E-Retailing

Meaning of E-Retailing

E-retailing uses internet as a medium for customers to shop for the goods orservices. It can be either pure-plays or bricks-and-clicks. Pure-play usesinternet as primary means of retailing while bricks-and-clicks uses theinternet as an addition to the physical store.

Now a day retailers have started offering almost everything under the sun oninternet. From products like groceries to services like online gaming and jobs,e-retailing covers all frontiers. Unfortunately, India has lagged in e-retail growth story due to low density ofinternet connections, lower penetration of credit cards and customer anxietyin using new technologies.We now discuss these issues and suggest possibleavenues for e-retailers to turn them to their advantage.

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E-Retailing

Introduction

The e-retailing(less frequently; e-Retailing, e-Tailing, etc.) is the concept of selling of retail goods using electronic media, in particular, the internet. The vocabulary electronic retailing, that used in internet discussions as early as 1995, the term seems an almost in evitable addition to e-mail, e-business and e-commerce, etc. e-retailing is synonymous with business- to- consumer (B2C) transaction model  of e-commerce. Although e-retailing is an independent business model with certain specific constituents like; trust model, electronic transaction process, etc, but in reality it is a subset of e- commerce by nature.

E-Retailing stores sell online promotion only for goods that can be sold easily online, e.g., Amazon did for Books & CDs, etc. The online retailing require lots of displays and specification of products to make the viewers have a personal feel of the product and its quality as he gets while physically present in a shop.

E-Retailing refers to retailing over the internet. Thus an e-Retailing is a B2C (Business to customer) businessmodel that executes a transaction between businessman and the final consumer.  E-

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Retailers can be pure play businesses like amazon.com or businesses that have evolved from a legacy business such as tesco.com.  The e-retailing is a subset of e-commerce.  Thus, e-commerce is the master domain defining the e-retailing operation.

Definition

Electronic retailing (e-tailing) is a buzzword for any business-to-

consumer (B2C) transactions that take place over the Internet. Simply

put, e-tailing is the sale of goods online. Companies like Amazon and

Dell created the online retail industry by putting the entire customer

experience - from browsing products to placing orders to paying for

purchases - on the Internet. The success of these and other companies

encouraged more traditional retailers to create an online presence to

augment their brick-and-mortar outlets.

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Features

1) The provision of an on-line catalogue, which allows one to browse through differentcategories of goods. Thus, it is dynamic and linked with order process

2) The provision of a search engine, which  is a very important  feature that does notexist .

3) The provision of a shopping cart, which allows convenient goods selection. 

An abilityto provide an automatic price update.4) Personalization of store layouts, promotions, deals,

and marketing.5) The ability to distribute digital goods directly. 6) An on-line customer salesperson, “who” can help

customers to navigate through. 7) An order status checking facility, which is

a useful feature before submission.8) The use of Forums (collaborative purchasing circles) to create

a customer communityand thus increase “stickiness.”

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Common features of e-retailing web sites include:

method for selecting your purchases, eg shopping cart

mechanism for creating and submitting an order

secure e-payment facility

appropriate distribution mechanism

browsing facility, normally by subject or by category

searching facility

mechanism for customer service and feedback

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Essentials of E-RetailingElectronic retailing or e-tailing, as it is generally being called now, is the direct sale of products, information and service through virtual stores on the web, usually designed around an electronic catalogue format and auction sites.  There are thousands of storefronts or e-commerce sites on the Internet that are extensions of existing retailers or start-ups.  Penetration of computers and proliferation of the Internet has given rise to many new forms of businesses, such as business process outsourcing, call centre based customer relationship management, medical transcription, remotely managed educational and medical services and of course, electronic retailing.

There are certain essential ingredients for an electronic retailing business to be successful.  One must consider these components well in advance before setting up an electronic storefront.  These essential components are:

Attractive business-to-consumer (B2C) e-commerce portal Right revenue model Penetration of the Internet 

E-Catalog It is a database of products with prices and available stock.

Shopping Cart The customers select their goodies and fill shopping cart.  Finally, as in a real store, at the time of checkout, the system calculates the price to be paid for the products.

A payment gateway Customer makes payments through his/her credit card or e-cash.  The payment mechanism must be fully secure.

Support Services in E-Retailing

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

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Communication backbone Payment mechanism Order fulfillmentLogistics

E-retailing in India During the dotcom boom – Ecommerce was the sunrise

industry, the one that would change the face of the world. While Ebay and Amazon – the twin pillars of Ecommerce in US did bring about paradigm shift in USA, the tech pundits in India are still a bit iffy about Ecommerce in India.

The Ecommerce market is expected to touch 9210 Crore INR in 2007-08, E Tailing or E RE-tailing market is only about 1150 Crore INR according to a survey conducted by Internet and Mobile Association of India and Indian Market Research Bureau (IMRB).

For the purpose of this article E-tailing is defined as Ecommerce sites including auction sites that sell groceries, apparel, CD’s, books, electronic items, gifting item etc but exclude travel, digital downloads and online classifieds sites.

The top E-tailers in India are indiatimes.com, fabmart.com, rediffshopping.com. They have managed to retain their lead due to innovative business strategies, supply chain model and changing urban lifestyles 

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EVOLUTION OF E-RETAILING

E-retailing has become an accepted mode ofretailing – though one that will ultimately capture agood market share of total retail sales .

E-retail players from all over the world, includingthe US. Amazon.com, Buy.com, eBay, J.C. Penney,Lands’ End, Office Depot, and The Sharper Imageare among those retailers that have developed e-commerce sites specifically to serve market

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Major trends of e retailing

Technologies that help you see and experience the productbetter e.g. virtual reality, Java 3D etc.

