The document discusses the evolution of traditional retail to e-tailing. It begins by defining traditional retail as brick-and-mortar stores like mom-and-pop shops. It then outlines the evolution to include larger store formats like supermarkets and malls. Cataloging emerged which allowed customers to order directly from catalogs. The internet was a game changer, transforming catalogs into virtual catalogs on websites. This led to the rise of e-tailing/e-retailing, defined as selling retail goods electronically over the internet. E-tailing provides benefits like vast information, easy comparisons, and flexible pricing but also faces challenges like security issues and the inability to see/feel products. Overall the document traces the

1. Retail to e-tail –The evolutionary
patterns and perspectives
Vinod Urath
Guruvayurappan Institute of
Management
Coimbatore

2. Meaning
Retailing is referred to as the
physical process of attaining the
place utility for the comfort and
timeliness of the final customer
by arranging the physical
infrastructure for the easy
availability of the items sought for.

3. A traditional retail format –what?
• is defined in modern times as a
brick and mortar retail system, in
the retailing term .

4. Traditional Trade
Traditional Trade
• is defined as all that trade that flows through
traditional outlets, such as kiosks,
• corner shops, local mom and pop shops, open
markets, etc. It represents all trade with the
• exception of that which flows through retail
chains, supermarkets, or super stores

5. • Traditional trade is characterized by a large complex network
• of independently owned retailers and distributors carrying
• primarily local or regional brands.
• Key Characteristics
• Traditional Trade Categories
• Food and Beverages
• Clothing and Textile
• Consumer Durables
• Jewelry and Watches
• Home Décor and Furnishing
• Personal Care
• Footwear
• Books, Music and Gifts
• 3

6. • exception of that which flows through retail
chains, supermarkets, or super stores
• Definition of Traditional Trad

7. TRADITIONAL FORMATS DEPENDS ON
• These were dependent on two important
factors as
• 1. Intimacy with the customer
• 2. geographical proximity

8. Evolutionary view of retailing
• Traditional formats:
a) Brick and Mortar—
• -1.kiranas,
• 2.mom and pop
• To SUPERMARKETS AND EVEN MALLS WHICH ARE
larger, bigger formats.
• BUT IT AGAIN EVOLVED INTO
• b) cataloguing- to reach directly the final customer
-

9. Cataloguing:
• Cataloguing:
• where in the customers are reached through
mails with telephone numbers of the producer
and /or nearest outlets of his being informed
about /marked,.
• the manufacturer sends a well designed product
brochure giving maximum information/demos
and such in a manner which makes it attractive
and easily understandable.

10. Web the game changer
• -the catalogues were very APT in the sense
that it also got built in mechanism of order
placement and a payment. Additionally this is
done in the comforts of the home..
• AND This system seems to go well until the
discovery of web..

11. By the advent of internet
• Virtual market places started to come to the
limelight

12. With advent of internet ,cataloguing
also evolved
• Cataloguing evolved into:
• a) virtual cataloguing: To reach the customer
thro web pages which acts as the catalogue
with multiple pages..

13. • The web era had transformed the traditional
catalogues to more web adaptable forms and
thus the web pages itself had started to act as
the catalogue pages. But the question all
along was-Is it that it is just the same in
functionality as the traditional catalogue?.

14. The virtual catalogue:
• Wherein its advantage was that it afforded
larger no: of pages than a conventional
catalogue
• Later it got evolved into one which uses the
possibilities of the medium
• For Ex: videos to show demos, or animations
etc..

15. The positives and negatives of
traditional retail over virtual one
• Shopping experience
• Personal info not in public domain
• Negatives:
• Timely info and quick dissemination of
information not possible
• Needed in some product types where
product gets outdated fast or perishes

16. • At a basic level, any commercial transaction that involves a direct sale to a consumer at any point of time may be
termed as retailing. It can be the selling of apparel, books, music, footwear, grocery items or other things. Such a
retail trade could take place in a shopping mall, a mom-and-pop store, a department store, or in a friendly
neighborhood grocery shop. Most of such retail trades that can be done through the brick-and-mortar retailing
route can be successfully replicated over the Internet as well. In the traditional sense, the term Retailing referred
to the final transaction between a business and a customer (B2C).
Other business models include:
Business-to-business (B2B) – These remain the largest source of commercial transactions (about 80% of all
transactions).
Consumer-to-business (C2B) – This is an emerging sector. A good example of the consumer-to-business model is
“Priceline”
Consumer-to-consumer (C2C) - This model relies on various online communities. A prominent and hugely
successful example of the consumer-to-consumer model is “eBay”.
The C2B and C2C sectors are recent phenomena that have emerged taking full advantage of the various electronic
media to evolve into potentially major sectors within the retail industry. Earlier, the two sectors played a minimal
role in the retail industry but they are gaining momentum with a concurrent rise in the electronic commerce
around the world.

