….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

Greater Noida– 201 306

March 2010

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 Contents
Page No.

1. Executive Summery ……………….. 5

2. Objective ……………….. 6
3. About Retail ……………….. 7
4. Prediction for Retail Sector ……………….. 10
5. About E-Retailing ……………….. 11
6. E- Commerce Market ………………… 12
7. Advantages ………………… 18
8. Fraud and Security Concern .………………. 21
9. Problem faced by customer ………………… 25

10.Rcommendation ………………… 30

11.Conclusion ……………….. 31

12.Bibliography ……………….. 32

DECLARATION FORM

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 I hereby declare that the Project work entitled E- 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 : Nagendra Pratap Singh

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

Acknowledgement
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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:- PGDM(RM),2008-2010

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 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 E-retailing/ 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.

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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 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 sq ft (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 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.

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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 sq ft to 7,00,000 sq ft
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 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!.

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  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 sq ft to 2,000 sq ft and large supermarkets ranging
from of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and
personal sales.

 CONVENIENCE STORES: These are relatively small stores 400-2,000 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.
MBO’s: 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 industry’s 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 increasing employment levels as FDI would result in
market growth and expansion which in turn will result in employment generated at
various levels.

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

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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 & Spencer’s, 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

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

10
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 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, e-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.

The E-Commerce Market: Size and Trends

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Since mid 1990’s 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 don’t sell ’ you loose. It’s 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 eMarketer’s annual report in 2006 the E-Commerce 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 ’ 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 E-Commerce market. These
countries 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, 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 E-Commerce 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

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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).

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

1.Amazon.com

2. Planetrx.com

3. Ticketmaster.com

4. Gateway.com

5. Barnesandnoble.com

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 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 and

Satyamonline.com.

 Payment
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

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  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.

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

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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, organizations try to adopt techniques of online shopping
without understanding these techniques and/or without a sound business model. Rather
than supporting the organization’s 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 customer’s 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

16
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
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 pension’s
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 (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

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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 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 in-
stock 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 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,

18
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

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.

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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.

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.

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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.

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.

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

21
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 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

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.

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Many websites keep track of consumers shopping habits in order to suggest items and
other websites to view. Brick-and-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.

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

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their 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-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 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.

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  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
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 multi-brand 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
potential customers 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.

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 In a nut shell

 Why is Ecommerce so important?

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 E-tailers have developed many innovative promotions to lure customers and
there by growing the market.

 Barriers to Growth

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But then all is not well in the E-tailer’s 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, CD’s and electronic gadgets. High margin
goods such as apparel are not very popular because of the touch and feel factor. Most
Indian’s are not comfortable using their credit cards for 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 customer’s
taste, budget and previous purchases. They sense the customer’s 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

* 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.

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 * 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
retailer’s 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 E-tailers 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 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.

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 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 don’t. 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 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
and companies should try to find out quick way of solving the frauds complains. It
will hwlp company to win the faith of customers.

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  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.

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.

Consumer’s preferences are changing rapidity and becoming highly diversified. It is

difficult for the retail stores to satisfy all the needs of the customers. The most of the
consumer’s 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 needs
and want 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.
Indians are not so much technosavy that help those who are ready to cheat with the
customers. Companies 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 once and
those who do’not 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

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salve 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 is
bright in India and now slowly-2 people are changing their perception and accept the
changes comes in the buying process.

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=NTFC9z2Ty8Sohy
upmGsLyYfTRyU&hl=en&ei=qGeaS7jKH9G3rAe96unEAg&sa=X&oi=book_result&ct=result&resnum=3&ve
d=0CBAQ6AEwAg#v=onepage&q=&f=true

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