project reprt dudeee

7/31/2019 Project Reprt Dudeee

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A PROJECT REPORT

ON

E-RETAILING

(A new business tool to capture the existing market)Project work submitted in partial fulfillment of the requirement for award of the POST GRADUATE DIPLOMA IN MANAGEMENT

By

SAYED HABIBULLA

(10PGDM0017)

UNDER THE ESTEEMED GUIDANCE OF

Prof. MOHANTY

(DEPARTMENT OF MARKETING AND LOGISTICS)

INTERNATIONAL SCHOOL OF INFORMATION TECHNOLOGY

BUSINESS SCHOOL

HYDERABAD

2012


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CONTENTS

INDEX PAGE No.

1. Executive Summery .. 1

2. Objective .. 2 3. About Retail .. 3 4. Prediction for Retail Sector . . 65. About E-Retailing .. 7 6. E- Commerce Market .. 87. Advantages .. 148. Fraud and Security Concern .. 16

9. Problem faced by customer .. 20

10. Recommendation .. 23

11. Conclusion ..24

12. Bibliography . 25


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Executive Summary

This project includes study of modern retailing concept which help customer as well asshopkeeper 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 thereality. With the help of E-retailing/ E-tailing anyone can buy anything from a pen to carwith in a second. In this project I try to find out that whether this service is helpful to thecustomer or will increase problems to the customers. This project is done on secondarydata, I have analyzed the secondary data from different sources like Internet, newspapermagazines etc . In the project in the starting I have given little intro of RETAILING in INDIAand 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 tothe 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 andmore from the usage of internet. Top 10 companies which are based over e-retailing isalso mentioned clearly in this project

Ending of this project contains suggestions and recommendations by me by studyingsome projects and some reports available on Internet.


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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.


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About Retail

The word retail is derived from the French word retailer, which means to cut off apiece or to break bulk.A retailer may be defined as a dealer or trader who repeatedlysells goods in small quantities. The sale of goods or commodities in small quantitiesdirectly to consumers. Of, relating to, or engaged in the sale of goods or commodities atretail. It also means to sell in small quantities directly to consumers .According to PHILIP KOTLER, Retailing includes all the activities involved in sellinggoods or services to the final consumers for personal use. A Retailer or Retail store is anybusiness 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. Theretail industry is divided into organized and unorganized sectors. Over 12 million outletsoperate 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 undertakenby 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 theprivately owned large retail businesses. Organized retail segment has been growingat a blistering pace, exceeding all previous estimates. According to a study byDeloitte Haskins and Sells, organized retail has increased its share from 5 per centof total retail sales in 2006 to 8 per cent in 2007. The fastest growing segmentshave been the wholesale cash and carry stores (150 per cent) followed bysupermarkets (100 per cent) and hypermarkets (75-80 per cent). Further, itestimates the organized segment to account for 25 per cent of the total sales by2011.

UNORGANIZED RETAIL: Unorganized retailing, on the other hand, refers to thetraditional formats of low-cost retailing, for example, the local kirana shops, ownermanned general stores, paan / beedi shops, convenience stores, hand cart andpavement vendors, etc. Unorganized retail ing is defined as an outlet run locally bythe owner or caretaker of a shop that lacks technical and accountingstandardization. The supply chain and sourcing are also done locally to meet localneeds. Its organized counterpart may not obtain its supplies from local sources.


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RETAILING FORMATS IN INDIA

MALLS: The largest form of organized retailing today. Located mainly in metrocities, in proximity to urban outskirts. Ranges from 60,000 sqft to 7,00,000sqft andabove. They lend an ideal shopping experience with an amalgamation of product,

service and entertainment; all under a common roof. Examples include ShoppersStop, Pyramid, and Pantaloon.

Shopping-centre development has attracted real-estate developers and corporatehouses across cities in India. As a result, from just 3 malls in 2000, India is all set tohave over 220 malls by 2005. Today, the expected demand for quality retail space in2009 is estimated to be around 40 million square feet. While previously it was thelarge, organized retailers with their modern, up-market outlets, and direct consumerinterface- 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 lower prices, the rightstore mix, and the right timing, would Ensure the success of the mall revolution inIndia.

