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Etailing introduction

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  • 1. E-TAILINGINTRODUCTION
  • 2. BRICK AND MORTAR BUSINESS:The term brick and mortar business is used to refer to a company thatpossesses a building or store for operations. The name is a derived from thetraditional building materials associated with physical buildings — bricks andmortar. Its first use was in 1992.More specifically, in the jargon of ecommerce businesses, brick and mortarbusinesses are companies that have a physical presence and offer face-to-facecustomer experiences.
  • 3.  “E-tailing is the selling of retail goods on the Internet. research predicted that e-tailing would grow to $37 billion by2002. E-tailing has resulted in the development of e-tailware --software tools for creating online catalogs and managing thebusiness connected with doing e-tailing.
  • 4.  The word E-tail has its roots in the word „retail‟. E stands for „electronic‟ since the shopping process happensthrough the electronic media (internet). With the use of a web-space a virtual shop is created and theproducts are displayed through images in this space with thefeatures and price tags. By accessing this shopping site a customercan choose his/her products into a cart. The payment to this product can be done in various modes asmentioned by the shopping site. The product would be delivered to the address specified by thecustomer.
  • 5. Steps involved in E-tailing:-The shopping process through internet media happens in 5 stepsgenerally.1. Customer visit: The customer accesses the website of the e-tailer through his/her mobile or PC or laptop.2. Choice of product: customer visits the site he/she would choose a product based on the image and valid information available on the web page.3. Payment online: Payments to the product can be made online through credit or debit card or even cash on delivery basis where the customer pays the e-tailer when the product is delivered to him/her.4. Product delivery: The delivery of the product would be based on the availability of the product in the inventory closest to the customer‟s delivery address. This process may also involve shipment of the product.
  • 6. Benefits of e-tailing:  Less Space: It reduces the space occupied by retail outlets in the real world.  Easy Access: It gives quick and easy access to a shopping space at any time and from any place where there is access to internet.  Saves time: It saves time of the customer that is spent on travelling to a shopping place in real world.  Platform for various goods: It creates a new platform for goods from different parts of the world which could be imported by placing an order.
  • 7. E-tailers in India:  Yebhi.com  Flipkart.com  Infibeam.com  Myntra.com  E-bay.com  Indiatimeshopping.com
  • 8. There are certain essential ingredients for an electronic retailingbusiness to be successful:  Attractive business-to-consumer (B2C) e-commerce portal  Right revenue model  Penetration of the InternetE-Catalog: It is a database of products with prices and available stock.Shopping Cart: The customers select their goodies and fill shoppingcart. Finally, as in a real store, at the time of checkout, the systemcalculates the price to be paid for the products.A payment gateway: Customer makes payments through his/her creditcard or e-cash. The payment mechanism must be fully secure.
  • 9. Support Services in E-Retailing:The electronic retail business requires support services, as aprerequisite 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:  Communication backbone  Payment mechanism  Order fulfillment  Logistics
  • 10. MULTI-CHANNEL RETAILING  Multi-channel retailing is a marketing strategy that offers your customers a choice of ways to buy products.  A true multi-channel strategy covers purchases from a store, purchases from a website, telephone ordering, mail orders, interactive television, catalog ordering and comparison shopping sites.Objective of Multi-Channel Retailing:The aim of a multi-channel retailing strategy is to maximize revenueand loyalty by offering your customers choice and convenience.
  • 11. Multichannel retailing is the merging of retail operations in such amanner that enables the transacting of a customer via many connectedchannels.Channels include: retail stores, online stores, mobile stores, mobile appstores, telephone sales and any other method of transacting with acustomer.
  • 12. Experience:A successful multi-channel strategy offers your customers a consistentquality of experience, whichever channel they use. The customersexperience in buying a product influences her perception of yourbrand. You must ensure that all customer-facing staff in your contactcenters, retail outlets, order processing departments and websitedevelopment understand and comply with your companys customerservice standards. Policies such as returns and delivery charges shouldalso be consistent across each channel.
