FMCG Online in India Ver1.1

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FMCG Online in India

MIM JBIMS 2009-10 Page 2 Author: Saeed Khan, MD, sCytech Private Limited, India

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1.0. Introduction1.1 Background

1.2 Problem Discussion1.3 Research Purpose and Research Questions

2.0. Literature Review2.1 FMCG online shopping trends in India2.2 FMCG onlineglobal selling2.3 Essentials of online shops

2.3.1. The Online Environment2.3.2. The top 10 technical considerations for any online shop

3.0. Methods for building trust for FMCG online selling in India3.1. Portal enrichment3.2. Process improvements3.3. Brand building3.4. Marketing initiatives

4.0. Case study: Ocados successful online grocery service

5.0. Findings and Conclusions5.1. Is it the right time for FMCG companies in India to target onlinemarket?5.2. Managerial Implications5.3. Implication for theory5.4. Suggestions for future research

References


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1.1 Background

The online environment provides an opportunity to the customer to place an order

for their required products at their comfort. Instead of personally going to shops or

malls, customer can browse shopping sites. They can view catalogues, product

details, check availability, and delivery locations, price, etc. They can also compare

amongst products of similar category, order the product, pay online and receive the

confirmed orders.

The story of online shops started with the use of website for publishing online

catalogues. The simple shop metaphor provides catalogue, shopping cart and

payment method usually called payment gateway. The latest in the shopping site

technologies is the bazaar storefront which gives 3D model of a typical bazaar

environment.

Western countries are using online shops to buy products since long time. The

global online market especially the FMCG online market is huge as compared to

India. As per the research and trend analysis by IMRBs syndicated research

productInternet in India (i-cube), the online shopping in India is encouraging and

FMCG online market demands are also very good.

The major FMCG categories are:

Baby Care

Cosmetics


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Food & Beverages

Hair Care

Household Products

Laundry

Oral Care

Personal Care & Hygiene

Personal Healthcare

The new categories which are being added into the FMCG industry are:

Tobacco

Lightings

1.2 Problem Discussion

This research project is focussing on why & how FMCG companies in India sell their

products online. With increasing internet usage habits by Indians and increase in

online shopping, FMCG companies can start selling their products online.

1.3 Research Purpose and Research Questions

The research for this subject is done as an exploratory research project. An

Exploratory research provides good insights into the issue, situation or any business

ideas. To define the research problem, an exploratory research can be carried out.


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The problems are formulated clearly in exploratory research and it aims at clarifying

the concepts, gathering explanations and gaining insights.

Exploratory research can be performed using a literature search, surveying certain

people about their experiences, focus groups, and case studies. This research

report is made with the help of literature available as well as best practices used by

different eCommerce companies.

The case studies included in this research paper is based on different literature

available in public domain and issued by the vendors who supported Ocado being

successful online grocery company in UK.

The very purpose of the project is to help understand the online scenario in India

and how Indian FMCGs companies (like other US or UK based FMCG companies)

do online business selling their products.

With the help of literature mentioned above and the best practices adopted by

different eCommerce companies worldwide, we will try to answer below questions.

FMCG Online market in IndiaBrief analysis

How to enrich the eCommerce portal?

How to improve online service?

How to streamline the supply chain processes?

How to retain customers trust for their personal information?

How to build the online portal brand?


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This report contains below sections as mentioned below:

The FMCG online trends in India;This section explores different buying habits

of Indias online buyer. It also explores attempt by some Indian online sellers for

selling beauty and personal care products.

The FMCG onlineglobal selling;This section gives insight of online buying

habits of Western countries and specially focuses on successful grocery selling by

UKs major FMCG online sellers.

Essentials of any online shops; This section explores the online

environment consisting of brand value of the domain name, website design, content

& security, shopping carts. It also explores the top ten technical considerations for

any good online shop.

Methods for building trust for FMCG online selling in India; This section is

divided into four sub-sections as given below;

Portal enrichment

Process improvements

Brand building

Marketing initiatives

At the end, the case study of UKs successful online grocery service Ocado will

give more insights of implementing and running FMCG online business.


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Active internet users in India are around 39.30 millions (36 millions in Urban and 3.3.

millions in rural areas) according to NRS 2006 survey. The online selling eTailing

stands at Rs. 850 crores for the year 2006-07 with Rs 1105 crores industry at the

end of 2007-08. The important surveys done by Internet and Mobile Association In

India for studying Indian Online Consumers Buying Trends gave insights on

products customers looked information for and the products bought by them online.

The following trends were observed:

Internet Usage:

96% of online shoppers have used the Internet for more than 1 year and 65% of

shoppers have been using the Internet for more than 5 years. 89% of online

shoppers use the Internet for more than 5 hours a week and 42% for more than 20

hours a week. It represents that the internet is becoming an integral part of our daily

activity.

Internet Activity:

95% of online shoppers use the internet for e-mail, 84% for work related activity,

77% and 72% for surfing and personal research respectively, 57% for online banking

& 48% for shopping (interestingly a higher percentage of women believe that online

shopping is a basic activity).

Credit/Debit Card Ownership:


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81% of online shoppers own a credit card & 75% of online shoppers own a debit

card.

Frequency of Purchase:

67% of online shoppers have shopped online as recently as 3 months showcasing

the growing acceptance of ecommerce. 53% of online shoppers have shopped

online more than 5 times, 27% of online shoppers have shopped online more than

10 times.

City ranking per Category:

Mumbai (24%) holds the top slot for every category, except jewellery

Delhi (19%) fast competing with Mumbai in accessories, apparel, gifts, Home

appliances categories and has piped Mumbai to rank 1 in jewellery.

Chennai (7%) is at rank 3 for railway tickets, airline tickets, magazines, home tools,

toys, jewellery, beauty products and sporting goods categories.

Bangalore (6%) is at rank 3 for books, electronic gadgets, accessories, apparel,

gifts, computer peripherals, movies, hotel booking, home appliances, movie tickets,

health and fitness productsand apparel gift certificates.

Kolkata (5%) jumps to rank 3 in online music sales online and is rank 4 for the

movies & the music categories.


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Hyderabad / Secunderabad surges to rank 4 for movie tickets & pushes Chennai to

rank 5 in this category.

Lucknow (2%) jumps to rank 4 for beauty products category. Ahmedabad (2%)

ranks at 5 for the toys category. Jaipur moves in the top 8 cities for books, music,

and home tools & movie tickets. Nasik makes an entry in apparel gift certificate &

sporting goods. Trichy makes its debut in the health and fitness products category.

Kanpur makes it debut in the railways category.

Wallet Spends:

93% of online shoppers have bought products & services above Rs 300, 89% above

Rs 500, 74% above Rs 1000, 14% in the range of Rs 500-1000, 38% have bought

goods in the price range of Rs 1000-5000, 20% of online shoppers have bought

goods in the price range of Rs 5000-10000 & 16% of online shoppers have bought

goods in the price range above Rs 10000.

Payment Preferences:

62% of online shoppers have used Credit Cardsfor online purchase & whereas

only 30% would prefer to use it online if given a choice.

