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E tailing (Seminar Report)


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Seminar Report

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E tailing (Seminar Report)

  1. 1. AN SEMINAR REPORT ONSubmitted To: Submitted By:Dr. Shuchi Gupta Sandeep Singh SainiFaculty MBA MBA (P) Roll No.- 938 Maharaja Agrasen Instituteof Management & Technology, Jagadhri
  2. 2. E-TailingTABLE OF CONTENTSIntroduction 1E-Tailing 2Types Of E-Tailers 4Internet Usage And Population Statistics 9Retaining An E-Tail Customer 10E-Tailing In India 11Future Of E-Retailing In India 11Conclusion 16Slides Handouts 17Sandeep Singh Saini 1
  3. 3. E-TailingINTRODUCTIONE-tailing, or e-commerce can be described as transactions that are conducted over anelectronic network, where the buyer and merchant are not at the same physical location,for example plastic card transactions via the internet.According to a recent study:  Presently there are 4 million Internet users in India and the number is growing.  Computer Hardware, cinema, Books, Music cassettes /CDs, travel tickets and gifts are sold through the net in a big way.E-tailing is the practice of selling retail goods on the internet. It is the abbreviatedversion of “electronic retailing” which essentially constitutes business to consumertransaction. While the concept of online retailing or e-tailing is no longer in itsnascent stage; it continues to evolve, as advanced e-commerce applications act as apotent catalyst in the development of e-tailing.The idea of online retailing or e-tailing which almost every net-savvy individual isfamiliar with; offers a convenient mode of shopping online and the consumer getsto choose from a diverse range of products and services as opposed to theanalogous physical shopping experience. Furthermore, online retailers or e-tailersget to expose and sell their products to a global audience through their e-stores.(also termed as online stores, internet shops, webshops etc.)Sandeep Singh Saini 2
  4. 4. E-TailingE-TAILINGE-tailing (less frequently: etailing) is the selling of retail goods on the Internet.Short for "electronic retailing," and used in Internet discussions as early as 1995,the term seems an almost inevitable addition to e-mail, e-business ande-commerce. E-tailing is synonymous with business-to-consumer (B2C)transaction.E-tailing began to work for some major corporations and smaller entrepreneurs asearly as 1997 when Dell Computer reported multimillion dollar orders taken at itsWeb site. The success of hastened the arrival of Barnes and Noblese-tail site. Concerns about secure order-taking receded. 1997 was also the year inwhich Auto-by-Tel reported that they had sold their millionth car over the Web,and Commerce Net/Nielsen Media reported that 10 million people had madepurchases on the Web. Jupiter research predicted that e-tailing would grow to $37billion by 2002.The E-commerce industry plays a vital role in its growth and development. Theconsumer or buyer is usually provided with detailed information and description ofthe product which helps them make a judicious choice before making an onlinepurchase. For consumers who face a paucity of time or want a diverse range ofproducts to choose from, e-tailing proves to be an ideal option. Every e-tailer wantshis/her share of domain amidst the vast World Wide Web galaxy. Due to theintense competitory quotient involved, every e-tailer out there wants to offer theircustomer/buyer a smooth and pleasant shopping experience. Therefore, e-tailing isjust not restricted to putting up products for sale for consumers to buy. Asconsumers today are well-informed, it is understood that they would make a wellSandeep Singh Saini 3
  5. 5. E-Tailinginformed decision as well. This involves a fair amount of product research, pricecomparison and checking the credibility of the e-store.Advanced security features for on-line shoppers is another must-have so they areassured they are dealing with a reliable web-store. Trust and security are essentialelements that enhance the functionality and credibility of any e-tail store.Establishing an online store is a much cheaper alternative to a physical store.However, significant amount of expenditure is incurred for promotional purposes.This is an indispensable strategy which determines the success of any e-tail store.Some online stores also offer live chat facilities with their representatives for helpand other queries. (Tribuneindia, 2003).Typical consumer behaviour involves searching for products and services on thesearch engines like Google and Yahoo!. Being listed on a search engine not onlyenhances the web store’s visibility, it also conveys an impression of the website’sprofessionalism and greatly contributes towards generating traffic and subsequentsales. By recognizing consumers’ shopping patterns and tastes, retailers aretailoring the shopping experience for its customers. Additionally loyalty programsare offered to frequent buyers to enhance the click to buy ratio. According to thedata released by comScore networks “total Internet spending, including travel, hit$143.2 billion in 2005”. (TheClickZnetwork, 2006).With advances in e-commerce technology, e-tailing is getting more refined andcontinues to fine-tune itself in an attempt to surpass consumer expectations.Sandeep Singh Saini 4