18. Another evolution-Multi channel retail
• Multichannel retailing: meanings
• “Multichannel retailing” has been used to indicate both:
• 1. the existence of different store formats offering different
• retail services
• 2. the existence and growing importance of retail companies
• managing different store formats
• Ie, existence of many differentiated retail
• products - store formats and the service they provide –
• offering consumers alternative ways to fulfil their
• procurement needs
• … and e-commerce is just one of them
• 4

19. • (Multichannel retailing: meanings)
• Like in most other industries, the industrialisation of retailing
• started with one successful and undifferentiated product on which
• to build up economies of scale
• The supermarket as the “Ford T” of retailing
• Price competition led to innovation and product differentiation
• Superstore, hypermarket, convenience store, hard and soft
• discount, supercentre, wholesale club, e-commerce ...
• Innovation followed different paths in different countries but it has
• spread across borders: a variety of retail products coexists
• everywhere
• The emergence of multichannel retailing and of companies
• managing different store formats

20. • Buying behaviour
• Store formats offer consumers different bundles of service
• attributes at different prices
• “Utility of time and place” differentiated by store format
• Like for most other goods and services, consumers buy more than
• one type of retail service
• Consumers buy the same goods from different store formats
• The proportion of total expenditure going to different store formats
• depend on the characteristics of households and the occasions in
• which they shop
• Retailers position both their trade names and store formats

21. yet Another evolution-multi channel
Retailing to cross-shopping/cross-
retailing
• Is from multi channel retailing/shopping to cross
shopping
• Multi channel retailing is the process of putting
up multiple channel formats for the sale of same
type of goods.
• A traditional multi channel could be as follows.
• As an example a shoe manufacturer can sell his
wares in multi brand ,company brand showroom
,or through direct marketing using different
medias…

22. Multi channel in raw form meant
basically price competition
• Multi channel retail in its raw traditional ,
non virtual form was not considered an
integrated selling operation since this was
not a seamless retailing for the
consumers.
Seamlessness happens when one channel is
acting as a helpful tool for the customer even
when he finally purchases thro some other
channel

23. Cross channel retailing/shopping:
• Cross channel shopping Is the shopping
through multiple channels which provides
seamlessness..
• ie; using more than one channel for the
purchase of a product in such a way that in
this case the usage of the medium for better
knowledge acquisition and processing takes
more importance over any other aspect.

24. Main feature of cross shopping in
comparison with multi channel one
• Cross shopping happens by way of
comparisons ,price quotes, feature ,warranty
comparisons etc ..which is seen as different at
least in some type of product segments when
purchased thro different channels..
• An Example of it is
-seen in Airline ticketing

25. Main feature of cross shopping in
comparison with multi channel one
• Also This cross shopping had its impact in
cross channel retailing --
• by also promoting sites which gives expert
advises, previews ,enabling the internet
savvy customer to compare and thus help
give a seamless integration happen..
• also this helps to learn more in the privacy of
himself and take a well thought out decision.

26. Because of all this ,Studies show that
• a)Large Penetration of web enabled cross
shopping is happening
• The number of cross channel shoppers
increased 8% between 2004 -2005,with some
40 million or 55% of online consumers cross
shopping certain selected products.
• cross channel shoppers spent an average of
$458 over 3 months on products researched
online and bought offline.

27. • b) Profile:
• Cross channel shoppers tended to be wealthier,
younger and more experienced (kerner,
2004).They tended to have more discretionary
income and spend more and be more engaged
with brands (WSJ 2004)
• cross channel shoppers were more inclined to
buy online than single channel shoppers. thus the
online adoption was 75% more than single
channel shoppers(kerner 2004).

