This document is a final dissertation report submitted by Prateek Malpani to partially fulfill the requirements for a Post Graduate Diploma in Management from Mudra Institute of Communications, Ahmedabad. The dissertation explores customer relationships in e-retail in India, with a focus on developing a customer retention framework as a marketing strategy for internet retailers. The report includes an introduction, literature review, research methodology involving primary and secondary research, data analysis and results, conclusion summarizing a proposed customer purchase cycle and retention framework, and limitations and scope for future research.

1. FINAL DISSERTATION REPORT
Customer Relationships in E-retail in India
A customer retention framework as a potent marketing management strategy for
internet retailers in India
Submitted by:-
Prateek Malpani
PGP – 18
Roll no. 18047
Under the guidance of:-
Dr. Anita Basalingappa
Submitted to:
Mudra Institute of Communications, Ahmedabad (MICA)
To partially fulfill the requirements for the Post Graduate Diploma in Management
(Communications)
February 2013

2. Acknowledgements
This research would not have been possible without the help of a lot of people. First and
foremost I would like to profusely thank my guide and mentor Dr. Anita Basalingappa. I would
like to thank her for being patient and making sure that I do a good job at it even at times when I
went off track. She helped me narrow down my research objective and guide me to the correct
way to approach and structure the entire topic which otherwise would have been haywire.
I would like to thank Mr. Vaneet Chibber, my Media professor at MICA who readily helped me
in connecting with his contacts in the ecommerce industry. He is also the Head of Media
Management department at MICA and it was because of him that I got introduced to the
interesting world of internet retail.
I would like to thank Maltesh Ashrit, my batch mate for helping me with his Marketing Research
prowess. I would like to thank MICA for giving me an opportunity to intern with one of the
leading ecommerce companies in the country and hence giving me enough motivation to pursue
such a topic.
- Prateek Malpani
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3. Executive Summary
This study explores the nature of customer relationships in e-retail in India. With the advent of
fast and speedy internet services along with smartphone penetration India is in the middle of an
e-commerce boom right now with more and more shopping websites and a world to choose from
for a regular online shopping customer. In such a scenario it becomes extremely important to
understand the nature in which a customer is approaching to this sudden wave of online shopping
and accordingly try and customize and build your business so as to differentiate yourself from
herd.
The motivation behind this study was to speed up the road to profitability of the horde of
ecommerce websites by a deeper understanding of customers and their patterns while shopping
online.
In the first part of the research through secondary research and analysis of interviews it
understands the perception of online retailers and their approach to take their website to the next
level among the masses. It notes down the key points and words to be validated in the second
part of the research.
The later part of the research is the quantitative part where a comprehensive survey is designed
to be filled by regular online shoppers with an effort to find a pattern and analyze basic and
advanced shopping patterns, factors that induce online buying, factors that are important
while shopping online and a major factor that hinders customer retention which is price
sensitivity versus brand loyalty.
The research is designed in such a way that everything at the end points and leads to the final
deliverable of a framework which can be used in the industry according to the size and market
share of the ecommerce website. A customer purchase cycle is understood using Factor
analysis and other frequency based data followed by potential marketing practices and customer
retention strategies that can be followed.
By trying to understand customer relationships in remote space, the research tries to contribute to
the body of knowledge. Customer retention and CRM in ecommerce is anyway an upcoming
field in the internet retail industry which many marketers are looking at it seriously and this
research will further help contribute to the industry.
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4. Table of Contents
Acknowledgements ...........................................................................................................................2
Executive Summary ..........................................................................................................................3
Introduction and Rationale of the study ...........................................................................................6
Contribution to Body of Knowledge ......................................................................................................... 8
Contribution to Industry ............................................................................................................................ 8
Understanding Scope of Customer Relationship in remote space ............................................................ 8
Literature Review .............................................................................................................................9
Importance and Benefits of Customer Retention strategy in Marketing ................................................... 9
Retention Strategies in B2C Service Relationships ................................................................................ 10
Customer Retention – Customer Acquisition trade off ........................................................................... 12
Scope of Indian Internet Retail ............................................................................................................... 13
Online Shopper behavior in India ........................................................................................................... 14
Customer retention, loyalty and e-commerce ......................................................................................... 16
Social Media and CRM ........................................................................................................................... 17
Knowledge Gap .............................................................................................................................. 18
Research Problem, Research Questions and Research Objective .................................................... 18
Research Problem ................................................................................................................................... 18
Key Research Questions ......................................................................................................................... 19
Research Objective ................................................................................................................................. 19
Research Design and Methodology ................................................................................................. 20
Part 1 - A ................................................................................................................................................. 20
Sampling ................................................................................................................................................. 21
Sampling Characteristics ........................................................................................................................ 21
Part 1 - B ................................................................................................................................................. 22
Sampling ................................................................................................................................................. 22
Sampling Characteristics ........................................................................................................................ 22
Research Part 1 Summary ....................................................................................................................... 23
Part 2 ....................................................................................................................................................... 24
Sampling ................................................................................................................................................. 24
Sampling Characteristics ........................................................................................................................ 25
Research Part 2 Summary ....................................................................................................................... 26
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5. Research Methodology and Design Flow ............................................................................................... 27
Data Analysis, Results and Discussion ............................................................................................ 28
Qualitative Phase and Secondary Research ............................................................................................ 28
Key Research Findings ....................................................................................................................... 30
Quantitative Phase .................................................................................................................................. 32
Data Analysis ...................................................................................................................................... 32
Analysis of Basic Online Shopping Patterns ...................................................................................... 33
Analysis of Factors that induce Online Buying .................................................................................. 38
Analysis of perceived importance of different factors while buying online ....................................... 44
Analysis of Advanced Online Shopping Patterns ............................................................................... 48
Analysis of Price Sensitivity versus Brand Loyalty ............................................................................ 55
Conclusion ...................................................................................................................................... 62
Purchase Cycle ........................................................................................................................................ 62
Key points to be noted ............................................................................................................................ 63
Customer Relationship Management Framework.................................................................................. 66
Limitations and Scope for Future Research .................................................................................... 68
Limitations .............................................................................................................................................. 68
Scope for future Research ....................................................................................................................... 68
References ...................................................................................................................................... 70
Appendix ........................................................................................................................................ 72
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6. Customer Relationships in E-retail: A customer retention framework as a potent
marketing management strategy for internet retailers in India
Introduction and Rationale of the study
The aim of this study is basically to deal with customer relationships in e-retail in India and how
customer retention as a strategy can be looked as a potential untapped marketing management
strategy for the internet retailers in India so that they can start charting out their way to
sustainable and profitable business by following the golden rules of marketing which says that a
customer kept is more valuable than a customer acquired. The research done will thus lay a
foundation in defining with the help of primary and secondary research as to how customer
retention is a good marketing strategy to adopt in a service industry like internet retail and then
try and relate it to the current internet retailing industry in India.
With growing internet penetration and more and more retailers looking to venture online it
becomes necessary to see the possible framework which will increase loyalty, retain customers
and develop relationships beyond pure transactional and financial. This will require us to look at
the current ecommerce and internet based retail market scenario in India and the buying pattern
of customers online. We will also need to focus at the drivers and barriers for acceptability of
internet retail as a concept and the reasons from which the customers will derive emotional
benefit and in turn decrease churn/defect rate. The motive of this research is to figure out factors
and check out basic parameters to find out a way in which you can curb customer attrition
The industry is currently booming with new ecommerce companies venturing into retail and
trying to catch the customer’s attention. There is still some fear and education that needs to
happen when it comes to customer apprehension when buying online. The touch and feel factor,
credit card frauds, low quality products are some factors that still resist customers from buying
online.
However the scene is improving day by day. To take a real life example Flipkart.com closed
2011-12 with revenue of over Rs 500 crore. It has a registered user base of over two million
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7. customers and ships out 30,000 items a day, clocking daily sales of an estimated Rs 2.5 crore (Rs
25 million). (Mookerji & Shinde, 2012)
According to a recent report from Internet and Mobile Association of India (IAMAI), total
Indian market for e-com is around Rs 50,000 crore, of which 80 per cent or Rs 40,000 crore is
captured by travel e-commerce (online train, bus and airline tickets) while non-travel or retail e-
com is only 20 per cent or Rs 10,000 crore. Experts hope that by the year 2025, the total e-com
market will reach at least Rs 4, 00,000 crore and the share of retail will be half at Rs 2, 00,000
crore (Maitra, 2012) (Advisors, 2011).
While these e-retail website increasingly concentrate on acquiring new and new customers
nothing in particular has been implemented to retain them. The principles of marketing have
always stated the fact that customers that are loyal tend to bring in more revenue than the
customers that replace them or the newly acquired ones. It is also very difficult to justify the
huge cost per acquisition in your marketing plans. A change needs to come the way e-retail
websites devise their promotional campaigns where they send out massive discounts and deals in
a bid to acquire more and more customers and ignoring the ones that have been loyal and regular
with them.
Customer retention in e-retail makes sense because there are lot of moment of truths that a
customer faces with the brand and the service when interacting with it. By capturing these
instances a relationship can be easily built because it gives you lot of opportunities to wow the
customer and please him so that he becomes loyal, do a repeat purchase and refer it to someone.
A customer when happy with a service or sad for that matter influences his entire network of
friends, family, and colleagues and not to mention the online social media community that he is a
part of. Therefore, it makes sense to give preferential treatment to a select few rather that making
a loss every transaction and rewarding even those who haven’t been that faithful.