  6. 6. E-TailingTYPES OF E-TAILERS E-TAILERS PURE PLAY BRICKS AND E-TAILERS CLICKS E-TAILERSPure Play E-Tailer: - A pure play e-tailer uses the Internet as its primary meansof retailing. Examples of pure play e-tailers are Dell and and Click E-Tailer: - A brick and click e-tailer uses the Internet to pushits goods or service but also has the traditional physical storefront available tocustomers. Combining this new type of retail and the old of a general store is a newtype of store which is part of the green economics movement, promoting ethicalconsumerism.Sandeep Singh Saini 5
  7. 7. E-TailingTRIGGERS OF E-TAILINGE-tailers who take part in pure play–type business have the opportunity to turnhigher profit margins, due in part to the fact that many of the overhead expensesassociated with a physical retail space, such as labour, retail space, and inventory,can be significantly alleviated. Pure play allows for a retailer to be able to reachcustomers worldwide, while still only maintaining one location for each and everycustomer to visit, 24 hours a day, 7 days a week.  No real estate costs : e-tailers do not have to maintain expensive showrooms or warehouses in prime locations, they operate through their web sites and thus save drastically on the real estate costs. The real estate costs in the metropolitan cities are sky high. Besides this, maintenance costs of a virtual store vis-à-vis a physical store is much less.  Easy and comfortably : Easy and comfortably -obtained info is another advantages that shopping on the Net offers. On the Internet, product information is just a few clicks away, all accessed in the comfort of a home. Traditional retailing stands out in stark contrast: the consumer searches frantically, runs up and down, grills a poorly trained store assistant who is unable to help him out. In the bargain, valuable time is lost. Simply put, shopping on the Internet for, say 15 minutes could save a two-hour trip to the mall. Consumers prefer to save this time so that they can devote more time for their professional and domestic priorities.Sandeep Singh Saini 6
  8. 8. E-Tailing  Better interaction with the customers : The greatest benefits of online commerce is its ability to establish interaction en-masse. Interaction refers to the ability of reaching customers on an individual basis and react appropriately to responses of individual customers. Interaction is a vital tool for mass customization. Examples are many and include online marketing of flowers, software books and education. This has also led to greater satisfaction among the online buyers. According to a research agency, 82% of the online buyers have been found to be satisfied with their purchases.  Mass Media : A supermarket has limited area of operation. It caters to customers of a city (and/or its suburbs), but a web site can be accessed from any part of the country or for that matter from any part of the world, thus increasing the potential customer base.Sandeep Singh Saini 7
  9. 9. E-TailingBARRIERS OF E-TAILINGMany studies have shown that e-tailers are failing to meet the needs of onlinecustomers and that they generally only have one chance to make a good impressionif they want their customers to return. It is said that the three most important thingsthat e-tailers today must work on to ensure profitability are "search, support andpromotion."Most of the e-tailing ventures have not been as profitable as they were expected tobe, the reasons being: -  One estimate is that India has a mere 4 million Internet users, mostly are from metros. According to web analysts many areas of retailing, Internet is unlikely gather a sizable slice of market. And that could be several years to come. , Especially in businesses where margins are thin.  Despite a higher Internet penetration, cities like Mumbai or New Delhi might not be a haven for an e-tailer. Reason: for things like grocery, there is a shop out there at every nook and corner. All that an individual has to do is just make a phone call and the goods are delivered at his doorstep. Thrown in along with free home delivery is a months credit.  Cheap labour : Thanks to easy availability of domestics at an affordable wage bill, quite a few of the rich customers hire them for doing domestic chores, which include shopping. The usual Indian aversion to use credit cards. Thanks to low penetration of credit cards and the lack of popularity ofSandeep Singh Saini 8
  10. 10. E-Tailing debit cards, e-tailing might find it an uphill task to catch on.  Mounting competitive pressures : The market for online buying is still at a nascent stage. The turnover of the sector is relatively small and many players have already entered into it. Thus many e-tailers are eyeing a small market, exerting more pressure on operating margins.  Shopping is still a touch--feel--hear experience : Unlike the Americans, Indians do not suffer from time-poverty and shopping is still considered to be a family outing. Hence this type of an environment creates a problem of customer retention. In e-tail, customer retention by 5% leads to increase in profits by 25%. Most people buying on the net do it out of curiosity and a repeat purchase is unlikely.  Inadequate information provided when the customers discerns it certain products like clothes, cosmetics etc. involve higher customer involvement. Most customers are comfortable buying books and music on the Internet because the information required making a purchase decision is simple.Sandeep Singh Saini 9
