Seminar Report

1. AN
SEMINAR REPORT
ON
Submitted To: Submitted By:
Dr. Shuchi Gupta Sandeep Singh Saini
Faculty MBA MBA (P)
Roll No.- 938
Maharaja Agrasen Institute
of Management & Technology, Jagadhri

2. E-Tailing
TABLE OF CONTENTS
Introduction 1
E-Tailing 2
Types Of E-Tailers 4
Internet Usage And Population Statistics 9
Retaining An E-Tail Customer 10
E-Tailing In India 11
Future Of E-Retailing In India 11
Conclusion 16
Slides Handouts 17
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3. E-Tailing
INTRODUCTION
E-tailing, or e-commerce can be described as transactions that are conducted over an
electronic network, where the buyer and merchant are not at the same physical location,
for example plastic card transactions via the internet.
According to a recent study:
 Presently there are 4 million Internet users in India and the number is
growing.
 Computer Hardware, cinema, Books, Music cassettes /CDs, travel tickets
and gifts are sold through the net in a big way.
E-tailing is the practice of selling retail goods on the internet. It is the abbreviated
version of “electronic retailing” which essentially constitutes business to consumer
transaction. While the concept of online retailing or e-tailing is no longer in its
nascent stage; it continues to evolve, as advanced e-commerce applications act as a
potent catalyst in the development of e-tailing.
The idea of online retailing or e-tailing which almost every net-savvy individual is
familiar with; offers a convenient mode of shopping online and the consumer gets
to choose from a diverse range of products and services as opposed to the
analogous physical shopping experience. Furthermore, online retailers or e-tailers
get to expose and sell their products to a global audience through their e-stores.
(also termed as online stores, internet shops, webshops etc.)
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4. E-Tailing
E-TAILING
E-tailing (less frequently: etailing) is the selling of retail goods on the Internet.
Short for "electronic retailing," and used in Internet discussions as early as 1995,
the term seems an almost inevitable addition to e-mail, e-business and
e-commerce. E-tailing is synonymous with business-to-consumer (B2C)
transaction.
E-tailing began to work for some major corporations and smaller entrepreneurs as
early as 1997 when Dell Computer reported multimillion dollar orders taken at its
Web site. The success of Amazon.com hastened the arrival of Barnes and Noble's
e-tail site. Concerns about secure order-taking receded. 1997 was also the year in
which Auto-by-Tel reported that they had sold their millionth car over the Web,
and Commerce Net/Nielsen Media reported that 10 million people had made
purchases on the Web. Jupiter research predicted that e-tailing would grow to $37
billion by 2002.
The E-commerce industry plays a vital role in its growth and development. The
consumer or buyer is usually provided with detailed information and description of
the product which helps them make a judicious choice before making an online
purchase. For consumers who face a paucity of time or want a diverse range of
products to choose from, e-tailing proves to be an ideal option. Every e-tailer wants
his/her share of domain amidst the vast World Wide Web galaxy. Due to the
intense competitory quotient involved, every e-tailer out there wants to offer their
customer/buyer a smooth and pleasant shopping experience. Therefore, e-tailing is
just not restricted to putting up products for sale for consumers to buy. As
consumers today are well-informed, it is understood that they would make a well
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5. E-Tailing
informed decision as well. This involves a fair amount of product research, price
comparison and checking the credibility of the e-store.
Advanced security features for on-line shoppers is another must-have so they are
assured they are dealing with a reliable web-store. Trust and security are essential
elements that enhance the functionality and credibility of any e-tail store.
Establishing an online store is a much cheaper alternative to a physical store.
However, significant amount of expenditure is incurred for promotional purposes.
This is an indispensable strategy which determines the success of any e-tail store.
Some online stores also offer live chat facilities with their representatives for help
and other queries. (Tribuneindia, 2003).
Typical consumer behaviour involves searching for products and services on the
search engines like Google and Yahoo!. Being listed on a search engine not only
enhances the web store’s visibility, it also conveys an impression of the website’s
professionalism and greatly contributes towards generating traffic and subsequent
sales. By recognizing consumers’ shopping patterns and tastes, retailers are
tailoring the shopping experience for its customers. Additionally loyalty programs
are offered to frequent buyers to enhance the click to buy ratio. According to the
data released by comScore networks “total Internet spending, including travel, hit
$143.2 billion in 2005”. (TheClickZnetwork, 2006).
With advances in e-commerce technology, e-tailing is getting more refined and
continues to fine-tune itself in an attempt to surpass consumer expectations.