SPECIALTYSTORES : Chains such as the Bangalore based Kids Kemp, the Mumbaibooks retailer Crossword, RPG's Music World and the Times Group's music chain

Planet M, are focusing on specific market segments and have establishedthemselves 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 orexcess stock left over at the season. The product category can range from a varietyof perishable/ non perishable goods.

DEPARTMENTAL STORES: Departmental Stores are expected to take over the

apparel business from exclusive brand showrooms. Among these, the biggestsuccess is K Raheja's Shoppers Stop, which started in Mumbai and now has severallarge stores (over 30,000 sq. ft) across India and even has its own in store brand forclothes called Stop!.

HYPER MARTS/SUPERMARKETS: Large self service outlets, catering to variedshopper needs are termed as Supermarkets. These are located in or nearresidential high streets. These stores today contribute to 30% of all food & grocery


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organized retail sales. Super Markets can further be classified in to minisupermarkets typically 1,000 sqft to 2,000 sqft and large supermarkets rangingfrom of 3,500 sqft to 5,000 sq ft. having a strong focus on food & grocery andpersonal sales .

CONVENIENCE STORES: These are relatively small stores 400-2,000 sq. feetlocated near residential areas. They stock a limited range of high-turnoverconvenience 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 asingle 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) formultiple products in the retail sector. FDI is already permitted in the retail sector in somesegments. There is a demand to extend FDI in retail sector. At present, India allows 100percent FDI in cash- and carry wholesale trading and export trading through theautomatic 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, thetotal retail market in India is estimated at $ 353 billion in 2008, and expected to grow ateight percent annually to touch $ 416 billion by 2010.The developing countries have the most preferable destination for FDI. India is also oneof the most important. It will help in increasing employment levels as FDI would result inmarket growth and expansion which in turn will result in employment generated atvarious levels.


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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 willincrease to US$609.9 billion in 2010 from US$394 billion in 2005. KPMG Report says thatthe organized retail would grow at a higher rate than the GDP in the next five years. Theretail sector would generate employment for more than 2.5 million people by the year2010, predicts an analysis by MaFoi Management Consultants Ltd. Traditional vis a visModern Format Retailers The retail boom will face a strong competition from the 12million mom-and-pop stores. These are easily accessible and provide services like freehome delivery and goods at credit, which is not possible with hypermarkets andsupermarkets. Buying from Malls, Supermarkets and Department stores like Big Bazaar,Marks & Spencers, etc. provide a different environment where one can pick and choosefrom a variety of products. Owing to the entry of such big players, the small shopkeepersfear losing their business. Reliance Retail Ltd. has been inviting such people to join in itsDairy business as franchisees.

Growth of Retail Sector in India


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E Retailing

E-tailing began to work for some major corporations and smaller entrepreneurs as earlyas 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-Telreported that they had sold their millionth car over the Web, and Commerce Net/NielsenMedia 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. Itcan be either pure-plays or bricks-and-clicks. Pure-play uses internet as primary 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 allfrontiers.

Unfortunately, India has lagged in e-retail growth story due to low density of internetconnections, lower penetration of credit cards and customer anxiety in using newtechnologies.

During the dotcom boom Ecommerce was the sunrise industry, the one that wouldchange 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 aboutEcommerce in India.

Today the Internet might be viewed as a huge market potentially capable of covering thepopulation of the whole world. This is why electronic commerce or E-Commerce is soattractive for many traditional businesses.

E-Commerce consists of the buying and selling of products or services over electronicsystems such as the Internet and other computer networks. The amount of tradeconducted electronically has grown dramatically since the large introduction of theInternet. A wide variety of commerce is conducted in this way, including things such aselectronic funds transfer, supply chain management, e-marketing, online marketing,online transaction processing, electronic data interchange, automated inventorymanagement systems, and automated data collection systems. Modern electroniccommerce typically uses the World Wide Web in at least some point in the transaction\'slifecycle


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The E-Commerce Market: Size and Trends

Since mid 1990s traditional traders followed large Computer Manufacturers into the newsphere 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-Commercemarket is huge and still growing.

