.E- Retailing.

A new business tool to capture the existing market

Dissertation submitted in partial fulfillment of the requirements of the

two year full-time Post Graduate Diploma in Retail Management
Programme

Submitted by
.Nagendra Pratap Singh
Roll No: FT (RM)-08-114
Batch: 2008-2010
Institute For Integrated Learning in Management
Graduate School of Management
16, Knowledge Park
1

Greater Noida 201 306

March 2010

Contents
Page No.
1.
2.
3.
4.
5.
6.
7.
8.
9.

Executive Summery
.. 5
Objective
.. 6
About Retail
.. 7
Prediction for Retail Sector.. 10
About E-Retailing
.. 11
E- Commerce Market 12
Advantages 18
Fraud and Security Concern
.. 21
Problem faced by customer 25

10.Rcommendation 30
11.Conclusion
12.Bibliography

..31
.. 32

DECLARATION FORM

I hereby declare thatthe Project

workentitledE- RETAILING (A NEW BUSINESS TOOL TO CAPTURE
THE EXISTING MARKET) submitted by me for the partial fulfillment of
the Post Graduate Diploma in Retail Management Program to Institute for
Integrated Learning in Management, Greater Noida is my own original
work and has not been submitted earlier either to IILM GSM or to any
other Institution for the fulfillment of the requirement for any course of
study. I also declare that no chapter of this manuscript in whole or in part
is lifted and incorporated in this report from any earlier / other work done
by me or others.

Place

Date :

Signature of Student

Name of Student

Address

: Nagendra Pratap Singh

: 26-Gayatri Vihar, Thatipur, Gwalior, M.P.

Acknowledgement

Acknowledgement is not only a ritual but also an expression of

indebtedness to all those who have helped in the preparation process of the
project. One of the most pleasant aspect is collecting the necessary
information and compiling it is the opportunity to thank those who
actively contributed to it.

I would like to express my sincere appreciation to Prof. Ajeet Sharma his

kind help, guidance, support and encouragement throughout my project .
This project will help me to curve my personality in the best manner,
which is needed for professional career. In fact this project is the mirror of
my aspiration.

Signature
Name:- Nagendra Pratap Singh
Course:2010

PGDM(RM),2008-

Executive Summary

This project includes study of modern retailing concept which help

customer as well as shopkeeper or companies to buy or sell products at
lowest price, with in time. Now everyone wants to save there time and to
fulfill there wish E-Retailing comes in the reality. With the help of Eretailing/ E-tailing anyone can buy anything from a pen to car with in a
second. In this project I try to find out that whether this service is helpful
to the customer or will increase problems to the customers.This project is
done on secondary data, I have analysed the secondary data from different
sources like Internet, newspaper magazines etc . In the project in the
starting I have given little intro of RETAILING in INDIA and the formats
of RETAIL in India like MALLS, HYPER MARKET, Convenience store
etc.
E-retailing working has been also shown in the project how the e-retailing
is beneficial to the customers and securities concern on E-RETAILING .I
have given the advantages of E-retailing and how this modern world is
getting changed or rather say getting more and more from the usage of
internet. Top 10 companies which are based over e-retailing is also
mentioned clearly in this project
Ending of this project contains suggestions and recommendations by me
by studying some projects and some reports available on Internet.

Objectives
The objective behind making the project is to find out:
Whether e-retailing able to change the shopping experience of
customer or not.
Whether e-retailing is boom or curse for the customers and
Companies
What steps a e-retailing format companies should take to
increase the profitability.
Where people are interested in this modern way of shopping or
that traditional way.

About Retail
The word retail is derived from the French word retailer, which means
to cut off a piece or to break bulk.A retailer may be defined as a dealer
or trader who repeatedly sells goods in small quantities. The sale of goods
or commodities in small quantities directly to consumers. Of, relating to,
or engaged in the sale of goods or commodities at retail. It also means to
sell in small quantities directly to consumers.
According to PHILIP KOTLER, Retailing includes all the activities
involved in selling goods or services to the final consumers for personal
use. A Retailer or Retail store is any business enterprises whole sales
volumes comes primarily from retailing,
TYPES OF RETAIL SECTOR
Retailing is one of the pillars of the economy in India and
accounts for 35% of GDP. The retail industry is divided into
organized and unorganized sectors. Over 12 million outlets
operate in the country and only 4% of them being larger
than 500 sqft (46 m2) in size. Organized Retail
Unorganized Retail
ORGANIZED RETAIL:Organized retailing refers to trading
activities undertaken by licensed retailers, that is, those who are
registered for sales tax, income tax, etc. These include the corporate
backed hypermarkets and retail chains, and also the privately owned
large retail businesses. Organized retail segment has been growing at
a blistering pace, exceeding all previous estimates. According to a
study by Deloitte Haskins and Sells, organized retail has increased its
share from 5 per cent of total retail sales in 2006 to 8 per cent in
2007. The fastest growing segments have been the wholesale cash
and carry stores (150 per cent) followed by supermarkets (100 per
cent) and hypermarkets (75-80 per cent). Further, it estimates the
8