23% of online shoppers have paid for online transactions by Debit Cardswith only

5% preferring to use their Debit card online if given a choice. 58% of online user use

58% of online user use Cash on Deliveryas a payment option but only 42% prefer

to use it.

28% of online shoppers use Debit from Bank accountwhereas only 14% would

actually prefer using this option. 28% of online shoppers have paid by


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Cheque/DDbut only 10% actually would like to pay by Cheque/DD

Satisfaction Index:

18% of online shoppers are Highly Satisfied with online shopping and 62% are

Satisfiedwith their online shopping experience making a case for repeat purchases

and peer to peer recommendations on this interactive medium. 17% are Neither

Satisfied or DissatisfiedAn opportunity to convert them towards this increasingly

high satisfying index.

Top Reasons Shoppers Buy Online:

70% of online shoppers like Home deliveryabout online shopping, 62% like Time

saving, 60% of online shoppers like the 24x7concept, 45% like the Ease of use&

39% of online shoppers like product comparisons.

Important Attributes of Online Shopping:

38% of online shoppers find online promotions important; 53% believe that it is very

important to clearly state product availability, 60% state that variety of offering is very

important; 61% of online shoppers prefer clarity in delivery schedules & 46% of

online shoppers consider shipping fees as a very important attribute in their online

shopping experience.

[1]

Food, Home Provision & Grocery Products:


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Online Shopping CategoriesProducts & services boughtonline %

Beauty Products 12%

Categories bought by Men & Women onlineProducts & services boughtonline Male Female

Beauty Products 10% 23%

72% of purchasers of Beauty Products online are male; the female bias (28%) is

greatly reduced in comparison to other categories sold online. Beauty Products if

given a boost by appropriate promotions and with tremendous opportunities to cross

sell is a product category expected to grow considerably.

50% of the purchasers of Beauty Products online are Married with kids.

Shoppers who purchased Beauty Products also purchased Accessories (62%), Gifts

(58%), Apparel (53%), Computers & Peripherals (50%) and Books (50%) thus

making a case for retailers in multi category e-shops to cross sell across categories

and allows for online advertisers to place media buys as appropriate to their

category.


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[3]

The results of the surveys show that a good online market available in India for

especially for the Beauty Products with 12% of the online buyers buying these

products online. The Mumbai, Delhi online buyers numbers are more than other

Metro buyers from Chennai, Lucknow, Bangalore, Kolkata. It is to be noted that, the

overall number of online buyers for the beauty products is encouraging.


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According to IMRBs syndicated research product - Internet in India (I-Cube) Reports

for the year 2006 and 2007, the online selling i.e. eTailing stands at Rs. 850 crores

for the year 2006-07 with Rs 1105 crores industry at the end of 2007-08. The 12% of

selling Beauty Products online the estimated market size will come to Rs. 102 crores

for the year 2006-7 and 132.6 crores for the year 2007-08. With focus on other

FMCG products like Food, Home Provision & Grocery, Cosmetic and Perfumes etc.

there is huge opportunity for the FMCG companies for pushing their products online

to the customers.

The Study of ASSOCHAM says that the total FMCG market in India is currently

estimated at Rs.200,000 crore. [4]


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Present Indian FMCG online sellers:

The FMCG online selling especially the Beauty Products are done by eTailers and

not by the FMCG companies themselves.

Some of the initiatives are given below:

Shoppers Stop (http://www.shoppersstop.com)

http://www.shoppersstop.com/catalogservlet?categoryId=315542

Shoppers Stop.Com (India) Ltd. is part of Shoppers Stop Group which sells products

online. One of its categories includes FMCG range of international beauty products

includes LOreal and Chambor, Nike, Davidoff, etc brands.

Shoppers Stop product categories include:
http://www.shoppersstop.com/http://www.shoppersstop.com/http://www.shoppersstop.com/http://www.shoppersstop.com/catalogservlet?categoryId=315542http://www.shoppersstop.com/catalogservlet?categoryId=315542http://www.shoppersstop.com/


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Fragrances , Skincare , Cosmetics and Makeup and Hair Care

Infibeam (http://www.infibeam.com)

http://www.infibeam.com/SDP.action?catalogId=P-B-C-Lakme-lakme-cosm-08

Infibeam is Ahmedabad based e-Commerce company selling different kinds of

products. The company sells different beauty, perfumes and cosmetic products

online. The brands Infibeam selling includes Adidas, Hugo Boss, Loris Azzaro,

Ralph Lauren, Christian Dior, Elizabeth Arden, Carolina Herrera, Lakme.

Infibeam product categories include:

Body Care, Cosmetic Hampers, Deodorants, Hair Care, Perfumes, Skin

Care, Mens Perfumes, and Womens Perfumes

Their Cosmetic Hampers are the online bestsellers.
http://www.infibeam.com/http://www.infibeam.com/http://www.infibeam.com/http://www.infibeam.com/SDP.action?catalogId=P-B-C-Lakme-lakme-cosm-08http://www.infibeam.com/SDP.action?catalogId=P-B-C-Lakme-lakme-cosm-08http://www.infibeam.com/


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Violica (http://www.violica.com)

http://www.violica.com/

Violica is an e-Commerce company specialised in selling Indian and international

beauty and cosmetic products. This is a Hyderabad based company started in 2006.

Violica product categories include:

Eye Care, Face Care, Hair Care, Hair Loss & Growth, Hair Removal,

Hair Styling, Makeup, Manicure & Pedicure, Nail & Cuticle, Skin Care,

and Spa & Body
http://www.violica.com/http://www.violica.com/http://www.violica.com/http://www.violica.com/http://www.violica.com/http://www.violica.com/


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HomeShop18 (http://www.homeshop18.com)

http://www.homeshop18.com/shop/u/y/c-Health-Q-and-Q-Beauty/Home_Online-clI_2-cI_561-#home

The HomeShop18 is venture of Network18 Group. Started in April 2008,

HomeShop18 is online and on-air selling.

The e-Commerce site of HomeShop18 sells different brands of health and beauty

products.

HomeShop18 product categories include:

Cosmetics, Perfumes & Deos, and Personal Care
http://www.homeshop18.com/http://www.homeshop18.com/http://www.homeshop18.com/http://www.homeshop18.com/shop/u/y/c-Health-Q-and-Q-Beauty/Home_Online-clI_2-cI_561-#homehttp://www.homeshop18.com/shop/u/y/c-Health-Q-and-Q-Beauty/Home_Online-clI_2-cI_561-#homehttp://www.homeshop18.com/


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Indiatimes Shopping (http://shopping.indiatimes.com)

http://shopping.indiatimes.com/i/f/t/Beauty_PersonalCare-ctl-20376665-&utm_source=ShpHmpg&utm_medium=txt&utm_content=BeautyPersonalCare&utm_campaign=LeftNav

Indiatimes Shopping is part of Times of Indias Indiatimes.com initiative. The

company sells different beauty and personal care products online.

