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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

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