organized segment to account for 25 per cent of the total sales by

2011.
UNORGANIZED RETAIL: Unorganized retailing, on the other
hand, refers to the traditional formats of low-cost retailing, for
example, the local kirana shops, owner manned general stores, paan /
beedi shops, convenience stores, hand cart and pavement vendors,
etc. Unorganized retailing is defined as an outlet run locally by the
owner or caretaker of a shop that lacks technical and accounting
standardization. The supply chain and sourcing are also done locally
to meet local needs. Its organized counterpart may not obtain its
supplies from local sources.
RETAILING FORMATS IN INDIA
MALLS: The largest form of organized retailing today. Located
mainly in metro cities, in proximity to urban outskirts. Ranges from
60,000 sqft to 7,00,000sqft and above. They lend an ideal shopping
experience with an amalgamation of product, service and
entertainment; all under a common roof. Examples include Shoppers
Stop, Pyramid, and Pantaloon.
Shopping-centre development has attracted real-estate developers and
corporate houses across cities in India. As a result, from just 3 malls in
2000, India is all set to have over 220 malls by 2005. Today, the
expected demand for quality retail space in 2009 is estimated to be
around 40 million square feet. While previously it was the large,
organized retailers with their modern, up-market outlets, and direct
consumer interface- who had been a key factor driving the growth of
organized retail in the country, now it is the malls which are playing the
role.
Segmentation in malls, like up-market malls, mid-market malls,
etc., proper planning, correct identification of needs, quality products at
9

lower prices, the right store mix, and the right timing, would Ensure the
success of the mall revolution in India.
SPECIALTY STORES: Chains such as the Bangalore based Kids
Kemp, the Mumbai books retailer Crossword, RPG's Music World
and the Times Group's music chain Planet M, are focusing on specific
market segments and have established themselves strongly in their
sectors.
DISCOUNT STORES: As the name suggests, discount stores or
factory outlets, offer discounts on the MRP through selling in bulk
reaching economies of scale or excess stock left over at the season.
The product category can range from a variety of perishable/ non
perishable goods.
DEPARTMENTAL STORES: Departmental Stores are expected to
take over the apparel business from exclusive brand showrooms.
Among these, the biggest success is K Raheja's Shoppers Stop, which
started in Mumbai and now has several large stores (over 30,000 sq.
ft) across India and even has its own in store brand for clothes called
Stop!.
HYPER MARTS/SUPERMARKETS:Large self service outlets,
catering to varied shopper needs are termed as Supermarkets. These
are located in or near residential high streets. These stores today
contribute to 30% of all food & grocery organized retail sales. Super
Markets can further be classified in to mini supermarkets typically
1,000 sqft to 2,000 sqft and large supermarkets ranging from of 3,500
sqft to 5,000 sq ft. having a strong focus on food & grocery and
personal sales.

10

 CONVENIENCE STORES:These are relatively small stores 4002,000 sq. feet located near residential areas. They stock a limited
range of high-turnover convenience products and are usually open for
extended periods during the day, seven days a week. Prices are
slightly higher due to the convenience premium.
MBOs: Multi Brand outlets, also known as Category Killers, offer several
brands across a single product category. These usually do well in busy
market places and Metros.
CONTRIBUTION OF FDI IN RETAILING
India will look into the industrys demand for foreign direct
investment (FDI) for multiple products in the retail sector. FDI is already
permitted in the retail sector in some segments. There is a demand to
extend FDI in retail sector. At present, India allows 100 percent FDI in
cash- and carry wholesale trading and export trading through the
automatic route, while 51 percent FDI is permitted in single brand
retailing.
According to a join study by Assoc ham and accounting and consultancy
firm KMPG, the total retail market in India is estimated at $ 353 billion in
2008, and expected to grow at eight percent annually to touch $ 416 billion
by 2010.
The developing countries have the most preferable destination for FDI.
India is also one of the most important. It will help in
increasingemployment levels as FDI would result in market growth and
expansion which in turn will result in employment generated at various
levels.

