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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

CONTENTS INDEX PAGE No.

1. 2. 3. 4. 5. 6. 7. 8. 9.

Executive Summery Objective About Retail Prediction for Retail Sector About E-Retailing E- Commerce Market Advantages Fraud and Security Concern Problem faced by customer

.. 1 .. 2 .. 3 .. 6 .. 7 .. 8 .. 14 .. 16 .. 20 .. 23 ..24 . 25

10. Recommendation 11. Conclusion 12. Bibliography

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 analyzed 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 Eretailing and how this modern world is getting changed or rather say getting more and more from the usage of internet. Top 10 companies which are based over e-retailing is also mentioned clearly in this project Ending of this project contains suggestions and recommendations by me by studying some projects and some reports available on Internet.

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

About Retail
The word retail is derived from the French word retailer, which means to cut off a piece or to break bulk.A retailer may be defined as a dealer or trader who repeatedly sells goods in small quantities. The sale of goods or commodities in small quantities directly to consumers. Of, relating to, or engaged in the sale of goods or commodities at retail. It also means to sell in small quantities directly to consumers. According to PHILIP KOTLER, Retailing includes all the activities involved in selling goods or services to the final consumers for personal use. A Retailer or Retail store is any business enterprises whole sales volumes comes primarily from retailing,

TYPES OF RETAIL SECTOR


Retailing is one of the pillars of the economy in India and accounts for 35% of GDP. The retail industry is divided into organized and unorganized sectors. Over 12 million outlets operate in the country and only 4% of them being larger than 500 sqft (46 m2) in size. Organized Retail Unorganized Retail

ORGANIZED RETAIL: Organized retailing refers to trading activities undertaken


by licensed retailers, that is, those who are registered for sales tax, income tax, etc. These include the corporate backed hypermarkets and retail chains, and also the privately owned large retail businesses. Organized retail segment has been growing at a blistering pace, exceeding all previous estimates. According to a study by Deloitte Haskins and Sells, organized retail has increased its share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007. The fastest growing segments have been the wholesale cash and carry stores (150 per cent) followed by supermarkets (100 per cent) and hypermarkets (75-80 per cent). Further, it estimates the organized segment to account for 25 per cent of the total sales by 2011.

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

RETAILING FORMATS IN INDIA


MALLS: The largest form of organized retailing today. Located mainly in metro cities, in proximity to urban outskirts. Ranges from 60,000 sqft to 7,00,000sqft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment; all under a common roof. Examples include Shoppers Stop, Pyramid, and Pantaloon. Shopping-centre development has attracted real-estate developers and corporate houses across cities in India. As a result, from just 3 malls in 2000, India is all set to have over 220 malls by 2005. Today, the expected demand for quality retail space in 2009 is estimated to be around 40 million square feet. While previously it was the large, organized retailers with their modern, up-market outlets, and direct consumer interface- who had been a key factor driving the growth of organized retail in the country, now it is the malls which are playing the role. Segmentation in malls, like up-market malls, mid-market malls, etc., proper planning, correct identification of needs, quality products at lower prices, the right store mix, and the right timing, would Ensure the success of the mall revolution in India.

SPECIALTY STORES: Chains such as the Bangalore based Kids Kemp, the Mumbai
books retailer Crossword, RPG's Music World and the Times Group's music chain Planet M, are focusing on specific market segments and have established themselves strongly in their sectors.

DISCOUNT STORES: As the name suggests, discount stores or factory outlets,


offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods.

DEPARTMENTAL STORES: Departmental Stores are expected to take over the apparel business from exclusive brand showrooms. Among these, the biggest success is K Raheja's Shoppers Stop, which started in Mumbai and now has several large stores (over 30,000 sq. ft) across India and even has its own in store brand for clothes called Stop!.

HYPER MARTS/SUPERMARKETS: Large self service outlets, catering to varied


shopper needs are termed as Supermarkets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery

organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sqft to 2,000 sqft and large supermarkets ranging from of 3,500 sqft to 5,000 sq ft. having a strong focus on food & grocery and personal sales. 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. MBOs: Multi Brand outlets, also known as Category Killers, offer several brands across a single product category. These usually do well in busy market places and Metros.

CONTRIBUTION OF FDI IN RETAILING


India will look into the industrys demand for foreign direct investment (FDI) for multiple products in the retail sector. FDI is already permitted in the retail sector in some segments. There is a demand to extend FDI in retail sector. At present, India allows 100 percent FDI in cash- and carry wholesale trading and export trading through the automatic route, while 51 percent FDI is permitted in single brand retailing. According to a join study by Assoc ham and accounting and consultancy firm KMPG, the total retail market in India is estimated at $ 353 billion in 2008, and expected to grow at eight percent annually to touch $ 416 billion by 2010. The developing countries have the most preferable destination for FDI. India is also one of the most important. It will help in 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 people by the year 2010, predicts an analysis by MaFoi Management Consultants Ltd. Traditional vis a vis Modern Format Retailers The retail boom will face a strong competition from the 12 million mom-and-pop stores. These are easily accessible and provide services like free home delivery and goods at credit, which is not possible with hypermarkets and supermarkets. Buying from Malls, Supermarkets and Department stores like Big Bazaar, Marks & Spencers, etc. provide a different environment where one can pick and choose from a variety of products. Owing to the entry of such big players, the small shopkeepers fear losing their business. Reliance Retail Ltd. has been inviting such people to join in its Dairy business as franchisees. Growth of Retail Sector in India