The E-commerce market is totally democratic. This is p erfect capitalism: if you sell youwin, if you dont sell you loose. Its all about marketing and ec onomic rules of demandand supply. Certain products or services appear more suitable for online sales; othersremain more suitable for traditional sales. Many successful purely virtual companies dealwith 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 thathave 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 colorintegrity appears important. Nonetheless, clothing sold through the internet is bigbusiness in the U.S.

According to eMarketers annual rep ort in 2006 the E-Commerce market size in Europehas grown to 106 billion ($133 billion). Analysts say that it is very likely to go onincreasing and display a very fast rate of annual growth up to 25%. The situation will bestable for at least five year s and the market will reach the point of 323 billion ($407billion) by 2011.

Britain, France and Germany prevail in the European E-Commerce market. Thesecountries have the largest share in the total figures transactions up to 72%. British E -Commerce market ranks first and analysts believe it will reach $114 billion in 2011, whichis 41% higher than the figures of 2006. Germany holds the second place. However, it isfirst 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 E-Commerce growth in the countries like Italy, Hollandand Spain.

A wide range of goods and services can be sold through the Internet. A large piece in thispie is held by Information Technology. However, the share of other niches (for instance,traveling and finance) is unexpectedly high. Real estate, computers, hardware andsoftware, tourism, and financial services comprise the top of the list


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The Ecommerce market is expected to touch 323 billion ($407 billion) by 2011, E Tailingor E RE-tailing market is only about 1150 Crore INR according to a survey conducted byInternet and Mobile Association of India and Indian Market Research Bureau (IMRB).

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 chainmodel and changing urban lifestyles

Logistics

Consumers find a product of interest by visiting the website of the retailer directly, or doa 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 onlineretailers use shopping cart software to allow the consumer to accumulate multiple itemsand to adjust quantities, by analogy with filling a physical shopping cart or basket in aconventional store. A "checkout" process follows (continuing the physical-store analogy)in which payment and delivery information is collected, if necessary. Some stores allowconsumers to sign up for a permanent online account so that some or all of thisinformation only needs to be entered once. The consumer often receives an e-mailconfirmation once the transaction is complete. Less sophisticated stores may rely onconsumers to phone or e-mail their orders (though credit card numbers are not acceptedby e-mail, for security reasons).


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Top ten e-retailers

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, Fabmart.com, Tsnshop.com andSatyamonline.com.

Payment

Online shoppers commonly use credit card to make payments, however some systemsenable 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


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Some sites will not allow international credit cards and billing address and shippingaddress have to be in the same country in which site does its business. Other sites allowcustomers from anywhere to send gifts anywhere. The financial part of a transactionmight be processed in real time (for example, letting the consumer know their credit cardwas declined before they log off), or might be done later as part of the fulfillment

process.

Some online retailing sites in India

E Bay is heading the race of online retailers. In this race it has become very difficult todetermine the online retail store that makes the products available at convenient andcheap rates. From this very difficulty has cropped up comparison sites. Comparison isdone on the basis of an index which is constructed from the data available from differentshopping 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 thebest deal but also offline as well. Sites like Rediffproductsearch, Compare India.com haveconstructed the data that is taken from the conventional local retailers. These sites helpthe 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 levelof convenience, but also because of the broader selection; competitive pricing andgreater access to information. For organizations it increases their customer value and thebuilding of sustainable capabilities, next to the increased profits.

Information load

Designers of online shops should consider the effects of information load. Mehrabian andRussel (1974) introduced the concept of information rate (load) as the complex spatialand temporal arrangements of stimuli within a setting. The notion of information load isdirectly related to concerns about whether consumers can be given too muchinformation in virtual shopping environments. Compared with conventional retailshopping, computer shopping enriches the information environment of virtual shoppingby providing additional product information, such as comparative products and services,as well as various alternatives and attributes of each alternative, etc.