11

ESTIMATES AND PREDICTIONS FOR RETAIL SECTOR:

At present, the industry is estimated to be at more than US$ 400 billion by
a study of McKinsey. The Economist Intelligence Unit (EIU) estimates the
retail market in India will increase to US$609.9 billion in 2010 from
US$394 billion in 2005. KPMG Report says that the organized retail
would grow at a higher rate than the GDP in the next five years. The retail
sector would generate employment for more than 2.5 million people by the
year 2010, predicts an analysis by MaFoi Management Consultants Ltd.
Traditional vis a vis Modern Format Retailers The retail boom will face a
strong competition from the 12 million mom-and-pop stores. These are
easily accessible and provide services like free home delivery and goods at
credit, which is not possible with hypermarkets and supermarkets. Buying
from Malls, Supermarkets and Department stores like Big Bazaar, Marks
& Spencers, etc. provide a different environment where one can pick and
choose from a variety of products. Owing to the entry of such big players,
the small shopkeepers fear losing their business. Reliance Retail Ltd. has
been inviting such people to join in its Dairy business as franchisees.
Growth of Retail Sector in India

12

E RETAILING
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 CommerceNet/Nielsen Media reported
that 10 million people had made purchases on the Web.
E-retailing uses internet as a medium for customers to
shop for the goods or services. It can be either pure-plays
or bricks-and-clicks. Pure-play uses internet as primary

13

means of retailing while bricks-and-clicks uses the internet

as an addition to the physical store.
Now a day retailers have started offering almost everything
under the sun on internet. From products like groceries to
services like online gaming and jobs, e-retailing covers all
frontiers.
Unfortunately, India has lagged in e-retail growth story due
to low density of internet connections, lower penetration of
credit cards and customer anxiety in using new
technologies.
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.
Today the Internet might be viewed as a huge market
potentially capable of covering the population of the whole
world. This is why electronic commerce or E-Commerce is
so attractive for many traditional businesses.
E-Commerce consists of the buying and selling of products
or services over electronic systems such as the Internet
and other computer networks. The amount of trade
conducted electronically has grown dramatically since the
large introduction of the Internet. A wide variety of
commerce is conducted in this way, including things such
as electronic funds transfer, supply chain management, e14

marketing, online marketing, online transaction processing,

electronic
data
interchange,
automated
inventory
management systems, and automated data collection
systems. Modern electronic commerce typically uses the
World Wide Web in at least some point in the transaction\'s
lifecycle.

15

The E-Commerce Market: Size and Trends

Since mid 1990s traditional traders followed large
Computer Manufacturers into the new sphere and today
you can buy practically anything through the Internet: from
a bunch of flowers to a car. The only exception seems to be
a trip to Mars. Today E-Commerce market is huge and still
growing.
The E-commerce market is totally democratic. This is
perfect capitalism: if you sell you win, if you dont sell
you loose. Its all about marketing and economic rules of
demand and supply. Certain products or services appear
more suitable for online sales; others remain more suitable
for traditional sales. Many successful purely virtual
companies deal with digital products, music, movies,
education, communication, software, photography, and
financial transactions. Examples of this type of company
include Amazon.com, Google, E-Bay and Paypal. Products
less suitable for E-Commerce include products that have a
low value-to-weight ratio, products that have a smell, taste,
or touch component, products that need trial fittings most
notably clothing and products where color integrity
appears important. Nonetheless, clothing sold through the
internet is big business in the U.S.
According to eMarketers annual report in 2006 the ECommerce market size in Europe has grown to 106 billion
($133 billion). Analysts say that it is very likely to go on
increasing and display a very fast rate of annual growth
16

up to 25%. The situation will be stable for at least five

years and the market will reach the point of 323 billion
($407 billion) by 2011.
Britain, France and Germany prevail in the European ECommerce market. These countries have the largest share
in the total figures transactions up to 72%. British ECommerce market ranks first and analysts believe it will
reach $114 billion in 2011, which is 41% higher than the
figures of 2006. Germany holds the second place. However,
it is first in the number of online-customers there are as
many as 3 million.
Some researchers also note that in the next five years the
European market might increase significantly due to the ECommerce growth in the countries like Italy, Holland and
Spain.
A wide range of goods and services can be sold through the
Internet. A large piece in this pie is held by Information
Technology. However, the share of other niches (for
instance, traveling and finance) is unexpectedly high. Real
estate, computers, hardware and software, tourism, and
financial services comprise the top of the list
The Ecommerce market is expected to touch 323 billion
($407 billion) by 2011, E Tailing or E RE-tailing market is
only about 1150 Crore INR according to a survey conducted
by Internet and Mobile Association of India and Indian
Market Research Bureau (IMRB).