This research will provide a framework through research for a customer retention strategy that
will be best suited for e-retail. It will try and find out pain points and buying patterns thus
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8. zeroing on factors that drive customer retention and in turn solve the apprehensions in buying
online and building brand loyalty.
Contribution to Body of Knowledge
Most studies on customer relationships so far are from the offline perspective. This study
attempts to contribute to the area of customer relationships in the light of remoteness between
customers and e-retailers.
This research plans to contribute to the body of knowledge by looking at customer relationship,
keeping in mind customer retention and loyalty in ecommerce. Ecommerce being in a very
nascent stage in India this research will help a lot in defining the way marketing and customer
relationship management will be looked at.
Contribution to Industry
The e-retail companies right now are finding it increasingly difficult to fuel repeat purchases and
sustain loyal customers. This study will help them understand customer relationships better and
eventually establish a long lasting relationship with the customers which is more than just
transactional or one time. It will help in understanding the drivers to build brand loyalty in e-
retail in India. According to (Sinha, Shishodia, & Patnaik, 2012) in their article, they’ve
mentioned that customer relationship management is the missing piece among Indian ecommerce
players. They say that most of the ecommerce players are busy playing the “I am the cheapest”
game and hence don’t build loyal customers. This research tries to help the industry by finding
the parameters to complete that missing piece and bridge the gap between customers and e-retail
websites.
Understanding Scope of Customer Relationship in remote space
The implication of this study will also result in exploring various other areas and ways in which
customer relationship can be established in remote space where there are just mechanical touch
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9. points and very few personal interactions. It will help current industry players determine broad
policy changes in customer engagement.
Literature Review
Importance and Benefits of Customer Retention strategy in Marketing
Customer acquisition has always been the norm in traditional marketing approach with a quest
for market share dominance through mass marketing techniques (Ahmed & Buttle, 2001). This
has been the current strategy for the ecommerce players as well who right now measure their
success not in terms of repeat purchases but in terms of unique visitors and the race is to figure
out how to attract as many customers with lucrative deals and promises. With the choices being
increased for the online customer it becomes important to move from a traditional marketing
approach to a relationship marketing approach which advocates supplier-customer interaction
with a focus on retaining customers than acquiring them (Ahmed & Buttle, 2001). Another way
to look at it would be to combine traditional marketing with relationship and personalized
marketing so that they both work together and make it a daily practice in impressing your
customer with relevant communication, meaningful conversation and personalized
recommendations.
Customer Retention along with emotional benefits also has a lot of economic benefits.
(Reichheld, 1996) identified some economic benefits of retaining customers which are basically
savings on customer acquisition cost, assured returns from existing customers’, reduction in
relative operating costs, word of mouth and free referral marketing, customer base that is less
price sensitive and won’t think about promotions and price points when making a purchase.
(Basalingappa & Subhas, 2009) have stated that customer acquisition costs are much higher than
customer retention costs and building loyalty, brand equity, trustworthiness through customer
retention makes more profit sense.
(Singh & Khan, 2012) have tried to differentiate between benefits obtained from customer
retention and customer loyalty. They’ve stated that the cost of getting a new customer is 5-12
times greater than cost of retaining the old customer also it helps your business know your
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10. customers better thus decreasing the cost of planning and saving energy, man power and money
to acquire a new customer. They came to a conclusion that ROI is up to 10 times higher for
investments in customer retention than in customer acquisition. Another important insight
highlighted by the authors was the fact that your most dissatisfied customers are likely to tell 9
other people about their problem. Increase in 5% retention and loyalty can lead up to 75% profit.
In the same point of view (Reichheld & Schefter, 2000) in their article have mentioned that
acquiring customers on the internet will be enormously expensive and unless those customers
stick around and make a lot of repeat purchases over the years, the profits will remain elusive.
The rule is simple that companies should concentrate more on acquiring customers and retaining
them rather than acquiring a one-time transaction.
Retention Strategies in B2C Service Relationships
The table below is the result of the research done by (Ahmed & Buttle, 2001) conceptualizing a
framework for customer retention strategies according to the business situation.
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11. When you consider customer retention in your marketing plans it should not be generalized.
Customer Retention does not follow a one size fit all generic framework. It becomes important
for a company to tailor its customer retention plans according to the business situation, sector,
and consumer interaction that it experiences. We will address this briefly in the later part of the
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12. research as to how different categories and ecommerce website need to adopt a different way of
approaching their customer retention strategies.
It is also necessary to consider the specific factor out of the various ones which largely affect
your customer retention and influence them to either leave or stay back. Research in this area has
been done by (Aflaki & Popescu, 2012) who propose a dynamic model on behavioral theories
and empirical evidence to determine if past service experiences effect service quality
expectation, customer satisfaction and more importantly customer retention in which they
conclude that as long as better service history has positive (goodwill) effects on retention, the
firm offers lower service in the long run to less adaptive customers, i.e. those who anchor more
on past experiences. These customers are more profitable than those who focus on recent
experiences, but only if they have received better treatment in the past. The memory effects
reverse, however, if habituation (disconfirmation) rather than goodwill (service quality) drives
defection decisions.
Customer Retention – Customer Acquisition trade off
While formulating a marketing plan, one question for an established business always remains the
cause of concern whether to put your investment in customer acquisition or to concentrate on
customer retention. However, it has been proved and stated by experts time and again that
acquiring a customer is a lot more expensive that retaining, also a returning customer tends to be
more profitable than a new one still some papers have argued otherwise.
(Namazi, 2011) quotes in her article Emmet Murphy who is the author of ‘Leading on the edge
of Chaos’ that acquiring new customers can cost as much as five times more than satisfying and
retaining current customers.
(Voss & Voss, 2008) in their report talk about competitive density as a factor to decide whether
customer retention or acquisition is the correct strategy to adopt. According to them in an
industry with high competitive density it makes more sense to go for an acquisition strategy as an
emphasis on innovation and competitor learning will enhance performance while customer
retention aims at enhancing performance with emphasis on customer relationships in low
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13. competitive density. The further conclude by saying that an objective measure of competitive
density offers greater insights in a dynamic marketplace.
(Dong, Yao, & Cui, 2011) in the journal article have argued that customer retention and
acquisition are both separate tasks but intertwined and hence it becomes difficult to design
incentive mechanisms that focus on both of them, because customer acquisition more often than
not have a negative effect on retention and in turn the firm profit. They’ve stressed on the fact
that customer acquisition and retention are tasks that are usually performed by customer
representatives interacting directly with the consumers. This may lead to conflict and one may
lead to lower performance of other and hence depending on whether the firm has delegated its
customer acquisition and retention planning to its representative or is handled by the customer
relationship managers the firm should decide whether the two tasks should be separate or go
hand in hand taking into consideration the spoiling effect of acquisition on retention or direct
selling under delegation for retention.
A sharp focus on increasing customer lifetime value and measuring key customer metrics will
lead to a faster speed to growth and profitability.
Scope of Indian Internet Retail
To stress on the fact that why internet retail needs a customer retention strategy we should first
look at some eCommerce and eRetail trends and the dynamics of the competition as well as
competitive density in the industry as of now. Internet retail in India right now is a business
segment which is a decade old, all players big or small are losing money and yet investors are
ready to pump in more and more funds (Maitra, 2012).
There have been reports that none of the Indian ecommerce companies are making money and
every transaction to acquire a customer is turning out to be a loss making affair but still the
future looks positive keeping in mind the changing social and behavioral dynamics of india’s
internet and mobile consumption.
There is research done by many experts to substantiate this investment. The reason for this
optimism according to dot com players are an increased availability in online payment options, a
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14. wider range of merchandize, online tracking of shipments, 24 hour seven day a week customer
care and a larger internet reach at cheaper cost (Dawn & Kar, 2011).
This can further be articulated that online retail has 2 broad potential benefits which increase in
sales and decrease in costs. Increase in sales in terms of convenience, wider reach and variety,
huge customization, faster time to market, personalization and more importantly which is
relevant to this study is the scope of superior CRM. Decrease in costs will basically result from
the removal of intermediaries and inventory costs.
With advantages also come certain disadvantages that can impede the growth of e-tailing in
India. Increase in transportation cost and reverse logistics, not suitable for touch and feel
products and differentiation becomes very difficult apart from price and tangible parameters.
Online Shopper behavior in India
(Widger & Bahl, 2012) indicated that today’s online shopper in India has inflated expectations
and retailers are doing whatever necessary to drive consumers online. They’ve further went
ahead and mentioned that as the eCommerce market in India develops the consumers will
develop and will have specific demands ranging from low prices, seamless and convenient return
process and low cost shipping. In this context customer retention as a strategy comes handy and
also as the only obvious solution with a long term objective to build relationships and brand
loyalty.
The above though resonated with (Dawn & Kar, 2011) who in their paper have concluded by
giving two suggestions for e-tailing business in India customer care as the online customer is
more sensitive and difficult to retain and the industry should ensure that customers feel safe
while transacting online.
Another strong observation by Euromonitor in its report, Internet Retail in India mentioned that
in their review period most Internet retailers offered the same services and the pricing was also
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15. very competitive. All etailing players also offered good cheap deals to attract consumers which
have wired them to be price sensitive when looking for products online (Euromonitor, 2012) .
This was the reason that most of the e-retailers concentrated on customer acquisition thus
increasing the CPA (cost per acquisition) and completely ignoring the concept of LTV. The
rationale thus becomes that customer retention strategies and customer relationships can be
looked and studied by internet retailers in India as a differentiation strategy in the competitive
scenario. The Indian customers who shop online are not yet ready to evolve. New ways of
targeting them, rewarding them need to be developed in order to extract the maximum out of
your customers and not make it just a one-time affair. Relevant communication and deeper sense
of understanding on online shopping behavior is required to build meaningful relationship with
your customers and increase brand loyalty.
A study recently concluded by Global Web Index on Global Ecommerce scenario reports that
clothes, mobile and books lead the category in percentage of purchases transacted online. This
means that the above mentioned categories are the categories that people have now started to
accept and buy freely without any hassles. They trust buying books and clothes and think that it
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16. is safe. Books were anyway the very first category many ecommerce website launched them
with. Mobile phones are becoming popular as a category because many e-retail websites give
you ability to research, compare and then decide what to go for. Most of the people who order
mobile phones are aware what they want to buy because it’s a high involvement category. Also,
mobile phones are now available in large price ranges and such availability and comparison
ceases to exist in an offline multi brand outlet.
Customer retention, loyalty and e-commerce
(Reichheld & Schefter, 2000) realized the importance of loyalty fairly early thus stating the need
for executives to gain the loyalty of their most profitable existing customers in order to not get
caught in the whims of only the most price sensitive buyers. They also concluded the fact that
spending most of your marketing investment on distributing online coupons and exposing banner
ads with less concentration on building communities and encouraging referrals will mean making
long term losses in your customer base.
Research has also been done to determine why online customers will remain with a particular
retailer. It is imperative to note down the emotional and financial incentives that a customer will
get to perform repeat purchases from your website alone and not getting swayed by any other
online retailer offering lucrative deals.
Value sharing according to (Tsai, Huang, Jaw, & Chen) is an important factor to drive customer
expectation into maintaining a strong relationship with the service provider and their research
also suggested to include value sharing as a basic element for an e-retailer’s retention program.
Website interactivity and personalization plays an important role in maintaining customer
retention in the electronic commerce market as it is the sole channel for both communication and
transaction. The website should be your biggest marketing tool and thus the focus on
interactivity becomes imperative.
Variety of things like customized communication and offering in traditional CRM campaigns, e-
retailers’ email, newsletters and rewards for regular customers were found to positively influence
customer perception of investments in long term relationships made by the retailers (Yoon, Choi,
& Sohn, 2008).
16