Indiatimes major categories include:

Body Care, Deodorants, Eye care, Face Care, Hair Care, Oral Care and

Perfumes.
http://shopping.indiatimes.com/http://shopping.indiatimes.com/http://shopping.indiatimes.com/http://shopping.indiatimes.com/i/f/t/Beauty_PersonalCare-ctl-20376665-&utm_source=ShpHmpg&utm_medium=txt&utm_content=BeautyPersonalCare&utm_campaign=LeftNavhttp://shopping.indiatimes.com/i/f/t/Beauty_PersonalCare-ctl-20376665-&utm_source=ShpHmpg&utm_medium=txt&utm_content=BeautyPersonalCare&utm_campaign=LeftNavhttp://shopping.indiatimes.com/i/f/t/Beauty_PersonalCare-ctl-20376665-&utm_source=ShpHmpg&utm_medium=txt&utm_content=BeautyPersonalCare&utm_campaign=LeftNavhttp://shopping.indiatimes.com/i/f/t/Beauty_PersonalCare-ctl-20376665-&utm_source=ShpHmpg&utm_medium=txt&utm_content=BeautyPersonalCare&utm_campaign=LeftNavhttp://shopping.indiatimes.com/i/f/t/Beauty_PersonalCare-ctl-20376665-&utm_source=ShpHmpg&utm_medium=txt&utm_content=BeautyPersonalCare&utm_campaign=LeftNavhttp://shopping.indiatimes.com/


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48% of people in Western Europe and 73% of people in the US, have access to the

internet. Of those with home access, 6% in Europe and 14% in the US, have

ordered and bought products or services online. It is to be noted by the retailers and

manufacturers of personal care products the ever-changing requirements of the

online personal care buyer and information seeker, in order to formulate successful,

long-term eCommerce strategies and gain ground over their competition.

Compet i t ive Dynamics

Portals and search engines were among the least popu lar start ing poin ts for

consumers .

Customer Focus:

58% of al l personal care inform at ion seekers in Western Euro pe are male. In

contras t, in th e US 74% are female.

Market Context

The onl ine perso nal care market was wo rth US$292.5 mil l ion in the year

2000 and is f orecas ted to be worth US$4,510.7 mil l io n in the year 2005.

Future Forecast

Only 13% of Europeans and 19% of North Amer icans intend to use thei r

mob i le phone to research produc ts onl ine in the next 12 mon ths.

It makes good business sense to reach your customers who have online presence.

[5]


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[6]

Online Grocery Shopping in UK

The online grocery market in the UK is dominated by four of the UK's major

supermarket chains Tesco, Sainsbury's, ASDA and Waitrose and by a fifth

supplier, Ocado, which is a warehouse-based online operation and a partner

distributor to Waitrose. Outside of these five major suppliers, the market is mainly

populated by a wide range of niche, specialised retailers, many of which offer

products that are not always available in the major supermarkets. Apart from the five

leading online suppliers, no other supermarket chains in the UK operate in the online

grocery market not even Morrisons, which is the fourth-largest supermarket chain

by market share. The costs and complexity of establishing an online service `from

scratch' appear to be a significant obstacle for many of these chains.

The recent focus of the five major online grocers has seen them expand their

distribution networks, improve their stock availability levels and enhance the


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functionality of their websites. However, in the current recession, other factors are

now being given more attention particularly price competition between the sites,

which is becoming increasingly important. In addition, environmental issues have

become more significant. For example, the leading suppliers have introduced

measures to reduce the number of plastic bags used for home-delivered orders and

to use more fuel-efficient delivery vehicles.

As at December 2008, the UK had the fifth-highest number of broadband

subscriptions among the Organisation for Economic Co-operation and Development

(OECD) group of countries (and the third-largest number among the European

OECD countries). These high broadband connection rates have enabled the UK to

become a leading centre for online sales in general, and for online sales of grocery

products in particular. Plans have been outlined to construct a super-fast broadband

network across the UK, and this should in turn allow the online grocers to develop

new website designs and technologies in order to take advantage of such

developments.

Exclusive research commissioned for this report showed that 17.8% of all

respondents purchased groceries via the Internet at least once in a year, with 3.8%

making online purchases at least once a week and a further 2.4% making them two

or three times a month. One in 20 respondents said they purchased groceries online

once a month. However, almost a third of those who said they bought groceries via

the Internet agreed that, due to the recession, they had reduced the amount they

usually spent on online grocery purchases.


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Key Note forecasts that in the 5 years up to 2013, the UK Internet grocery market

will continue to demonstrate high annual rates of market expansion and to account

for an increasing proportion of grocery sales overall. The value of the Internet

grocery market is projected to more than double by 2013, compared with the size of

the market in 2008.

[7]


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2.3.1. The online environment

The online shopping websites are attractive web pages with shopping carts for

buying the products. The typical e-commerce site consists of the price range lists,

product catalogue, shopping cart and payment system.

The most popular and visible B2C model on the web is the Web mart (or digital

storefront). The model is a result of the creative merger of two shopping metaphors:

the mail-order (catalogue) business and the shopping mall and supermarket.

[8]

The online retail stores or online shops or web mart or digital storefront are also

known as e-tailers, which comes in all sizes and shapes, from giant Amazon.com to

tiny local stores who have a website. The online shop is much like the typical brick

and mortar storefront, except that customers only have to dial into the internet to

check their inventory and place an order. Some online shops, sometimes referred to

as 'click and mortar' or 'clicks and bricks', are subsidiaries of existing physical stores

and carry the same products. Wal-Mart is an example of complimentary online

stores.

[9]

Similar to industrial-age counterparts, the online shops provide:

Ultimate purchasing platform to buyers

Allow owners to cross-sell and up-sell, maintains higher margins

Compares the value delivery system by reducing transaction costs


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When end users need to buy something, they go to their online shops.

Meanings: Storefronts of the Economy

When end user wants to buy, he goes to storefront

Offerings: Products (product offering, order taking)

Services (Fulfilment, customer services/supports)

Content (Information on products/services)

Target Audience: Niche market and buyers

Activities: Provide standalone network based products, services and content

distributed in an Economy model

Competencies Required: Multiple relationship management. Ability to form/dissolve

relationships rapidly. Robust/flexible information with plans for growth. Scaleable to

meet evolving challenges/opportunities. Continuous innovation in product offerings

and customer service

Goal: Dominant target niche

Examples: Amazon.com, E*TRADE

The online shop link to back office system, provide on-the-fly data integration with

the legacy systems, assign quantity discounts and special pricing to sale items and

handle sales tax and shipping charges. The online stores also links to payment

gateways, email notification, security and encryption tolls and long file analysis tools


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to monitor customer's buying habits. The online shops are easy to navigate, set

customers login names and passwords. With easy navigation, online stores also

provide a concise search engine to items in the store.