  • 13. Integrate:You can use the data available from multi-channel strategies to identifycustomer preferences and maximize lifetime revenue. The risk in amulti-channel strategy is that customers information and profiles canbecome fragmented as they use a number of channels. In an integratedstrategy, purchasing data is consolidated into a single database so youget a 360-degree view of your customer.
  • 14. Research:A high proportion of shoppers conduct their pre-purchase research onthe Internet, although they may use other channels to make the finalpurchase. The definition of multi-channel retailing must therefore takeaccount of each stage of the purchasing process.
  • 15. Pricing:When you operate a multi-channel strategy, you have the option ofcharging the same price for a product across all channels, or offeringyour customers different prices, depending on their channel choice.Offering customers website prices that are lower than store prices iscommon practice and reflects the lower overheads in websiteoperations. Your customers also have a choice between lower onlineprices and personal service in the store.
  • 16. Reach:A multi-channel strategy gives you the ability to expand your businesson a national or global scale without investing in further physicalstores. An e-commerce website can be designed to operate in multiplecurrencies and with local content to attract customers in manycountries. You can also conduct business across multiple time zoneswith no restrictions on opening or closing times.
  • 17. Successful Organizations with E-tailing:  Marks & Spencers  Fairmont Hotels
  • 18. There are five key factors that retailers should be addressing now, ifthey‟re to stay ahead of the game.1. With shoppers consolidating their spending on fewer retailers, the winners will be those who ensure they make it onto the „most favoured‟ list for their target customers.
  • 19. 2. Operating in a multi-channel world makes it even more important to understand your most valuable customers, and to be able to serve them when they want, and how they want. winning retailers will be those who rapidly develop a „single view of product‟ - enabling them to instantly locate available stock across all channels and locations, and so serve more customers, more often, and with a wider variety of products.
  • 20. 3. The digital space provides a raft of new opportunities to engage consumers, and to learn from their comments and behaviors - from Twitter and Facebook, to online campaigns and consumer reviews, the opportunities to have conversations with customers are growing every day. The winners will be those who listen carefully to their customers, becoming tuned to their needs; and those who find creative opportunities to encourage consumer contribution, making shoppers feel like an integral part of the brand.
  • 21. 4. New performance measures that reflect the realities of this new multi-channel world are the next essential building block to making profitable decisions and choices. Developing the KPIs (Key Performance Indicators) to evaluate a store‟s effectiveness as a showroom, compared to its effectiveness as a transaction space, and capturing the value of websites as a research tool and in driving footfall to stores, are examples of areas that leading retailers are beginning to focus on today.
  • 22. 5. The winners will be those who can deliver a sustainable advantage by developing new operating models, designed to handle the realities of multichannel retailing. The current supply chain was built to get stuff to stores - it‟s not ideal for a system that‟s 10% online and growing - and as direct channels continue to gain scale, there will be opportunities to flex operations to improve margins. But it‟s not just about the supply chain - rethinking organization structures, roles, incentives and governance are key to delivering a seamless customer experience across channels - and to achieving „most favoured‟ status with your most valuable customers.
  • 23. Shortcomings of e-retailing1. It has no theatrical ambience which can be the customer.2. It lacks an emotional shopping experience that the customer can get in a personal shopping store.3. It being container of intangible merchandise (i.e., virtual display of merchandise) does not provide sensory support to the customer, these the customer cannot hold, small, feel, or try the product.4. On line customers are reluctant to part with their credit card details on net, fearing they may be misused. It arises security issues. The customers are not yet convinced about the foolproof status of this method, especially in Indian environment.5. It provides, to a large extent, impersonal services which the Indian customers are not exposed to; they are rather used to the tangible personalized services whichs they miss in online retailing services.6. It is lacking in family shopping experience which the Indian customers enjoy at the weekends, and particularly during festive seasons and marriage marketing.