E Retailing
E-tailing began to work for some major corporations and smaller entrepreneurs as early as 1997 when Dell Computer reported multimillion dollar orders taken at its Web site. The success of Amazon.com hastened the arrival of Barnes and Noble's e-tail site. Concerns about secure order-taking receded. 1997 was also the year in which Auto-by-Tel reported that they had sold their millionth car over the Web, and Commerce Net/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


Since mid 1990s traditional traders followed large Computer Manufacturers into the new sphere and today you can buy practically anything through the Internet: from a bunch of flowers to a car. The only exception seems to be a trip to Mars. Today E-Commerce market is huge and still growing. The E-commerce market is totally democratic. This is perfect capitalism: if you sell you win, if you dont sell you loose. Its all about marketing and economic rules of demand and supply. Certain products or services appear more suitable for online sales; others remain more suitable for traditional sales. Many successful purely virtual companies deal with digital products, music, movies, education, communication, software, photography, and financial transactions. Examples of this type of company include Amazon.com, Google, E-Bay and Paypal. Products less suitable for E-Commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings most notably clothing and products where color integrity appears important. Nonetheless, clothing sold through the internet is big business in the U.S. According to eMarketers annual report in 2006 the 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 ECommerce market ranks first and analysts believe it will reach $114 billion in 2011, which is 41% higher than the figures of 2006. Germany holds the second place. However, it is first in the number of online-customers there are as many as 3 million. Some researchers also note that in the next five years the European market might increase significantly due to the 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

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 6. Mothernature.com 7. Iprint.com 8. Hallmark.com 9. Buy.com 10. Bigstar.com Indian e-tailers: Satyamonline.com. Rediff.com, Jaldi.com, Fabmart.com, Tsnshop.com and

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 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 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 organizations culture and brand name, the website should satisfy consumer's expectations. A majority of consumers choose online shopping for faster and more efficient shopping experience. Many researchers notify that the uniqueness of the web has dissolved and the need for the design, which will be user centered, is very important. Companies should always remember that there are certain things, such as understanding the customers wants and needs, living up to promises, never go out of style, because they give reason to come back. And the reason will stay if consumers always get what they expect. McDonaldization theory can be used in terms of online shopping, because online shopping is becoming more and more popular and website that wants to gain more shoppers will use four major principles of McDonaldization: efficiency, calculability, predictability and control. Organizations, which want people to shop more online for them, should consume extensive amounts of time and money to define, design, develop, test, implement, and maintain website. Also if company wants their website to be popular among online shoppers it should leave the user with a positive impression about the organization, so consumers can get an impression that the company cares about them. The organization that wants to be acceptable in online shopping needs to remember, that it is easier to lose a customer then to gain one. Lots of researchers state that even when site was a top-rated, it would go nowhere if the organization failed to live up to common etiquette, such as returning e-mails in a timely fashion, notifying customers of problems, being honest, and being good stewards of the customers data. Organizations that want to keep their customers or gain new ones try to get rid of all mistakes and be more appealing to be more desirable for online shoppers. And this is why many designers of webshops considered research outcomes concerning consumer expectations. Research

conducted by Elliot and Fowell (2000) revealed satisfactory and unsatisfactory customer experiences.
User interface

It is important to take the country and customers into account. For example, in Japan privacy is very important and emotional involvement is more important on a pensions site than on a shopping site. Next to that, there is a difference in experience: experienced users focus more on the variables that directly influence the task, while novice users are focusing more on understanding the information. There are several techniques for the inspection of the usability. The ones used in the research of Chen &Macredie (2005) are Heuristic evaluation, cognitive walk through and the user testing. Every technique has its own (dis-)advantages and it is therefore important to check per situation which technique is appropriate. When the customers went to the online shop, a couple of factors determine whether they will return to the site. The most important factors are the ease of use and the presence of user-friendly features