[10]

The bazaar storefront

The bazaar storefront provides a buyer with marketplace and price flexibility. The

prices for each product in a bazaar depend on a variety of factors, including the

season (peak or off-peak), the bargaining experience of the seller, the tenacity and

culture of the buyer, and the manner in which the buyer handles the preliminary

social etiquette. The word bazaar, originating from the language of Uygur, means

marketplace on the Silk Road. The word conjures up images of bustling and

prosperous trading activities.

The bazaar storefront unlike the 2D desktop interface, boasts 3D interfaces & under

the right circumstances, users are able to mentally project themselves into a virtual

space. The 3D modelling technology like Active World is used to create a bazaar

environment.

The bazaar universe is, of course, developed in a local language. Within the bazaar

universe are spaces for different types of goods for example, a gold room, a

carpet room, a slipper room, and so forth. Waiting at the entrance of each space

are animated avatars with whom potential customers can converse. The avatars are

the counterparts of the shop assistant in the shopping mall. The avatars behaviours

correspond to particular cultures. Non-verbal behaviour, in particular, is highly

culture specific and constitutes 60% of interactive messages. For example, an


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Indonesian would use the right thumb rather than an index finger when pointing to a

person; a Japanese smile can mean appreciation but it can also mean feeling

embarrassed or sorry for another person. Transactions are carried out by negotiating

prices with avatars.

Shopping bots are specially designed engines that provide price comparisons. Using

such culturally specific shopping bots, customer profiling can be developed. Bots

have a great potential in data mining, finding patterns in enormous amounts of data.

A customer profile may include information about negotiation skills, level of risk

taking, and the ratio between an initial offer and the settlement price.

[8]

The components such as domain name, website design, shopping carts, web

content and security are essential parts of any online shops.


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Domain name

The domain name is very important for first time online customers looking out for an

item. The domain name suggests many things about the company which is going to

service the customers. The customers try to relate the brand value of the website

domain name with the kind of product service he or she will get.

Website design, content and securi ty

Technically analysed and designed website serves the very basis of any storefront.

The primary objective of a website is to attract a number of interested customers to

visit the companys online presence (Simeon, 1999). A firm use a website as a mean to

introduce itself and its products to a wide audience, creating corporate and product

awareness in the market (Kim et al., 2003). A good website design helps firm achieve this

goal.

Design elements described by the Oppenheim and Ward, (2006) that make a web

site effective can be classified into the following:

Presentation elements

Content

Accessibility

Navigation

Language

Transaction pages

Security, privacy and authority


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Presentation elements:

Visual cues

Visual cues according to Oppenheim and Ward (2006) are similar to those found in

the conventional method of physical distribution. Therefore, the patterns, colours and

shapes of links used should be used to provide tangible cues similar to that of a

confectionery shop. E-shoppers will expect products online to be grouped in a

similar way to how they are in a shop.

Page layout

According to Oppenheim and Ward (2006) a consistent page layout throughout the

site is needed, as people learn best from repetition. Consistent placement of

interface elements can help users learn to recognize them, allowing maximum

benefit from experience using the site This helpsimprove the usability of a web site,

which Nielsen states is very important. A successful web site should have a similar

look and feel to other web sites. This is because customers spend most of their time

on other sites, so widespread design elements should be incorporated into the

design.

User-friendly design

As Oppenheim and Ward, (2006) describes that minimum scrolling, particularly on

the homepage, is necessary. A user-friendly design element such as drop-down lists

and radio buttons can minimize keystrokes and help to prevent errors that often

occur when inputting information.


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Fonts

Oppenheim and Ward (2006) recommended the use of sans-serif fonts rather than

serif fonts due to their legibility, and experts encourage the use of headings and

sub-headings to provide a logical structure. Bold text is often helpful to highlight

important text and bullets and numbers are useful for indicating the separate steps

of a procedure, although overuse of this is considered to be poor practice. The use

of capital letters for entire words and sentences and the use of italics are not

recommended. Flashing or blinking text should also be avoided, as these

overburden a users information load and interfere with the focusing of attention.

The site should, obviously, be free of typing errors.

Use of Colours and Graphics

Oppenheim and Ward (2006) described that colours, fonts and graphics should be

suitable and relevant to the web site. Further explained; colours should not be more

than three for body text and no more than two should be used for the heading text.

The use of a small range of colours helps to add consistency to a web site and

enables areas of information to be classified into sections. Colours can convey

images to users and influence their perception of the company. For example, white

is associated with purity, cleanliness, lightness and emptiness, purple conveys

wealth and sophistication, and blue conveys truth, dignity and power. White space is

essential when trying to achieve an uncluttered appearance. This is important

because both the amount of content, or density, and the placement of content on a

page will affect coherence that is, how easily visitors can manage the information

and perform relevant tasks

Content:


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It is important that visitors to the web site have easy access to information providing

proper descriptions and photographs of the products as well as pricing and

availability of products is clearly displayed. This should detail the exact content and,

where necessary, dimensions of the product and provide the visitor with the

opportunity to view a close up image of the product rather than just a text-based

description. Unstructured, meaningless content on a page results in users

experiencing difficulty finding information and navigating around the web site.

Avoiding the use of patterned backgrounds helps preserve white space. Negative

contrast is an effective feature, for example, using black text on a plain white

background provides a simple but very effective appearance for the web site.

Providing detailed error messages is an important design element. It is important to

provide the easy instructions to the user how to get more information either online or

offline.

Personalization to a users preferences such as suggesting new products which are

similar to previous orders placed, or by creating promotional offers based on

information gathered about what is selling well at a particular time of the year, can

also be successful in encouraging return visits. Techniques such as frequent buyer

incentives, for example discounts or gifts, can encourage repeat online visits and

purchases, as they help to create value for customers. A whats hot or whats new

section can also attract potential customers.


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A navigation bar containing clear links helps to improve navigation for visitors and a

logical structure with different sections and levels helps provide a rational path for

users to take a site map, content list and index, with a link to the site map on every

page are useful for larger web sites. Studies have shown that amongst visitors, site

map and help pages are very popular and can speed navigation.

Language:

There should be very little technical jargon for inexperienced Internet users, and

users should be able to select the language they wish to view the web site in.

Further strongly supported by the findings that the lack of multilingual options raised,

a web sites offering a version of the multilingual feature is vital if a web site is to

successfully trade on a global scale.

Transaction pages:

Many surveys show that the key reason online shoppers do not complete a

transaction is due to a complicated, confusing transaction process. Therefore, online

transactions should be as straightforward as possible and should not be too time

consuming. A special design focus is required on transaction pages to retain the

users attention. Prompting users is required on transaction web pages as a method

of gathering additional information, and also as a method of instructing people to

correct or modify the information they have entered . Providing user-friendly

instructions on how to complete the necessary forms to make the transaction can

help do this. The web site should have reliable stock availability information and

some form of easy-to-print acknowledgement or confirmation should be sent to the


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customer once an order has been placed. A reminder should be given to users to

print confirmation pages and keep them as receipts.