17

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

Logistics
Consumers find a product of interest by visiting the website
of the retailer directly, or do a search across many different
vendors using a shopping search engine.
Once a particular product has been found on the web site
of the seller, most online retailers use shopping cart
software to allow the consumer to accumulate multiple
items and to adjust quantities, by analogy with filling a
physical shopping cart or basket in a conventional store. A
"checkout" process follows (continuing the physical-store
analogy) in which payment and delivery information is
collected, if necessary. Some stores allow consumers to
sign up for a permanent online account so that some or all
of this information only needs to be entered once. The
consumer often receives an e-mail confirmation once the
transaction is complete. Less sophisticated stores may rely
on consumers to phone or e-mail their orders (though
credit card numbers are not accepted by e-mail, for
security reasons).

Top ten e-retailers

18

1.Amazon.com
2. Planetrx.com
3. Ticketmaster.com
4. Gateway.com
5. Barnesandnoble.com
6. Mothernature.com
7. Iprint.com
8. Hallmark.com
9. Buy.com
10. Bigstar.com
Indian e-tailers: Rediff.com, Jaldi.com,
Tsnshop.com and Satyamonline.com.

Payment

19

Fabmart.com,

Online shoppers commonly use credit card to make

payments, however some systems enable users to create
accounts and pay by alternative means, such as:
Debit card
Various types of electronic money
Cash on delivery (C.O.D., offered by very few online
stores)
Cheque
Wire transfer/delivery on payment
Postal money order
Reverse SMS billing to mobile phones
Gift cards
Direct debit in some countries
Some sites will not allow international credit cards and
billing address and shipping address have to be in the
same country in which site does its business. Other sites
allow customers from anywhere to send gifts anywhere.
The financial part of a transaction might be processed in
real time (for example, letting the consumer know their
credit card was declined before they log off), or might be
done later as part of the fulfillment process.

20

21

Some online retailing sites in India

E Bay is heading the race of online retailers. In this race it
has become very difficult to determine the online retail
store that makes the products available at convenient and
cheap rates. From this very difficulty has cropped up
comparison sites. Comparison is done on the basis of an
index which is constructed from the data available from
different shopping sites. The bechna.com and the
ultop.com are such sites though many more sites are
entering this zone.
The comparison sites not only help to choose the online
sites that would be providing the best deal but also offline
as well. Sites like Rediffproductsearch, Compare India.com
have constructed the data that is taken from the
conventional local retailers. These sites help the customer
in finding out the local retail store that will best suit his
purpose.
Design
Why does electronic shopping exist? For customers it is not
only because of the high level of convenience, but also
because of the broader selection; competitive pricing and
greater access to information. For organizations it increases
their customer value and the building of sustainable
capabilities, next to the increased profits.
Information load

22

Designers of online shops should consider the effects of

information load. Mehrabian and Russel (1974) introduced
the concept of information rate (load) as the complex
spatial and temporal arrangements of stimuli within a
setting. The notion of information load is directly related to
concerns about whether consumers can be given too much
information in virtual shopping environments. Compared
with conventional retail shopping, computer shopping
enriches the information environment of virtual shopping
by providing additional product information, such as
comparative products and services, as well as various
alternatives and attributes of each alternative, etc.
Two major sub-dimensions have been identified for
information load: complexity and novelty. Complexity refers
to the number of different elements or features of a site,
which can be the result of increased information diversity.
Novelty involves the unexpected, suppressing, new, or
unfamiliar aspects of the site. A research by Huang (2000)
showed that the novelty dimension kept consumers
exploring the shopping sites, whereas the complexity
dimension has the potential to induce impulse purchases.
Consumer expectations
The main idea of online shopping is not in having a good
looking website that could be listed in a lot of search
engines and it is not about the art behind the site. It also is
not only just about disseminating information, because it is
all about building relationships and making money. Mostly,
23

organizations try to adopt techniques of online shopping

without understanding these techniques and/or without a
sound business model.
Rather than supporting the
organizations culture and brand name, the website should
satisfy consumer's expectations. A majority of consumers
choose online shopping for faster and more efficient
shopping experience. Many researchers notify that the
uniqueness of the web has dissolved and the need for the
design, which will be user centered, is very important.
Companies should always remember that there are certain
things, such as understanding the customers wants and
needs, living up to promises, never go out of style, because
they give reason to come back. And the reason will stay if
consumers always get what they expect. McDonaldization
theory can be used in terms of online shopping, because
online shopping is becoming more and more popular and
website that wants to gain more shoppers will use four
major
principles
of
McDonaldization:
efficiency,
calculability, predictability and control.
Organizations, which want people to shop more online for
them, should consume extensive amounts of time and
money to define, design, develop, test, implement, and
maintain website. Also if company wants their website to
be popular among online shoppers it should leave the user
with a positive impression about the organization, so
consumers can get an impression that the company cares
about them. The organization that wants to be acceptable
in online shopping needs to remember, that it is easier to
24

