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ISSN 2348 - 8891

"E-TAILING - THE KEY TO MODERN RETAILER's SUCCESS"


Dr.Deepti Singh Verma Dr. Sonali Dube

ABSTRACT

Internet is a potent medium that can serve as a unique platform for the growth of
retail brands in India. The Indian retail market is witnessing a revolution. The current
web-based models for e-tailing are part of an embryonic phase preceding an era of
rapid transformation, challenge, and opportunity in Indian retail market. It is not just
the metros that are fueling the online scene in India the demand supply gap in tier 2-3
cities where there is brand awareness but no availability of products and services is
also adding to growth. Online retailing portals such as eBay.in, Snapdeal.com, and
Naaptol.com are registering anywhere between 40 and 60% of their sales from rural
areas apart from the tier II and III cities. The penetration rate is quite low in comparison
to other countries worldwide; however the number of users is significantly high. The
present scenarios of e-tailing opportunities, its market, the viabilities and trends etc.,
have been discussed in this paper.

Keywords: E-tailing, Multichannel, Product Diversity, Service, Strategy, Online shopping.

Altius Shodh Journal of Management & Commerce

ISSN 2348 - 8891

INTRODUCTION

With rapid growth of the Internet and globalization of market, the retail sector has become
an increasingly competitive and dynamic business environment. Business and marketing
activities are affected by the invent of Internet technologies and the Internet is revolutionizing
commerce, marketing, retailing, shopping and advertising activities of products and services.
There are several attractive attributes of Internet to not only e-customers but also companies
on time and money saving, communicate, convenience, easy accessibility, selection from a
wide range of alternatives, and the availability of information for making decisions and all
marketing activities can be performed via the Internet efficiently. In the era of globalization,
companies are using the Internet technologies to reach out to valued customers and to provide
a point of contact 24 hours a day, 7 days a week. E-commerce and e-marketing are the two
important terms in the new Internet-based business domain. E-commerce can be defined as
a way of conducting business by companies and customers performing electronic transactions
through the Internet. E-marketing, (also known as Internet Marketing, Web Marketing, and
Online Marketing etc.) can be defined as the promotion of products or services through the
Internet whereas; e-tailing can be defined as selling products and services by using the Internet.
E-tailing is defined as retailing conducted online, over the internet.
The e-tailing industry is expanding rapidly with strong early life cycle growth. In U.S. between
2003 and 2008 industry revenue rose at a CAGR of 20%. Even in 2009, when total retail
sales fell 7.2%, online sales grew 4.3%. Despite the recent economic slowdown, the etailing sector enjoys continued growth due to increasing worldwide internet penetration and
other factors. Long term trends driving increases in online activity remain positive. We expect
such trends to support continued expansion by internet companies despite a weak economic
environment. Coming to Indian scenario, the organised retailing is showing a tremendous
growth in recent years (See Figure 1: Growth of Organised Retailing in India). And
proportionately the electronic retail growth of Indian market as estimated by Euro-monitor
report stands close to 48% CAGR and in value term it is going to touch INR 27 billion(Rs
2700 crores) by 2010 from INR 4 billion in 2005.
LITERATURE REVIEW According to Turban (2006), e-tailing is defined as retailing
conducted online, over the internet. Wang (2002) has provided a broad definition of etailing by defining it as the selling of goods and services to the consumer market via the
internet. Zeithaml (2002) has defined that the success of e-tailing depends on the efficient
web site design, effective shopping and prompt delivery. The other e-store services are
delivery on real time, return and replacement process, period of filling out online orders
form, speed of response time to e-customers queries. Ratchford (2001) has said that through
Internet, consumers can gather information about merchandise and they compare a product
across suppliers at a low cost.
Rao (1999), E-commerce offers increased market activity for retailers in the form of growing
market access and information and decreased operating and procurement costs. Myerson
(1998) expressed that consumers are getting smarter in using e-tailers (and online search
Altius Shodh Journal of Management & Commerce

ISSN 2348 - 8891

engines and Rao (1999), E-commerce offers increased market activity for retailers in the
form of growing market access and information and decreased operating and procurement
costs. Myerson (1998) expressed that consumers are getting smarter in using e-tailers (and
online search engines and agents) for convenience and comparison- shopping. Guttman (1998)
describes several unique elements make online shopping different from the traditional instore retail model. Besides offering convenience and expanded product variety, the online
model also makes it easy for consumers to access and compare data from multiple sources.
Meeker (1997), retailers might cry foul, but the new shopping paradigm they have to face is
that as premium customers begin to accept the e-tail alternative in larger numbers.