Security, privacy and authority:

According to Oppenheim and Ward, (2006) Security is a paramount concern for e-

business website design. Visitors have more confidence in the security of

professional- looking sites further explains the importance for companies to convey

a reliable, trustworthy image online. This can be achieved through a high quality

brand identity and information about the company that summarizes its pedigree

customer confidence can be improved if company contact details are published on

the web site. This is also a legal requirement of the Consumer Protection

Regulations with regards to distance selling (Directive of European Parliament,

1997).

For secure payment methods such as Pay Pal can assist, as they are used by a

large number of sites. Websites must accept a good range of international credit and

debit cards.

Playfulness:

Playfulness is thought to increase return visits by customers, as it provides

interaction between the user and the system and makes the shopping experience

more fun. For example, the Jelly Belly (2005) web site provides entertaining content,

encouraging visitors to return to the site at various times of the day to complete

surveys and win free product samples. The Cadbury, 2005 web site uses a similar

technique, providing competitions, free desktop downloads and a selection of

Product- related games. [11]


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Shopping Carts

Shopping Carts are integral part of the online shopping experience. The online

shopping cart is just like a cart available in any Retail Stores where you are keeping

your selected Items and do the payment at the Exit point. The Payment Clerk at the

Retail Store takes out your selected items, scan the bar-code, packs it and collects

the payment from you. In the same manner, once online shopping users have

located the items to buy, it is important that he/she be able to begin the ordering

process. Therefore, the shopping cart should be easy to find and located

consistently throughout the site. Amazon.com does this well by putting the shopping

cart icon in the top right corner of every page. There should also be multiple entry

points into the shopping cart from the site so users can see what is in their cart and

add additional items.

It is also important to allow the storing of Shopping Carts on the portal. Customers

may not follow through with the purchase for several reasons; for example, they may

go to another site for comparison or may want to wait to accumulate several items in

the shopping cart to reduce their shipping charges. Online sellers may also want to

support similar features commonly referred to as wish lists, gift registries, or

shopping lists. This type of feature allows a user to gather items together for a

purchase at a future date or create a list to share as gift ideas with friends and

family. It is also important to have feature of removing items from the shopping cart

easily.

[12]


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2.3.2. The top 10 technical considerations for any online shop

As the online shops or the commerce web-sites of more and more businesses come

into their own as significant revenue drivers, major retailers are now recognizing

their online shops as mission criticalbusinesses. Now they pay more attention to

the online channel. For evolving business need certain points need to be

considered.

Scalability

The product catalog

Business user control

Search

Agility

Reporting and Analytics

Standards

Integration

Interoperability

Synergy

Scalabil i ty The website should perform efficiently through traffic peaks. An

Unresponsive customer-facing application will frustrate the customers, drive them to

competitors, and kill the online business. As the web-site popularity increases, it

needs to scale with minimal effort. Its not advisable to incur disproportionate

infrastructure management costs just to keep the site, well, scalable.


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One should look for below queries:

What is the peak number of visits (open sessions) the site has supported?

How many orders per day does the site take?

How many page views per visitdoes each visitor make on average?

How big or complex is the product catalog, and how many categories, products and

SKUs are in it?

What is the average response time of the home page and typical detail pages?

How much hardware, software and infrastructure are required to handle these

volumes?

The prod uct catalogThe product catalog is the online repository for every item

one sells. It has to effectively promote the items most wanted to be pushed, and

simultaneously help the customers find them what they are looking for. But poorly

constructed product catalogs can be rigid and uncompromising, especially if the

product attributes dont naturally align with the definitions set. To make an inflexible

product catalog accommodate business realities, companies end up misusing data

fields, filling irrelevant mandatory data fields with gibberish, duplicating data in

multiple places, and inventing esoteric codes to artificially accommodate information

the catalog doesnt natively support. Its often hard to predict what kind of products

one will be selling in the future, and what other applications may need to populate

these catalogs. Companies lose the agility needed to quickly adjust offers and

promotions, and continually adapt to changing e-commerce business needs.


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Can the catalog represent different types of product with different attributes, and

what are the limitations?

How many product categories and sub-categories will the catalog support?

Can a single product or sub-category exist in multiple categories without data

duplication?

Can different catalogs be defined for purposes other than a B2C store?

How easy is it to relate accessories and create bundles?

Business user cont ro lThe web-site should directly empower the merchandisers,

marketing managers, and other business owners. The business users should be

able to take control, and every task that they can safely do themselves means one

less task that IT will have to do. One needs to make sure that the application is

technically and architecturally sound with proven capabilities. Also look for tools that

business managers can use themselves.


Can product and category managers control their parts of the catalog?

Can merchandisers define promotions and discounts on products, orders and

shipments without IT involvement?


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Can a targeted e-mail campaign be sent without IT extracting the customer lists?

Can executives pull their own standard reports, and even create their own new

ones?

Can business users directly manage critical and constantly changing content like

the home page?

Can business users do all these activities with the confidence that they won t

breakthe Web site?

SearchHow easily can customers find what they want, and how easily can one

promote the products that need to be pushed based on customer searches? The

search box is often the first tool an e-commerce customer uses. There was a time

when expectations of search were pretty low. Today, users expect search to not only

find, but also guide them to the products theyre looking for. A search experience

that really works for the customers can significantly increase online revenue.

However, the e-commerce site search is just one piece of the puzzle. External

search engines like Yahoo! And Google also need to find the products, causing a

headache for site managers with dynamically generated commerce pages, since

search engine spiders are likely to misinterpret what they find on a dynamically

generated page. As we all know from our own online experiences, there is nothing

more frustrating to customers than searching for, but not finding, something that we

know is on your site somewhere.



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How easily can one integrate a commerce search experience into the online store?

What product attributes can customers search on?

What happens if customers search using similar terms to, but not the exact words

of the product descriptions? What if they make spelling mistakes?

Can one learn about the customers based on their searches?

Is the search engine pre-integrated and catalog-aware?

Can one present relevant promotions as customers search the site?

What business control one had in creating filtering and navigation paths?

How easily can external search spiders index the dynamic site?

Agi l i tyHow easily one can implement business requests to monitor and respond

to an individual Web visitors behaviour?


What Web site behaviours can be easily monitored? Is monitoring restricted to a

single Web visit, or can it span multiple sessions?

What automatic actions can I take once I recognize a desired behaviour?

How do I manage business rules and marketing scenarios?

and most importantly,

How much resource and time will be required to implement these activities, and

can they be re-used?


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Report ing & Analy t ics The portal must have all the features needed to

understand the online business. The e-commerce Web site stores a veritable

treasure trove of information about the customers, their behaviour, and preferences.

But businesses typically struggle to figure out how to leverage the business value

this data holds. Configuring the portal to capture and log all the available information

can be an arduous job, especially when the data may be coming from a large variety

of sources. Furthermore, one may be using the data in different ways over time, and

one may need new information to drive specific campaigns. Or, one may want to

base campaigns on different behaviour from what youve been tracking.


How does the site capture and store both historic and behavioural data?

What insights can one get from customerssearches?

What pre-integrated tools extract business intelligence from this data?

What reports and dashboards offer visibility into the business?

How easy is it to monitor business metrics like conversion rates and average order

sizes?