17. (Rao, Goldsby, Griffis, & Iyengar, 2011) proposed that customer satisfaction along with the
order fulfillment process is an important determinant of overall customer satisfaction with the
retailer as well as with the extent of the customer retention enjoyed by the retailer.
Social Media and CRM
Social Media is now being recognized as an important CRM tool used by many organizations
especially by telecom operators. Vodafone for example has an excellent CRM system integrated
with its Facebook and twitter page which is very prompt and quick in its reply. Social
networking references and sharing will further drive sales through mobile applications and social
media. Having a social media presence has become increasingly important for many
organizations especially when it is in the services sector.
Driving positive conversations online as well making evangelists out of your regular and loyal
customers will help increase referral traffic and well as sales on your ecommerce website. For
example, Ebay.in realized that Indians are very conservative when it comes to buying online.
Their social media strategy hence focused on making evangelists out of women consumers
because according to their research they have the final say in any purchase. In this way they
turned social media into an effective customer relationship management mechanism answering
close to 1200 queries a month. They also were successful in overpowering negative sentiments
about ebay. Ebay increased engagement by sending out best deals on the most popilar products
keeping their likes and recommendations in mind which further led to higher conversion rate and
increased word of mouth. (Sengupta, 2012)
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18. Knowledge Gap
The aim of this research is to find out the relationships the current e-retail scenario is trying to
maintain or should maintain with the customers. As the competitive density among the internet
retail industry in India increases it becomes more important to make sure that your customers
stay with you and the transaction is not a one-time affair. The customer switching cost being a
rock bottom low and with the customer being presented with so many options to choose from it
is obvious that this relationship is driven majorly by transactional and rational benefits that a
customer will derive rather than loyalty and trust. The study thus tries to tap into this need gap
where you find out methods and structure to come up with a customer retention model in the
Indian internet retail scenario and thus get a better insight and understanding of the customer
relationships in e-retail in India. The knowledge gap is the importance of CRM which is
currently the missing piece in Indian e-retail websites and within CRM special focus is given to
customer retention.
Research Problem, Research Questions and Research Objective
Research Problem
 To understand the criticality of customer relationships and customer retention strategies
in Indian e-retail services in India.
 To understand how and on what factors will a customer retention program based on
marketing parameters and concepts will trigger a positive response from an online
customer.
 To understand whether there is a connect with the marketers and the online customers
when it comes to understanding what the customer wants and hence successfully
delivering it.
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19. Key Research Questions
The key research questions were as follows:-
1. What are the factors that influence people to buy online?
2. What are basic factors that are important to people before they make a purchase online?
3. Where do people usually look for deals and discounts?
4. What are the customer retention and acquisition strategies currently followed by etailers
in India?
5. To find out if the online shoppers are price sensitive or brand loyalists
6. What are the types of offers that can make people shop online?
7. What are the concerns and risks associated with shopping online?
Research Objective
 The broader objective of the entire research is to understand customer relationships in e-
retail in India.
 The objective of the research is to find out factors that influence and motivate people to
shop online which in turn can be used by marketers in the internet retail industry in India
to frame a better targeted and structured customer retention strategy.
 The other objective is to find out if Indian shoppers are price sensitive or brand loyalists
when it comes to online shopping.
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20. Research Design and Methodology
The research was conducted in 2 parts,
•Interview with people •Survey to validate
in managerial and
decision making
Part 1-B online buying patterns.
position in internet
retail industry.
• Analysis of interview
available on the public •Interview with online
domain shoppers on their
shopping behavior
Part 1-A •This was done to frame
the questionnaire.
Part 2
The objective of the study was a mix of findings, observations and validations. It therefore was
required to structure the nature of research to be both Exploratory and Descriptive.
Part 1 - A
An analysis of interviews available on the internet of people in the internet retail industry was
done in order to already use the quotes and insights from people that were outside my access.
Along with this analysis, a set of questions were sent to some personal contacts that are currently
in the managerial and decision making position of leading e-retail companies in India.
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21. Sampling
Sample Size: 5
After taking 5 interviews the results and responses were being saturated and therefore a decision
was taken to limit the sample size to 5 and start analyzing.
The sample consisted of 2 personally taken interviews and 3 interviews available in the public
domain. The 3 interviews were accessed from the public domain because the questions being
answered by those interviews were similar to the ones designed by the researcher. It was also
made sure that the interviews were recent and not older than 6 months.
Accessing and analyzing the interviews available on the internet and other sources also gave the
researcher the freedom to include the insights from some highly influential people in the internet
retail industry which otherwise were not available for his research.
Sampling Characteristics
Interviewer Interviewee Designation URL Company
- K Vaitheeswaran Founder and http://bit.ly/RxDlow Indiaplaza.com
CEO
Anil Narasimha COO http://bit.ly/Ui6ViM Homeshop18.com
Mascarenhas Jayakumar
Saniya Seth Praveen Sinha Co-founder & http://bit.ly/YtbZ6t Jabong.com
Managing
Director
Self Avinash Verma Program - Infibeam.com
Manager
Self Navneet Kumar Business Head - Easytradestore.com
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22. Part 1 - B
The other objective was to find out some keywords and insights mentioned by the professionals
as well as current online shoppers to be used in the second part of the research which will be a
quantitative online survey filled by customers who shop online.
A secondary research in the background was always a part of the methodology in order to find
the correct questions to formulate the questionnaire for primary research. The secondary research
was done by reading research articles that have already been done related to this particular field.
Sampling
Sample Size: 5
Five interviews were conducted because after 4th interview the responses were being saturated
and repetitive. This was done only to find out parameters and key findings to structure the survey
to be used in Part 2 of the research methodology.
Sampling Characteristics
Name Age Gender Daily internet Money Occupation
usage – active spent online
and passive per month
combined(hours) (Rs.)
Reshma 24 Female 6 500-1000 Student
Harikumar
Yogita 24 Female 4 250 - 500 IT
Thelasaria Professional
Akshay Thakre 26 Male 3 250 Self
Employed
Iti Maheshwari 45 Female 2.5 - 3 500 Home
Maker
Revant Pande 27 Male 4-6 1000 Student
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23. Research Part 1 Summary
To get some insights into what exactly is being practiced by companies right now for customer
retention and also to comprehend the e-retailer’s understanding of online shoppers.
To interact with regular online customers and take note of insights and keywords to frame the
questionnaire.
Data Collection Instrument
 In-depth interviews and informal interaction
 A discussion on designed set of direct questions to be answered by the same set of people
 Secondary research of recent interviews by respondents not accessible for this particular
research
Type of Research - Qualitative Analysis
Analysis of primary data will be qualitative because the objective is to provide insights and
understandings. The process was flexible and unstructured.
Analysis Tool - Content Analysis
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24. Part 2
A comprehensive online questionnaire was designed keeping all the above stated research
objectives, problems. The online questionnaire also tried to incorporate all the findings of Part 1
of the survey.
Sampling
The survey was distributed online through various methods such as facebook groups, linkedin,
email, twitter etc. Distributing the survey online made sense as it required to be filled by people
who frequent the internet more often and are at least light to medium shoppers online.
Distributing the survey online also made it easy and convenient to get more number of
respondents in a week of making the survey live and as the major source of distribution was
social media the conversion ration of link sent to link clicked was very high because of instant
visibility and call to action.
The sample for the quantitative survey was an almost accurate target group which was
substantiated by the e-retailers that they plan to target majorly working professionals as well as
the youth who they consider to be the major drivers of online shopping in the fast paced world.
Survey Link Sent Links Clicked Survey Completed Survey Incomplete
200 151 125 126
24

25. Sampling Characteristics
Gender
# Answer Response %
1 Male 56 51%
2 Female 53 49%
Total 109 100%
Age:
# Answer Response %
1 <19 1 1%
2 19 – 25 72 66%
3 26 – 30 35 32%
4 31 – 40 1 1%
5 41 – 45 0 0%
6 45+ 0 0%
Total 109 100%
Education level:
# Answer Response %
Under Graduate
1 1 1%
and below
2 Graduate Level 27 25%
Post Graduate
3 81 74%
Level
4 Doctorate 0 0%
Total 109 100%
25

26. Research Part 2 Summary
To arrive at critical success factors that would impact and help implement customer retention
strategies in e-retail in India
Data Collection Instrument
Online questionnaire in the form of a survey that will test online shopping behavior and
motivation
Type of Research – Quantitative Analysis
Analysis Tool
 Factor Analysis
 Frequencies and Percentages
26

27. Research Methodology and Design Flow
Qualitative Phase
Task:
To identify the parameters for the next
stage (quantitative exercise)
To get insights into what is being practiced
by companies right now for customer
retention
Quantitative Phase
Task:
To arrive at and narrow down critical
success factors that would impact and help
customer retention strategies for internet
retailers in India
To validate or refute the findings of
Qualitative phase
27

28. Data Analysis, Results and Discussion
Qualitative Phase and Secondary Research
Content Analysis
A collection of recent interviews given by top executives in leading e-retail websites were
searched for and studies to find a commonality between them. This commonality was based on
parameters such as their view on the Indian internet retail industry and its future, the offers and
marketing efforts that trigger positive response from customers. Other parameters such as
concerns and risks that are currently deterring online shopping in India were also looked upon.
Please find below key findings and analysis of all the interviews looked upon the internet as well
as taken on a personal basis in the form of an informal interaction or over a discussion on the
internet.
Interview 1 – “Ecommerce is here to stay and not going back” - K Vaitheeswaran, the
founder and CEO of Indiaplaza.com (Vaitheeswaran, 2012)
On Future of Internet Retail Industry in India
He says that the industry is yet to mature and will take some time in the same way any new
company takes. He also bets heavy on mobile commerce with increase in smart phone, internet
penetration.
On challenges faced in operating an ecommerce store
Getting consumers to transact online was and still is a big challenge as the trust as well as the
touch and feel factor plays a huge role.
Interview 2 – “Discounts have always attracted shoppers in India” – Narsimha Jayakumar,
COO, E-commerce for Homeshop 18 (Jayakumar, 2012)
On evolving roles of customers
According to him, the trend to offer discounts to customer will grow stronger in the days to
come.
28