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Two major sub-dimensions have been identified for information load: complexity andnovelty. Complexity refers to the number of different elements or features of a site,which can be the result of increased information diversity. Novelty involves theunexpected, 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 belisted in a lot of search engines and it is not about the art behind the site. It also is notonly just about disseminating information, because it is all about building relationshipsand making money. Mostly, organizations try to adopt techniques of online shoppingwithout understanding these techniques and/or without a sound business model. Rather

than supporting the organizations culture and brand name, the website should satisfyconsumer's expectations. A majority of consumers choose online shopping for faster andmore efficient shopping experience. Many researchers notify that the uniqueness of theweb has dissolved and the need for the design, which will be user centered, is veryimportant. Companies should always remember that there are certain things, such asunderstanding 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 consumersalways get what they expect. McDonaldization theory can be used in terms of onlineshopping, 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 consumeextensive amounts of time and money to define, design, develop, test, implement, andmaintain website. Also if company wants their website to be popular among onlineshoppers it should leave the user with a positive impression about the organization, soconsumers can get an impression that the company cares about them. The organizationthat wants to be acceptable in online shopping needs to remember, that it is easier tolose a customer then to gain one. Lots of researchers state that even when site was atop -rated, it would go nowhere if the organizat ion failed to live up to commonetiquette, 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 wantto keep their customers or gain new ones try to get rid of all mistakes and be moreappealing to be more desirable for online shoppers. And this is why many designers of webshops considered research outcomes concerning consumer expectations. Research


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conducted by Elliot and Fowell (2000) revealed satisfactory and unsatisfactory customerexperiences.

User interface

It is important to take the country and customers into account. For example, in Japanprivacy is very important and emotional involvement is more important on a pensionssite than on a shopping site. Next to that, there is a difference in experience: experiencedusers focus more on the variables that directly influence the task, while novice users arefocusing more on understanding the information.

There are several techniques for the inspection of the usability. The ones used in theresearch of Chen &Macredie (2005) are Heuristic evaluation, cognitive walk through andthe user testing. Every technique has its own (dis-)advantages and it is thereforeimportant to check per situation which technique is appropriate.

When the customers went to the online shop, a couple of factors determine whetherthey will return to the site. The most important factors are the ease of use and thepresence of user-friendly features


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Advantages

Convenience

Online stores are usually available 24 hours a day, and many consumers have Internetaccess both at work and at home. Other establishments such as internet cafes andschools provide access as well. A visit to a conventional retail store requires travel andmust take place during business hours.

Searching or browsing an online catalog can be faster than browsing the aisles of aphysical store. One can avoid crowded malls resulting in long lines, and no parking.Consumers with dial-up Internet connections rather than broadband have much longerload times for content-rich web sites and have a considerably slower online shoppingexperience.

Some consumers prefer interacting with people rather than computers because they findcomputers hard to use. Not all online retailers have succeeded in making their sites easyto use or reliable. On the other hand, a majority of stores have made it easy to find thestyle one is looking for, as well as the price range that is acceptable making the shoppingexperience quick and efficient. The internet has made shopping an almost effortless task.

In most cases, merchandise must be shipped to the consumer, introducing a significantdelay 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 insupplyBricks 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 packagewhen 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 uponreceiving an order. Orders are only filled during warehouse operating hours, and theremay be a delay of anywhere from a few minutes to a few days to a few weeks before in-stock items are actually packaged and shipped. Many retailers inform customers howlong 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 importantfactor in consumers' choice of merchant. Customers can choose the type of shipping theywant 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 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 resultin delays, or in some cases, return of the item to the retailer. Automated delivery booths,


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such as DHL's Packstation, have tried to address this problem. When shopping in a retailstore, 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 notwhat 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 thetraditional advantage of physical stores. For example, the online shoe retailerZappos.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 theirorder in accordance with the Consumer Protection (Distance Selling) Act 2000.

Information and reviews

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 packagingwill be available for direct inspection (which might involve a test drive, fitting, or otherexperimentation).