Do the reports allow to drill-downinto them to find the data behind results?

How easily can one create ad-hoc reports to get quick answers to specific

questions?

Can one merge Web data with non-Web data, to see a multi-channel view of the

business?


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StandardsIs the application built on a standards-based platform?

An e-Commerce is no longer a renegade out-post of IT. Its a fundamental, mission-

critical organization within a businesssystems portfolio. It must run on a standards-

based platform that can be supported by standard skill-sets across the organization

and in the wider marketplace. In todays enterprise applications, the technology

playing field has narrowed to either a Java/J2EE or Microsoft .NET architecture.

Integrat ion How easily can the application integrate with other systems? The

team that develops and supports it contains a mix of technical and businesses

professionals who drive an important part of the corporate strategy. As businesses

become more imaginative about how they mix their Web channel with other

customer touch points, clean and easy integration is mandatory. Just about every

element of an e-commerce application may be either self-contained or driven by

other systems.


Where does the application store customer data?

Which system owns the master product catalog?

Which application owns the current SKU inventory count?

Which application owns pricing?

Which application does the financial reporting?


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How are orders communicated and fulfilled, and what happens when things go

wrong? How are credit card details authorized, and how is transaction settlement

handled?

How is fraud detection handled?

How can promotions and discounts be synchronized with the other channels?

How can the Web application integrate with in-store systems for in-store pickup or

returns processing?

Interoperabi l i ty Does the application function within a Services Oriented

Architecture? Many forward-thinking businesses want their different applications to

be able to play together such that new composite applications and businesses

processes can be quickly assembled to increase market competitiveness. Service

Oriented Architectures, and the ability to wire applications together based upon a

Web Services backbone, will be an important element in improving a business

ability to respond to changing business conditions. An e-commerce application may

be an integral part of any such architecture. This is true both for the data the e-

commerce application stores (customer information, product and pricing information,

etc.) and for the business processes it supports (order placement, inventory update,

etc.).


Can the application support B2B and B2B2C business processes?


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Can the application support other interactions beyond shopping, like Web self

service or customer care?

What information in the e-commerce application is presented through Web

Services, and how does it do it?

Which business processes are available as Web Services, such that other

applications may easily invoke them?

How can the application connect to the enterprise service business architecture, to

stay aware of important business events happening elsewhere in the business?

SynergyWill the application support business models beyond B2C e-commerce?

Simple B2C e-commerce applications are built to support individual customers,

orders and credit cards; but business relationships can get much more complicated

than that. When the top-tier business accounts buy in volume, they don t want to

enter a credit card number for every order they place.


Does the e-commerce application support customer profiles AND organizational

profiles such as an Accountor a Business?

Can hierarchical businesses structures be modeled?

Can different roles be defined, and permissions set against them?

Can different contract types, catalogs, price lists and discounting structures be set

up; perhaps for every company business is done?

Can business support tiered and volume discounting structures?


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Can purchase limits and approval processes be easily implemented?

Can purchases be made against cost centers and purchase orders, as well as be

followed up with invoicing?

[13]


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33..00..MMeetthhooddssffoorrbbuuiillddiinnggttrruussttffoorrFFMMCCGGoonnlliinneesseelllliinnggiinnIInnddiiaa

To retain the customers and increase the sales, it is important to build trust among

customers. The business must integrate portal and services together to give their

customers joyful online shopping experience. The proposed model to be named as

eCommerce Service Model, will try to explore important functionalities to be added

in the portal from customer service point of view. The eCommerce best practices

then can be added into these important functionalities.


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3.1. Portal enrichment

3.2. Process improvements

3.3. Brand building

3.4. Marketing initiatives

3.1. Portal enrichment

3.1.1. Portal's ease of use

An easy to use portal is what the customer always looking for. Complicated look-n-

feel of the portal confuses the customer and he/she may immediately switch to

another shopping site. Simple layout of the website with distinct way of showing the

products with all relevant details help customer decides fast. Easy search abilities

increase the portal power and this tool help customers find their product they wish to

buy.

3.1.2. Portal appeal to consumer

The portal is appealing to customer when it s web page quality as well as look-n-feel

taken care of. This can be compared to a brick & mortar shop where the marketer

uses ATL and BTL to promote and showcase the product. Likewise, the portal

should wisely use web page visible space.


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Beauty flash (http://www.beautyflash.co.uk)

Above picture is an example of cross selling other related products using effectively

eShop visible web page space.

Portal should be configured in such a way that when a customer is selecting an item,

other items used in conjunction with this should be displayed on screen. Also, if

other brand of the same kind is available that should also be displayed. This gives

customer a choice to select the correct required item. For example, when a

customer is selecting a particular shampoo, the conditioner should be shown to

him/her. This way cross-selling and up-selling helps business.


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3.1.3. Alternative shopping cart

Through alternative shopping cart, customer is given an extra basic interface to buy

the products. It helps those customers who are not tech-savvy and wish to buy

online. The new trends in shopping carts features may confuse non-tech-savvy

customer. Alternative shopping cart is the best option to service such customers and

retain them.

3.1.4. Simplified check-out process

The check-out process should be very easy. Many shopping portals ask their

customers to first login and then proceed. For first time buyer, who wish to buy but

do not want to spend time filling the long profile form for Login ID creation simply

switches to another site.

For such buyers, there should be simplified check-out-process. This means that the

buyer should be given chance to buy without any profile form filling. If the buyer

wants to buy, he will select the Item and add into the shopping cart, the portal will

store this information into a temporary shopping cart. After this selection, the buyer

then clicks the check-out button and reaches Payment section. Here, he will fill the

crucial information like email id where he will receive order status information and

payment information.

The simplified check-out process reduces customers time for making an order and

especially a first time customer always likes such a method.


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3.1.5. Wide product range to choose

The wide range of products to choose enhances the trust of the buyer. Showing the

products in a list format, with thumbnail helps customer identify the product easily. In

most of the cases, customer rates the portal based on an easy to find search option.

When the number of listed item increases, the search feature becomes more

important. Thus search function on the eShop portal is determined to be very

important element of the customer experience. Differently spelled words should also

be able to be searched. For example, someone searching for Beauty Cream

labelled as Crme only should also come in results. Moreover, the search engine

should take care of misspelled words.

On wide product range front, customer will look for:

Easy reach and easy use search feature:

The easily available search on the each portal page helps customer find the

required item. The search engine should be able to find exactly what customers

are looking for. The ambiguous terms, one or two word phrases typed in

search box should retrieve relevant results.


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Advanced Search option:

The advanced search option should allow customers to select prices,

options, colours, sizes, models, etc. The dynamic browse functionality

should offer customers highly organised search results.

Sorting feature with every way customer like to do:

The standards are "Price - low to high," "Price - high to low,"

Popularity," aka "Best Selling," "Featured," "Rating" and "New" or Latest."

3.1.6. Product catalogue

A good looking product catalog with the respective photographs will always

appreciated by the buyer. Before, making a buying decision, customer would like to

see the product. When an Online portal provides details with a nice photograph of

the product, this will help buyer decide quickly.