29. On challenges faced in operating an ecommerce store
Their biggest challenge has however been to gain the online consumer’s trust as they heavily rely
on the touch and feel factor and are not comfortable shopping online.
On drivers of online shopping from business point of view
Lack of infrastructure for brick and mortar stores and increasingly huge internet audience in
India is considered to be the major drivers according to him.
On HomeShop18’s USP and differentiation
They like to differentiate themselves in the cluttered space by claiming to have a diverse
portfolio and a wide variety of brands and products. They also claim to be investing in customer
engagement as well as operational capabilities to improve delivery mechanism.
On current and future technology being used for customer engagement
Personalized recommendations based on past purchases, according to them will be the next
technology revolution in ecommerce space for customer engagement. Also, attention to best
possible virtual shopping experience will be given in order to recreate the feel of shopping
offline.
Interview 3 – “There is a convenience of shopping across the globe with just a click” –
Praveen Sinha, Co-founder and Managing Director, Jabong.com (Sinha, 2013)
On challenges faced in operating an ecommerce store
To ensure high quality service delivery helping them differentiate from their competitors.
On drivers of online shopping
Wide variety, comparison across brands, convenience of shopping, delivery at doorstep, flexible
payment modes and return policies are some of the drivers of online shopping according to him.
29

30. On evolving role of customers
The number of customers shopping online is increasing every day. Online shopping looks
promising not only for metros but even for tier1 and tier2 towns where brands are not so easily
accessible.
On Jabong’s USP and differentiation
It’s USP is in providing exceptional service offering through wide variety of products and
creating a niche for themselves in fashion and lifestyle segment. They also concentrate heavily
on delivery and customer service.
Key Research Findings
The common research findings from the above interviews as well as from few other informal
discussions were as follows.
Future of Ecommerce Customer Appeal Differentiation Drivers of Online
Strategy Shopping
Everyone agreed that
trust is a major issue
Everyone agreed to the Most of the ecommerce Convenience,
when it comes to
fact that ecommerce companies have comfort, delivery
transacting online as
outlook for India is ironically claim to have service and
they still believe in
positive banking the same differentiation payment options
the power of touch
heavily on sheer strategy that of wide are the major
and feel. Deals and
numbers as well as variety and range of drivers of online
discounts however
lack of infrastructure products and excellent shopping according
appeal to the
for offline stores. customer service. to the e-retailers
customers and is
bound to grow.
30

31. Content Analysis of Interviews of Regular Online Shoppers
The interview with regular shoppers was taken to understand the parameters and their attitude
towards online shopping. One of them went on to say that she is starting to look at online
shopping as a very logical and convenient step to shopping in the near future. According to her
with the nature of Indian families slowly becoming nuclear and increasing population of men and
women both going to work specially in metro cities will change the way people shop online.
Three out of 5 respondents say that they like to shop online because it is quick and comfortable
and it’s only about time when people will be open to shop regularly without having any
apprehension or fear. They like the idea of mobile and social shopping too but that is an area
which can be researched on great detail.
Four out of 5 respondents claimed that they’ve never completed a purchase without making sure
that they are paying the lowest price or else they are availing some sort of offer or redeemable
coupon for the particular product.
The sample size average age being around 24 were fairly open to niche websites offering
handmade products and different variety. They liked brands such as Chumbak.com,
HappilyUnmarries.com which provided original products and quirky designs.
After doing the content analysis of all 5 interviews certain keywords were highlighted such as
discounts, social media presence, innovative products, comfort, free shipping, fast, convenient
and fast lifestyle. These highlighted keywords were then kept in mind before framing the survey
to be filled by a larger sample to understand patterns, characteristics, factors, motivation and
behavior.
31

32. Quantitative Phase
A questionnaire was designed on the basis of the information and parameters gathered in the
qualitative stage. This questionnaire was distributed online to around 200 respondents out of
which 150 attempted the survey with 125 completed responses and 25 were rejected due to
incompletion. The online method was chosen for the following reasons.
 The software qualtrics.com was used to create the online survey.
 The survey was also made dynamic and intelligent by comparing between options that
was rendered relevant by the respondent. For example it does not make sense to compare
an Infibeam.com with Jabong.com if that is not what the respondent has preferred most or
least in the first case.
Data Analysis
 The objective of this research was to find out critical factors that would influence
online shopping and in turn help internet retailers in India concentrate on relevant
parameters when designing their customer retention strategy , hence the method of
analysis for the data collected used was Factor Analysis
 Factor Analysis was used to find our specific reasons as to why people buy online.
 Factor Analysis was also used to find out specific parameters that people consider
while shopping online.
 The other mode of data analysis used was frequency and plots to substantiate some
facts and showcase a trend among online shoppers.
32

33. Analysis of Basic Online Shopping Patterns
This section will consist of very basic questions asked in the survey. The very first question that
people were asked was if they shop online, if they don’t there was no point making them fill the
rest of the survey and they were redirected to the end of the survey.
Do you shop online?
# Answer Response %
1 Yes 109 87%
2 No 16 13%
Total 125 100%
However, a trend to observe over here is 87% of the respondents agreed to have shopped online
or still shop online. This goes on to verify the interview given by e - retailers as to why they have
so much banking on the future of Indian ecommerce. This also explains the investments and
funding in some of the leading ecommerce companies. People in India specially the youth both
living in Metro as well as Tier 1 and Tier2 cities are now being open to shopping online. From a
sample of 125 if 109 have agreed to shopping online, that is alarmingly high number and reasons
enough for marketers as well as e-retailers to concentrate more and more on customer
engagement, retention and their website’s brand equity.
After asking the screener question, it was also necessary to ask the nature and frequency of them
shopping online. Over here comes to light a fact that even though people have become more
open to the idea of online shopping they still don’t frequent it that often. There can be several
reasons to this such as trust, quality, experience, awareness etc. which we shall discuss and
discover in the research later.
33

34. Which of these best describes the frequency of buying products online?
# Answer Response %
Once or less
1 than once a 80 73%
month
2-3 times a
2 25 23%
month
4 or more
3 than 4 times 4 4%
a month
Total 109 100%
As you can see in the above table that 73% of the people who said yes to shopping online have or
only shop once or less than once a month. That is very less a ticket price for a company and
therefore makes it even more important for an online shopping website to treat each and every
customer valuable. This also should make them look at the customer acquisition cost and how
that will affect their profitability. Most of the companies in a bid to target more and more people
tend to ignore the customer acquisition cost incurred through their marketing efforts and go
overboard and oversell their website. The above fact makes you look inside your own customer
portfolio and think of ways to increase the lifetime value of a customer who’s already shopped
once before and was happy or sad with the experience.
These numbers also prove that ecommerce and e-retail scenario in India, although growing is
still at a nascent stage. Online shopping is still not the first preference of people when they think
of shopping. In order for a business to develop the category should develop first.
The follow up question to the above had to be the dependence on why you shop when you shop.
We had to find the motivation and reason behind the number of times you shop online. The
options to the below questions were decided after considering the kind of shopping that usually
happens on the internet according to secondary research already done.
34

35. What is the frequency of buying products online dependent on?
# Answer Response %
Impulse
buying while
1 browsing 38 35%
shopping
websites
Need based -
Shop only
2 when there is 74 68%
an immediate
need for it
Special
discounts,
3 offers, sale on 72 66%
particular
days
This was a multiple choice question and hence the percentages would exceed 100. It was chosen
to be multiple choices because a respondent could fall and relate to more than one category.
However more than 65% of the people agreed to have shopped online only because there was a
special discount offer or sale running on that particular day. This also explains the sudden
increase in traffic and sales on the day of recently concluded Great Online Shopping Festival
organized by Google. According to a report by economic times, participating retailers in the
Online Shopping Festival reported 50% – 80% jump in sales only because additional discounts
and deals were being offered on that particular day. (Bhushan & Singh, 2012)
Around 68% also agreed to have shopped online only because there was a need for it. Shopping
for recreation or when you are low that usually happens when it comes to offline and traditional
shopping was absent over here. Moreover there are less chances of impulse shopping happening
35

36. because the touch and feel factor is completely missing. There is no personalized way of
targeting a customer and the chances of losing the customer are very high.
Another minute observation was that the 4 people who claimed to have shopped more than 4
times a month also checked that their shopping largely was dependent on special discounts,
offers and sale on particular days.
We will dig deeper into this aspect further in the research.
At what time of the day do you usually shop online?
# Answer Response %
Morning
1 (8AM - 6 6%
12Noon)
Afternoon
2 23 21%
(Noon - 5pm)
Evening (5pm
3 18 17%
- 8pm)
Night (8pm
4 62 57%
onwards)
Total 109 100%
Around 74% of the people claimed to have shopped online after 5pm. This might primarily
because of working professional getting time to shop after the entire days work. This data will
help in companies running their social media strategies.
Normally, people when they log on to internet they tend to visit and check their social media
websites as well and therefore it will be a good strategy to target them through your facebook
and twitter accounts by running deals and discounts as they are prone to shopping during that
time. Running your campaigns and targeting them is a deeper concern because your effort might
go unnoticed due to clutter that is already available on social media.
36

37. You need to observe when on your website maximum traffic, clicks and conversion happens and
accordingly run deals, offers that time.
The above data clearly states that there is no point in targeting your ads and social media
campaigns in the first half of the day as people don’t consider that to be their shopping time.
37

38. Analysis of Factors that induce Online Buying
Please rate on the level of agreeableness on the following statements. Please read each of
the statements carefully before rating.
# Question Totally Somewhat Neutral Somewhat Completely Mean
Agree Agree Disagree Disagree
I buy online because it
1 53 42 7 7 0 1.71
saves time
I buy online because
2 there are discounts and 48 51 7 2 1 1.69
offers
I buy online because I
3 like the comfort of 43 41 15 8 2 1.94
buying from home
I buy online because I
4 can read reviews from 36 36 21 14 2 2.17
other buyers
I buy online because it
5 helps me compare 47 44 13 5 0 1.78
products
I buy online because
there are different brands
6 48 35 19 7 0 1.86
and variety at the same
place
I buy online because the
product was not
7 21 27 26 30 5 2.73
available at the nearest
store
I buy online because i
enjoy browsing and
8 14 27 20 32 16 3.08
saving products in my
cart and buy them later
I buy online because i
can get actual
9 14 45 29 19 2 2.54
information about the
product
38

39. By mere observation of the above table we can see that major reasons that people see as benefits
of online shopping and motivation of buying online are the easy access and readily available of a
plethora of options and products in the click of a mouse. People have completely agreed to
statements such as I buy online because it saves time. An ecommerce website needs to make sure
that saving time is the basic functionality that it can provide an online shopper before anything
else.
Comfort and time are hygiene factors that an online website must have followed by discounts
and variety of products. Most of the ecommerce companies claim to differentiate on variety and
diverse product portfolio which came out during our qualitative research however, discounts,
deals and lucrative offers along with comfort and time saving are some factors that will make
people buy online even more.
The act of browsing and saving products in your wishlist or shopping cart is one of the least
preferred activities that make people buy online. All those emails that say “You’ve forgotten
something in your shopping cart” might not yield result if those products are followed by a
personalized discount offer.
Objective of running a factor analysis
 Factor analysis will enable to summarize the data for many variables which will in turn
help in understanding the underlying dimensions that govern the perception in smaller
number of factors.
 In this case, the objective of running this factor analysis is to understand the broad
constructs of the motivation or factors behind why exactly people buy online.
Interpretation of the output
We can see the total variance explained matrix that dividing 9 variables into 4 factors will result
in eigen values > 1 for all of them and will explain variance 65.610%. There was no way in
which the conditions, variance and eigen values both together were being satisfied, hence an
option which made the most intuitive sense was chosen.
39