  • 24. Success factors for e-retailing  Strong Branding  Unique Merchandising  Value Addition  Competitive Pricing: competitive pricing finds scope from potential decrease in charges and expenditures that he had to bear while in brick-and-mortar mode of marketing.  Better CRM  Better Distribution Efficiency  Soothing Website Design  Transparency in Services.
  • 25. Continued……….. The aesthetic and easy handling facilities are two important termsin this relation. The aesthetic provides initial attraction along withkeeping the visitor long held with the site. The maneuvering easiness keeps the visitor surfing it for long. The aesthetics of the website must provide soothing look and feeland clarity of objects or scripts to the visitor along with sufficientergonomic considerations, so that the visitor does not feel tired at theearliest. The careful placement of buttons and links provides ease inhandling it. Finally, the transparency of services creates faith on the visitor ofthe site as well as on the customer of the business.
  • 26. Challenges of E-Retailing:1. Unproven Business ModelsMost of the businesses on the Net were experiments in new areas anddid not provide enduring sources of profit. This was the primaryreason behind closing down of 90 per cent of the purely e-commercecompanies in the beginning of this century. Today, dot-combusinesses have matured a little. Still some of the businesses are atexperimental level and do not guarantee regular revenue.
  • 27. 2. Requirement to Change Business Process:The traditional business may require the goods to be present at thewarehouse and inspected before being shipped to the customer, but inelectronic retailing, shipping of goods from one place to another to acustomer would not be possible. The retailer may appoint a localsupplier at the city where the customer resides and instruct the supplierto deliver the goods. This would require by passing certain businessrules and a lot of faith on the local supplier. It would require businessconfidence that the supplier would follow the instructions and deliverthe same product in good quantity and perfect quality. Merchandiseplanning and demand analysis is also difficult in e-retailing, ascompared to traditional retail businesses.
  • 28. 3. Channel ConflictsCompanies selling through the Internet as well as through brick storesmay find their interest conflicting at many places. In electronicstorefront orders, the goods directly reach the end-consumer and so thedistributors and sellers may feel the threat to their existence. Most ofthe time, it is seen that retailers tend to reduce price over the Net. Thesale at the brick store may store may drop because the retailer may tendto sell more through the Internet as a result of reduction of prices.
  • 29. 4. Legal Issues:  Proper laws have not yet evolved for Internet base transactions. E- mail and digital signatures are now being recognized as valid for any legal purpose.  Value Added Tax (VAT) is yet another area that creates problems.  Taxes on goods and services are still an issue. Since the taxes are levied and shared by multiple government agencies at local, state or federal level, there are no clear rules to guide retailers on that.  In e-retailing, the place of billing, the place of dispatch of goods and the place of delivery all differ. If these three places fall in different jurisdictions of governments, levy and submission of taxes would be a problem.
  • 30. 5. Security and Privacy:  Despite a lot of security arrangements, such as passwords and firewalls, we come across the news of website hacking and data pilferages.  The Internet being on public domain is more susceptible to unauthorized peeping.  People are wary of revealing information regarding their credit cards and personal details on the Net because they can be misused.  Security of payment gateway is a major concern, which has to be taken care of by the retailer by putting up pro
  • 31. Single channel e-tailing:Retailers that sell products solely on the Internet, benefit from theirfocus on reaching their consumer targets, because they don‟t have tomanage the competition for company resources.many e-retailers are doing well by taking advantage of niche marketsand connecting with their customers. Web-only retailers are especiallygood at being found by their potential customers, and many of themare gaining expertise in marketing through online social networks.social media interaction has spread rapidly to older users, it is youngerconsumers who interact on the channels that drive sales growth atniche retailers such as Nasty Gal Inc.
  • 32. 9 Characteristics of Well-Designed E-Commerce Websites1. Ease of NavigationWhen attempting to sell products to visitors, the first requirement forselling a product is that the shopper has to be able to find specificallywhat he or she is looking for. Effective navigation is important to anywebsite, but it‟s especially critical for e-commerce sites. Lost visitorswill result in lost sales, so every effort should be made to have a sitewith clear, logical navigation.Examples:Nike‟s online shop uses a vertical navigation menu. When you glideover an item, such as “Men”, you will then be presented with optionsfor different product types, brands, collections, and sports, making iteasier to narrow it down and find what you want quickly.