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Example: Trust William: UK

(http://www.trustwilliam.com/)

Trust William gives product catalog based on Category wise, Ingredient wise as well

as Bestsellers & Recommends wise.

Trust William product description clearly display different sections of the product like

the Product, Information, Ingredients, Dosage, Warnings, and Reviews. Such in-

depth information about the product provides good perspective to the customer

before making a buying decision.


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3.1.7. Products comparison features

The internet provides good platform to compare different products before placing an

online order. There are websites like compareindia.com, naaptol.com in India where

customers can compare the products with respect to features and price. When such

feature is made available itself in the selling portal, it increases the chances of

customers coming again for online purchase.

Juice Beauty Organic Solution (http://www.juicebeauty.com)


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3.1.8. Product reviews

The product reviews of the past purchase help build confidence. The satisfied

customer posts the feedback on the selling portal, which is made available to view

by all customers. The customer can report many things including complaints, joy of

using any particular product or any harm happened to customer. This feature is very

good for beauty products selling online when the market is very rapidly coming up

with new products. The feature will allow selling company to analyse the trends,

requirements and changes to be done in their product offering.


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Example: Drugstore (http://international.drugstore.com)

It is also a good idea to provide Top Popularity Score Chart as shown below from

Shopping.com (http://www.shopping.com)


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3.1.9. Freshness dating of the portal

It refers to the freshness on the homepage of the portal. When customer logged in,

he/she should get new products, offers, promotions. The pictures should also be

changed frequently. The concept of freshness dating is similar to the brick & mortar

shop where the seller regularly changes their displayed products.

Same way, when regular customer visit the online shop, he/she should not feel that

old products are still on display. The freshness dating of the shopping site needs

proper housekeeping and planning.

3.1.10. Virtual societies

The virtual societies on the portal helps customers share their views. They can refer

the experience of other customers before making decision of buying any product.


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This helps customers for deciding high end FMCG products like beauty and

cosmetic products. This knowledge in turn help business also to understand the

customers needs better.

3.1.11. Localisation

The localisation of the portal refers to the needs of the customers locally. This is an

important aspect. The price and specification of the product should be as per local

standard. For example, customer in India expects the price in Rupees and the

specifications as per ISI standards. This become important when customer logged

into any MNC selling portal and Indian customers are asked to pay in Dollars. This

could also happen when you want to buy the product as per Indian standards and

the portal is showing specifications as per American standards.

Example: Drugstore (http://international.drugstore.com/)


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3.1.12. Guided Chats

When a customer is browsing a shopping page online and has any question, or not

able to find the product he/she looking for, he/she makes use of live support. The

live support can be taken by clicking on the Chat button which opens in a window.

With this interface, he/she will be connected to live support customer care executive.

The study, Online Shopping Review: Testing Three Communication Methods,

came as a result of Smith taking a closer look at some of the more compelling

insights revealed in a recent BoldChat report on live chat effectiveness.

The report concluded that live support chat software is an important tool for driving

sales. Additionally, the survey showed that online shoppers ranked live chat as the

number one preferred method of communicationahead of phone and e-mailin a

variety of typical purchase situations.

3.2. Process improvements

3.2.1. Click-to-call

Click-to-call is new concept where the customer places or enquires about product

and the selling agent calls back customer to assist further. This can be given as an

extra service support to loyal customers. Now days most valuable online customers

begin their research online, but ultimately purchase products and services offline.

With the online shop serving as an extension of the brand, delivering a positive

experience online can make the difference to a buyer. Multi-channel customers

demand consistency across channels.

Click-to-call service can be given two ways:


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Offline: buyer clicks on click-to-call service and get call at the

scheduled time.

Example: Nike US (http://www.nike.com/nikeos/p/nike/en_US)

Online: at the time when buyer is online, he receives the call from an

agent, and will be assisted at the time buyer wants to enquire or buy.

The agent help buyer for making the decision.

3.2.2. Third Party Trust Certificate

Here customer click on the icon made available on shopping website and rate the

store based on their shopping experience. The final rating results can be displayed

as:


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Asmi Diamonds (http://www.asmidiamonds.in)

A new form of payment service is started by eBillme where during the checkout

process; the customer can pay via online banking or can take the eBill from the

seller and can pay at the Walk-in locations of the eBillme. This service is useful for

the buyers who do not have the credit card or hesitate to use the same fearing for

any fraudulent activities for using credit card online. This method of payment gives

new payment method to customers and also helps them trust the online shopping

company.


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3.2.4. Secured Payment Gateways

Secured payment is the major test of trust for any online buyer. The gateway is the

interface between shopping portal, buyer and the Credit Card or Debit Card Bank.

When customer does the payment using Credit or Debit Card, the browser is

redirected to the payment gateway site. This gateway encrypts the customers vital

Credit Card or Debit Card information and ensures that information passes securely

between the customer and the merchant (shopping site) and also between merchant

and payment processor. Some of the payment gateways are CCAvenue, PayPal,

Google Checkout, etc.

In the absence of secured payment gateways on the shopping portal, customers

usually hesitate to place orders.


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3.2.5. Secured website

Customers want to ensure that the personal details including Credit Card or Debit

Card details are not hacked by any hacker and misused. When shopping portal is

using 128Bit encryption services of Security Companies like Trustwave or VeriSign,

the shopping service is trusted by customers.

Example: VeriSign Secure Certificate issued towww.indiaplaza.in

When user clicks on the VeriSign icon available on eShop portal, this will open up

new windows showing above details like Site Name to whom this certificate issued

validity and Name of the Organisation owning the site.
http://www.indiaplaza.in/http://www.indiaplaza.in/http://www.indiaplaza.in/http://www.indiaplaza.in/


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Trustwave Secure Certificate issued to Retails Direct

3.2.6. Goods Delivery process

It is now imperative to perfect the logistics delivery process. Negligence of this

process may put the online selling company on high risk. The supply chain

management behind fulfilment of the orders will be the deciding factor of the return

of the customer to the portal again. Different options to be provided on the portal in


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3.2.8. Customer Relationship and Service

Customer relationship is an important aspect for any business. Its a continual

process of interacting with customers via online, phone or personal interactions. The

goal of customer relationship and service is sustaining the customers for long time.

With proper customer relationship and service provided to the customer, the

feedback channel is established. With the help of this channel, customer can tell his

observations, can request for specific kind of service or can ask for resolution of the

disputes also. Multi-channel is also helping customer relationship and service to

satisfy customers.

3.2.9. Personal data privacy

The customers are very critical about their personal data privacy. A February 2005

survey by security provider RSA Technologies suggested that one-quarter of internet

users may have cut back on their online shopping expenditure out of fear for the

security of their personal information like credit card details, bank account details, or

even their email addresses. This fear does not arise for established brands like

Amazon, but for the start- up or niche market sellers, convincing the customers

especially the potentially first time customers that you will handle data their safely

becomes very important.

