contd.,
Business Ratings Sites
• Bizrate.com, gomez.com
Trust Verification Sites
• TRUSTe (truste.org), Verisign.com
Other Shopper Tools
• Escrow services
• Communities of consumers who offer advice and
opinions
• E-wallet (or e-purse)
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Trustworthiness of
e-tailer
•Ability
•Integrity
•benevolence
Trustworthiness of
Internet
Shopping medium
•Technical competence Individual
•Reliability trust
•Understanding of medium propensity Consumer
Contextual factors •Consumer trust in
•Effectiveness of third demographics Internet
party certification •Personality shopping
•Effectiveness of security characteristics
infrastructure •Clue seeking
•Current media reportage
Other factors
•Size
•Branding The role of trust
•Presence of physical store
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 Trust Stamp

• A Trust stamp indicates that the customer details

on tradeindia.com are authentic & verified. Only
members that have completed a verification
procedure conducted by a third-party get to
display a Trust Stamp on tradeindia.com.

• Trust stamp is an indicator of companies

standing in the market. It is an effective tool
through which buyers get credible information
Page 33
 Benefits of Trust Stamp

For Sellers

• Gives instant credible information of the

company. 
• Offers high chances to receive enquiries from
buyers. 
• Provides buyers with extra confidence in
dealing with Trust Stamp suppliers.
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Retailing vs E-Tailing

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 Challenges for e-tailing

Competitors are just a click away

Visitors can disappear seconds

Shopping is a multi step process

Time between initial visit and purchase has

increased.

Customers wait for merchants' best offer.

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 What opportunities does E-retailing provide?

•
E-Retailing opens up many doors for companies.
•
E-Retailing provides a greater range of people to sell
the products to.
•
This can lead to increase in profits and a decrease in
costs.
•
The web site can also lead to opportunities of better
and cheaper products to sell thought globalisation.
Page 37
 Issues in E-Tailing

Disintermediation
• The removal of organizations or business process
layers responsible for certain intermediary steps in a
given supply chain

Reintermediation
• The process whereby intermediaries (either new
ones or those that had been disintermediated) take on
new intermediary roles

Page 38
 Contd.,

Channel conflict
Situation in which an online marketing channel upsets
the traditional channels due to real or perceived damage
from competition

• Determining the right price

• Personalization
• Fraud and illegal activities
• How to make customers happy
Page 39
 Managerial Issues
What should our
strategic position
be?

Are we
Should we set
financially
up alliances?
viable?

How will
Should we
intermediaries
recruit out of
act in
town?
cyberspace?

Are there
Do we have
international legal
ethics and privacy
issues regarding
guidelines?
online recruiting?
Page 40
 Problems with
the Payment
System

Language Problems with

Problem Shipping

Bottlenecks Faced
By E-retailing
in India

Products
offered at Offline
discounted presence
rates

Page 41
The Top 10 online retailers (internet
retailers) are as followed
• Amazon.com Inc.
• Staples Inc.
• Dell Inc.
• Office Depot Inc.
• Apple Inc.
• OfficeMax Inc.
• Sears Holding Corp.
• CDW Corp.
• Newegg.com
• Best Buy
Page 42
 Advantages of E-retailing

To consumers
• Convenience
• Better information
• Competitive pricing
• Ability to shop 24/7
• Wider product availability
• Customized and personalized information and buying options
• Easy comparison shopping
• Quick delivery of digital products
• Ability to create a one-on-one relationship with the
• Seller

Page 43
 Advantages of E-retailing

To e-retailers

• Global reach
• Better customer service
• Saves on the wages and premises costs
• Reach a larger audience
• Accepts orders 24-hours a day
• Mass customization
• More value added services

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 Disadvantage of E-Retailing

For Consumers
• Credit card and security worries
• Lack of interaction
• Can’t see or feel the merchandise
• Don’t know how
• Premium charged for delivery
• Difficulties with returning goods for refund

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 FOR E-RETAILERS
• Substantial set-up, investment and ongoing costs
• Your site must be available and operational 24 hours a day.
This may mean employing a night shift of
• customer service operators or maintenance staff.
• The Internet market is still only small in comparison
• to the traditional market.
• You must be vigilant maintaining your site.
• Update offers, prices, specials and products regularly.
• Check for errors and working links.
• Answer queries promptly.
• Complex logistics of fulfillment

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 Future Prospects In India
Development should be made in
• Infrastructure level
• Extensive technology development
• Better supply chain logistics
• Innovative business model to attract customer
• Internet based businesses gaining momentum
in India.