lose a customer then to gain one. Lots of researchers state

that even when site was a top-rated, it would go nowhere
if the organization failed to live up to common etiquette,
such as returning e-mails in a timely fashion, notifying
customers of problems, being honest, and being good
stewards of the customers data. Organizations that want
to keep their customers or gain new ones try to get rid of
all mistakes and be more appealing to be more desirable
for online shoppers. And this is why many designers of
webshops considered research outcomes concerning
consumer expectations. Research conducted by Elliot and
Fowell (2000) revealed satisfactory and unsatisfactory
customer experiences.
User interface
It is important to take the country and customers into
account. For example, in Japan privacy is very important
and emotional involvement is more important on a
pensions site than on a shopping site. Next to that, there is
a difference in experience: experienced users focus more
on the variables that directly influence the task, while
novice users are focusing more on understanding the
information.
There are several techniques for the inspection of the
usability. The ones used in the research of Chen &Macredie
(2005) are Heuristic evaluation, cognitive walk through and
the user testing. Every technique has its own

25

(dis-)advantages and it is therefore important to check per

situation which technique is appropriate.
When the customers went to the online shop, a couple of
factors determine whether they will return to the site. The
most important factors are the ease of use and the
presence of user-friendly features

Advantages
Convenience
Online stores are usually available 24 hours a day, and
many consumers have Internet access both at work and at
home. Other establishments such as internet cafes and
schools provide access as well. A visit to a conventional
retail store requires travel and must take place during
business hours.
Searching or browsing an online catalog can be faster than
browsing the aisles of a physical store. One can avoid
crowded malls resulting in long lines, and no parking.
Consumers with dial-up Internet connections rather than
broadband have much longer load times for content-rich
web sites and have a considerably slower online shopping
experience.
Some consumers prefer interacting with people rather than
computers because they find computers hard to use. Not
all online retailers have succeeded in making their sites
26

easy to use or reliable. On the other hand, a majority of

stores have made it easy to find the style one is looking
for, as well as the price range that is acceptable making
the shopping experience quick and efficient. The internet
has made shopping an almost effortless task.
In most cases, merchandise must be shipped to the
consumer, introducing a significant delay and potentially
uncertainty about whether or not the item was actually in
stock at the time of purchase. Most successful sites will say
whether or not a product is in supplyBricks and clicks
stores offer the ability to buy online but pick up in a nearby
store. Many stores give the consumer the delivery
company's tracking number for their package when
shipped, so they can check its status online and know
exactly when it will arrive. For efficiency reasons, online
stores generally do not ship products immediately upon
receiving an order. Orders are only filled during warehouse
operating hours, and there may be a delay of anywhere
from a few minutes to a few days to a few weeks before instock items are actually packaged and shipped. Many
retailers inform customers how long they can expect to
wait before receiving a package, and whether or not they
generally have a fulfillment backlog. A quick response time
is sometimes an important factor in consumers' choice of
merchant. Customers can choose the type of shipping they
want from overnight, to a few days. The quicker the
delivery the higher the shipping cost. A weakness of online
shopping is that, even if a purchase can be made 24 hours
27

a day, the customer must often be at home during normal

business hours to accept the delivery. For many
professionals this can be difficult, and absence at the time
of delivery can result in delays, or in some cases, return of
the item to the retailer. Automated delivery booths, such as
DHL's Packstation, have tried to address this problem.
When shopping in a retail store, customers can handle and
inspect the actual product before they purchase it.
In the event of a problem with the item - it is not what the
consumer ordered, or it is not what they expected consumers are concerned with the ease with which they
can return an item for the correct one or for a refund.
Consumers may need to contact the retailer, visit the post
office and pay return shipping, and then wait for a
replacement or refund. Some online companies have more
generous return policies to compensate for the traditional
advantage of physical stores. For example, the online shoe
retailer Zappos.com includes labels for free return shipping,
and does not charge a restocking fee, even for returns
which are not the result of merchant error. In the United
Kingdom, Online shops are prohibited from charging a
restocking fee if the consumer cancels their order in
accordance with the Consumer Protection (Distance
Selling) Act 2000.

Information and reviews

28

Online stores must describe products for sale with text,

photos, and multimedia files, whereas in a physical retail
store, the actual product and the manufacturer's packaging
will be available for direct inspection (which might involve
a test drive, fitting, or other experimentation).
Some online stores provide or link to supplemental product
information, such as instructions, safety procedures,
demonstrations, or manufacturer specifications. Some
provide background information, advice, or how-to guides
designed to help consumers decide which product to buy.
Some stores even allow customers to comment or rate
their items. There are also dedicated review sites that host
user reviews for different products.
In a conventional retail store, clerks are generally available
to answer questions. Some online stores have real-time
chat features, but most rely on e-mail or phone calls to
handle customer questions.