40. Total Variance Explained
Extraction Sums of Squared Rotation Sums of Squared
Initial Eigenvalues Loadings Loadings
% of Cumulative % of Cumulative % of Cumulative
Component Total Variance % Total Variance % Total Variance %
1 2.354 26.150 26.150 2.354 26.150 26.150 2.151 23.902 23.902
2 1.449 16.097 42.247 1.449 16.097 42.247 1.365 15.164 39.066
3 1.103 12.251 54.498 1.103 12.251 54.498 1.268 14.087 53.153
4 1.000 11.111 65.610 1.000 11.111 65.610 1.121 12.456 65.610
5 .768 8.537 74.146
6 .685 7.607 81.753
7 .625 6.949 88.702
8 .597 6.632 95.334
9 .420 4.666 100.000
Extraction Method: Principal Component Analysis.
We can also examine the KMO and Bartlett’s statistic, the KMO statistic is above the required
value of 0.6.
KMO and Bartlett's Test
Kaiser-Meyer-Olkin Measure of .636
Sampling Adequacy.
Bartlett's Test of Approx. Chi- 116.146
Sphericity Square
Df 36
Sig. .000
Analysis of the Rotated Component Matrix, we can see that 9 variables clearly allocated in 3
groups containing interdependent variables and having well defined themes.
40

41. Rotated Component Matrixa
Component
1 2 3 4
I buy online because there are different .713
brands and variety at the same place
I buy online because i can get actual .693
information about the product
I buy online because i enjoy browsing .677
and saving products in my cart and buy
them later
I buy online because I can read reviews .485
from other buyers
I buy online because it saves time .856
I buy online because I like the comfort .682
of buying from home
I buy online because the product was .810
not available at the nearest store
I buy online because it helps me .653
compare products
I buy online because there are discounts .932
and offers
Extraction Method: Principal Component Analysis
Rotation Method: Varimax with Kaiser Normalization
Rotation converged in 6 iterations
41

42. The 4 underlying themes that emerge out of Factor analysis are:
Factor 1: Product Availability and Information – The ability to Research
a) I buy online because there are different brands and variety at the same place
b) I buy online because I can get actual information about the product
c) I buy online because I enjoy browsing and saving products in my cart
d) I buy online because I can read reviews from other buyers
Factor 2: Comfort and Convenience – The advantage of Comfort
a) I buy online because it saves time
b) I buy online because I like the comfort of buying from home
c) I buy online because the particular product was not available in the nearest store
Factor 3: Discounts and Promotions – The urge for Impulse
a) I buy online because there are discounts and offers
Factor 4: Product comparison and informed decision – The facility to Reason
a) I buy online because it helps me compare products
Although the output was divided in 4 factors it made intuitive sense to club the comparison of
products in the research phase so that we have 3 different and distinct parameters that influence
people to buy online namely,
1. Research
2. Comfort
3. Impulse
These parameters can now help marketers to design their website offerings, their marketing
campaigns surrounding them so that they directly appeal to the online shoppers. The customer
retention strategies can now be designed in such a way that all the above phases are either
ingrained in the website or pushed through other promotional means to satiate the needs of a
regular online shopping customer.
42

43. Flipkart for example has a product comparison tool like no other website has which will
definitely help people spend more time on flipkart than anywhere else. It has a software tool in
which you can simply drag and drop products and thus compare which become particularly
handy when you are trying to compare different mobile phone features which is practically
impossible to do in an offline store. Thus in this way Flipkart makes sure that the customer stays
on their website for the research and comfort phase and by pushing discount deals like cash back,
loyalty points, discounts it is satiating the impulse phase to finally complete the purchase cycle.
YeBhi.com for example gives the customer a window of returning any product within 100 days
which will give the customer extra comfort and space to try its product. When you give the
customer that kind of a room it becomes easy for the customer to trust the website however
efforts should be taken to make sure the return and exchange policies are customer friendly and
well defined so that the entire process is smooth and there is no sort of fatigue be caused to the
customer.
Jabong.com continuously has more and more discount and deals that promise products at throw
away prices. Infibeam.com also has a daily Magic Box promotion which promised the listed
product at the lowest price on the entire World Wide Web on that particular day. These are
however challenger brands trying to make their way in the e-commerce space. It becomes
necessary for them to surround their strategy around discounts and deals to lure the customer
first and wow them later with their impressive customer and delivery service mechanism.
43

44. Analysis of perceived importance of different factors while buying online
In a similar fashion factor analysis was run on a question where people were asked to rate the
factors they deemed important buying online. This question was asked in order to arrive at
factors and come to a consensus whether e-retailers as well as online shoppers are in line with
what they thinking are necessary and important in an ecommerce website.
A 3 factor analysis was run which satisfied the eigen value greater than 1 condition and
explained 65% variance. The method of extraction was Principal Component Analysis.
Rotated Component Matrixa,b
Component
1 2 3
-All possible payment options .819
-Free Shipping services .790
-Discounts, deals and offers .729
-Security of financial information .568
-Look and feel of the website .869
-Ease of use of the website .739
-Reputation of online shopping website .659
-Social Media presence .736
-Reviews of the website by other .716
online customers
-Prior purchase experience .628
Three underlying groups and themes came into highlight in this exercise as well. The question
asked was Please rate the importance on a scale of 1-5 ranging from “Not at all important” to
“Extremely important” that you would give to the factors listed below. The statements and
options were derived from qualitative and secondary research performed in Part 1.
44

45. Factor 1: Hygiene Factors
a) All possible payment options
b) Free Shipping services
c) Discounts, deals and offers
d) Security of financial information
In order to win over a customer an ecommerce website should make sure that these factors are
well present and if present well stated on the website to gain the customer’s trust. These factors
can be looked upon as the first thing that a customer looks for in an e-retail website before
making a purchase.
This fact is also substantiated by (Ganguly & Dash, 2009) where the findings state that the
security of information was considered the most important factor in generating online trust
Factor 2: Interactive and User friendly
a) Ease of use of the website
b) Look and feel of the website
If we dig deeper into neuro-marketing it is a proven fact that look and feel of the website will
play an important role in a user spending more time in looking at products of that website. The
colors should appeal to the user and the navigation should be simple, smooth and user friendly.
(Ganguly & Dash, 2009) also go on to state that online stores in India should use effective
implementation of website factors such as information design, communication, privacy and
security as a marketing tool and enhance purchase intention.
Factor 3: Reputation and Zero Moment of Truth
a) Reputation of online shopping website
b) Social Media presence
c) Reviews of website by other online customers
d) Prior purchase experience
45

46. According to the results of the survey it is important for the customer that the community that he
is a part of supports and recommends him of buying online from a particular website. That is
why social media presence and reviews of the website by other online customers come into
picture. It emerged in one of the interviews that a respondent will always check online on
mouthshut.com an online review website of products and services before making a purchase.
It thus becomes important that in order to retain your customer you have to take care of your
online reputation. Have a prompt and friendly customer service offline as well as on social
media. Take care of the bad reviews and make sure to correct them in future.
Initiate feedback from your regular customers and reward them for doing the same.
The below table is the collection of responses of rated importance on different factors that form
an e-retail website. Again, simply by observation we can state that apart from social media
presence most of the factors were considered to be very important and necessary. Social media
presence was the only factor that a customer thought wasn’t very important for them to but from
a particular website. It is therefore not a deciding factor and can be stated as “good to have” but
not “must have”.
Security of financial information was considered to be of utmost importance because if the
customer feels secured browsing a particular website, he is more likely to purchase without
thinking twice.
46

47. Please indicate how important are the following factors to you when you are
shopping online
# Question Not at all Very Neither Very Extremely
Important Unimportant Important nor Important Important
Unimportant
Security of
financial
1 information 1 6 2 32 68
Look and feel
2 of the website 0 4 22 69 14
Reputation of
online shopping
3 website 1 4 12 51 41
Ease of use of
4 the website 1 5 11 59 33
Social Media
5 presence 11 22 53 22 1
Prior purchase
6 experience 3 8 17 62 19
Reviews of the
website by
other online
7 customers 1 17 22 51 18
Free Shipping
8 services 3 6 14 46 40
All possible
payment
9 options 1 8 14 40 46
Discounts, deals
10 and offers 4 4 20 46 35
47

48. Analysis of Advanced Online Shopping Patterns
Some questions in the survey were structured in such a way so as to gauge some of the advanced
shopping behavior and patterns of online customers. These were included in order to find out and
may be develop a process in which a purchase is made so as to get insights on media vehicles as
well as campaigns with which a marketer can target and convince a prospective customer.
Before shopping online, which of the following activities do you do?
# Answer Response %
Compare costs
1 98 90%
across websites
Read/Search
2 product reviews 80 73%
and information
Read customer
service reviews of
3 the website that 52 48%
you are planning to
shop from
Look for return or
4 43 39%
exchange policy
Others, Please
5 12 11%
mention
As seen above, 90% of the total responses collected comparing costs across websites is the
number one thing that people do before shopping online. This can also bring the price sensitivity
angle which we shall dig deeper into. The customer would want to make sure that he is not
paying anything extra.
The second most common thing that people do is reading reviews about the product that they are
buying and also checking out customer service reviews of the website they are buying from. In
order to make sure that your customer does not wander off to any other website it becomes
necessary that there is ample product information and reviews already available on your
shopping website.
48

49. People have shown to have interest in return and exchange policy also but relatively less
compared to the above two. This may be related to trust issues with the product quality which
can be dealt with later in the research.
Some of the other things that people claimed to have done before making a purchase was to
check an offline store to either get a feel of the product available online or to see if it’s available
at a lower price in the nearest store. This goes on to prove that e-retail websites are yet to re-
create the same shopping experience similar to that of an offline store. People also confessed to
looking out for offers and deals before buying the product.
One of the major concerns for someone handling an e-retail website is that of products being left
in the shopping cart and a purchase action not being fully completed. (Sinha, Shishodia, &
Patnaik, 2012) also state that loyal customers have almost triple conversion rate, double the visit
to carts and 10% higher cart value.
The below question was included to find out reasons for not completing a purchase and try and
find a pattern to it so that the data can be used to incorporate a strategy which will make the
customer not leave the product midway.
49