28. e-tailing or e-retailing
• e-tailing or e-retailing refers to the selling of retail goods electronically over the Internet.
• The term is a short form for "electronic retailing", and surfaced in the 1990s for being
frequently used over the Internet. The term is an inevitable addition to other similar terms
such as e-business, e-mail, and e-commerce.
• E-tailing usually refers to the business-to-consumer (B2C) transactions.
e-tailing offers the consumers huge amounts of information in the form of web sites with
useful links to similar sites that allows consumers to compare products by looking at
individual items. The convenience of online shopping is unmatched indeed. Shopping out of
your home or office reduces the stresses of waiting in lines and dealing with irritating sales
people. However, E-tailing causes problems with fit, since the consumer cannot try the items
on. Return policies may also act as turn offs and items can be difficult to return. The shipping
and handling costs may turn the customers away. e-tailing requires technology savvy
customers and this puts a limit on its potential reach. We can see that E-tailing is emerging as
an interesting phenomenon in the retail industry that is on a rise despite the disadvantages
associated with it.

29. • E-tailing is gaining ground. In the year 2009, clothing and apparel
segment clocked online revenues to the tune of $ 19.5 billion.
Online retailing is classified into three main categories:
1. Click – The businesses that operate only through the online
channel fall into this category. Prominent examples in this category
include: Dell, Amazon.com and e-Bay.
2. Click and Brick – The businesses that use both the online as well
as the offline channel fall into this category. Common example
includes: Barnes and Noble's.
3. Brick and Mortar – This is the conventional mode of retailing. The
businesses that do not use the latest retailing channels and still rely
upon the conventional mode belong to this category.

30. Advantages of e tailing/ Multi-
Channel retailing
•
E-tailing offers unique advantages to the consumer that no other form of retailing can match.
• 1.Free availabilty of information about prodts
• 2. allows for easier comparisons across broad product categories with the evolution of
shopping bots and similar mechanisms.
• 3. The medium also offers flexible/dynamic pricing mechanisms to the consumer.
•
4.Minimal investment - e-tailing does not require a retailer to invest in warehouses,
showrooms or other commercial properties at prime locations. They operate through their
web sites and thus save drastically on the real estate costs. The real estate costs in the
metropolitan cities can be prohibitively high. Moreover, maintenance costs of a virtual store
are negligible in comparison to a physical store.
Comfortable and easy to use - The Internet offers easy and comfortable access to all the
required information by a customer. Over the Internet, product information is just a few
clicks away, easily accessible from the comfort of a home. Traditional retailing is quite
cumbersome in contrast to e-tailing. It involves frantic search for the required product,
running up and down the retail store, asking the poorly trained store assistants for help. The
process involves significant wastage of valuable time. Simply put, shopping on the Internet
for fifteen minutes is equivalent to a two-hour trip to the mall. Consumers prefer to save
their precious time so that they can better utilize it.

31. • Customer interaction - The greatest benefit of online commerce is its ability to interact with the
customers. Such an interaction allows the retailers to reach the individual customers and react
appropriately to their responses. Interaction acts as a vital tool for mass customization. The common
examples include online marketing of books, flowers, software and education. This has also led to greater
satisfaction among the online buyers. According to a research agency, 81% of the buyers were found to be
highly satisfied with their online purchases.
Mass Media - A supermarket is limited in its area of operation. It caters to a specific geographical location
such as a city and/or its suburbs. However, a web site is globally accessible leading to a worldwide reach
and an increased potential customer base.
Search option - With web search capabilities (which need further development) it is easier to find the
particular types of goods required by a customer. The consumer decides what he wants to buy rather than
the retailer offering what he wants to sell. This ultimately translates into consumer empowerment.
User friendly - Customers can execute transactions via the same medium the information is provided, so
there is no disconnect between the desire to purchase and the ability to purchase. (Payment schemes are
still evolving and therefore this advantage is likely to become more apparent in the future.)

32. • Effective price discrimination - E-tailers can use price discrimination in an
effective and efficient manner. E-tailers can use previous transactions to
identify the likelihood of products being purchased at certain price points
and use this information for price discrimination.
Customized product placement - E-tailers can change the online
placement/display of a product based on the previous transactions so to
increase the visibility of goods that the user is more likely to buy based on
the previous encounter at the time purchase. This allows a contextual
design of placement to ensure conversion of a visit/hit to the web site into
a sale.
Global reach - Customers have a much wider choice at their fingertips (a
variety of e-tail sites to choose from etc.) In this way, the web creates a
global market place that brings together multiple consumers and retailers.

