Retail Management Assignment

PROJECT REPORT ON
“ONLINE RETAILING”

Submitted by:

NAME: APARNA

CLASS: MBA Eve B

ROLL NO. : 50135103918

 INTRODUCTION

E-Commerce is a huge domain on conducting business over internet and online

retailing is a part of it. When we discuss on digitally/ Internet enabled commercial
transactions between organizations and individuals using latest web technologies
as per the policies of the organization it takes the form of e- business. Nowadays,
‘e’ is gaining momentum and most of the things if not everything get digitally
enabled. Thus, it becomes very important to clearly understand different types of
commerce or business commonly called as e-commerce.

There are mainly five types of e-commerce models:

 Business to Consumes (B2C)

This model involves organizations as business houses and consumers and

costumers. This is the most common model in e-commerce. In this model, online
businesses sell to individual consumers. When B2C started, it had a small share in
the market but after 1995 its growth was exponential. In this business model the
business house will have a e-commerce website which will list all their product
categories with detailed information about products with photographs, flash
animation and comparing similar products etc., for quick decision making over
web. E.g. An online Music portal selling CD’S/ DVD’s and streaming Audio on the
web e.g. www.imusti.com

 Business to Business (B2B)

International Journal of Research and Management (IJBRM), Volume (I): Issue (3)
106 It is the largest form of e-commerce in involving business of trillions and
dollars. In this form, the buyers and sellers are both business entities and do not
involve an individual consumer. It is this like the manufacturer supplying goods to
the retailer or wholesaler. E.g. www.indiaplaza.in is a online store, which sells
popular branded products to consumer, where its supply chain network directly
linked to Manufacturer. Hence, Business to Business model.
  Consumer to Consumer (C2C)

E-Bay is an excellent example for this model an auction site where a consumer
can sell their antique or old used items at discounted price to others, rest of the
consumers who are all interested in those will bid for that. This auction will
happen for a time period and ends; now the highest bidder will make payment
and buy the product. Here e-bay plays a role of having/ facilitating a platform to
make consumer to consumer transactions.

ONLINE RETAILING
Online Retailing is the use of technology such as computers and the internet to
sell a range of products and services online to the world.

To start an online retailing business, an organization or an individual should have

the below:

1. A unique Idea/ Product to sell

When all Personal computer assemblers sell PC’s and Servers in a traditional way,
Michael Saul Dell, founder CEO of Dell Inc., got a unique idea of selling PC’s over
web, which was a grand success.

2. A Perfect Business Plan

Is all about the online retailing business idea, Product or services, people
involved, their expertise, a project report with all standard projected statements
prepared by a professional team, Competitor analysis, Capital investment, Loans,
Business location, Government regulations and policies, Technology plans, IT
infrastructure required.

3. Technology Plans

Organization may start off in a small way and then based on the response they
can get more funding and grow in a big way.

 They need to finalize an attractive easy to remember domain name e.g.

www.dell.com. International Journal of Business Research and
Management (IJBRM),Volume(1):Issue(3) 107

 Need to finalize a hosting server to book web space from their various plans
e.g. www.Hostmonster.com to start with and later go for their own scalable
IT infrastructure setup based on the response and growth.

 Need to Acquire IT team for developing e-Commerce website or to

outsource the work. Also we can think of using Open source like OS
 Commerce a popular e- Commerce application and Open source CRM
application for customer relationship.

 If we are going to develop from the scratch on our own technology, the
below website development process will be followed as per Fig. 3. Website
development process.

 Compare and finalize Payment gateway based on their initial setup fee/
transaction fee the popular payment gateway service providers are CC
Avenue, ICICI, Bill desk, Pay pal and few more players.

 Once the website is launched, related internet marketing, popularly caller

as SEO (search engine optimization) work to be started to increase the
popularity and visitors of the site.

 Plan and organize supply chain management to deliver product or service

to the online users who place orders.

 Post sales support plans.

COMPANIES DOING ONLINE RETAILING

Myntra.com:

It is a leading online fashion store in India where you can find fashionable and
trendy clothes for men, women and kids. You can buy apparels of different brands
and avail discounts on their offers.

