g v Venkatesh Seminar

8/8/2019 g v Venkatesh Seminar

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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 ascomputers and the internet to sell a range of

products and services online to the world.

E-tailers

Retailers who sell over the Internet


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History

The first recorded B2C online home shopping wasGateshead SIS/Tesco in 1984.

The world's first recorded online home shopper wasMrs. Jane Snowball, 72, of Gateshead, England in May1984.

In 1995 Amazon expanded its online shopping, and in1996 eBayappeared.


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Growth

Findings by IAMAI (Internet and mobile association

of India)

Rs.9000 crore worth of e-commerce was conducted onlinein 2007-08 from Rs.7000 crore in 2006-07, an estimated29% 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 theirpresence.


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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 substantiallybased 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

$316 billion by 2010.


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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


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Growth of E-retailing in India


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Barriers to Growth

Most Indians are not comfortable using their

credit cards for shopping and there is always a

fear ofwhat you see may not be what you get.

There may be a problem with complaint

resolution, especially after receipt of wronggoods 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

Consumer electronics

Office supplies

Sporting goods

Books and music

Toys

Health and beauty

Apparel and clothing

Jewelry

Cars

Services

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 tocollect personal and financial information fromcustomers.

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 orfeatures of a site, which can be the result of

increased information diversity

Novelty-Novelty involves the unexpected,suppressing, new, or unfamiliar aspects of thesite.


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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 makepayments, however some systems enable users to createaccounts 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


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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 isthe method often used in the bricks and clicks

business model.


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Shopping cart systems

Shopping cart software allows the consumer toaccumulate multiple items and to adjust quantities,

Provides online services to help small businesses get

online store, improve you way to increase sales, andprovide better customer service.


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Contd.,

Open source shopping cart packages include advancedplatforms such as Interchange, and off the shelfsolutions asAvactis, Satchmo, osCommerce.

It is usually installed on the company's own web serverand may integrate into the existingsupply chain so thatordering, payment, delivery, accounting and

warehousing can be automated to a large extent.

Shopping CartSystem v6.0.lnk


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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 ofPosition

A number of the things to be kept in mind forWebsite positioning are

Key phrases

Website linkPopularity

Superior Content

Appropriate Name Tags


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E-Retailing Business Models

Classification byDistribution 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


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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 multiplemarketing channels simultaneously (e.g., both physicaland online stores)


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Intermediation

There was speculation that the Internet would eliminateintermediaries in the supply chain.

The process of shortening the supply chain is known asdisintermediation

New intermediaries often arise to facilitate theshortened supply chain. This is known as re-intermediation

Re-intermediation means that the intermediary functionis shifted rather than completely eliminated.


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ManufacturerManufacturer ManufacturerManufacturerManufacturerManufacturer

WholesalerWholesaler

DistributorDistributor

RetailerRetailer

ConsumersConsumers ConsumersConsumers ConsumersConsumers

DisintermediationDisintermediation

ElectronicElectronic

IntermediariesIntermediaries

Traditional distribution systemTraditional distribution system Direct Marketing through InternetDirect Marketing through Internet Electronic IntermediariesElectronic 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


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Consumer Issues

There are a number of consumer issues that areimportant to Internet retailers.

Technical issuesare 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 whospecify 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 andopinions

E-wallet (or e-purse)


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The role of trust

Trustworthiness ofTrustworthiness of

ee--tailertailer

AbilityAbilityIntegrityIntegrity

benevolencebenevolence

Trustworthiness ofTrustworthiness of

InternetInternet

Shopping mediumShopping medium

TechnicalTechnical competencecompetenceReliabilityReliabilityUnderstanding of mediumUnderstanding of medium

Contextual factorsContextual factors

Effectiveness of thirdEffectiveness of third

party certificationparty certificationEffectiveness of securityEffectiveness of security

infrastructureinfrastructureCurrent media reportageCurrent media reportage

Other factorsOther factors

SizeSize

BrandingBrandingPresence of physical storePresence of physical store

IndividualIndividual

trusttrustpropensitypropensity

ConsumerConsumer

demographicsdemographicsPersonalityPersonality

characteristicscharacteristicsClue seekingClue seeking

ConsumerConsumer

trust intrust in

InternetInternet

shoppingshopping


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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 verificationprocedure conducted by a third-party get to display

a Trust Stamp on tradeindia.com.