OBJECTIVE OF THE STUDY

This study seeks to highlight the issues, Challenges and opportunities and strategies for etailing.Other objectives of the study are as follows:
To draw out, the driving factors for growth of the e-tailing.
To elucidate the strategic role of e-tailing in achieving the retail organization objectives.

RESEARCH METHODOLOGY

This paper purely depends on secondary data. To collect the statistical data we have used
various sources like annual report, research articles from e-journals, reference books,
research articles from news papers and off-line journals and sources from Internet etc.

Research Design: Exploratory


Type of data: Secondary data
Sources of data: Books, Journals, Magazines, Internet, etc.

NEED OF THE STUDY

Retailers are increasingly leveraging their presence across channels of catalogue, web, stores
and kiosks, to increase their share of the customer's wallet and expand across consumer
segments. Recent studies on consumer shopping behaviour indicate that multichannel shoppers
show a significantly higher value and frequency of purchase than single channel shoppers.
Thus, the focus of modern retailing shifted to 'e-tailing', one of the most adoptive channel.
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Few 'Live Bytes' of organised retailers are quoted to emphasize the need of "e-tailing".

E-TAILING

E-tailing is defined as the sale of goods and services through the Internet. Electronic retailing,
or e-tailing, can include business-to-business and business-to-consumer sales. E-tailing
revenue can come from the sale of products and services, through subscriptions to website
content, or through advertising. It is a play on the words "retail" and "e-commerce."
E-tailing requires businesses to tailor traditional business models to the rapidly changing
face of the Internet and its users. E-tailers are not restricted solely to the Internet, and some
brick-and-mortar businesses also operate websites to reach consumers. Online retailing is
normally referred to as e-tailing. Chen et al. (2004) divided e-tailing into three categories:
(1) pure online players, (2) click-and-mortar retailers, and (3) retailers who replace the
physical store with a wholly-online operation.

Relationship between E-Business, E-Commerce and E-Tailing

IMPORTANT FOR E-TAILING TO GROW IN INDIA


The growth of e-tailing in India will positively have four broad impacts:
A. Generate employment
B. Facilitate growth of allied industries

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C. Promote entrepreneurship
D. Reduce transaction costs

DIFFERENCES BETWEEN TRADITIONAL RETAIL AND E-TAIL

E-tailing

Traditional retailing

Location and
Presence

Physical
branded goods
easily identified and
found.
Most traditional
and oldest location
for retail.
Commands
attention
In the retail
landscape.

Location is the web address, available globally through


internet connection.
Can establish a presence through cross promotions (links
between sites)

Use of store space and proper


assortment.

Merchandising

Promotional
Activity

Inventory
Management

Signage other product nformation


tools.

Web page layout


Relationship between product and
text
Signage and other product
information tools
Category search and sorting
mechanism
Interactive product locations

Pricing strategies and campaigns can


Pricing strategies and campaigns can be implemented instantaneously
be implemented on a daily basis
depending on internal organizational
constraints
Multiple inventory ownership

Product must be available at multiple


store locations to maximize purchasing options, with most prominent being
traditional, just-in-time and a hybrid of
opportunities
two.

Altius Shodh Journal of Management & Commerce

ISSN 2348 - 8891

CHALLENGES AND OPPORTUNITIES ON E-RETAILING IN INDIA

We have identified about several impediments for the growth of e-tailing. They are:
(i)

consumers can not touch and feel products,

(ii)

orders can take several days to be delivered,

(iii) shipping costs are often excessive,


(iv) customer service is often poor and
(v) Returns can be difficult.

A number of consumer characteristics as potential obstacles to Internet growth, including


consumer traditional shopping experiences, an aversion or lack of access to the required
technology and the perceived risks of electronic shopping.

Controlling customer data


As the delivery services are becoming more modern in using information technology, e-tailers
may face some risks to properly handle on their consumer data. The data related to the
socioeconomic status of customers to their buying patterns and preferences, helps
intermediaries and shippers reduce costs.

Problems with the payment system


People in India are not accustomed to the online shopping system and moreover the online
payment system through the credit card is also totally alien to them. Most of them do not
avail of the transaction facilities offered by the credit cards. They are also dubious regarding
the online payment system through the credit cards. Companies should protect their system
from hackers as customers often worry about theft of their personal information, such as a
credit card number. Both technological and legal tools should be used to enhance the security
of e-commerce.