  • 33. 2. The Design Does Not Overpower the Products:A design that is excessive for no valid reason will usually do more harmthan good, as it will draw attention to the design of the site and awayfrom the products. There sites have chosen to keep the design simpleso that the products don‟t have to compete for the attention of visitors.Examples:Apple uses simplicity in the design of their products as well as anyone.Their online store takes the same approach with a clean, attractivedesign that does not provide any distractions for shoppers.Shoe Guru is another very well-designed site that avoids anythingexcessive. The page shown below lists the men‟s athletic shoes that areavailable. The page simply provides a product photo, name, and price,as well as a link to the product page for more details and purchaseoptions.
  • 34. 3. Easy Checkout:If the checkout process involves too many steps or is confusing,shoppers will wind up abandoning their cart with items leftunpurchased. Ideally, the checkout should involve a minimal amountof steps and should be as easy as possible for shoppers.Examples:Add an item to your cart at White and Warren and you will immediatelysee the contents of your shopping cart. You will be presented with theoptions to continue shopping or to checkout. If you chose to checkout,you can login as an existing customer or create a new account.
  • 35. Easy Check Out:
  • 36. 4. Branded:Many shoppers are influenced in their purchasing decisions by thebrand, and so the need to establish a strong brand is import for bothonline and offline selling.Examples:Oakley is a well-established brand that is recognized as a leader in theirindustry. Their website does an effective job of working with theirexisting brand. It is an attractive website that stands out from many ofthe others that are selling sunglasses online.
  • 37. Brand should be displayed:
  • 38. 5. The Design Style Matches the Products:when designing an e-commerce site it‟s important to consider the styleof the products that will be available on the site. This is a little bit morerelevant for smaller stores with a specific type of product and forwebsites of a particular brand or company that has established acertain identity.If the design style does not match very well with the particularproducts that are for sale, there will be a disconnect that exists andvisitors may have a hard time relating to products and determining if itis right for them.Examples:Innovative Baby sells clothing, furniture and other items for kids. Thedesign and color scheme of their website does a good job of matchingup with their products, but it still looks professional and appealing tothe adults who are likely to be the ones doing the shopping.
  • 39. Design of the website matches the product:
  • 40. 6. Showcases the Most Popular Products:Many e-commerce sites make an effort to showcase items that arelikely to be of interest to visitors, obviously with the intention ofhelping visitors to find something that they will buy.Examples:Eddie Bauer uses a large portion of the homepage to promote an end-of-season sale. There is a very large image and links to sale items inseveral categories: men, women, bags and gear, and white sale.
  • 41. Showcases the most popular products:
  • 42. 7. Promotes Related Products:promotion of related products that the customer may also be interestedin. Promoting the right products that buyers are likely to be interestedin is key regardless of the approach that is used.Examples:The Company Store, visitors will be presented with related productssuch as cleaning and storage products.
  • 43. Promotes related products:
  • 44. 8. Effective, Accurate Product Photos:Providing quality photos that accurately portray the product can help toovercome this challenge and can make the buying decision easier onvisitors.Examples:REI includes many different pictures of products. The pictures showthe product from several different angles and stages, as well as packedup. Potential buyers will be able to get a very good feel for the productbased on these photos, and not buying it because of a fear of theunknown is much less likely than would be the case without as manygood photos.
  • 45. Effective product photos:
  • 46. 9. Effective Site-Wide Search:The type of search and the amount of options that should be offered tonarrow the search should be based on the size of the site and the itemsthat are available.Example:At Lee, after choosing the type of product you would like to look at, theleft sidebar will include some advanced search options that will narrowdown the products being displayed if you are having trouble with theitems that are shown.
  • 47. Effective wide search:

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