Inkfruit.com:

Buy apparels for guys and girls, accessories and footwear on this e-commerce
website on this Asia’s largest e-commerce website. They have the selective
designs and give their customers the best things.

Dealsandyou.com:

This site offers various kinds of deals be it holidays,shirts etc. Also this site gives
heavy discounts on regular basis that cab be profitable for the shoppers.Browse
this site for more.

eBay:

eBay India is one of the largest online marketing site that offers diverse products.
In most of electronic products EMI for 3 or 6 months is available with HDFC. They
offer deals of the week with good discounts.

Homeshop18:

Homeshop18 is one of the largest electronic retailing companies of India which

sells its products through Internet, TV and mobile. If offers a diverse range of
products including apparels, jewelry, books, home appliances, toys and electronic
items. It has a customer base of over 5 million and delivers products to more than
50 cities in India. With its highly user-friendly website, it provides a completely
hassle free shopping experience.

Infibeam.com:

Infibeam is an e-commerce website that sells almost everything online. You can
search for books, mobiles, gifts, computers, games, watches, movies, electronics,
home and lifestyle and much more. Also Infobeam offers hot deals on many
products, so you can save a lot by ordering it through this site. You can also shop
on EMI. Check out their magic box to know the deal of the day.

99labels.com:

This site offers many fashion and luxury brands at good prices. Check this site for
more brands.

Rediff Shopping:

Another online shopping where you can shop for wide variety of stuff is Rediff
shopping. The rediff product catalogue contains more than 100,000 products.
They have some of the best online deals.

Yebhi.com:

This online e-commerce website is the baby of Big Shoe Bazaar India Pvt Ltd. It
started its online store under the name of www.bigshoebazaar.com selling just
the footwear. But with the immense response, they added many other products
such as accessories, apparels, bags, mobiles and jewelry in the product list. Yebhi
is a winner of the Online Retail Awards 2011 Highly Commended
(Fashion,Clothing & Footwear) and Winner of - Economic Times - Best Ecommerce
Company - Award 2010.

Zoomin:

One of its own kind, Zoomin does not sell the products mentioned above for
different ecommerce websites, but it allows you to create a photo album of your
by uploading the pics. Then you can place the order to buy that unique, photo
book of your. You can order for photo prints, canvas prints, collage, zig zag minis,
photo mugs, calendars, greeting cards and more products related to photos.

20North.com:

This website offers variety of products like electronics, books, music, movies, car
accessories. The site also offers lucrative deals. Log onto the site to shop. Happy
Shopping!!!
Indiangiftsportal:

This is known for providing gifts for various occasions like birthdays, anniversary,
wedding, bhai dooj, diwali and many more. Also flowers, cakes, chocolates and
many more things are offered by this site. Browse it today to send gifts to your
loved ones.

MagazineMall:

This company specifically deals in magazines and one can get magazines of
different and unique categories like Gardening/Housekeeping, lifestyle, fashion,
luxury, current affairs and many more.

Bindaasbargain:

Here new deal comes everyday at 10 am and it is India's first One Deal A Day
online shopping site. Check out the site for new deal.

Buytheprice.com:

The site offers Mobiles, Computers, Cameras, Home Appliances, Life style, Audio
and Video and much more. Variety of products are available under each category.

Perfume2order:

It has categories like Perfumes for Men, Perfumes for Women, Deodorants & Deo
Stick, Perfume Gift Set, Designer Wallet & Belts, Flowers, Handbags & Clutches,
Sunglasses and many more things. To know more, check this site out.

Timtara.com:

It offers many products under each category. For example,computer category has
products like Antivirus, Blank CD/DVD, ePAD, Harddrives, Headphones, Keyboard,
Laptops & Notebooks, Memory Cards, Mouse and much more.Browse this site for
more categories and more products.

Caratlane.com:
CaratLane is India's first and largest online diamond jewellery store. With a
network of over 4000 global vendors, CaratLane offers more than 1,00,000 loose
diamonds, and over 1000 readyto-choose diamond and gemstone jewellery like
rings, pendants, earrings, bracelets and bangles. Every diamond sold at CaratLane
is certified by internationally renowned labs like GIA, IGI, HRD and AGS, and their
prices are up to 25% lower than other retailers in India.