Page 47
 Contd.,

• With rise in internet awareness, people use it

more to facilitate work.
• E-tailing catching up in India with major
retailers setting shop online.
• TATA group announces opening of an e-mall,
in the next 2 months.
• Vishal retail launches online shopping portal.

Page 48
 Amazon.com

• AMAZON B2C type of e-retailing which deals

with sales of books, musicCDs, DVDs, software,
kitchen items, etc.
• Amazon tracks what its customers purchase and
then uses that information to satisfy and meet
customer.
• Expectations Amazon’s advantage lies in the fact
that it lists huge catalogue of titles, and is much
easier to search among them online Page 49
 E-bay

• E bay is C2C type of e-retailing

• Buyers can bid on items of interest and all eBay users
to browse through listed items in a fully automated
way.
• When an item is listed on eBay a non refundable
insertion fee is charged.
• A fee is charged for additional listing options to
promote the item.
• A final value (final sale price) fee is charged at the end
of the seller's auction.
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 Survey objective

• To identify key factors influencing online

shopping purchase behaviour.

• To identify the factors that can explain the

differences in online buying behaviour of
Indian Consumer and Foreign Consumer.

Page 51
 Ways of Survey

• Direct contact
• E-mail
• Phones
• Reputed intermediaries/Agents

Page 52
 E-retailing

Sales

100% 73%

50%
0% 27%

YES

NO

Page 53
 Current Sales

SALARIED PROFESSIONAL STUDENTS

25%

75%

Page 54
Cards own for purchase

1%
8%

CREDIT CARD
DEBIT CARD
BOTH

91%

Page 55
 Internet Access

Sales
OFFICE HOME
MOBILE PHONES OTHERS

17%

14%

62%
7%

Page 56
 when did you shop online
10%

with in last fortnight

39% with in last month
with in last 6 months
more than 6 months
32%

19%

Page 57
 Highest amount spent

33. 32%
Less than Rs.500
Rs.500 - Rs.1000
Rs.1000 - Rs.5000
57. 56%
Rs.5000 - Rs.10000
More than Rs.10000
12. 12%

Page 58
 More secure websites

13% 16%

Amazon.com Inc.
Dell Inc.
20% Fabmart.com
Rediffshopping.com
Ebay
India times shopping
52%

Page 59
 United states survey details
• Survey population – 20
• Purchasing through online – 100%
• Access internet – 100% in home only
• Every one are having both credit and debit
card.

Page 60
 Online shopping compared to
offline shopping
coimbatore US

32
28

14 13

0 0 0 0 0
very convenient similar less very
convenient convenient inconvenient
Page 61
 Price Comparison
45
40
40
35 33
30
25
20
15
10
5
0 0 0
0
Very cheap Cheaper Similar More Very
expensive expensive

Price

Page 62
 Method of payment

Chart Title
coimbatore US

47

16 15
10
4
0 0 0

credit/debit card bank transfer cash on delivery money transfer

Page 63
 Chart Title

not sure of product quality

cannot bargain/ negotiate

naad to touch and feel the product

significant discount are not there

have to wait for delivery

0% 20% 40% 60% 80% 100% 120%

Page 64
 What helps to decide which site

coimbatore US
32

17
14
10 11
6
3
0 0 0

ing ing
sa
w it o
n
ine
rt is rt is I da ng
e e r e
dv dv ff e en h
a a l o m arc
e m
TV lin c ia c o se
on sp l re
a
son
er
p

Page 65
 Enough information about
online product
25

20

15

10

5 coimbatore
US
0
EE EE AL E E E E
R R T R R R
AG AG E U A G
SA
G
LY N IS I
L D D
T A LY
L
TO TA
TO
Page 66
 Online shopping is useful

coimbatore US

27
24

12
9 8 7
5

0 0 0

totally agree agree neutral disagree totally

disagree

Page 67
 Online shopping easy to do

coimbatore US

27

20

15

10
8 7
5

0 0 0

totally agree agree neutral disagree totally

disagree

Page 68
 Online shopping secure

coimbatore US
28

23

13 14

8 7

0 0 0 0
totally agree agree neutral disagree totally
disagree

Page 69
 Conclution

According to the survey most of the consumers

are looking for
• Assured security for financial transaction.
• Branded product.
• Must have money-back guarantee.
• Immediate exchange on dissatisfaction .
• The web site is duly certified and registered
under government authority.
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 RECOMMENDATION

• Efforts need to be taken to educate the online

buyers on the steps that need to be undertaken
while making an online purchase.
• Proper security should be assured to the people
making online purchases.
• Government should play a bigger role in
encouraging online shopping.

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 Thank You
for your esteemed presence

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