33. Disadvantages of e tailing/ Multi-
Channel retailing
•
Most of the e-tailing ventures have not been as profitable as they were expected to be, the primary
reasons were:
Security issues - Security issues hold the center stage when it comes to consumer concerns while shopping
through the online media. A lack of trust and privacy concerns prevents a lot of consumers from making
online purchases. Consumers are also concerned with the use of their personal data provided during the
online transactions.
Customer retention - In e-tailing, an increase in the customer retention by 5% leads to a corresponding
increase in profits by 25%. Most of the people buying on the Internet do so out of curiosity and this makes
a repeat purchase highly unlikely.
Unsuitable for certain product categories – In case of product categories that require relatively higher
customer involvement, the e-tailing route is found to be grossly inadequate in providing sufficient
information to the customers. Examples include retailing of products like clothes, cosmetics etc. Most
customers are comfortable buying books and music on the Internet because the information required for
making a purchase and the customer involvement is low. However, in case of a blue Trouser, the customer
may want to know things such as: Which shade of blue is it? How does it feel on the skin? How easily does
it crease? The traditional retailing does not suffer from such a problem. In the non-standard product
categories, the Internet offers limited amounts of crucial information to the customer. In such cases, only
the seller knows about the true quality of the trouser and this leads to an ‘information asymmetry’.

34. • Shopping is still a touch-feel-hear experience - some do not suffer from 'time-poverty' and
shopping is still considered to be a family outing. Hence this type of an environment creates a
problem of customer retention.
Complicated medium - Ease of use is a problem, as the web design may suffer from high complexity
bordering on total chaos in some cases.
Navigation hiccups - E-tail stores do not have standardized designs in comparison to the physical
retail stores and product catalogs. Therefore different user behaviors (navigation schemes) need to
be learned for each e-tail store. This is a temporary issue as the evolution of the web continues.
Website design flaws - Graphic presentation and aesthetics may not be as compelling for a web site
as in case of a physical retail store or a product catalog. This is a temporary issue that may resolve
with the evolution of the web design.
Limited access to the Internet - Not all customers have access to the web, as they do to the postal
system. This is a temporary issue as the evolution of the web continues.
Barriers to growth in e-tailing

35. These occurrences are definitely
impacting the usage of the medium of
web for retailing and is termed as e-tailing
• The broad classifications of e tail are as follows
• 1. Click – The businesses that operate only
through the online channel fall into this category.
Prominent examples in this category include:
Dell, Amazon.com and e-Bay.
2. Click and Brick – The businesses that use both
the online as well as the offline channel fall into
this category. example includes: Barnes and
Noble's.

36. CRM TO CMR ENABLED BY internet :
• The next major development in the evolution
of this e tailing is in CMR enabled retailing.
• CRM is termed as the process of actively
seeking and integrating all the customer touch
point inputs in order that the processes to
keep and engage the customers are improved
upon .

37. But the new paradigm is a movement from CRM TO
CMR which is named as customer managed
relationship.
• It is a relationship in which a business uses a
methodology , software and internet capability to
control access to information and ordering.
Primarily here it is so designed that customer can
decide how he communicate with the company.
• The basic premise of CMR is that customer
should be empowered to manage the
relationship. like, allowing customer to select
when, where and how interaction with marketer
to take place.

38. • the main objective of CRM is to enable the
marketer to change customers behavior in a
way which is profitable to the company while
simultaneously meeting the customer need.
• While CMR try to make customer feel that he
is in control of the interaction and that they
manage their relationship with the company.

39. AN example-CMR
• To take the example of banking and service
sector organization ,in these customers usually
do not entirely trust their financial service
providers to act in their best interests, especially
on advices related to investments. as the
recommendations may be biased depending on
commissions.
• so, conventional CRM practices like sending
promo mail and statutory annual statements
have limited appeal.

40. • Here, they can implement CMR, supported by
a powerful web site which offers variety of
tools for customers to input their data ,access
information on various financial products
,work out alternative scenarios on their own,
and take decisions on their own.
• In effect the relationship with the company is
now managed by the customers.

41. THANK
YOU