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Introduction to retailing. IR – Class 4 26 December 2009. Scope of Discussion. Defining E-tailing Objectives of E-tailing . When to E-tail Service aspects of E-tailing Conventional Retail Vs E-tailing Organizational Perspective of E-tailing Advantages to E-tailing Barriers to E-tailing

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Introduction to retailing

Introduction to retailing

IR – Class 4

26December 2009

Scope of discussion
Scope of Discussion

  • Defining E-tailing

  • Objectives of E-tailing.

  • When to E-tail

  • Service aspects of E-tailing

  • Conventional Retail Vs E-tailing

  • Organizational Perspective of E-tailing

  • Advantages to E-tailing

  • Barriers to E-tailing

  • E-tailing in India

  • The future of E-tailing

Defining e tailing
Defining E-tailing

  • E-tailing is nothing but ELECTRONIC RETAILING.

  • It is a retail format in which the retailer and customer communicate with each other through an interactive electronic network (internet, mobile telephony, interactive TV etc) (Levy & Weitz, 2001)

E tail categories
E-tail- Categories

Electronic Retail

Non-store e-tailing

Internet e-tailing

Websites, Mobile commerce platforms etc.

Television, E-kiosks

Stages of e tailing
Stages of e-tailing


    • Provide information about the company, its products and its contact details.


    • Integrate the monetary transaction ability to their websites.


    • Brings the Internet into the brick-and-mortar location with browser-based kiosks, POS, or terminals

    • Provides additional information from manufacturers' sites, and allow for online orders of items not carried at that brick-and-mortar location.


    • The process of focusing on customer orders and engineering delivery process from “Order to Delivery”.


    • The highest form of achieving Customization through digitization. (eg: McLaren Mercedes)

Objectives of e tailing
Objectives of E-tailing

  • Alternate channel of Product selling

  • Information Dissemination

  • Customer contact.

  • Value Engineering

  • Extend positive brand equity to online and electronic medium.

When to e tail
When to E-tail??

The point of entry for organizations into the e-tailing format has to be discovered using the following pointers.

  • Addressing Geographic diversity

  • Extendable offline equity to the online channel

  • Changing Customer preferences

  • Organizational Growth strategies (Product Vs Market strategies)

Objective of e retailing
Objective of e-retailing

  • To complete product purchase transactions…

  • e-retailing exhibits more of the characteristics of a service transaction than a goods transaction.

  • Unique benefits to the consumer

    • Time saved

    • Increased convenience

    • Reduced risk of dissatisfaction

  • The product search and evaluation facility is provided and the product delivery service is contracted before the tangible good is received

  • The heterogeneity in delivery quality is less severe in e-retailing - because of the uniformity of computer-based transactions.

Retailing vs e tailing
Retailing vs. E-tailing

  • A retailer is restricted to a particular location

  • A brick-and-mortar retailer has to identify a good location for his operations and wait for customers.

  • A retailer has to spend considerable time, effort and money in setting up his shop, stocking inventory and creating display patterns.

  • Customer retention is achieved through better offers, loyalty programs etc.

An e-tailer can go global

An e-tailer has to virtually attract a customer to his site and offer him exemplary services

Thanks to web-driven retailing, an e-tailer has no such hassles

The primary aim of every e-tailer is to attract a prospective customer to his e-tail site. That calls for a large adspend.

Retaining an e-tail customer is certainly a costly affair. For, in the world of the web there is nothing such as loyalty.

Barriers to e tailing
Barriers to E-tailing

  • Lack of trust

  • Payment gateways not clear

  • Security concerns

  • Transaction fulfillment is questioned

  • No integration between online and offline stores

  • Physical large shopping malls themselves are a new concept in India

E tailing in india
E-tailing in India

  • According to leading consultants KSA Technopak, the Organized Retail market in India is estimated to be around 5000 crores by 2007. Currently it is around 1000 crores.

  • The E-tail market in India is estimated to be around 100 crores.

The future of e tailing
The Future of E-tailing

  • The future of E-tailing is connected with global PC, Internet and Mobile Telephone penetration.

  • Spread of Mobile platforms and maturity of financial markets

  • Comfort levels of Customers increasing when it comes to procuring through electronic channels.

Characteristics of successful e tailing
Characteristics of Successful E-Tailing

  • High brand recognition

  • A guarantee provided by highly reliable or well-known vendors

  • Digitized format

  • Relatively inexpensive items

  • Frequently purchased items

  • Commodities with standard specifications

  • Well-known packaged items that cannot be opened even in a traditional store

E retailing business models
E-Retailing Business Models

  • Classification by Distribution Channel

    • Mail-order retailers that go online

    • Direct marketing from manufacturers

    • Pure-play e-tailers

    • Click-and-mortar retailers

    • Internet (online) malls

Online purchase decision aids
Online Purchase-Decision Aids

  • Shopping portals

    • Gateways to e-storefronts and e-malls; may be comprehensive or niche oriented

  • Shopping robots (shopping agents or shopbots)

    • Tools that scout the Web on behalf of consumers who specify search criteria

  • Business Ratings Sites


  • Trust Verification Sites

    • TRUSTe (,

  • Other Shopper Tools

    • Escrow services

    • Communities of consumers who offer advice and opinions

    • E-wallet (or e-purse)

Online purchase decision aids1
Online Purchase-Decision Aids

  • Other Shopper Tools

    •’s A9 Search Engine

      • Remembers information

      • A user can make notes about any Web page and search them

      • Offers a new way to store and organize bookmarks

      • Recommends new sites and favorite old sites specifically for the user to visit

Amazon com toys r us & Toys“R”Us

  • Alliance between and Toys“R”Us

  • expertises in e-tailing business, but could not get best deal from toy manufacturers

  • Toys“R”Usis the best in toy industry but failed in e-tailing

  • Seemed to be a promising agreement

  • However, they sued each other after 4 years out of 10-year agreement.

    • Toy“R”Us wanted amazon to sell only its products

    • Amazon interpreted the agreement to allow it to sell other companies’ products

Issues in e tailing
Issues in E-Tailing


The removal of organizations or business process layers responsible for certain intermediary steps in a given supply chain


The process whereby intermediaries (either new ones or those that had been disintermediated) take on new intermediary roles

The b2c supply chain
The B2C Supply Chain

Issues in e tailing1
Issues in E-Tailing

  • Channel conflict

    Situation in which an online marketing channel upsets the traditional channels due to real or perceived damage from competition

  • Determining the right price

  • Personalization

    • Mass customization

  • Fraud and illegal activities

  • How to make customers happy

    • Need market research