Some online stores provide or link to supplemental product information, such asinstructions, safety procedures, demonstrations, or manufacturer specifications. Someprovide background information, advice, or how-to guides designed to help consumersdecide which product to buy.

Some stores even allow customers to comment or rate their items. There are alsodedicated review sites that host user reviews for different products.

In a conventional retail store, clerks are generally available to answer questions. Someonline stores have real-time chat features, but most rely on e-mail or phone calls to

handle customer questions.

Price and selection


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

Shipping costs (if applicable) reduce the price advantage of online merchandise, thoughdepending on the jurisdiction, a lack of sales tax may compensate for this.

Shipping a small number of items, especially from another country, is much moreexpensive than making the larger shipments bricks-and-mortar retailers order. Someretailers (especially those selling small, high-value items like electronics) offer freeshipping on sufficiently large orders.

Fraud and security concernsGiven the lack of ability to inspect merchandise before purchase, consumers are at higherrisk of fraud on the part of the merchant than in a physical store. Merchants also riskfraudulent purchases using stolen credit cards or fraudulent repudiation of the onlinepurchase. With a warehouse instead of a retail storefront, merchants face less risk fromphysical 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. Identitytheft is still a concern for consumers when hackers break into a merchant's web site andsteal names, addresses and credit card numbers. A number of high-profile break-ins inthe 2000s has prompted some U.S. states to require disclosure to consumers when thishappens. 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 privateinformation to a system operated by a malicious party. Denial of service attacks are aminor risk for merchants, as are server and network outages.

Quality seals can be placed on the Shop web page if it has undergone an independentassessment 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 manydifferent seals, or seals unfamiliar to consumers, may foil this effort to a certain extent. A


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number of resources offer advice on how consumers can protect themselves when usingonline retailer services. These include:

Sticking with known stores, or attempting to find independent consumer reviews of theirexperiences; also ensuring that there is comprehensive contact information on the

website before using the service, and noting if the retailer has enrolled in industryoversight 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 atelephone number and/or street address along with e-contact information; whether a fairand reasonable refund and return policy is clearly stated; and whether there are hiddenprice inflators, such as excessive shipping and handling charges.

Ensuring that the retailer has an acceptable privacy policy posted. For example note if theretailer does not explicitly state that it will not share private information with otherswithout consent.

Ensuring that the vendor address is protected with SSL (see above) when entering creditcard information. If it does the address on the credit card information entry screen willstart 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 tohack, and provides a variety of upper, lower, and special characters and could be sitespecific and easy to remember.

Although the benefits of online shopping are considerable, when the process goes poorlyit can create a thorny situation. A few problems that shoppers potentially face includeidentity theft, faulty products, and the accumulation of spy ware. Whenever youpurchase a product, you are going to be required to put in your credit card informationand billing/shipping address. If the website is not secure a customers information can beaccessible 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 constantlyresponding to these developments with new ways to manipulate the system. Eventhough these efforts are making it easier to protect yourself online, it is a constant fightto maintain the lead. It is advisable to be aware of the most current technology andscams out there to fully protect yourself and your finances. One of the hardest areas todeal with in online shopping is the delivery of the products. Most companies offershipping insurance in case the product is lost or damaged; however, if the buyer opts notto purchase insurance on their products, they are generally out of luck. Some shipping


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companies will offer refunds or compensation for the damage, but it is up to theirdiscretion if this will happen. It is important to realize that once the product leaves thehands of the seller, they have no responsibility (provided the product is what the buyerordered 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 concernsof online shopping. While it may be easy to compare the base price of an item online, itmay not be easy to see the total cost up front as additional fees such as shipping areoften not be visible until the final step in the checkout process. The problem is especiallyevident with cross-border purchases, where the cost indicated at the final checkoutscreen may not include additional fees that must be paid upon delivery such as dutiesand brokerage. Some services such as the Canadian based Wishabi attempts to include

estimates of these additional costs, but nevertheless, the lack of general full costdisclosure remains a concern.

