INFIBEAMGroup 4

IntroductionINFIBEAM.COM: Where customers could browse through products and have the same delivered within India within a few days.1.5 % Market Share in 3 YearsSuccessful Partnerships with many retail GiantsDo-it-Yourself E-Commerce platform for Other Retailers

IntroductionExpansion to Newer formats: Photo Printing Website and Remote Cataloguing CompanyVishwagram Bazaar in collaboration with Government of Gujrat to expand and tap into the upcoming rural market

ONLINE RETAIL MARKET INDIAPeople not comfortable in transacting online. Still in adaptation processLow internet penetration (only 42 mill users with 3.7% penetrationPayment and Physical infrastructure not much developedMain Offering: Pricing, Selection and Convenience.Wide Selection (Virtualization of Inventory)Low penetration of Credit and Debit Cards.

ONLINE RETAIL MARKET INDIAGrowing Internet Subscription RateLacklustre execution and poor customer service primary cause of closure of players.Few Sites could build trust and loyaltyChallanges:

Supply Chain Accurate and Timely Delivery of products Complex system of Taxation

CompetitionCompany

Started in

Merchandise

Promotion

Sales Users

Misc

FlipKart October 2007

Books, CDs, DVDs, Mobiles, Computers, Music, Movies Games, Gadgets

SNS and WOM, TV Ads

250 Mill in 200775 Cr in 2010-11

500000

Books are top selling category, projected revenue of 1 Bill in 2014-15

Ebay (C2C)

2004 Practically Anything between users (50000)

Social and Viral Marketing, Print and TV

----- 2.5 Million

Company

Started in

Merchandise

Promotion

Sales Users Misc

India Plaza (NRI Pop)

1999 Books, music, camers, mobile, appliances, flowers, cakes, toys

Rewards and loyalty programs for Banks, Airlines etc

20 Cr in 2007

--- Low Prices Reliable operations

Rediff 1996 Books, car accessories, h/w, health and beauty, jewellery, kitchenware, apparel, electronics and toys

‘DEAL HO JAYE’,

14.6 Mill in 2009-1017.94 mill in 2010-11

15 Million every month

--

Company

Started in

Merchandise

Promotion

Sales Users Misc

Indiatimes

Elecronics, apparels, watches, bags, jewellery, gifts

Brand Image of Parent Company

312 mill in 2009-10

47 mill in 2010

Good distribution network and different payment options, Encrytion tech and privacy rules

Increasing footfalls (clicks) and time spent

Wide Variety/Depth of Products (using virtualization of inventory).Consistent addition to product portfolios.Ability to search for products on various parameters (individually or in combinations)Additional Features: What your Friends Viewed, You may Also Like, Products similar/Related to this.Referral Programs.Social Media interactionImproving the online experience with navigation, search, online help and porting over shopping lists

Increasing basket sizeOnline CouponsLoyalty ProgramsDiscountsSeasonal or Festival SalesPromotion Codes

Current Pricing Strategy

Magic Box – One product everyday at a heavily discounted priceMaintain low prices across categoriesLowest possible price throughout yearRegular monitoring of competition’s prices to set target purchase pricesRobust supply chain of tail products helping in increasing sales

Suggested ChangesAlso keep track of prices in modern retailers to beat themMore discounts, offers during weekends to increase trafficUse of automated pricing technology - which automatically adjusts prices within specified business rules when a competitor changes their prices on productsIncrease margins on tail productsPrice discrimination - Identify the sources through which customers come to the website -- and price accordingly

MerchandisingProduct Categories 5 Share of Orders

Books and Magazines 50

Electronics 25

-Home Entertainment and appliances 38

- Computers, cameras and peripherals 34

- Mobiles and peripherals 28

Lifestyle 25

- Apparel and accessories 49

- Home Lifestyle 32

-Gifts 12

-Others 7

Suggestions on Merchandising

Product bundling and cross selling for related productsIncrease seasonal merchandising (if not being done currently)Increase homepage coverage for Apparels which could have more margins (currently not shown on homepage)Increase membership by Loyalty programs to increase customization according to buying pattern, sex, affluence, age, etc.

WEB DESIGN CONSIDERATIONS FOR E-RETAIL STORE

The Simpler the BetterCustomers don’t expect to be confused by a super innovative and inconvenient navigation or non-readable text. Store’s home page should not be overloaded with a complex navigation structure

New Products/ Most favored product DisplayThese should be given discount so as to increase traffic, and should be on the very first page. One slider banner with several rotating images (with vivid titles, discounted prices and special buying conditions) will be enough to grab visitors’ attention and to make them follow the link to take a closer look at the featured products. It will work for both first-time and returning visitors.