Lack of full cost disclosure


It is easy to compare the basic price of an item online, it may not be easy to see the total
cost up front as additional fees such as shipping are often not be mentioned.

Altius Shodh Journal of Management & Commerce

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Handling returns
The problem of returns is very much prominent in e-tailing businesses in India. The customers
can return defective or unwanted merchandise which he receives. E-commerce retailers,
with their emphasis on convenience and customization, must match this standard of service.
At present, they do not.

Delivering the goods cost-effectively


At present, every single transaction challenges e-tailors to deliver the goods quickly, cheaply
and conveniently. The existing mode for home delivery works well for letters and flat packages
but not for e-tailing as it encompasses with high volumes and wide variety of package shapes
and sizes.

Problems with shipping


The customers using the online shopping channel should be assured that the products that
they have ordered would reach them in due time.

Offline presence
The customers of India should be assured that the online retailers are not only available
online but offline as well. This gives them psychological comfort and trust. The concept of eretailing or online retailing in India has not gained prominence as Indians prefer to touch the
products physically before buying them. Studies have also revealed the preferences of the
customers towards the traditional shopping methods. Hence the online retailer in India should
first make it a point to spot the potential customers and accordingly plan out the product.

Language problem
Most internet retail shops use English as their mode of communication. English may not be
comprehensible to the majority of the Indian population. To increase the customer base,
content in the online retail shops should be provided in local language.

The opportunities of e-tailing industry in India are as follows:

Convenience:
Normally online stores are usually available 24 hours a day, and many consumers have internet
access both at work and at home.
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Price and selection:


One of the biggest advantages of online shopping is to find out quickly deals for items at
services with many different vendors. Search engines , on-line price comparison services
and discovering shopping items can be used to find out sellers for a particular products or
services. Some retailers also offer free shipping on sufficiently large orders. Searching an
online catalogue can be faster than browsing the physical catalogue of a brick and mortar
store.

Market research:
Retailers can use their online presence as a tool to gain valuable customer information to
forecast future customer demand. Online market research has some powerful advantages,
such as monitoring real-time buying decisions. In addition, online customers have the
knowledge and experience necessary to answer the questions, which produces more accurate
and reliable data.

Online customer service:


In India, websites are becoming new channels for conducting customer service; therefore
their general acceptance level will increase, due to the benefits provided to customers. For
example, a customer could ask for a product introduction or a personalized product in the
pre-purchase stage, and could also check the delivery status online. All such services can be
available uninterrupted online, which is almost impossible in the physical world, due to the
cost.

Promotional tool:
A website can be used as a medium to conduct promotional experiments, due to the wide
reach of the internet, and the low cost. Therefore, it will be a great opportunity for Indian
companies to promote their businesses.

Marketing tool:
A website is also an effective channel to communicate with customers. Organizations do not
need to rely solely on one-way communication media, such as TV and newspapers. The
internet provides a two-way communication channel. As a new communication channel, the
internet can provide benefits to retailers, such as low costs, interactivity, personalization,
and continuous communication.

Altius Shodh Journal of Management & Commerce

ISSN 2348 - 8891

GROWTH DRIVERS OF E-TAILING:

The key global e-tailing drivers includes, increasing broadband penetration Expansion in etailing services is closely correlated with an increase in broadband penetration. Continuing
growth in broadband uptake, as well as faster connection speeds, provides support for growth
at internet companies. Continuing increased broadband penetration will remain a key factor
in the ability of e-tailers to acquire market share at the expense of general retailers.

Better technology = better services

Increased product diversity

More confidence in payment options

Reducing the incremental mark-up

THE ROLE OF SOCIAL SITES IN SHOPPING RESEARCH

Today's shopper is savvy with almost black belt certification in researching product and
pricing. There is a method to their madness where they are willing to make a significant
investment in time when the reward reaped is finding the right product at the right price.
Concept of research via social sites and given their continued influence and time spent by
consumers in these communities, it appears to be a divide between community and commerce
as just significant number of customers take advantage of social sites for research.

EXTERNAL BARRIERS TO E-TAILING

There are many external barriers to the diffusion and implementation of e-commerce. These
barriers include:
1. The high cost of internet access;
2. Lack of effective payment facilities and banking services;
3. Advanced retail network;
4. A cultural lack of trust;
5. Lack of government policy and legal frameworks;
6. Lack of education in e-commerce;
7. Customers' need for the physical shopping experience.