Price and selection

One advantage of shopping online is being able to quickly
seek out deals for items or services with many different
vendors (though some local search engines do exist to help
consumers locate products for sale in nearby stores).
Search engines, online price comparison services and
discovery shopping engines can be used to look up sellers
of a particular product or service.
29

Shipping costs (if applicable) reduce the price advantage of

online merchandise, though depending on the jurisdiction,
a lack of sales tax may compensate for this.
Shipping a small number of items, especially from another
country, is much more expensive than making the larger
shipments bricks-and-mortar retailers order. Some retailers
(especially those selling small, high-value items like
electronics) offer free shipping on sufficiently large orders.

30

Fraud and security concerns

Given the lack of ability to inspect merchandise before
purchase, consumers are at higher risk of fraud on the part
of the merchant than in a physical store. Merchants also
risk fraudulent purchases using stolen credit cards or
fraudulent repudiation of the online purchase. With a
warehouse instead of a retail storefront, merchants face
less risk from physical theft.
Secure Sockets Layer (SSL) encryption has generally solved
the problem of credit card numbers being intercepted in
transit between the consumer and the merchant. Identity
theft is still a concern for consumers when hackers break
into a merchant's web site and steal names, addresses and
credit card numbers. A number of high-profile break-ins in
the 2000s has prompted some U.S. states to require
disclosure to consumers when this happens. Computer
security has thus become a major concern for merchants
and
e-commerce
service
providers,
who
deploy
countermeasures such as firewalls and anti-virus software
to protect their networks.
Phishing is another danger, where consumers are fooled
into thinking they are dealing with a reputable retailer,
when they have actually been manipulated into feeding
private information to a system operated by a malicious
party. Denial of service attacks are a minor risk for
merchants, as are server and network outages.

31

Quality seals can be placed on the Shop web page if it has

undergone an independent assessment and meets all
requirements of the company issuing the seal. The purpose
of these seals is to increase the confidence of the online
shoppers; the existence of many different seals, or seals
unfamiliar to consumers, may foil this effort to a certain
extent. A number of resources offer advice on how
consumers can protect themselves when using online
retailer services. These include:
Sticking with known stores, or attempting to find
independent consumer reviews of their experiences; also
ensuring that there is comprehensive contact information
on the website before using the service, and noting if the
retailer has enrolled in industry oversight programs such as
trust mark or trust seal.
Before buying from a new company, evaluate the website
by considering issues such as: the professionalism and
user-friendliness of the site; whether or not the company
lists a telephone number and/or street address along with
e-contact information; whether a fair and reasonable
refund and return policy is clearly stated; and whether
there are hidden price inflators, such as excessive shipping
and handling charges.
Ensuring that the retailer has an acceptable privacy policy
posted. For example note if the retailer does not explicitly
state that it will not share private information with others
without consent.
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Ensuring that the vendor address is protected with SSL (see

above) when entering credit card information. If it does the
address on the credit card information entry screen will
start with "HTTPS".
Using strong passwords, without personal information.
Another option is a "pass phrase," which might be
something along the lines: "I shop 4 good a buy!!" These
are difficult to hack, and provides a variety of upper, lower,
and special characters and could be site specific and easy
to remember.
Although the benefits of online shopping are considerable,
when the process goes poorly it can create a thorny
situation. A few problems that shoppers potentially face
include identity theft, faulty products, and the
accumulation of spy ware. Whenever you purchase a
product, you are going to be required to put in your credit
card information and billing/shipping address. If the
website is not secure a customers information can be
accessible to anyone who knows how to obtain it. Most
large online corporations are inventing new ways to make
fraud more difficult, however, the criminals are constantly
responding to these developments with new ways to
manipulate the system. Even though these efforts are
making it easier to protect yourself online, it is a constant
fight to maintain the lead. It is advisable to be aware of the
most current technology and scams out there to fully
protect yourself and your finances. One of the hardest
areas to deal with in online shopping is the delivery of the
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products. Most companies offer shipping insurance in case

the product is lost or damaged; however, if the buyer opts
not to purchase insurance on their products, they are
generally out of luck. Some shipping companies will offer
refunds or compensation for the damage, but it is up to
their discretion if this will happen. It is important to realize
that once the product leaves the hands of the seller, they
have no responsibility (provided the product is what the
buyer ordered and is in the specified condition).