Shopping by CategorySince products have a number of categories, hence the search or browsing should be category wise or else the customers might get too confused

Creating Search Boxes A few seconds after entering the site, if a potential customer can’t find a thing he/she needs, more likely he/she will go away and find another store. Hence it is necessary to have search boxes

Creating a Product list with ImagesThoughtful products categorization will bring better results and help to arrange the web space better. It is extremely important to have availability of images since people shop visually.  Home pages can’t include numerous pictures of all products, but they can be illustrated with the most eye-catching ones or the most favored products.

Contact InfoA good customer care from the website’s end assures the physical presence of the online media, hence this is of prime importance.

Payment SystemPayment system icons are usually located at the bottom of the home page or even through the entire website. They are not clickable and just let us know how we can pay on this store. The payment should be accepted from a number of resources such as credit card, debit card, online banking or even “cash on delivery” should be an option.

Shopping Cart/ Checkout Link/ Account CreationPeople should create an account (but it’s not an obligation). It will not take much time but customers will be able to check their previous orders. Store should track their customers account activity and present them with some discounts or special buying conditions. It’s considered that the upper left part of web pages is the most viewable because visitors start looking through a website’s content from there. Hence a shopping cart icon as well as login should be present there to let the customers know their purchases.

Name/ Website logoThe home page is not a place for self-promotion. Clear logo, store name and short descriptive sentences about what the company is be more than enough. This is because majority of customers are interested in the goods/ services being offered rather than the company offering them.

SUPPLY CHAIN MANAGEMENT FOR E-RETAILING

• Get in a contract with the suppliers within 20 kms of every e-gram that has to be established. For different areas there should be different suppliers.

• Getting IT implementation on suppliers side to keep a check on inventory.

• Implement better warehouse management, including tailored pick orders and stock replenishment by pre-set thresholds.

• Implementing reverse logistics, incase the consumers want to sell their products

•  Track and manage inventory, including in multiple locations by getting up-to-date information about in-stock quantities.

• Real time access to customer records, sales histories and customer activity, for offering better services, discounts and service recovery.

• Implementing the information recovery of getting real time data of delivery on time to the customers through 3rd party logistics.

infibeam.com

India Post

CustomersWarehouse

World Wide WebSuppliers

SUPPLY CHAIN MODEL FOR E-RETAILING

Promotion

Target Consumers

• College going & Young Men

• To tap them tools such as Social Networking sites are most important.

• Fan pages, discussion forums etc

For Offline Users

Awareness• At least

making people aware of it as one of the options in the e commerce space.

• TV is most important tool for this purpose.

For online users

• SEO -- The majority of shoppers choose to click on a result from the first-page of results

• Affiliate Programs – Use well known highly visited sites especially their Buildabazaar partners for exchange in ad space.

Fund Raising

• PR – Since one of their main objective is fund raising therefore this is one tool which they have to use

more often.

Customer Lifetime value is important but since the major value proposition in this space is low cost so we think its more about being in the consideration set , providing best deals & hassle free experience.Although additional Customer acquisition cost due to promotion & for awareness is calculated below:

Because of both low effectiveness & regulatory cap on SMS’s we suggest zero spend on the space, also one of the components could be PR but since we are talking about direct additional customer acquisition cost due to promotion we have not taken PR into account.

E- commerce in US- Amazon.com

Amazon.com offered convenience of browsing million books in a single sitting

Used technical innovation to offer more product category Amazon operated retail website and allowed third parties to sell product on its site

Operated several websites for search and navigation

Offered e commerce platform to other retailers and individual sellers to enhance revenue.

E commerce in china-Success of Taobao

Launched in native language for online auction and shopping in year 2003Offering for business retailer and individual entrepreneur to open their online retail storesUnlike eBay which charged listing fees it was free to useLocal name drew the local crowd attention and poached customer from rival eBay.

Taobao success cont…Understood its customer well and thus provided higher satisfactionUnlike eBay’s listing which were more product centric Taobao chose a customer centric listingTaobao targeted cell phone savvy Chinese customer over far less number of internet user( 5.3% penetration level in 2003) through instant messaging and voice mails.

Why e-bay failed in china

Failed to recognize that Chinese market and business environment very different than the west.

Failed to understand the local market and used wrong medium to reach to its target segment

Didn’t customized its product according to local taste and preferences instead stuck to its “ global platform” agenda.