50. Which of the following reasons describe your reason not to complete a purchase process?
# Answer Response %
I am unsure about
1 67 61%
the product quality
I am scared to use
2 my credit/debit 8 7%
card online
I want to touch
and feel the
3 47 43%
product before
buying
The time taken to
process the
4 25 23%
transaction was
higher
I was not sure if I
was paying the
5 correct price for 30 28%
the product that I
wanted to buy
The time being
promised for
6 35 32%
delivery was more
than I expected
There was no free
7 64 59%
shipping
I was not
convinced with the
8 website's 31 28%
return/exchange
policy
Others, Please
9 6 6%
mention
50

51. The three major reasons that come out from above research are product quality, free shipping and
delivery time. People tend to leave the product if they are not sure about the product quality or if
they think they would want to touch and feel the product at an offline store. The e-retailers need
to make sure that they are giving the customer enough assurances about the products listed on
their website so that they can make a purchase without any doubt.
Free shipping and delivery date is also considered to be one of the most important factors before
completing a purchase especially when it comes to small ticket products. It becomes
unreasonable for the customer to buy something which is not worth the shipping fee that the
website is asking for. Also, not travelling and saving the time and money might be a factor that
was being considered when the customer decided to shop online and if there is no free shipping
the customer might as well go and buy offline.
We’ve already substantiated more than once through both primary as well as secondary research
that deals, offers and discounts are one of the major drivers of people buying online both when
shopping out of need and buying out of impulse. Although, it needs to be find out that where
exactly people look for deals and discounts before buying online. This will result in better
targeting of your sales and promotion campaigns so that it reaches maximum number of eye
balls.
51

52. Where do you usually look for deals and offers to shop online?
# Answer Response %
Facebook,
1 26 24%
Twitter etc
Coupon
2 34 31%
Websites
Email
3 35 32%
Newsletters
On the
4 shopping 92 84%
website itself
Others, Please
5 4 4%
mention
According to the research, usually people look for deals and offers on the shopping website
itself. This might be because deals and offers are the first thing they look for when they land on
the website. Pushing deals through social media might not be that great an idea because of
already so much clutter and people might consider marketing campaigns and promotions as an
intrusion in their private space and might tend to ignore it. However email newsletters and tie
ups with coupon websites are equally a viable option as long as you don’t go overboard with it.
The e-retail websites that this research entails are assumed to have more than one category.
However, online customers in India are not open to and comfortable with buying everything
online. We have included this question to see the perceived risk that a customer associates with
different category of a regular e-retail website.
52

53. Indicate the amount of risk that you associate with shopping each of the below categories online
# Question Very Somewhat Undecided Somewhat Not at all
Risky Risky Not Risky Risky
Laptops and other
1 computer 28 32 14 24 11
accessories
Cameras and other
2 photography 23 35 22 17 12
equipment
Mobile phones and
other mobile devices
3 14 42 14 28 11
like tablets and mp3
players
Apparel and
4 13 23 15 39 18
Footwear
5 Books 0 1 5 10 93
Home and Kitchen
6 7 20 30 31 21
Appliances
TV, DVDs and
other audio devices
7 13 40 16 26 13
like speakers and
home theater system
The survey results show that Electronic items ranging from cameras, laptops, mobiles to TVs and
home theater usually are considered to be high risk items to buy online. This can come from the
fact that one of the major reasons of people not shopping online is because they are not sure of
the product quality. Trust is still a major factor and ecommerce websites have failed to establish
that parameter yet for people to shop freely online.
Books were also one of the very first categories that both amazon and flipkart ventured into
when they were just starting. It shows in the survey list that people find buying books online not
at all risky. They are very comfortable with that particular category and also to an extent buying
53

54. apparel and footwear. May be because they are low involvement products and you are very sure
before you buy them.
Websites like zovi and jabong have introduced try and buy options to increase their apparel and
footwear sales to overcome the fear of buying an incorrect size or color. E-retail websites
majorly in the mobile and electronics space need to come up with something like that to make
their customers feel secure.
A marketer or the owner of an e-retail website needs to know exactly how much time a customer
is spending before making a purchase. This will give him/her the opportunity to target the
customer in that window of opportunity. We’ve already tracked down the activities as well as
mindset that a consumer opts before making a purchase. The next question of the survey tries to
associate this with the time he/she spends before finally buying anything online.
On an average, How much time do you spend on an online website before making a
purchase?
# Answer Response %
Less than 5
1 0 0%
minutes
5 - 15
2 17 16%
minutes
15 - 30
3 48 44%
minutes
30 - 60
4 28 26%
minutes
More than an
5 16 15%
hour
Total 109 100%
54

55. The survey shows that around 41% take more than 30 minutes to shop online while around 44%
take at least 30 minutes before buying anything online. It is important to map out the customer
mind journey during this time taken before finally making a decision to buy. If the customer is
spending more than 30 minutes to buy something it becomes imperative to understand the
different activities that are taking place during those 30 minutes. This will ensure that there are
less dropout rates and increase sales conversion.
Analysis of Price Sensitivity versus Brand Loyalty
This particular section of research forms a majority of the basis on which the entire research is
being conducted. It is a common finding especially under the study of consumer behavior in
India that the customers in India are highly price sensitive. This holds true even more when it
comes to shopping online. The price sensitivity factor was brought to light after talking to some
regular online shoppers also after observing my own shopping pattern.
(Dattatri, 2012) mentions in his blog that the real problem with e-commerce is the collective
behavior and the psyche of Indian consumers who are highly price sensitive something that is
difficult to change. He says that understanding the Indian mind and finding innovative ways
around it is the only way you can bring the ball in your court.
This also explains the reason why discounts, deals and offers are the most sought after promotion
campaign and incentive that a customer looks for before making a purchase.
It is too early in the market to assume brand loyalty for a customer to have towards a particular
ecommerce website however there are some websites that people perceive to be safe, secure and
trustworthy while some are visited only to compare costs and obtain deals.
We had to establish that given a choice between your most preferred e-retail website and least
preferred e-retail website what you would choose if the latter is providing you more lucrative
options. The results were close and mixed.
The first question dealt with likeliness to shop when presented with certain popular sales
promotions.
55

56. How likely are you to shop if presented with the following options?
# Question Very Unlikely Undecided Likely Very
Unlikely Likely
Rs.100 cashback
1 on purchase of Rs 24 47 19 16 3
2000
Rs. 100 off on next
2 purchase on Rs 22 40 23 23 1
1000 current bill
50% off on a
particular
3 1 5 7 52 44
product/category
just for one day
If you are awarded
with loyal
4 7 26 34 31 11
customer
redeemable points
Buy 1 Get 1 Free
5 of lesser or same 0 6 14 58 31
value Offers
Refer a friend to
redeem an offer to
6 17 24 32 32 4
buy a product less
than its list price
The results show that people when presented with a cash back offer do not find it an incentive
enough to shop as the trade off in their mind is not equal. A shopping usually expects a customer
to buy a required amount before offering cash back. This tradeoff usually is not worth the money
spending.
56

57. However, a 50% off on a particular day or buy1 get1 free offers are likely to result in more
conversions of impulse shopping. This also goes on to prove that the Great Online Shopping
Festival organized by Google was a super success and a win-win situation for both e-retailers as
well as customers.
Infibeam.com also runs promotional campaigns called Magic Box, Aam Aadmi Offer and many
others which concentrate heavily on offering discounts of more than 50%. Discounts, offers,
deals work very well with online customers is a proven fact but you need to zero down exactly
what sort of communication and sales promotion you are planning to launch in order for it to be a
success.
A decent number of respondents also gave positive responses to shopping online if rewarded
with redeemable points. This is where your customer relationship management practices are
most tested. Every shopping business, online or offline claim to have a CRM practice in place.
They claim to have loyalty marketing for their customer engagement and retention program
however little do they differentiate or even plan to push and promote their loyalty program. If
customers are given exactly how and when they can redeem their points they will tend to build
more loyalty towards the brand and try and shop more often in order to reap benefits some day.
The next question requires you to rank some of the top e-retail websites in India. Based on the
ranking the subsequent questions are questions about Rank 1 and Rank 7 comparing the two. The
piping logic was used to form the next set of questions, if you ranked Flipkart as Rank 1 your
next question will be “What is that one reason that has not made you a regular customer of
Flipkart?”
Please rank order the following e-retail websites in order of your preference to shop at
these websites
Statistic Jabong Infibeam Homeshop18 SnapDeal Flipkart Ebay FutureBazaar
Mean
Ranking
3.02 4.56 5.02 4.10 1.41 3.61 6.27
The results show that Flipkart clearly leads it with around 83 people preferring it as the number
one website to shop online and a mean ranking of 1.41. This was followed by Jabong and Ebay
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58. with a mean ranking of 3.02 and 3.61 respectively. FutureBazaar was least preferred and given a
mean ranking of 6.27. Even though most of the respondents have preferred Flipkart we will now
test if the respondents stay loyal to it even if they are thrown with lucrative options from a
website which they’ve ranked least in their preference.
From our results we came to know that 83 out of 109 people have ranked Flipkart to be their
number one website to shop online. Out of these 83 people, 33 changed loyalties and decided to
go with their least preferred website when it came to books being offered at Rs. 25 less. This
number increased even further to 45 out of 83 when it came to a high involvement product like a
mobile phone which customers rated as a risky product to buy online and given that fact they
would still shop it from a website which they don’t trust as much.
If your least preferred website is offering a book for Rs. 25 less
than Flipkart where would you buy from?
# Answer Response %
1 Least Preferred 33 40%
2 Flipkart 50 60%
Total 83 100%
If your least preferred website is offering a mobile handset that you
want to buy for Rs. 1000 less than Flipkart but delivers 7 days later
where would you buy from?
# Answer Response %
1 Least preferred 45 54%
2 Flipkart 38 46%
Total 83 100%
This is where the concept of customized database marketing can come very handy and change
the game. According to (Bhatt, 2012) it will work better if the regular customers get discount
coupons that work only for them. He narrated his experience with healthkart.com when he was
given a discount coupon delivered in his email immediately after a purchase. It will serve the e-
retail website better if they reward their regular price insensitive customers through customized
58