Lack of full cost disclosure

The lack of full disclosure with regards to the total cost of
purchase is one of the concerns of online shopping. While it
may be easy to compare the base 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 visible until the final
step in the checkout process. The problem is especially
evident with cross-border purchases, where the cost
indicated at the final checkout screen may not include
additional fees that must be paid upon delivery such as
duties and brokerage. Some services such as the Canadian
based Wishabi attempts to include estimates of these
additional costs, but nevertheless, the lack of general full
cost disclosure remains a concern.
Privacy

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Privacy of personal information is a significant issue for

some consumers. Different legal jurisdictions have different
laws concerning consumer privacy, and different levels of
enforcement. Many consumers wish to avoid spam and
telemarketing which could result from supplying contact
information to an online merchant. In response, many
merchants promise not to use consumer information for
these purposes, or provide a mechanism to opt-out of such
contacts.
Many websites keep track of consumers shopping habits in
order to suggest items and other websites to view. Brickand-mortar stores also collect consumer information. Some
ask for address and phone number at checkout, though
consumers may refuse to provide it. Many larger stores use
the address information encoded on consumers' credit
cards (often without their knowledge) to add them to a
catalog mailing list. This information is obviously not
accessible to the merchant when paying in cash.

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Product Suitability
Many successful purely virtual companies deal with digital
products, (including information storage, retrieval, and
modification), music, movies, office supplies, education,
communication, software, photography, and financial
transactions. Other successful marketers use Drop shipping
or affiliate marketing techniques to facilitate transactions
of tangible goods without maintaining real inventory.
Some non-digital products have been more successful than
others for online stores. Profitable items often have a high
value-to-weight ratio, they may involve embarrassing
purchases, they may typically go to people in remote
locations, and they may have shut-ins as their typical
purchasers.[citation needed] Items which can fit through a
standard letterbox such as music CDs, DVDs and books
are particularly suitable for a virtual marketer.
Products such as spare parts, both for consumer items like
washing machines and for industrial equipment like
centrifugal pumps, also seem good candidates for selling
online. Retailers often need to order spare parts specially,
since they typically do not stock them at consumer outlets
in such cases, e-commerce solutions in spares do not
compete with retail stores, only with other ordering
systems. A factor for success in this niche can consist of
providing customers with exact, reliable information about
which part number their particular version of a product

36

needs, for example by providing parts lists keyed by serial

number.
Products less suitable for e-commerce include products
that have a low value-to-weight ratio, products that have a
smell, taste, or touch component, products that need trial
fittings most notably clothing and products where
colour integrity appears important. Nonetheless, Tesco.com
has had success delivering groceries in the UK, albeit that
many of its goods are of a generic quality, and clothing
sold through the internet is big business in the U.S. Also,
the recycling program Cheapcycle sells goods over the
internet, but avoids the low value-to-weight ratio problem
by creating different groups for various regions, so that
shipping costs remain low.

Problem faced by customer:

Problems with the Payment System
People in India are not used 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. Hence different payment
options should be made available to them like the credit

37

card, cash on delivery and net banking to give them further

assurance.
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. For this the retail companies have
resorted to private guaranteed courier services as
compared to postal services.
Offline presence
The customers should be assured that the online retailers
are not only available online but offline as well. This gives
them the psychological comfort that these companies can
be relied upon.
Products offered at discounted rates
The online retailers save on the cost of building and
employee salaries. Some part of this benefit should also be
enjoyed by the online customers by a reduction in the price
of the product. The customers should be conveyed this
message that they are getting the products at a discounted
price.
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

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base, content in the online retail shops should be provided

in local language.

Another reason why the concept of e- retailing or online

retailing has not gained prominence in India is that the
Indians prefer to touch the products physically before
buying them. This facility is provided through the multibrand outlets, not available online. Studies have revealed
the preferences of the customers towards the traditional
shopping methods. Hence the retailer online should first
make it a point to spot the potentialcustomers and
accordingly plan out the product. If the customers are more
open to online shopping, then nothing can be more
beneficial. They save the time and effort to visit,
departmental stores, shopping malls, etc. products can be
delivered by a click of the mouse.

In a nut shell

Why is Ecommerce so important?

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E commerce and ETailing, from a business perspective offer

an opportunity to cater to consumers across geographies,
no operational timings, unlimited shelf space and all this
with miniscule quantity of infrastructure. For a country like
India, this business model is a good way of growing the
consumption driven economy.

Growth Drivers
The growth in the E-tailing market is driven by the need to
save time by urban India. Besides with over 2.5 billion
internet users, access to internet has also played an
important role in growing the markets. Changing
demographics (youthful India), changing lifestyles and
exposure to the developed markets sure give a fillip to this
fledgling industry. The soaring real estate costs in India
have certainly inspired many an online venture. Also Etailers have developed many innovative promotions to lure
customers and there by growing the market.
Barriers to Growth
But then all is not well in the E-tailers paradise. The cost of
customer acquisition is pretty high in India about 1100
INR/customer which eats into the margins, as most goods
retailed are low value items such as books, CDs and
electronic gadgets. High margin goods such as apparel are
not very popular because of the touch and feel factor. Most
Indians are not comfortable using their credit cards for
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shopping and there is always a fear of what you see may

not be what you get. There may be a problem with
complaint resolution, especially after receipt of wrong
goods or delayed delivery.