  11. 11. E-TailingINTERNET USAGE AND POPULATION STATISTICSYEAR Users Population % Pen. Usage Source 1998 1,400,000 1,094,870,677 0.1 % ITU 1999 2,800,000 1,094,870,677 0.3 % ITU 2000 5,500,000 1,094,870,677 0.5 % ITU 2001 7,000,000 1,094,870,677 0.7 % ITU 2002 16,500,000 1,094,870,677 1.6 % ITU 2003 22,500,000 1,094,870,677 2.1 % ITU 2004 39,200,000 1,094,870,677 3.6 % C.I. Almanac 2005 50,600,000 1,112,225,812 4.5 % C.I. Almanac 2006 40,000,000 1,112,225,812 3.6 % IAMAI 2007 42,000,000 1,129,667,528 3.7 % IWS 2009 81,000,000 1,156,897,766 7.0 % ITU 2010 81,000,000 1,173,108,018 6.9 % ITU (Source: Singh Saini 10
  12. 12. E-TailingRETAINING AN E-TAIL CUSTOMERThe primary aim of every e-tailer is to attract a prospective customer to his e-tailsite. That calls for a large ad spend. Naturally, there has been a surge in dot.comadvertising in countries such as the United States. ad spends are so largethat as much as two-thirds of the capital raised by companies are spenttowards advertising. Ad spends by companies are so huge that whateversavings achieved in the areas of real estate and inventory is more than offset.What all these tell us is one simple thing: customer retention is the toughestthing on the web. Says K Ramesh, vice president of "First of all, it isdifficult to get a consumer come to your site. After he comes in, the task is to retainhim and get him frequently. Once he is confident about you, he will use his creditcard to make his purchases at your site."On balance, retaining an e-tail customer is certainly a costly affair. For, in theworld of the web there is nothing such as loyalty. Says Goel: "If you offer somefreebies, a customer may keep on coming to your site, with the expectation everytime that there would be some freebies out there. The moment you stop freebies,you could simply lose the customer." So, managing e-tailing promotion throughfreebies could be a tricky affair.Sandeep Singh Saini 11
  13. 13. E-TailingE-TAILING IN INDIADuring the dotcom boom – Ecommerce was the sunrise industry, the one thatwould change the face of the world. While Ebay and Amazon – the twin pillars ofEcommerce in US did bring about paradigm shift in USA, the tech pundits in Indiaare still a bit iffy about Ecommerce in India.For the purpose of this article E-tailing is defined as Ecommerce sites includingauction sites that sell groceries, apparel, CD’s, books, electronic items, gifting itemetc but exclude travel, digital downloads and online classifieds sites.The top E-tailers in India are,, have managed to retain their lead due to innovative business strategies,supply chain model and changing urban lifestyles.FUTURE OF E-RETAILING IN INDIAThere are divergent views on the future of e-retailing in India. Some experts are ofthe opinion that the giant, big brand retailers would dominate the small ones due totheir wider investment capacities. It would be next to impossible for the smallretailers and the kiranas to prove their existence in the battlefield of onlineretailing. Another viewpoint is that there would be an exponential growth in theonline retailing business in India.Sandeep Singh Saini 12
  14. 14. E-TailingTOUCH POINTS TO FOCUS ON1. Customer is the King – A good 24/7 customer service through email, chat and toll free phone is what the E-tailers are providing. Customer complaint resolution – whether, delayed delivery, product quality, wrong product delivered will certainly work towards long term relationship, retention and acquisition.2. Supply Chain - Most customer complaints and delivery returns can be traced to the supply chain vendors or merchants. They are in fact the most important internal customers. It is important to have the supply chain vendors or merchants well integrated into the system – both technically and strategically.3. New Business Models - E-tailers always search new and innovative business models. Case in point being US based Power Reviews – where it provides free review technology to E-tailers and all it asks in return is that the reviews collected on the retailer’s web site are syndicated, which is then aggregated on the, its sister website. Some Indian sites simply collect orders over a period of time say a week, order in bulk from the vendor and finally ship it to customer at a discounted rate. The customer is told beforehand about the delivery date, of course.4. Comparison Shopping and Customer Reviews - All the E-tailers are present on comparison shopping sites is of paramount importance – especially since people now visit these sites before they place the order. Being present on well known sites such as and is a very good idea. Also they encourage customer to write the product reviews – nothing authenticates their offering to an undecided customers like a good product review.Sandeep Singh Saini 13