Privacy

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 resultfrom supplying contact information to an online merchant. In response, many merchantspromise not to use consumer information for these purposes, or provide a mechanism toopt-out of such contacts.

Many websites keep track of consumers shopping habits in order to suggest items andother websites to view. Brick-and-mortar stores also collect consumer information. Someask for address and phone number at checkout, though consumers may refuse to provideit. 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 isobviously not accessible to the merchant when paying in cash.

Product SuitabilityMany successful purely virtual companies deal with digital products, (includinginformation storage, retrieval, and modification), music, movies, office supplies,education, communication, software, photography, and financial transactions. Othersuccessful marketers use Drop shipping or affiliate marketing techniques to facilitatetransactions of tangible goods without maintaining real inventory.


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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 embarrassingpurchases, 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 standardletterbox 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 forindustrial 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 themat consumer outlets in such cases, e-commerce solutions in spares do not compete withretail stores, only with other ordering systems. A factor for success in this niche canconsist of providing customers with exact, reliable information about which part numbertheir particular version of a product 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-weightratio, products that have a smell, taste, or touch component, products that need trialfittings most notably clothing and products where color integrity appearsimportant. Nonetheless, Tesco.com has had success delivering groceries in the UK, albeitthat many of its goods are of a generic quality, and clothing sold through the internet isbig business in the U.S. Also, the recycling program Cheap cycle sells goods over theinternet, but avoids the low value-to-weight ratio problem by creating different groups

for various regions, so that shipping costs remain low.


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Problem faced by customer

Problems with the Payment System

People in India are not used to the online shopping system and moreover the onlinepayment system through the credit card is also totally alien to them. Most of them do notavail of the transaction facilities offered by the credit cards. They are also dubiousregarding the online payment system through the credit cards. Hence different paymentoptions should be made available to them like the credit card, cash on delivery and netbanking 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 haveresorted 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 onlinebut offline as well. This gives them the psychological comfort that these companies canbe relied upon.

Products offered at discounted rates

The online retailers save on the cost of building and employee salaries. Some part of thisbenefit should also be enjoyed by the online customers by a reduction in the price of theproduct. The customers should be conveyed this message that they are getting theproducts 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 customerbase, 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 gainedprominence in India is that the Indians prefer to touch the products physically beforebuying them. This facility is provided through the multi-brand outlets, not available


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online. Studies have revealed the preferences of the customers towards the traditionalshopping methods. Hence the retailer online should first make it a point to spot thepotential customers and accordingly plan out the product. If the customers are moreopen to online shopping, then nothing can be more beneficial. They save the time andeffort 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?

E commerce and ETailing, from a business perspective offer an opportunity to cater toconsumers across geographies, no operational timings, unlimited shelf space and all thiswith miniscule quantity of infrastructure. For a country like India, this business model is agood 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 animportant role in growing the markets. Changing demographics (youthful India), changinglifestyles and exposure to the developed markets sure give a fillip to this fledglingindustry. The soaring real estate costs in India have certainly inspired many an online

venture. Also E-tailers have developed many innovative promotions to lure customersand there by growing the market.

Barriers to Growth

But then all is not well in the E- tailors paradise. The cost of customer acquisition is prettyhigh in India about 1100 INR/customer which eats into the margins, as most goodsretailed are low value items such as books, CDs and electronic gadgets. High margingoods such as apparel are not very popular because of the touch and feel factor. MostIndians are not comfortable using their credit cards for shopping and there is always afear of what you see may not be what you get. There may be a problem with complaintresolution, especially after receipt of wrong goods or delayed delivery.

The Real Issues

The Indian Retail industry has always thrived on personalization. The grocer, tailor oreven the mom n shop apparel store owner knows the preferences, remembers


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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 theAmerican counterparts. Hence it might make sense to create real consumer centricpromotions constantly that provide real value to the Indian consumer. Slowly but surelythis 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

* Customer is the King A good 24/7 customer service through email, chat and toll freephone is what the E-tailers are providing. Customer complaint resolution whether,delayed delivery, product quality, wrong product delivered will certainly work towardslong term customer relationship, retention and acquisition.