Naaptol:

The site offers products like mobiles,cameras,laptops,jewellery,gifts and what

not.check this site. Fernsnpetals:

The Ferns 'N' Petals (FNP) is known for good quality flowers & flower
arrangements. It has been claimed that it is a leading Florist in India. Send the
flowers to your loved ones from this site and give happiness to them.

VARIOUS BUSINESS MODELS OF ONLINE RETAILING

  Business to Consumer (B2C)

This model involves organizations as business houses and consumers and

customers. This is the most common model in e-commerce. In this model, online
businesses sell to individual consumers. When B2C started, it had a small share in
the market but after 1995 its growth was exponential. In this business model the
business house will have a e-commerce website which will list all their product
categories with detailed information about products with photographs, flash
animation and comparing similar products etc., for quick decision making over
web. E.g. An online Music portal selling CD’s / DVD’s and streaming Audio on the
web e.g. www.imusti.com.

 Business to Business (B2B)

International Journal of Business Research and Management

(IJBRM),Volume(1):Issue(3) 106 It is the largest form of ecommerce involving
business of trillions of dollars. In this form, the buyers and sellers are both
business entities and do not involve an individual consumer. It is like the
manufacturer supplying goods to the retailer or wholesaler. E.g.
www.indiaplaza.in is a online store, which sells popular branded products to
consumer, where its supply chain network directlylinked to Manufacturer. Hence
Business to business model.

 Consumer to Consumer (C2C)

E-Bay is an excellent example for this model an auction site where a consumer
can sell their antique or old used items at discounted price to others, rest of the
consumers who are all interested in those items will bid for that. This auction will
happen for a time period and ends; now the highest bidder will make payment
and buy the product. Here e-bay plays a role of having / facilitating a platform to
make consumer to consumer transactions.

 M-Commerce

Now a day’s all business executives were busy and want to do financial
transaction without going physically to bank. Example: Consumer want to pay
their utility payments viz., Insurance premium, Telephone bills, Income taxes etc.,
Transfer money to anybody in this world via mobile banking (e.g. ICICI Bank
iMobile) opens up the new technology of ecommerce as Mobile commerce.
Further the regular online stores were also optimizing their site user interface
design in order to make consumers shop from their mobile devices viz., iPad,
iPhone, Android enabled phones, and Microsoft windows mobile 6.x enabled
devices.

There are other types of e-commerce business models too like Business to
Employee (B2E), Government to Business (G2B) and Government to Citizen (G2C)
but in essence they are similar to the above mentioned types. Moreover, it is not
necessary that these models are dedicatedly followed in all the online business
types. It may be the case that a business is using all the models or only one of
them or some of them as per its need.

ADVANTAGES AND DISADVANTAGES OF ONLINE RETAILING

Advantages:

 The greatest and the most important advantage of e-commerce, is that it

enables a business concern or individual to reach the global market. It
caters to the demands of both the national and the international market, as
your business activities are no longer restricted by geographical
boundaries. With the help of electronic commerce, even small enterprises
can access the global market for selling and purchasing products and
services. Even time restrictions are nonexistent while conducting
businesses, as e-commerce empowers one to execute business transactions
24 hours a day and even on holidays and weekends. This in turn
significantly increases sales and profit.

 Electronic commerce gives the customers the opportunity to look for

cheaper and quality products. With the help of e-commerce, consumers
can easily research on a specific product and sometimes even find out the
original manufacturer to purchase a product at a much cheaper price than
that charged by the wholesaler. Online commerce also offers buyers a
wider range of products and services to choose from, as opposed to
conventional shopping, without the hassles of lugging around heavy
shopping bags and getting stuck in messy traffic jams, which turns out to be
more convenient and time-saving. Besides these, people also come across
reviews posted by other customers, about the products purchased from a
particular e-commerce site, which can help make purchasing decisions.