59. database marketing rather than lose money and reward customers who will hop on to some other
website at the sight of a better discount or deal which you may fail to provide at that time.
Another interesting fact that came to light was that people are open to the idea of loyalty
marketing, rewards and coupons in return of what they purchase from a website. 70% of the
people preferred shopping from Flipkart if it offered redeemable coupons worth the same amount
rather than buying a product worth lesser amount.
If your least preferred website is offering a product which is Rs. 250
less than Flipkart but the latter is offering you redeemable coupons
worth Rs. 250 where would you still buy that product from.
# Answer Response %
1 Least preferred 25 30%
2 Flipkart 58 70%
Total 83 100%
People were also asked to cite some concerns and problems that they have with their current
favorite website. Some of the interesting insights that came out of that question were
 People using their current favorite website merely as a review website and information
search website
 People also expect loyalty points in return which can be redeemed later. This is one major
gap that the e-retailers need to tap.
 Another pattern observed in the results were people commenting that they wish that their
favorite website would have better deals and discounts, by now we can safely say that it
is a fairly regular phenomenon. In order that an online shopping website should it must
regularly come up with new discounts and offers.
 Some of them even claimed that they are not a brand loyalist and if any other website is
giving them a better deal than their current regular one they will happily opt for it.
 We’ve seen above in the qualitative research about e-retailers talking about personalized
recommendations which also came out that the customers will become more regular if
they have customized personal recommendations for them.
59

60. The next 3 questions in the survey will try and deal with the core issue of brand loyalty and price
sensitivity.
The future questions that will be presented in the survey are a comparison between the “most
preferred” and “least preferred” website of the respondent. This comparison was done as a result
of ranking question asked before this question where the no.1 ranked website became the most
preferred and no. 7 ranked website became the least.
If your “least preferred website” is offering a book for Rs. 25 less than “most preferred
website” where would you buy from?
# Answer Response %
1 Least Preferred 52 48%
2 Mos Preferred 57 52%
Total 109 100%
The interesting thing to note over here is that almost 50% of the respondents chose the option of
buying the book from their least preferred website. This clearly means that when it comes to a
product priced lower than their regular ones they will change loyalties and buy the product from
which they don’t regularly buy from.
This goes on to prove that Indian customers are still not in the position to be hardcore brand
loyalist and are open to moving to the website they don’t really trust. It will take some more time
and the market to mature before people stay loyal to the brand no matter what and for this very
purpose customer engagement, retention, personalization, loyalty marketing and customization
of the shopping website’s offering should start.
60

61. If your least preferred website is offering a mobile handset that you want to buy, for Rs.
1000 less than your most preferred website but delivers 7 days later where would you buy
from?
# Answer Response %
1 Least Preferred 64 59%
2 Most Preferred 45 41%
Total 109 100%
Here, a small variation was performed. A high involvement product like mobile phone was taken
which was earlier proven to be a high risk category to shop online. A tradeoff between less price
and faster delivery service was thrown at the respondents. The results still the same where almost
60% of the respondents agreed that they will opt for the least preferred website even if it
delivered a week later than their favorite website only because it was offering lesser price.
If your least preferred website is offering a product which is Rs. 250 less than most
preferred but the latter is offering you redeemable coupons worth Rs. 250 where would you
still buy that product from.
# Answer Response %
1 Least Preferred 37 34%
2 Most Preferred 72 66%
Total 109 100%
The results of this question give the long time e-retailers some hope to retain their loyal
customers by giving them an incentive. The respondents agreed that they will stick to their most
preferred shopping website even if other website is offering them the same product in lesser
price if the regular website is offering them redeemable coupons worth the same trade off.
61

62. 66% agreed that they will stick to their website and would rather shop more than save money and
buying the product they don’t really trust as much as the one they do. This goes on to prove that
the respondents are open to the idea of loyalty marketing and redeemable coupons. People in
India generally like stuff for free and this will be an added incentive for them to be loyal to their
regular shopping website and take it more as a shopping destination than a discount shop.
Conclusion
Purchase Cycle
The research has helped in defining a certain cycle that a customer will follow before making a
purchase. The research highlights some new important insights as well as some basic hygiene
factors that an ecommerce website needs to follow.
Landing on the Searching for
website discounts, deals and
offers
Searching for product
reviews and
information
Comparing costs
30mins +
5mins – 15mins
0 – 5mins 15mins – 30mins
Purchase
Finding out the Making sure
review and customer presence of
service of the website hygiene factors
example, payment
Asking friends if it is options, delivery
safe to order time, free shipping,
return policy.
An average purchase cycle in a first time customer’s mind when shopping online
62

63. Further explaining the above purchase cycle, we can go on to say that Step 1 and Step 3 that is
Research and Impulse are the two most important factors in the shopping activity of an online
consumer every time. No purchase is made blindly without first comparing costs and checking
product reviews and then trying to find deals, discounts and offers. These factors will always
have a major influence and importance in the consumer’s mind before making a purchase online.
Step 2 and Step 4 are steps common only for first time customers or for customers who have
decided to shop from a shopping website they’ve not shopped before from.
Also the time allotted to these steps will also vary with respect to the category and degree of
involvement one is looking at.
Key points to be noted
 Internet and e-retail oriented companies are here to stay. Going by pure statistics and
being extremely conservative about it there are at least 100 million internet users in India
right now out of which 6 million shops online.
 Whether a customer experience was good or bad it is immensely important to concentrate
on this because in order to cover your acquisition cost you need to increase the customer
life time value. This is because a customer lost will also make you lose his/her entire
network of family, friends and colleagues.
 Customers are not totally open to online shopping yet and hence are open to innovation
and new ways in which companies can target them to make them a regular on their
website.
 Discounts and deals are more rampant in the online shopping scenario than anywhere
else. However, personalized and premium targeting might help your conversion rate even
better than a mass discount offer which is available for everyone. This was validated after
qualitative research as well as the results of the survey supported the facts that for both
customer acquisition and retention the online community are majorly lured when they see
a discount, sale or offer thrown at them as the one characteristic and behavior that will
not change without an effort is of price sensitivity.
63

64.  It is important to notice the correct time of the day to target customers to get maximum
returns of your online marketing buck. Pushing your promotion campaign at the correct
time when customers are online will become more relevant and attract more eyeballs.
 No matter how much e-retailer boast about wide variety of products being a
differentiation strategy, the customer fails to see it that way. There is a disconnect over
here between the e-retailers and the customers as the customers don’t really care how big
a website is but they care if the website rewards them with more than just diverse product
portfolio.
 Loyalty marketing is one of the better ways in which a customer might become a regular
on your shopping website. The survey results and interviews mention the idea of loyalty
points and redeemable coupons more than once and also gives proof that they will prefer
to shop more for the same amount than save more. Something more personal in terms of
gifting and loyalty points will help the shopping website in customer retention than
anything else and help them differentiate more prominently from their competitors.
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65. Explanation of derived factors that play an important role while buying online
 Research – The website along with a shopping portal should try and serve as an
information and research portal as well where people can trust to find genuine
information and referrals from the online community.
 Comfort – The website should assure the customer the comfort of its services and
hygiene factors such as privacy, financial information, shipping services and other basic
things. The website should also provide comfort in terms of look and feel when it comes
to navigation and ease of use of the website. The website should talk to the customer and
become your biggest marketing tool.
 Impulse – The website in order to achieve a higher conversion ratio should come up with
algorithm to throw personalized recommendations in terms of discounts, deals and offers.
A customer will tend to return more to the website if provided with this incentive.
 Reputation – A lot depends on website’s online reputation and word of mouth that has
been going the rounds of ecommerce websites. Any online shopper in India being the
apprehensive shoppers they are before making a purchase, would go and verify through
social media presence or review websites that the e-retail portal that they are buying from
is recommended by others online and there are no extreme cases or bad experiences.
65

66. Customer Relationship Management Framework
To conclude, we can now safely come up with a very basic framework that will be able to define
potential strategy an ecommerce website can opt for based on its current standing in the market.
For that we need to define the 5 different types of online shopping websites that currently co-
exists in the Indian scenario.
1. Established – These are the websites that have a fair amount of market share with them
currently in terms of traffic and revenue. They already have some sort of brand equity
with them and people have started to trust them and consider it safe for shopping online.
2. Challenger – These websites are the websites that are popular but still don’t have loyal
customers to boast about. They often get behind in the race losing to the number one and
trying hard to catch up posing a serious threat to the number 1 established website.
3. New Comer – These are recently launched websites, very new in the competitive scenario
and learning the rules of the game. Customers are hard to get because not many know
about them but are willing to try them out.
4. Local King – These websites are happy where they are. They cater to the local audience
and are not really looking for expansion or aggressive strategies.
5. Niche Player – These websites are niche and exclusive targeting a select group of people.
They have different and innovative products to lure their customers and win them over by
their creative solutions and personalized catering of services.
66

67. Type of Availability of Type of customer Potential customer retention strategies
ecommerce Hygiene* factors base
website
Established Must Have Customers are loyal 1. Loyalty programs and premium gifts
but tend to wander 2. Personalized recommendations
when offered lesser 3. Measure lifetime value
price 4. Customized database marketing
5. Cross sell cleverly and impress
Concentrating more on brand building and
relationship marketing
Challenger Must Have Customers come 1. Targeting and retargeting your current
and go when the customers
websites wins 2. Coming up with lucrative and personalized
against comparison discounts deals and offers
with the others 3. Timely customer service and communication
calendar
4. Social Media
Concentrating more on brand building and
customer acquisition
New Comer Must Have Customers are not 1. Welcome complaints
aware but are 2. Regular reviews and Blog updates
willing to try 3. Undersell and Over deliver
Concentrating more on brand awareness and
content marketing
Local King Good to have Customers will stay 1. Local deals and promotions
loyal as long as they
meet their basic
expectation
Niche Player Good to have Customers like their 1. Exclusive VIP Club Membership cards
product offering and 2. Selected product offerings.
are satisfied with the 3. Studying customer data and deriving patterns
services if they
continue to innovate
A framework defining customer retention strategies for different e-retail websites
67

68. Limitations and Scope for Future Research
Limitations
E-commerce industry is a huge space with a very large number of categories. Each category is
perceived very differently from other. A customer also approaches each category in a different
way, for example the buying pattern behavior of books is entirely different from the buying
pattern behavior of a television.
This is one of the limitations of the research as it does not look and concentrate at individual
categories separately. Based on, global web index mobiles clothes and books are heavily
purchased and hence these results are more relevant to these particular category purchases.
Scope for future Research
 The research only concentrates on Customer retention, however to understand customer
relationship as a whole, it is necessary to understand and consider the tradeoff between
customer acquisition and retention.
 Inbound marketing is an upcoming area of study which is increasingly being used to
study customer retention, attrition and acquisition by understanding churn patterns and
customer life time value. Hubspot.com an inbound online marketing company is the
pioneer to this and has different online marketing solutions that can lead to customer
retention. Hence, digital marketing practices clubbed with analytics can be studied and
research to work together with loyalty marketing and customer retention strategies.
 Research can be done in the area of big data and understanding ways in which you can
club and segregate your customers based on priority and business that they bring to you
and then accordingly target them in groups based on parameters such as frequency,
purchase capacity etc.
68