* Supply Chain --Most customer complaints and delivery returns can be traced to thesupply chain vendors or merchants. They are in fact the most important internalcustomers. 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 technologyto E-tailers and all it asks in return is that the reviews collected on the retailers web siteare syndicated, which is then aggregated on the Buzzillions.com, its sister website. SomeIndian sites simply collect orders over a period of time say a week, order in bulk from thevendor and finally ship it to customer at a discounted rate. The customer is toldbeforehand about the delivery date, of course.

* Comparison Shopping and Customer Reviews --All the E-tailers are present oncomparison shopping sites is of paramount importance especially since people now visitthese sites before they place the order. Being present on well known sites such ascompareindia.com andwize.com is a very good idea. Also they encourage customer towrite the product reviews nothing authenticates their offering to an undecidedcustomers like a good product review.


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Recommendations

Now a days customer wants to save there time from any thing so they like to buythings online but due to security reasons they dont. So those companies who arein the field of E-Tailing they should make secure the transactions made bycustomer to win their faith.

As we all know that India is a developing country and she is getting better andbetter ever moment but still there are some fields where we are not as good asother countries like USA, Britain, France, Germany etc. but we try to use the sametechnology or facility over hear. We need to understand that things which aresuccessfully working over there will not work with same quality and strength untilInfrastructure for that service will not up to 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 thatbusiness need to increase awareness among people by advertisement andcustomer should also be informed that how to purchase goods online.

Generally customer complains that most of the companies are failed to provideproducts on time, they even not sure that whatever they ordered will surelyreached to them. So Delivery time should be taken into consideration.

If any complain registered by the customer then it should be solved within timeand companies should try to find out quick way of solving the frauds complains. Itwillhwlp company to win the faith of customers.

The process of online purchasing should be simple and easier for customer so thatthey can easily access or order whatever they want. So many customer do not buyproducts from internet although they know that they can buy it online and theyhave access too because they do not want to spend their time in finding the rightproduct. They prefer to go to the market and buy it because they know where theyfound it.


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Conclusion

Now a days fashion of e-retailing is increasing day by day, youth are the movers whowant to try this facilities and in metro cities online buying is increasing very rapidly. Nowthey use online banking facility, book their movie ticket, railway ticket, recharge theirmobile online. But in two tier cities online facilities are not popular. They still buy railwayticket, movie ticket with the help of broker or personally standing in a queue. One reasonis that they do not believe on these facilities due to some cases of leak of personal dataand second one is penetration of internet user is very low in two tier cities.

Consumers preferences are changing rapidity and becoming highly diversified. It isdifficult for the retail stores to satisfy all the needs of the customers. The most of theconsumers want to get some attractive prices, good schemes and offers on every purchases and a shopping comfort as well. Those who are able to purchase their needsand want for a month in a bulk prefers to go to the retail chains. With the help of onlineshopping facility retailer can fulfill the need and demand of their customers and able toprovide better services to their customers.

In India online shopping is still not a preferred way of shopping because customers arefacing some problem regarding fraud, privacy, hidden charges, on time delivery etc.Indians are not so much technosavy that help those who are ready to cheat with thecustomers. Companies should need to promote or try to tell their customers about onlineshopping facility so that those who are aware about this they will use it at least once andthose who do not know they will think about using it. Companies need to find out thatwhat type of problem customer are facing while using online shopping facility and try tosalve there problem so that customer will find it easy in comparison to other way of shopping.

Slowly-Slowly time will change as the internet uses are increasing. Future of e retailing isbright in India and now slowly-2 people are changing their perception and accept thechanges comes in the buying process.

Bibliography


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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=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=true
http://www.google.com/http://www.google.com/http://www.ask.com/http://www.ask.com/http://www.wikipedia.com/http://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=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=truehttp://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=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=truehttp://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=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=truehttp://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=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=truehttp://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=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=truehttp://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=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=truehttp://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=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=truehttp://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=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=truehttp://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=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=truehttp://www.wikipedia.com/http://www.ask.com/http://www.google.com/

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