The Real Issues

The Indian Retail industry has always thrived on
personalization. The grocer, tailor or even the mom n shop
apparel store owner knows the preferences, remembers
customers taste, budget and previous purchases. They
sense the customers mood too which no CRM software
can claim to do.
Trying to personalize each customers experience might
be one way to grow.
The Indian consumer is still very need oriented, not very
impulse or deal oriented like the American counterparts.
Hence it might make sense to create real consumer centric
promotions constantly that provide real value to the Indian
consumer. Slowly but surely this is happening in India.
There have been horror stories about receipt of bad or
wrong goods, delayed deliveries, no response from the
company which adds up to not trusting the online
retailers. Through this changing albeit slowly, thanks to
automation and technical integration.
Touch points to focus on
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* 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 customer
relationship, retention and acquisition.
* 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.
* 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 retailers 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.
* Comparison Shopping and Customer Reviews --All the Etailers 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 andwize.com is
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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.

RECOMMENDATIONS

Now a days customer wants to save there time from

any thing so they like to buy things online but due to
security reasons they dont. So those companies who
are in the field of E-Tailing they should make secure the
transactions made by customer to win their faith.
As we all know that India is a developing country and
she is getting better and better ever moment but still
there are some fields where we are not as good as
other countries like USA,Britain,France, Germany etc.
but we try to use the same technology or facility over
hear. We need to understand that things which are
successfully working over there will not work with
same quality and strength until Infrastructure for that
service will not upto the mark in our country.
Still Indian customers are not aware about this kind of
facility is available to them, they still like to buy things
after visiting the shops.Companies which are in that
business need to increase awareness among people by
43

advertisement and customer should also be informed

that how to purchase goods online.
Generally customer complains that most of the
companies are failed to provide products on time, they
even not sure that whatever they ordered will surely
reached to them. So Delivery time should be taken into
consideration.
If any complain registered by the customer then it
should be solved within time andcompanies should try
to find out quick way of solving the frauds complains. It
willhwlp company to win the faith of customers.
The process of online purchasing should be simple and
easier for customer so that they can easily access or
order whatever they want. So many customer do not
buy products from internet although they know that
they can buy it online and they have access too
because they do not want to spend their time in finding
the right product. They prefer to go to the market and
buy it because they know where they found it.

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CONCLUSION
Now a days fashion of e-retailing is increasing day by day,
youth are the movers who want to try this facilities and in
metro cities online buying is increasing very rapidly. Now
they use online banking facility, book their movie ticket,
railway ticket, recharge their mobile online. But in two tier
cities online facilities are not popular. They still buy railway
ticket, movie ticket with the help of broker or personally
standing in a queue. One reason is that they do not believe
on these facilities due to some cases of leak of personal
data and second one is penetration of internet user is very
low in two tier cities.
Consumers preferences are changing rapidity and
becominghighly diversified. It is difficult for the retail stores
to satisfy all the needs of the customers. Themost of the
consumers want to get some attractive prices, good
schemes and offers on everypurchases and a shopping
comfort as well. Those who are able to purchase their
needs andwant for a month in a bulk prefers to go to the
retail chains. With the help of online shopping facility
retailer can fulfill the need and demand of their customers
and able to provide better services to their customers.
In India online shopping is still not a preferred way of
shopping because customers are facing some problem
regarding fraud, privacy, hidden charges, on time delivery
etc. Indiansare not so much technosavy that help those
who are ready to cheat with the customers. Companies
45

should need to promote or try to tell their customers about

online shopping facility so that those who are aware about
this they will use it at least onceand those who donot know
they will think about using it. Companies need to find out
that what type of problem customer are facing while using
online shopping facility and try to salve there problem so
that customer will find it easy in comparison to other way
of shopping.
Slowly-Slowly time will changeas the internet uses are
increasing. Future of e retailing is bright in India and now
slowly-2 people are changing their perception and accept
the changes comes in the buying process.

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BIBLIOGRAPHY

www.google.com
www.Ask.com
www.wikipedia.com
http://books.google.co.in/books?
id=zrFlIcn7enwC&printsec=frontcover&dq=e+retailing&source=bl&
ots=j0NfykUTdG&sig=NTFC9z2Ty8SohyupmGsLyYfTRyU&hl=en
&ei=qGeaS7jKH9G3rAe96unEAg&sa=X&oi=book_result&ct=resul
t&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=true

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