69.  The research can also further be turned into a different direction where the factors and
parameters found as a result of this study can be used to further dig deeper and
qualitatively find more insights which will help advertisers develop effective online and
offline marketing collateral related to e-retail to better communicate with their customers.
69

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72. Appendix
Discussion Guidelines for in-depth interview with internet retailers
1. Do you think ecommerce industry right now is a bubble waiting to burst? Give Reasons.
2. Which according to you are the 2 most important factors that one needs to take while
running an e-retail website successfully and ensuring faster way to profitability?
3. With high competitive density in the e-retail industry what is your strategy to retain
customers and fuel repeat purchases and brand loyalty.
4. What according to you right now is stopping customers from shopping online?
5. Do you have a CRM software tool or system set up to track and store customer data?
6. How would you differentiate your e-retail website from others?
7. Do you have different customer acquisition and retention strategies?
8. Do you think it is possible to create brand loyalty in e-retail space with price sensitive
audience and low switching cost?
Discussion Guidelines for in-depth interview with regular online shoppers
Demographics
 Name
 Age
 City
Lifestyle Habits
 Tell us something about yourself
 How do you spend a regular day?
Digital Behaviour
 What are the various media you consume on a daily basis?
 What are the activities you perform on online media?
 How much time do you spend on online media in the course of a day?
 Point of contacts for digital media consumption
 Which devices do you use to consume digital media?
o Laptop
o Smart Phone
72

73. o Tablets
o Personal Computers
Brands:
 Are you aware of any brand engagement activities done online?
 Which brands do you like to follow online and why?
Online Media:
 Which brand pages have you liked on Facebook and why?
 Have you ordered anything online in the last one month?
Online Shopping
 What do you generally do on the internet?
 Why do you shop online?
 What do you think are the advantages of online shopping over offline shopping?
 Please narrate one good and one bad experience with online shopping
 Please explain your activity on social media with brands and brand pages
 Give some reasons on why will you not shop online. What are your concerns?
Interview transcript of COO of EasyTradeStore.com
1. Do you think ecommerce industry right now in India is a bubble waiting to burst?
Give reasons..
No, I do not think so. Though there are few companies which are over valued but still
most of e commerce companies are much much undervalued . so there is no question of
bubble and its bursting.
2. Which according to you are the 2 most important factors that one needs to take
while running an e-retail website successfully and ensuring faster way to
profitability?
Logistics Cost, and manpower cost. No matter what customers always expect faster
delivery and efficient customer service. To retain exceptional talent and maintain
logistical efficiency is increasingly coming in way of ensuring profitability.
3. With high competitive density in the e-retail industry what is your strategy to retain
customers and fuel repeat purchases and brand loyalty.
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74. We are focussing on Niche segments which are otherwise not serviceable by
conventional trade. We still try and practice loyalty marketing with regular discounts and
emailers.
4. What according to you right now is stopping customers from shopping online?
Gray Market that operates on No Taxes while ecommerce has to pay high taxes, Lack of
attractive discounts, touch n feel, lack of clarity on returns and refunds.
5. Do you have a CRM software tool/system set up to track and store customer data?
YES, We developed it in house. Although we are still trying to figure out how to make
efficient use of it by integrating with marketing and sales functions.
6. From a customer's point of view, how would you differentiate your e-retail website
from others?
24x 7 availablity , convenience, and quality of products.
7. Do you have different acquisition and retention strategies, if yes what are they, give
one line about each?
Can not elaborate
8. Do you think with such low switching cost and price sensitive indian audience it is
possible to create brand loyalty in e-retail space?
Yes. It is possible by innovative and good quality product offering and services.
Survey used for quantitative research
Please find below the questionnaire designed.
Q1 Do you shop online ?
 Yes (1)
 No (2)
If No Is Selected, Then Skip To End of Survey
74

75. Q2 Which of these best describes the frequency of buying products online?
 Once or less than once a month (1)
 2-3 times a month (2)
 4 or more than 4 times a month (3)
Q3 What is the frequency of buying products online dependent on?
 Impulse buying while browsing shopping websites (1)
 Need based - Shop only when there is an immediate need for it (2)
 Special discounts, offers, sale on particular days (3)
Q4 At what time of the day do you usually shop online?
 Morning (8AM - 12Noon) (1)
 Afternoon (Noon - 5pm) (2)
 Evening (5pm - 8pm) (3)
 NIght (8pm onwards) (4)
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76. Q5 Please rate on the level of agreeableness on the following statements. Please read each of the
statements carefully before rating.
Totally Agree Somewhat Neutral (3) Somewhat Completely
(1) Agree (2) Disagree (4) Disagree (5)
I buy online
because it     
saves time (1)
I buy online
because there
    
are discounts
and offers (2)
I buy online
because I like
the comfort
    
of buying
from home
(3)
I buy online
because I can
read reviews     
from other
buyers (4)
I buy online
because it
helps me     
compare
products (5)
I buy online
because there
are different
brands and     
variety at the
same place
(6)
I buy online
because the
product was
    
not available
at the nearest
store (7)
I buy online
because i     
enjoy
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77. browsing and
saving
products in
my cart and
buy them
later (8)
I buy online
because i can
get actual
    
information
about the
product (9)
Q6 Before shopping online, which of the following activities do you do?
 Compare costs across websites (1)
 Read/Search product reviews and information (2)
 Read customer service reviews of the website that you are planning to shop from (3)
 Look for return or exchange policy (4)
 Others, Please mention (5) ____________________
Q7 Which of the following reasons describe your reason not to complete a purchase process?
 I am unsure about the product quality (1)
 I am scared to use my credit/debit card online (2)
 I want to touch and feel the product before buying (3)
 The time taken to process the transaction was higher (4)
 I was not sure if I was paying the correct price for the product that I wanted to buy (5)
 The time being promised for delivery was more than I expected (6)
 There was no free shipping (7)
 I was not convinced with the website's return/exchange policy (8)
 Others, Please mention (9) ____________________
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78. Q8 Where do you usually look for deals and offers to shop online?
 Facebook, Twitter etc (1)
 Coupon Websites (2)
 Email Newsletters (3)
 On the shopping website itself (4)
 Others, Please mention (5) ____________________
Q9 Indicate the amount of risk that you associate with shopping each of the below categories
online
Very Risky Somewhat Undecided Somewhat Not at all
(1) Risky (2) (3) Not Risky (4) Risky (5)
Laptops and
other
computer     
accessories
(1)
Cameras and
other
    
photography
equipment (2)
Mobile
phones and
other mobile
devices like     
tablets and
mp3 players
(3)
Apparel and
    
Footwear (4)
Books (5)     
Home and
Kitchen
    
Appliances
(6)
TV, DVDs
and other
audio devices
like speakers     
and home
theater
system (7)
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79. Q10 On an average, How much time do you spend on an online website before making a
purchase?
 Less than 5 minutes (1)
 5 - 15 minutes (2)
 15 - 30 minutes (3)
 30 - 60 minutes (4)
 More than an hour (5)
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80. Q11 Please indicate how important are the following factors to you when you are shopping
online
Not at all Very Neither Very Extremely
Important (1) Unimportant Important nor Important (4) Important (5)
(2) Unimportant
(3)
Security of
financial
    
information
(1)
Look and feel
of the website     
(2)
Reputation of
online
    
shopping
website (3)
Ease of use of
the website     
(4)
Social Media
    
presence (5)
Prior
purchase
    
experience
(6)
Reviews of
the website
by other     
online
customers (7)
Free Shipping
    
services (8)
All possible
payment     
options (9)
Discounts,
deals and     
offers (10)
80

81. Q12 How likely are you to shop if presented with the following options
Very Unlikely (2) Undecided Likely (4) Very Likely
Unlikely (1) (3) (5)
Rs.100 cashback
on purchase of     
Rs 2000 (1)
Rs. 100 off on
next purchase
    
on Rs 1000
current bill (2)
50% off on a
particular
product/category     
just for one day
(3)
If you are
awarded with
loyal customer     
redeemable
points (4)
Buy 1 Get 1
Free of lesser or
    
same value
Offers (5)
Refer a friend to
redeem an offer
to buy a product     
less than its list
price (6)
81

82. Q13 Please rank order the following e-retail websites in order of your preference to shop at these
websites
______ Jabong (1)
______ Infibeam (2)
______ Homeshop18 (3)
______ SnapDeal (4)
______ Flipkart (5)
______ Ebay (6)
______ FutureBazaar (7)
Q14 What according to you is that one thing lacking
from ${q://QID16/ChoiceGroup/ChoiceWithLowestValue} that is not making you its regular
customer?
Q15 If ${q://QID16/ChoiceGroup/ChoiceWithHighestValue} is offering a book for Rs. 25 less
than ${q://QID16/ChoiceGroup/ChoiceWithLowestValue} where would you buy from ?
 ${q://QID16/ChoiceGroup/ChoiceWithHighestValue} (1)
 ${q://QID16/ChoiceGroup/ChoiceWithLowestValue} (2)
Q16 If ${q://QID16/ChoiceGroup/ChoiceWithHighestValue} is offering a mobile handset that
you want to buy for Rs. 1000 less than ${q://QID16/ChoiceGroup/ChoiceWithLowestValue} but
delivers 7 days later where would you buy from ?
 ${q://QID16/ChoiceGroup/ChoiceWithHighestValue} (1)
 ${q://QID16/ChoiceGroup/ChoiceWithLowestValue} (2)
Q17 If ${q://QID16/ChoiceGroup/ChoiceWithHighestValue} is offering a product which is Rs.
250 less than ${q://QID16/ChoiceGroup/ChoiceWithLowestValue} but the latter is offering you
redeemable coupons worth Rs. 250 where would you still buy that product from.
 ${q://QID16/ChoiceGroup/ChoiceWithHighestValue} (1)
 ${q://QID16/ChoiceGroup/ChoiceWithLowestValue} (2)
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83. Q18 Name:
Q19 Age:
 (1)
 19 - 25 (2)
 26 - 30 (3)
 31 - 40 (4)
 41 - 45 (5)
 45+ (6)
Q20 You are?
 Male (1)
 Female (2)
Q21 Which of the following best describes your education level
 Under Graduate and below (1)
 Graduate Level (2)
 Post Graduate Level (3)
 Doctorate (4)
83