 For business concerns, e-commerce significantly cuts down the cost

associated with marketing, customer care, processing, information storage
and inventory management. It reduces the time period involved with
business process re-engineering, customization of products to meet the
demand of particular customers, increasing productivity and customer care
service. Electronic commerce reduces the burden of infrastructure to
 conduct businesses like physical store setups and thereby raises the
amount of funds available for profitable investment. It also enables
efficient customer care service by collecting and managing information
related to customer behavior, which in turn helps develop and adopt an
efficient marketing and promotional strategy.

Disadvantages:

 Electronic commerce is also characterized by some technological and

inherent limitations which has restricted the number of people using this
revolutionary system. One important disadvantage of e-commerce is that
the Internet has still not touched the lives of a great number of people,
either due to the lack of knowledge or trust. A large number of people do
not use the Internet for any kind of financial transaction. Some people
simply refuse to trust the authenticity of completely impersonal business
transactions, as in the case of e-commerce. Many people have reservations
regarding the requirement to disclose personal and private information for
security concerns. Many times, the legitimacy and authenticity of different
ecommerce sites have also been questioned.

 Another limitation of e-commerce is that it is not suitable for perishable

commodities like food items. People prefer to shop in the conventional way
than to use e-commerce for purchasing food products and objects that
need to be felt and touched before actually making the purchase. So e-
commerce is not suitable for such business sectors. The time period
required for delivering physical products can also be quite significant in
case of e-commerce. A lot of phone calls and e-mails may be required till
you get your desired products. However, returning the product and getting
a refund can be even more troublesome and time-consuming than
purchasing, in case you are not satisfied with a particular product.
  Thus, evaluating the various pros and cons of electronic commerce, we can
say that the advantages of e-commerce have the potential to outweigh the
disadvantages. A proper strategy to address the technical issues and to
build up customers' trust in the system can change the present scenario
and help e-commerce adapt to the changing needs of the world. Read
more at Buzzle.

BUYING BEHAVIOUR AND CONSUMER BRHAVOIUR of ONLINE

RETAILING
Consumer Behaviour on the Internet

The Internet provides an information-rich environment offering to the consumers’

continuous up- to-date information, about different suppliers, products and/or
services (Bruner, 1997; Chung- Hoon, 2003; Settles, 1995). As a result of the
information available to the consumers and the ease of switching from one
supplier to another, the power as Lindstrom (2002) argues has moved away from
the brand and onto the consumer. Previous researchers have studied aspects
related to con- sumers’ behaviour online. For example, Rowley considered how
consumers search the Web for information. Rowley (1996 and 2000), Morganosky
and Cude (2000) studied the criteria of e- consumers’ selection of products;
Merrilees and Fry (2002) studied how consumers develop brand attitudes about
e-retailers. The factors determining the consumers’ purchasing decisions are
chang- ing as they embrace e-commerce with expectations about efficiency,
service and support. Notably, Schultz (2000) describes e-customer loyalty in
cyberspace as an evolution from the traditional product driven, marketer
controlled concept towards a distribution driven, consumer controlled, and
technology-facilitated concept. Hence, understanding the drivers and dynamics of
how cus- tomer loyalty is developed and maintained in cyberspace is a critical tool
for marketers developing future marketing strategies in this area (Gommans et
al., 2001).

 Online brand loyalty

There are a number of definitions of brand loyalty focusing on different

parameters such as behav- ioural and attitudinal brand loyalty (see East, 1990;
Sheth et al., 1999; Webber, 1998). However, for the purpose of this study we use
a definition of brand loyalty given by Dick and Bashu (1994) which conceptualises
loyalty as the “strength of the relationship between an individual’s relative
attitude towards a brand and repeat patronage”.
Customer loyalty has sometimes been operationalised as a behaviour (hard-core
loyalty, repeat purchase probability, and other) and at other times as an attitude
(brand preference, commitment, intention-to-buy). As behaviour, customer
loyalty has been measured as the long-term choice probability for a brand
(Dekimpe et al., 1997; Jeuland, 1979), or as a minimum differential needed to
prevent switching (Raju et al., 1990).

Attitudinal approaches focused mainly on brand recommendations (Boulding et

al., 1993), resis- tance to superior products (Narayandas, 1996), repurchase
intention (Anderson and Sullivan, 1993), and willingness to pay a price premium
(Narayandas, 1996; Zeithaml et al., 1996).