Technologies that help you not to see at all but use anintelligent agent (or mobile agent) that does all theshopping tasks for you

Affiliate website through referralsPros: a link in the famous website may provide agood rank to the site–Cons: risk of loosing the customers to competitors

Business portals Pros: government support to the portal

–Cons: some big players are involved in it sothrough market study is required

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SCM in E-Retailing Supply Chain Management is a top strategic objective

for many companies. Supply chain management is flexible

enough to cater to the demands of customer as and when

there is a demand. Supple supply chain fulfills the

requirement of what the customer wants, when and where

it's wanted and at the lowest possible cost. The supple SCM

is only possible when management practices are

integrated with information technology to optimize

information and product flows among the processes and

business partners.

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Three level of e retaling

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Social Presence in E Retailing

Social presence (SP) is the extent to which amedium allows users to experience others as beingpsychologically present

It can also refer to the richness of the media or theinteractivity afforded by the media

SP could also be connected to the warmth feltthrough the medium.… A feeling of human contact....Sociability ....Sen sit ivity

Instilling human warmth through:–actual interaction with other humans–stimulating the imagination of interacting with other humans

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The Boom in ElectronicRetailing

Video MarketingNonstore retailing to consumers via standard and cable television

Electronic ShoppingNonstore retailing in which information about the seller’s products andservices is connected to consumers’ computers, allowing consumersto receive the information and purchase the products in the home

Electronic StorefrontCommercial Web site in which customers gather information about products, buying opportunities, placing orders, and paying for purchases

CybermallCollection of virtual storefronts (business Web sites) representing a variety of products and product lines on the Internet

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Advantages & Disadvantages of e-retailing

On the other hand, there are a number of advantages for retailers. First,location is unimportant. According to some textbooks, adapting an old saying, the three most important elements in retail are ‘location,location and location‘. The best high street locations are therefore expensive. The e-Retailer, though, can sell equally well to anywhere in the country, and even overseas. Second, size does not matter: small e-Retailers can compete on equal terms with large ones, and reach a larger audience than the high street — and be open twenty-four hours a day. For example, the independent bakery Bothams of Whitby in northern England has been a pioneer of e-Retailing and become one of the best-known UK case studies.

Retailers have been slow to take up e-Retailing. This is to some extent under standable in the light of the many disadvantages and problems.Retailers, for example, may lack the technical know-how, the substantial investment required or the order fulfilment capabilities. Set-up costs start from around £20,000 fo a small site, up to £500,000 for a large operation. And set-up costs are only th start: Datamonitor estimates that high street retailers are spending more o ongoing coststhan on setting up new sites.

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Benefits Electronic retailing is a powerful marketing technique for the right product with the right message to the right person. But what makes for the right combination? Why do consumers respond to TV offers or shop online?The short answer is that the consumer benefits. People respond to electronic retailing messages because it is to their advantage to do so. It addresses their needs, either practical or psychological.Electronic retailing, whether on TV or the Internet, is about motivation. How do you influence someone to do something - to pick up the phone or log on to a Web site and then make a purchase? Consumers will buy a product or service through an electronic retailing campaign because they perceive its value or because it makes them look better or feel better about themselves. They do this even though they cannot examine the product in person and may have to wait four to six weeks to receive the product. They accept these drawbacks for various reasons, including:Convenience. For people who are pressed for time and do not enjoy shopping, an electronic retailing product may take on added value because the buying transaction can be completed without hassle, quickly and at hours when traditional retailing is unavailable. It saves them time and energy.Early access. While many electronic retailing products are available in retail stores at some future date, the spot, infomercial or Web site offers the product now.

An electronic retailing campaign may be the only place where it is available immediately. If the product solves a difficult problem or offers an important improvement, consumers who buy from the electronic retailer can have the product in their hands sooner.Innovative or unique products. Getting a new, innovative product to market through traditional channels is expensive and time-consuming, and it

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requires some luck on the part of the product's developer. Electronic retailing allows a product's developer to bypass this process and sell directly to end-users. Consumers who see or hear an electronic retailing campaign get access to products that may never show up in a retail store because the developer lacked the resources to take on the massive retail industry. 

Better salesmanship. Let's face it: Most products are not well-merchandised. Key sales messages are poorly communicated or may be missing entirely. Electronic retailing often overcomes these problems, because the medium itself - television or the Internet - allows the person to be sold the product. They understand how it works and why. The benefits are presented clearly and convincingly. And make no mistake about it: People enjoy being sold to.So what's in it for marketers? Perhaps the scales are tipped in favor of consumers, particularly in today's e-commerce environment. But for a marketer with a new product, electronic retailing can be a cost-effective method of testing a product's viability in the marketplace. A successful electronic retailing campaign not only generates revenue but also builds brand awareness and paves the way for broader distribution.

That's not to say that electronic retailing does not have its pitfalls. While the cost of entry is low compared with the cost of mounting a traditional retail strategy, a poorly executed electronic retailing campaign can cost hundreds of thousands of dollars. And once launched, a product can be "knocked off" by an unscrupulous competitor.

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CONCLUSION In emerging markets, initiating an e-tailingventure is easy but evangelizing, selling &keeping customers happy is morechallenging.

Best model that works in India is -acombination of retailing and e-tailingLess number of Internet user; Mostly concentratedin metros.

Availability of Brick n mortar shops at every nookn corner thereby making it easy for customers.

Easy availability of domestics at affordable wages.

Aversion to using credit-cards owing to lowpenetration and popularity of debit and creditcards.

Logistics management

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