  15. 15. E-Tailing99LABELS.COM is being established as one of its kind members-only, onlineshopping community platform, hosting private online sales of luxury and premiumbrands. It is an innovative discount-oriented e-tailing website offering event basedonline sales for a limited time period on fashion-wear, accessories, lifestyleproducts, sportswear and gear, electronics and even furniture with members-onlyprices that are marked up to 70 % off label prices.Event based Sales 99labels is like having your favourite store at hand 24X7! As soon as a saleevent is planned, the customer get an e-mail trailer in advance, so that youretotally in the loop. Once the sale is open, purchases can only be made online, in asecure environment, where customer’s privacy is ensured and guaranteed by them.Sales usually last between 5 and 7 days, and are open to members only. The earlieryou visit, the more chances you have of being able to choose from a widerselection!The best way to shop 99labels also give the best ways to view and shop for your selection. Thecustomer can see each product clearly with zoom feature, then choose details likecolour options and error-proof sizes on the product page. They authenticate eachpiece of merchandise with their 99labels guarantee-- and by offering you flexiblepayment options like COD, net banking, or credit card. So customer can select hispayment mode and buy!Sandeep Singh Saini 14
  16. 16. E-Tailing INDIA GETTING COMFORTABLE WITH ONLINE SHOPPING (Source : Hindustan Times, Nov. 23, 2010)Is the average middle class Indian getting more tech-friendly in terms of consumerelectronics, changing the way India shops? This is the question Experian Hitwiseasked in its research. Its findings show that shopping is the 10th most popularonline activity in India, ranking below social networking, news and travel, butpicking up more visits than government, music or sports websites.By international standards, Indian e-commerce is immature - shopping ranks fifthin online activities in the US and fourth in the UK, Experians research reveals -but it is developing rapidly. Indians are increasingly seen using the internet to getmore information and to shortlist preferences.A typical online retailer in India receives half of its traffic from search engines.Topping the list of most searched-for products are cellphones at 3.5 per cent of allproduct-related search terms sending traffic to retailers. Nokia rules, picking uptwo in every five searches.Searches for "wireless internet" have more than doubled over the last three months,while mobile movies is the eighth most popular mobile phone-related search term.Software downloads are also in demand, while laptops, TVs and cameras arerespectively the third, fourth and fifth most searched for products online."The only non-gadget to make it into the top five list of most searched-for productsis cars - one in every 25 searches is for cars. A third of these searches are for usedor second hand cars; many specify a location. Bangalore is the most popularSandeep Singh Saini 15
  17. 17. E-Tailinglocation for car searches, followed by Mumbai and Chennai," said NavinChandani, MD, Experian Marketing Services, India.Cars are not the only the products searched for by location. Three of the 10 mostvisited retail sites fall into this category, with Quikr and ClickIndia taking the twotop spots and in eighth position. "The popularity of local classifiedssites pushes eBay India into seventh place. At number four, Amazon, anotherglobal e-commerce superpower, is one of only two other non-India sites in the top10," Chandani said. At number three is Softronic, which specialises in softwaredownloads. The fifth spot is taken by B2B trading platform Alibaba, whileentertainment and ticketing site is in ninth place.Sandeep Singh Saini 16
  18. 18. E-TailingCONCLUSION Indian retail industry is entering into a new phase of e-retailing. Theincreased internet penetration has opened a whole new market for the retailindustry and some of the big retail giants are eying it as a great opportunity. The e-retail revolution has come up with huge opportunities and advantages both for themarketer as well as the consumer. The consumer can now shop 24x7 from hishome and at his convenience. He can search for a product from a hoard of onlineshops and deals available. The increase in the percentage of working women is also playing a positiveimpact. But still the Indian consumer is bounded by factors like trust, quality andreliability of an online shop. Shopping is alike an experience for the consumerwhich is hard to be felt in online stores. He can just see the product but cannot giveit a trial. The consumer is also apprehensive about the misuse of his personalinformation like credit card/ debit card details which are required in completing anonline purchase transaction. According to an IMRB study, it states that shopping convenience, timesaving and the availability of a wide range of products were the three majortriggers of the Indian e-tailing market.Sandeep Singh Saini 17
  19. 19. E-TailingSLIDES HANDOUTSSandeep Singh Saini 18
  20. 20. E-TailingSandeep Singh Saini 19
  21. 21. E-TailingSandeep Singh Saini 20