While academic research is continuously engaged in refining various

conceptualisations for cus- tomer loyalty (see Jacoby and Chestnut, 1978; Kahn et
al., 1986; Samuelson and Sandvik, 1997), much less attention has been paid to e-
brand loyalty with some exceptions, such as: Gommans et al. (2001); Lodorfos et
al. (2003); Lodorfos and Dennis (2005); Reichfeld and Schefter (2000), Ribbink et
al. (2004) and Smith (2000).

 Factors affecting the consumer’s online purchase decision

Previous research into online brand loyalty suggests that consumers weight
differently the impor- tance of factors influencing their purchasing decisions in the
online market than those in the tradi- tional shopping environments, which in
turn may affect their e-brand loyalty. Factors that have been extensively covered
in previous research as having a significant effect on the consumers’ purchasing
decisions online, are: beliefs about brand, price, trust, experience and
convenience (see Chung-Hoon, 2003; Constantinides, 2004; Donthu and Garcia,
1999; Fayawardhena, 2003; Kung et al., 2002; Lodorfos et al., 2003; McCole, 2002;
Quint, 1998; Retlev, 1991). In addition to the above issues, time, ease and effort
have also been identified as factors affecting e-purchase deci- sion (Devaraj et al.,
2003).

 Price

In addition to the rapid growth of the Internet population there has been an
emphasis on Internet exchanges occurring at lower prices than in conventional
outlets. In part this is assumed to be due to the belief that a primary role of an
online store is to provide price related information and prod- uct information to
help reduce consumers’ search and purchasing costs (see Bakos, 1997; Kung et al.,
2002; Phau, 2000). The belief that price is a primary purchasing determinant for
online buyers is reinforced by the success of ‘auction sites’ (Kung et al., 2002). In
addition, there is the percep- tion that the Internet will lead to increased price
competition and the standardisation of prices es- pecially when products or
services are incapable of significant differentiation (Jarvenpaa and Todd, 1997;
Kung et al., 2002). However, a study by Brynjolfsson (2000) which considered pric-
ing comparisons of CDs and books on the Internet to those offered by High Street
stores identified that whilst prices were between 9 and 16 per cent lower on the
Internet, the online dispersion of prices was high (25% for CDs and 33% for
books). He also identified that those e-tailers of CDs and books with the lower
prices did not make the most sales. This suggests that price may not al- ways be
the determining purchase factor for e-consumers.

Price incentives were notably the motivation for early e-shoppers expecting to
find the lowest prices from e-tailers as a reward for their risk taking. This may be
changing now because as Fay- awardhena (2003) identified the online prices have
risen despite the fact that the purchasing cost is still one of the customers’ key
concerns. However, according to a number of studies previous ex- perience with
an e-brand or value recognition of a product affects the consumers’ views about
the importance of the purchasing price (Fayawardhena, 2003; and Grunert, 2002).

 Trust and security

Currall and Judge (1995) defined trust as an individual’s reliance on another party
under condi-tions of dependence and risk. Considering that risk is a function of
the probability that a hazard arises and the consequences of the hazard
(Schneider, 1998), an individual’s trusting behaviour depends on the nature of the
consequences. In the context of high-consequence systems such as etransactions,
risk avoidance behaviour may arise.