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6. E-Tailing
TYPES OF E-TAILERS
E-TAILERS
PURE PLAY BRICKS AND
E-TAILERS CLICKS
E-TAILERS
Pure Play E-Tailer: - A pure play e-tailer uses the Internet as its primary means
of retailing. Examples of pure play e-tailers are Dell and Amazon.com.
Brick and Click E-Tailer: - A brick and click e-tailer uses the Internet to push
its goods or service but also has the traditional physical storefront available to
customers. Combining this new type of retail and the old of a general store is a new
type of store which is part of the green economics movement, promoting ethical
consumerism.
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7. E-Tailing
TRIGGERS OF E-TAILING
E-tailers who take part in pure play–type business have the opportunity to turn
higher profit margins, due in part to the fact that many of the overhead expenses
associated with a physical retail space, such as labour, retail space, and inventory,
can be significantly alleviated. Pure play allows for a retailer to be able to reach
customers worldwide, while still only maintaining one location for each and every
customer to visit, 24 hours a day, 7 days a week.
 No real estate costs : e-tailers do not have to maintain expensive
showrooms or warehouses in prime locations, they operate through their web
sites and thus save drastically on the real estate costs. The real estate costs in
the metropolitan cities are sky high. Besides this, maintenance costs of a
virtual store vis-à-vis a physical store is much less.
 Easy and comfortably : Easy and comfortably -obtained info is another
advantages that shopping on the Net offers. On the Internet, product
information is just a few clicks away, all accessed in the comfort of a home.
Traditional retailing stands out in stark contrast: the consumer searches
frantically, runs up and down, grills a poorly trained store assistant who is
unable to help him out. In the bargain, valuable time is lost. Simply put,
shopping on the Internet for, say 15 minutes could save a two-hour trip to
the mall. Consumers prefer to save this time so that they can devote more
time for their professional and domestic priorities.
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8. E-Tailing
 Better interaction with the customers : The greatest benefits of online
commerce is its ability to establish interaction en-masse. Interaction refers to
the ability of reaching customers on an individual basis and react
appropriately to responses of individual customers. Interaction is a vital tool
for mass customization. Examples are many and include online marketing of
flowers, software books and education. This has also led to greater
satisfaction among the online buyers. According to a research agency, 82%
of the online buyers have been found to be satisfied with their purchases.
 Mass Media : A supermarket has limited area of operation. It caters to
customers of a city (and/or its suburbs), but a web site can be accessed from
any part of the country or for that matter from any part of the world, thus
increasing the potential customer base.
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9. E-Tailing
BARRIERS OF E-TAILING
Many studies have shown that e-tailers are failing to meet the needs of online
customers and that they generally only have one chance to make a good impression
if they want their customers to return. It is said that the three most important things
that e-tailers today must work on to ensure profitability are "search, support and
promotion."
Most of the e-tailing ventures have not been as profitable as they were expected to
be, the reasons being: -
 One estimate is that India has a mere 4 million Internet users, mostly are
from metros. According to web analysts many areas of retailing, Internet is
unlikely gather a sizable slice of market. And that could be several years to
come. , Especially in businesses where margins are thin.
 Despite a higher Internet penetration, cities like Mumbai or New Delhi
might not be a haven for an e-tailer. Reason: for things like grocery, there is
a shop out there at every nook and corner. All that an individual has to do is
just make a phone call and the goods are delivered at his doorstep. Thrown
in along with free home delivery is a month's credit.
 Cheap labour : Thanks to easy availability of domestics at an affordable
wage bill, quite a few of the rich customers hire them for doing domestic
chores, which include shopping. The usual Indian aversion to use credit
cards. Thanks to low penetration of credit cards and the lack of popularity of
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10. E-Tailing
debit cards, e-tailing might find it an uphill task to catch on.
 Mounting competitive pressures : The market for online buying is still at a
nascent stage. The turnover of the sector is relatively small and many players
have already entered into it. Thus many e-tailers are eyeing a small market,
exerting more pressure on operating margins.
 Shopping is still a touch--feel--hear experience : Unlike the Americans,
Indians do not suffer from 'time-poverty' and shopping is still considered to
be a family outing. Hence this type of an environment creates a problem of
customer retention. In e-tail, customer retention by 5% leads to increase in
profits by 25%. Most people buying on the net do it out of curiosity and a
repeat purchase is unlikely.