Trust stamp is an indicator of companies standingin the market. It is an effective tool through which

buyers get credible information


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Benefits of Trust Stamp

For Sellers

Gives instant credible information of thecompany.

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 hasincreased.

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.


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Issues in E-Tailing

Disintermediation

The removal of organizations or business processlayers responsible for certain intermediary steps in a

given supply chain

Reintermediation

The process whereby intermediaries (either newones or those that had been disintermediated) take onnew intermediary roles


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Managerial Issues

What should ourstrategic position

be?

Are wefinancially

viable?

Should werecruit out of

town?

Are thereinternational legalissues regardingonline recruiting?

Do we haveethics and privacy

guidelines?

How willintermediaries

act incyberspace?

Should we setup alliances?


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Bottlenecks Faced

By E-retailing

in India

Problems withthe Payment

System

Problems withShipping

Offlinepresence

Productsoffered at

discountedrates

LanguageProblem


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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. CDWCorp.

Newegg.com

Best Buy


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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


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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

Cant see or feel the merchandise

Dont 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.


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Contd.,

With rise in internet awareness, people use it

more to facilitate work.

E-tailing catching up in India with majorretailers setting shop online.

TATA group announces opening of an e-mall,

in the next 2 months. Vishal retail launches online shopping portal.


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Amazon.com

AMAZON B2C type of e-retailing which dealswith sales of books, musicCDs, DVDs,

software, kitchen items, etc. Amazon tracks what its customers purchase and

then uses that information to satisfy and meetcustomer.

Expectations Amazons advantage lies in thefact that it lists huge catalogue of titles, and ismuch easier to search among them online


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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 fullyautomated way.

When an item is listed on eBay a non refundableinsertion fee is charged.

A fee is charged for additional listing options topromote the item.

A final value (final sale price) fee is charged at theend 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.


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Ways of Survey

Direct contact

E-mail

Phones

Reputed intermediaries/Agents


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E-retailing

0%

50%

100%

YES

NO

73%

27%

YES NO


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Current Sales

75%

25%

SALARIED PROFESSION AL STUDENTS


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Cards own for purchase

1%

91%

8%

CREDIT CARD

DEBIT CARD

BOTH


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Internet Access

17%

14%

7%

62%

Sales

OFFICE HOME MOBILE PHONES OTHERS


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10%

32%

19%

39%

when did you shop online

with in last fortnightwith in last month

with in last 6 months

more than 6 months


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Highest amount spent

0. 0%0. 0%

33. 32%

12. 12%

57. 56%

Less than Rs.500Rs.500 - Rs.1000

Rs.1000 - Rs.5000

Rs.5000 - Rs.10000

More than Rs.10000


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More secure websites

16%

52%

0%0%

20%

12%Amazon.com Inc.

Dell Inc.Fabmart.com

Rediffshopping.com

Ebay

India times shopping


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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.


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Online shopping compared to

offline shopping

0

28

13

32

0

14

6

0 0 0

coimbatore US


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Price Comparison

0 0

33

40

0

0

5

10

15

2025

30

35

40

45

Very cheap Cheaper Similar Moreexpensive

Veryexpensive

Very cheap Cheaper Similar More expensive Very expensive


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Method of payment

credit/debitcard

bank transfer cash ondelivery

money transfer

47

1

10

0

16

0 4 0

Chart Title

coimbatore US


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

have to wait for delivery

significant discount are not

naad to touch and feel the

cannot bargain/ negotiate

not sure of product quality

have to waitfor delivery

significantdiscount are

not there

naad totouch andfeel the

product

cannotbargain/negotiate

not sure ofproductquality

disagree 0% 17.80% 0% 0% 19.17%

neutral 0% 23.20% 20.54% 0% 31.50%

agree 100% 58.90% 79.45% 100% 49.31%

Chart Title


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What helps to decide which site

17

10

0

14

32

0

11

03

6

coimbatore US


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Online shopping is useful

totally agree agree neutral disagree totallydisagree

9

27

24

12

0

87

5

0 0

coimbatore US


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Online shopping easy to do

totally agree agree neutral disagree totallydisagree

15

27

20

10

0

87

5

0 0

coimbatore US


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Online shopping secure

8

23

14

28

00

13

7

0 0

totally agree agree neutral disagree totally disagree

coimbatore US


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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 undertakenwhile making an online purchase.

Proper security should be assured to the peoplemaking 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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