 Convenience

Studies investigating e-consumers motivations to purchase products online

suggest that conven-ience is a primary factor affecting e-consumers purchasing
decision (Tracy, 1998). This finding is supported by other research, which
demonstrates that e-shoppers are convenience oriented (see Constantinides,
2004; Donthu and Garcia, 1999; Korganonkar and Wolin, 1999). There are a num-
ber of definitions in the literature for convenience linked to e-consumers
purchasing behaviour, however for the purpose of this study we focus on two
aspects of convenience, e-satisfaction and ease of use. Szymanski and Hise’s
(2000) research suggests that site design and convenience have a significant
influence on e-satisfaction levels. These findings are also supported by Brown et
al. (2003) and Jiang and Rosenbloom (2005). Ease of use includes saving time, site
design, site navigation, information architecture, site speed, ordering and
payment process, accessibility and search facilities (Constantinides, 2004; Wolfin-
barger and Gilly, 2001; Szymanski and Hise, 2000). According to Jiang and
Rosenbloom (2005), 73 percent of e-customers will leave an internet page and/or
site if it takes more than two to three clicks to get to where they want. Huber et
al. (2001) as well as Jiang and Rosenbloom (2005) sug- gest that e-customers
satisfaction criteria affect their purchasing attitude and their attitude to the e-
retailer. Therefore, satisfaction in this context is the consumer’s satisfaction based
on ease of use criteria prior to the purchase (see Alba et al., 1997; Wolfinbanger
and Gilly, 2001). In addition to satisfaction and ease of use, convenience includes
expectations, atmosphere, comfort, selection and control as attributes (Walsh et
al., 2003; Wolfinbarger and Gilly, 2001).
  Experience

In the literature on e-commerce, there has been extensive research on

consumers’ shopping experi-ence and their evaluations based on perceptions
concerning e-brands (Griffith et al., 2001; Jarvenpaa and Todd, 1997; Szymanski
and Hise, 2000). Fry and Merrilees (2001) found that those consumers with high
levels of perceived security risk were more likely to reduce their levels of risk
perception via in-depth experience with the internet site. Experience has been
recognised as an important factor leading to brand loyalty, as a consumer’s
experience with a brand will affect the attitudes that the consumer holds towards
the brand as well as its intention to purchase from the brand in the future.

TYPES OF ONLINE RETAILING

Business to Consumer (B2C)

B2C stands for Business to Consumer as the name suggests, it is the model taking
businesses and consumers interaction. Online business sells to individuals. The
basic concept of this model is to sell the product online to the consumers.

B2c is the indirect trade between the company and consumers. It provides direct
selling through online. For example: if you want to sell goods and services to
customer so that anybody can purchase any products directly from supplier’s
website.

Directly interact with the customers is the main difference with other business
model. As B2B it manages directly relationship with consumers, B2C supply chains
normally deal with business that are related to the customer.

Business to Business (B2B)

B2B stands for Business to Business. It consists of largest form of Ecommerce.

This model defines that Buyer and seller are two different entities. It is similar to
manufacturer issuing goods to the retailer or wholesaler. Dell deals computers
and other associated accessories online but it is does not make up all those
products. So, in govern to deal those products, first step is to purchases them
from unlike businesses i.e. the producers of those products.

“It is one of the cost effective way to sell out product through out the world”
Benefits:

 Encourage your businesses online

 Products import and export
 Determine buyers and suppliers
 Position trade guides

Consumer to Consumer (C2C)

C2C stands for Consumer to Consumer. It helps the online dealing of goods or
services among people. Though there is no major parties needed but the parties
will not fulfill the transactions without the program which is supplied by the
online market dealer such as eBay.
Peer to Peer (P2P)

It is a discipline that deal itself which assists people to instantly shares related
computer files and computer sources without having to interact with central web
server. If you are going to implement this model, both sides demand to install the
expected software so that they could able to convey on the mutual platform. This
kind of ecommerce has very low revenue propagation as from the starting it has
been tended to the release of use due to which it sometimes caught involved in
cyber laws of m-Commerce

It deals with conducting the transactions with the help of mobile. The mobile
device consumers can interact each other and can lead the business. Mobile
Commerce involves the change of ownership or rights to utilize goods and related
services.

FINDING, CONCLUSION AND FUTURE OF ONLINE RETAILING

Now that we have reviewed all basic information about e-Commerce specific to e-
Retailers and the challenges, advantages and disadvantages. From the
government point of view, it has to take effective steps to resolve all barriers or
disadvantages for e-commerce growth create opportunities for private, public
participation in infrastructure development. Similarly all our public organizations
should plan ahead to train our Indian business community to learn more about
the future business opportunities to compete global competition and towards our
countries growth. My future study is to plan, research and come out with
strategic plans which are more realistic, easy to adopt and implement across the
country which will resolve most of the prevailing issues.