 Inadequate information provided when the customers discerns it certain
products like clothes, cosmetics etc. involve higher customer involvement.
Most customers are comfortable buying books and music on the Internet
because the information required making a purchase decision is simple.
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11. E-Tailing
INTERNET USAGE AND POPULATION STATISTICS
YEAR Users Population % Pen. Usage Source
1998 1,400,000 1,094,870,677 0.1 % ITU
1999 2,800,000 1,094,870,677 0.3 % ITU
2000 5,500,000 1,094,870,677 0.5 % ITU
2001 7,000,000 1,094,870,677 0.7 % ITU
2002 16,500,000 1,094,870,677 1.6 % ITU
2003 22,500,000 1,094,870,677 2.1 % ITU
2004 39,200,000 1,094,870,677 3.6 % C.I. Almanac
2005 50,600,000 1,112,225,812 4.5 % C.I. Almanac
2006 40,000,000 1,112,225,812 3.6 % IAMAI
2007 42,000,000 1,129,667,528 3.7 % IWS
2009 81,000,000 1,156,897,766 7.0 % ITU
2010 81,000,000 1,173,108,018 6.9 % ITU
(Source: http://www.internetworldstats.com/asia/in.htm)
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12. E-Tailing
RETAINING AN E-TAIL CUSTOMER
The primary aim of every e-tailer is to attract a prospective customer to his e-tail
site. That calls for a large ad spend. Naturally, there has been a surge in dot.com
advertising in countries such as the United States. Dot.com ad spends are so large
that as much as two-thirds of the capital raised by dot.com companies are spent
towards advertising. Ad spends by dot.com companies are so huge that whatever
savings achieved in the areas of real estate and inventory is more than offset.
What all these tell us is one simple thing: customer retention is the toughest
thing on the web. Says K Ramesh, vice president of i2inext.com: "First of all, it is
difficult to get a consumer come to your site. After he comes in, the task is to retain
him and get him frequently. Once he is confident about you, he will use his credit
card to make his purchases at your site."
On balance, retaining an e-tail customer is certainly a costly affair. For, in the
world of the web there is nothing such as loyalty. Says Goel: "If you offer some
freebies, a customer may keep on coming to your site, with the expectation every
time that there would be some freebies out there. The moment you stop freebies,
you could simply lose the customer." So, managing e-tailing promotion through
freebies could be a tricky affair.
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13. E-Tailing
E-TAILING IN INDIA
During the dotcom boom – Ecommerce was the sunrise industry, the one that
would change the face of the world. While Ebay and Amazon – the twin pillars of
Ecommerce in US did bring about paradigm shift in USA, the tech pundits in India
are still a bit iffy about Ecommerce in India.
For the purpose of this article E-tailing is defined as Ecommerce sites including
auction sites that sell groceries, apparel, CD’s, books, electronic items, gifting item
etc but exclude travel, digital downloads and online classifieds sites.
The top E-tailers in India are indiatimes.com, fabmart.com, rediffshopping.com.
They have managed to retain their lead due to innovative business strategies,
supply chain model and changing urban lifestyles.
FUTURE OF E-RETAILING IN INDIA
There are divergent views on the future of e-retailing in India. Some experts are of
the opinion that the giant, big brand retailers would dominate the small ones due to
their wider investment capacities. It would be next to impossible for the small
retailers and the kiranas to prove their existence in the battlefield of online
retailing. Another viewpoint is that there would be an exponential growth in the
online retailing business in India.
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14. E-Tailing
TOUCH POINTS TO FOCUS ON
1. Customer is the King – A good 24/7 customer service through email, chat and
toll free phone is what the E-tailers are providing. Customer complaint
resolution – whether, delayed delivery, product quality, wrong product delivered
will certainly work towards long term relationship, retention and acquisition.
2. Supply Chain - Most customer complaints and delivery returns can be traced to
the supply chain vendors or merchants. They are in fact the most important
internal customers. It is important to have the supply chain vendors or merchants
well integrated into the system – both technically and strategically.
3. New Business Models - E-tailers always search new and innovative business
models. Case in point being US based Power Reviews – where it provides free
review technology to E-tailers and all it asks in return is that the reviews
collected on the retailer’s web site are syndicated, which is then aggregated on
the Buzzillions.com, its sister website. Some Indian sites simply collect orders
over a period of time say a week, order in bulk from the vendor and finally ship
it to customer at a discounted rate. The customer is told beforehand about the
delivery date, of course.