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INTERNAL BARRIERS TO E-TAILING


Barriers to the implementation of e-commerce implementation not only exist in the external
environment, but also in the internal organizational environment. These barriers are:
1.

Business processes;

2.

Strategic direction;

3.

Senior management commitment to e-commerce;

4.

Senior management knowledge of e-commerce;

5.

Investment;

6.

IT/IS expertise;

7.

Organizational mission;

8.

Profit objectives;

9.

Information systems;

10. Integration;
11. Organizational culture;
12. Product categories and prices.

EFFECTIVE STRATEGIES ON E-TAILING IN INDIA

Prompt delivery
The first major challenge faced by e-retailers was high expectations for prompt delivery of
Web orders by customers .One of several delivery options such as, express (next day),
priority (three to four days) and regular (five to ten days) may be selected and paid for by
the customer while ordering the product.

Supply chain
Ensuring supply of required amount of raw materials and products at the right time for the
right price as well as proper slotting and picking methods are very much important for effective
operating of e-tailing. E-retailers must have reliable supply-chain partners with the support
of a back end supply-chain management systems. Proper slotting and picking methods based
on the size, weight and demand nature must be devised to receive, slot, pick and pack
properly. A warehouse management system should be a part of the supply chain management
system to oversee the activities like order sorting, packing, and final bar coding for shipment.

Altius Shodh Journal of Management & Commerce

ISSN 2348 - 8891

Demand nature
Successful e-retailing companies will have to assess the supply and demand condition so
that they can meet unpredictable demand. A news-worthy event can create a huge demand
for a product within a short time. Seasonality factor also contributes to the unpredictability
of the demand nature. Popular items and may need to be assessed on its future demand to
avoid processing delays. Proper use of seasonality factors in forecasting models may contribute
to better demand forecasting for highly unpredictable items.

Reverse logistics
In any retail business, some products are returned from the point of consumption. Therefore,
the challenge is setting up infrastructure and procedures for reverse logistics. The process is
not only inevitable but also gaining importance as a viable, sustainable and profitable business
strategy. Procedures need to be established for returning orders. Drop-off points must also
be set up. A customer wanting to return merchandise should be encouraged to have
authorization to do so through the Web site. The e-tailors need to have an understandable
product return policy on the Web. A copy of the same policy may also be included in the
shipped package. A customer must identify the reason for returning the item. Based on the
reason, one of several actions such as, restock, recycle, remanufacture, send back to the
supplier may be taken. A flexible sorting or packaging line in the warehouse may be used to
handle returned items when needed.

Accuracy
To achieve high levels of accuracy in e-tailing business, the firm must consider the right
equipment to increase accuracy. This will augment the nature of its operations, and the level
of adjustment that managers are willing to make to minimize human errors. But if companies
gather and analyze warehouse performance statistics regularly, invest in automated data
collection and verification systems and equipment to the extent possible, create efficient
picking procedures, and train all employees thoroughly, then they can improve their accuracy
level and streamline the customer fulfillment process. Order fulfillment rate, accuracy of
order fulfillment and cost per order fulfillment are among important indicators need to be
evaluated routinely.

Altius Shodh Journal of Management & Commerce

ISSN 2348 - 8891

CONCLUSION

There are several important lessons to be learnt in the transition from bricks and mortar
retail to the digital e-tail world. While skills like speed, differentiation, and branding are
equally if not more important in the digital world, it is the ability to transform core operations
and practices to this new medium which might make the difference between success and
failure.Consumers are always hungry for modern ways of shopping. Indian retail sector is
growing fast and its employment potential is growing fast. The retail scene is changing really
fast. Retaining the e-customer is a tough challenge. The internet customer is very hard to
predict and is different from the normal customer.The current growth in e-tailing was driven
by start-ups, and backed by venture capital and entrepreneurship. While the Indian e-tailing
market is yet to achieve a steady state, these initial entrants have succeeded in capturing the
imagination of a sizeable consuming class. These have also acted as a catalyst in the creation
of an ecosystem necessary for the growth of e-tailing. E-tailing is an integrator of technology,
logistics, and infrastructure, and creates a relatively efficient marketplace for vendors and
consumers. At present, the Indian e-tailing market is limited by its incapability to play the
role of an efficient integrator. E-tailing possesses the potency to create new capabilities
which India needs and offer viable employment to Indian youth over the next decade. It has
the prowess to act as a catalyst and support the growth of new skills and industries.

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