TRUSTe seal on your online shop is a guarantee to the customer that you are

following the processes and procedure to safeguard the personal data privacy of the

customers as mentioned in the Privacy Statement.

[17]


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The dispute resolution program allows customers to put their claim in case of non-

satisfactory services provided by the portal company. The dissatisfaction could be

because of non-delivery of item, short delivery, wrong item delivery, etc. The dispute

resolution forum will ensure that customers grievances are heard and resolved to

their satisfaction.

eBay.com provides us one good example of their dispute resolution program called

as buyer protection program.

Under this program, eBay helps its buyers to lodge complaints for the following:

Item not received although Payment done

Item received but not significantly what was ordered

The buyer protection program provides step by step guide for the buyer to get the

answers of their queries. Such a program increases the trust of the buyers using the

online shopping portal like eBay.com. It means that ease of dispute resolution will

make customers comfortable spending money for online purchasing.


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3.3. Brand building

3.3.1. Initial trust of customer

Initial trust of the customer is one of the key obstacles for the online sellers to

succeed on internet medium. When a customer is logging onto the shopping portal,

he/she observes the look-n-feel as well as the information provided about the

services. Customers always validate the genuineness of the information provided.

Based on initial trust, customers develop motivation and purchase intentions. Online

customers look for technology, risk, company competency and develop the initial

trust

The initial trust is very important for any click onto the portal to become successful

sale.

3.3.2. Brand image

The brand image of the business is seen as an important factor before placing any

order. When the brand image of the selling company is good, customer easily

believe and place the order. In this competitive environment, improving and

retaining the brand image becomes critical. Several ways can be used to enhance

the online shopping brand image.

The seller company can use:

Media campaign is good starting point for making any brand building

exercise.


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Search Engine Optimisation (SEO) techniques to be visible on major

search engines like Google when any potential buyer is searching for the

product.

Social Media like facebook and twitter can be used to make brand

consciousness among the current and future buyers.

3.3.3. Customer Referral Program

A satisfied customer is the best advertising agent. The customers feedback,

comments and/or views about the product or delivery process are captured during or

after the online purchases. Another customer viewing the shopping site and planning

to buy the product will check this information. It will help the customer make decision

for the buying. The referral information creates awareness among the potential

buyers and also gives an opportunity of repeat business.

3.3.4. Rewards scheme (customer loyalty programs)


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The rewards scheme or customer loyalty programs are actually marketing initiative

to develop long lasting relationship with more valuable customers. The customer

enjoys such loyalty programs with consistent and memorable engagements.

The size of the Indian loyalty market is humungous approximately about Rupees

5000 crores. With a country that has 500 million people under the age of 24, an

increasing disposable income and a never-ending appetite for alignment to all things

fancy, the loyalty market holds great promise. [19]

Some public facts about loyalty programs

[20]

76% of US retailers and 75% of US shoppers are engaged in loyalty

programs

Shoppers Stop claims more than 60% of sales from loyalty members

Subhiksha claims 80% of sales comes from loyalty members

Shoppers Stops First Citizen loyalty program has given 80% boost to their sales,

Pantaloons Green Card program accounts for 55% sales, Future group expects

their loyalty program to generate 70% sales from lifestyle formats and Tatas Nano

bookings have been made by a large chunk of Clubwest members.

i-mint which is Indias first Multi Partner Rewards Program wherein Airtel, HPCL,

ICICI Bank, Air India, Lifestyle, Monginis, Bookmyshow.com and MakeMyTrip.com

joined hands to create a single rewards platform powered by sophisticated

technology.

On an average 4 crore i-mint points are redeemed every month


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i-mint card does not restrict its members from shopping at a particular place, it

allows you to enjoy earning rewards while online purchasing.

i-mint gives its members an opportunity to earn i-mint points rapidly at the

participating i-mint partners and merchants (29 cities across India) leading to faster

redemption of rewards.

Currently i-mint

o Has a consumer base of over 9 million members nationally.

o Is available in 29 cities across India

o Has a merchant base of over 3000 across several cities

o Is the only loyalty program to penetrate Business-to-Employee sector by

launching co-branded cards for employees of companies like Infosys

o Has also, launched an e-referral website in partnership with Global

Talent Metrics called STAR REFERRAL.

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For the online buyer, Online Reward Program like i-mint can be leveraged. Currently

online portals like asmidiamonds.in, ddamas.co.in, nakshatradiamonds.in,

bookmyshow.com, tantrauniverse.com and zoomin.com are leveraging the power of

i-mint online reward program.

When the customer is finally paying online, he or she was asked for the i-mint

number, which will give rewards for that online purchase. These rewards can be

seen on i-mint portal (https://www.imint.in/).
https://www.imint.in/https://www.imint.in/https://www.imint.in/https://www.imint.in/


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The encouraging figures clearly show that loyalty programs are well preferred by the

customers. The loyalty programs in India are always a hit because of the Indian

customers psychology of total value for money.


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3.3.5. Celebrity endorsements

The celebrity endorsements help the portal company build a good brand image. The

customer trusts such services endorsed by well known celebrities.

A study conducted by Insight Express on behalf of Brand Affinity Technologies

(BAT) measured the impact of adding targeted endorsements to online creative for

several national advertisers. Study participants shared their responses to BAT-

enabled display advertisements featuring professional athletes endorsing consumer

products and services, and to those same advertisements with no endorsement

talent. Combined with the results of BAT's live beta campaigns, findings indicate that

online endorsements perform strongly on both branding and direct-response levels.

"The high levels of recognition and passion that people have for their favourite

athletes and celebrities is what makes endorsement marketing perform so well," said

Ryan Steelberg, President and CEO of BAT.

When ad campaigns featuring (video and still) images of athletes were tested

against the same ads with no endorsement, the study found:

180% increase in unaided brand awareness, highlighting the ability of

endorsement ads to fundamentally "register" with consumers;

56% improvement in message association, where participants correctly

absorbed the attributes of tested products and services;

39% improvement in brand favourability, demonstrating how positive

associations about an athlete carry over to brands; and


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27% increase in purchase intent, a measure that speaks to brand and

behaviour goals.

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3.3.6. Delighted customers

The customer satisfaction is not the end of serving customers needs. Today,

customer has certain level of expectations from seller and wishes more than what is

to be provided. Customer is delighted when he/she gets the benefits of the brand on

long term relationship basis. Common sense suggests that delighted customer

would be more loyal than merely a satisfied customer.

3.4. Marketing initiatives

3.4.1. Online sales promotions and offers

Online sales promotions and offers attract customers for more buying. To increase

sales, portal must be configured to handle online sales promotions and offers. The

promotions and offers provide customers to have an opportunity to buy the product

with something extra. This extra can be completely free or an added product, added

grammage or added services.

Other examples of online sales promotion and offers may include online coupons,

electronic gift vouchers, web contests, etc.

Example: ASDA Stores, UK (http://www.asda.co.uk)
http://www.asda.co.uk/http://www.asda.co.uk/http://www.asda.co.uk/http://www.asda.co.uk/


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Documents

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