4. Comparison Shopping and Customer Reviews - All the E-tailers are present
on comparison shopping sites is of paramount importance – especially since
people now visit these sites before they place the order. Being present on well
known sites such as compareindia.com and wize.com is a very good idea. Also
they encourage customer to write the product reviews – nothing authenticates
their offering to an undecided customers like a good product review.
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15. E-Tailing
99LABELS.COM
99labels.com is being established as one of its kind members-only, online
shopping community platform, hosting private online sales of luxury and premium
brands. It is an innovative discount-oriented e-tailing website offering event based
online sales for a limited time period on fashion-wear, accessories, lifestyle
products, sportswear and gear, electronics and even furniture with members-only
prices that are marked up to 70 % off label prices.
Event based Sales
99labels is like having your favourite store at hand 24X7! As soon as a sale
event is planned, the customer get an e-mail trailer in advance, so that you're
totally in the loop. Once the sale is open, purchases can only be made online, in a
secure environment, where customer’s privacy is ensured and guaranteed by them.
Sales usually last between 5 and 7 days, and are open to members only. The earlier
you visit, the more chances you have of being able to choose from a wider
selection!
The best way to shop
99labels also give the best ways to view and shop for your selection. The
customer can see each product clearly with zoom feature, then choose details like
colour options and error-proof sizes on the product page. They authenticate each
piece of merchandise with their 99labels guarantee-- and by offering you flexible
payment options like COD, net banking, or credit card. So customer can select his
payment mode and buy!
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INDIA GETTING COMFORTABLE WITH
ONLINE SHOPPING
(Source : Hindustan Times, Nov. 23, 2010)
Is the average middle class Indian getting more tech-friendly in terms of consumer
electronics, changing the way India shops? This is the question Experian Hitwise
asked in its research. Its findings show that shopping is the 10th most popular
online activity in India, ranking below social networking, news and travel, but
picking up more visits than government, music or sports websites.
By international standards, Indian e-commerce is immature - shopping ranks fifth
in online activities in the US and fourth in the UK, Experian's research reveals -
but it is developing rapidly. Indians are increasingly seen using the internet to get
more information and to shortlist preferences.
A typical online retailer in India receives half of its traffic from search engines.
Topping the list of most searched-for products are cellphones at 3.5 per cent of all
product-related search terms sending traffic to retailers. Nokia rules, picking up
two in every five searches.
Searches for "wireless internet" have more than doubled over the last three months,
while 'mobile movies' is the eighth most popular mobile phone-related search term.
Software downloads are also in demand, while laptops, TVs and cameras are
respectively the third, fourth and fifth most searched for products online.
"The only non-gadget to make it into the top five list of most searched-for products
is cars - one in every 25 searches is for cars. A third of these searches are for 'used'
or 'second hand' cars; many specify a location. Bangalore is the most popular
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17. E-Tailing
location for car searches, followed by Mumbai and Chennai," said Navin
Chandani, MD, Experian Marketing Services, India.
Cars are not the only the products searched for by location. Three of the 10 most
visited retail sites fall into this category, with Quikr and ClickIndia taking the two
top spots and carwale.com in eighth position. "The popularity of local classifieds
sites pushes eBay India into seventh place. At number four, Amazon, another
global e-commerce superpower, is one of only two other non-India sites in the top
10," Chandani said. At number three is Softronic, which specialises in software
downloads. The fifth spot is taken by B2B trading platform Alibaba, while
entertainment and ticketing site Book-my-shows.com is in ninth place.
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18. E-Tailing
CONCLUSION
Indian retail industry is entering into a new phase of e-retailing. The
increased internet penetration has opened a whole new market for the retail
industry and some of the big retail giants are eying it as a great opportunity. The e-
retail revolution has come up with huge opportunities and advantages both for the
marketer as well as the consumer. The consumer can now shop 24x7 from his
home and at his convenience. He can search for a product from a hoard of online
shops and deals available.
The increase in the percentage of working women is also playing a positive
impact. But still the Indian consumer is bounded by factors like trust, quality and
reliability of an online shop. Shopping is alike an experience for the consumer
which is hard to be felt in online stores. He can just see the product but cannot give
it a trial. The consumer is also apprehensive about the misuse of his personal
information like credit card/ debit card details which are required in completing an
online purchase transaction.
According to an IMRB study, it states that shopping convenience, time
saving and the availability of a wide range of products were the three major
triggers of the Indian e-tailing market.
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19. E-Tailing
SLIDES HANDOUTS
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