Advantages
Convenience Online stores are usually available 24 hours a day, and many consumers have Internet access both at work and at home. Other establishments such as internet cafes and schools provide access as well. A visit to a conventional retail store requires travel and must take place during business hours. Searching or browsing an online catalog can be faster than browsing the aisles of a physical store. One can avoid crowded malls resulting in long lines, and no parking. Consumers with dial-up Internet connections rather than broadband have much longer load times for content-rich web sites and have a considerably slower online shopping experience. Some consumers prefer interacting with people rather than computers because they find computers hard to use. Not all online retailers have succeeded in making their sites easy to use or reliable. On the other hand, a majority of stores have made it easy to find the style one is looking for, as well as the price range that is acceptable making the shopping experience quick and efficient. The internet has made shopping an almost effortless task. In most cases, merchandise must be shipped to the consumer, introducing a significant delay and potentially uncertainty about whether or not the item was actually in stock at the time of purchase. Most successful sites will say whether or not a product is in supplyBricks and clicks stores offer the ability to buy online but pick up in a nearby store. Many stores give the consumer the delivery company's tracking number for their package when shipped, so they can check its status online and know exactly when it will arrive. For efficiency reasons, online stores generally do not ship products immediately upon receiving an order. Orders are only filled during warehouse operating hours, and there may be a delay of anywhere from a few minutes to a few days to a few weeks before instock items are actually packaged and shipped. Many retailers inform customers how long they can expect to wait before receiving a package, and whether or not they generally have a fulfillment backlog. A quick response time is sometimes an important factor in consumers' choice of merchant. Customers can choose the type of shipping they want from overnight, to a few days. The quicker the delivery the higher the shipping cost. A weakness of online shopping is that, even if a purchase can be made 24 hours a day, the customer must often be at home during normal business hours to accept the delivery. For many professionals this can be difficult, and absence at the time of delivery can result in delays, or in some cases, return of the item to the retailer. Automated delivery booths,

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

Information and reviews 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. 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 ecommerce service providers, who deploy countermeasures such as firewalls and antivirus software to protect their networks. Phishing is another danger, where consumers are fooled into thinking they are dealing with a reputable retailer, when they have actually been manipulated into feeding private information to a system operated by a malicious party. Denial of service attacks are a minor risk for merchants, as are server and network outages. 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 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. 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 shutins 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 outletsin such cases, e-commerce solutions in spares do not compete with retail stores, only with other ordering systems. A factor for success in this niche can consist of providing customers with exact, reliable information about which part number their particular version of a product 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 color 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 Cheap cycle 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. 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.

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 But then all is not well in the E-tailors paradise. The cost of customer acquisition is pretty high in India about 1100 INR/customer which eats into the margins, as most goods retailed are low value items such as books, CDs and electronic gadgets. High margin goods such as apparel are not very popular because of the touch and feel factor. Most Indians are not comfortable using their credit cards for shopping and there is always a fear of what you see may not be what you get. There may be a problem with complaint resolution, especially after receipt of wrong goods or delayed delivery. The Real Issues The Indian Retail industry has always thrived on personalization. The grocer, tailor or even the mom n shop apparel store owner knows the preferences, remembers

customers taste, budget and previous purchases. They sense the customers mood too which no CRM software can claim to do. Trying to personalize each customers experience might be one way to grow. The Indian consumer is still very need oriented, not very impulse or deal oriented like the American counterparts. Hence it might make sense to create real consumer centric promotions constantly that provide real value to the Indian consumer. Slowly but surely this is happening in India. There have been horror stories about receipt of bad or wrong goods, delayed deliveries, no response from the company which adds up to not trusting the online retailers. Through this changing albeit slowly, thanks to automation and technical integration. Touch points to focus on * Customer is the King A good 24/7 customer service through email, chat and toll free phone is what the E-tailers are providing. Customer complaint resolution whether, delayed delivery, product quality, wrong product delivered will certainly work towards long term customer relationship, retention and acquisition. * Supply Chain --Most customer complaints and delivery returns can be traced to the supply chain vendors or merchants. They are in fact the most important internal customers. It is important to have the supply chain vendors or merchants well integrated into the system both technically and strategically. * New Business Models --E-tailers always search new and innovative business models. Case in point being US based Power Reviews where it provides free review technology to E-tailers and all it asks in return is that the reviews collected on the retailers web site are syndicated, which is then aggregated on the Buzzillions.com, its sister website. Some Indian sites simply collect orders over a period of time say a week, order in bulk from the vendor and finally ship it to customer at a discounted rate. The customer is told beforehand about the delivery date, of course. * Comparison Shopping and Customer Reviews --All the 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.

Recommendations
Now a days customer wants to save there time from any thing so they like to buy things online but due to security reasons they dont. So those companies who are in the field of E-Tailing they should make secure the transactions made by customer to win their faith. As we all know that India is a developing country and she is getting better and better ever moment but still there are some fields where we are not as good as other countries like USA, Britain, France, Germany etc. but we try to use the same technology or facility over hear. We need to understand that things which are successfully working over there will not work with same quality and strength until Infrastructure for that service will not 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 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 willhwlp company to win the faith of customers. The process of online purchasing should be simple and easier for customer so that they can easily access or order whatever they want. So many customer do not buy products from internet although they know that they can buy it online and they have access too because they do not want to spend their time in finding the right product. They prefer to go to the market and buy it because they know where they found it.

Conclusion
Now a days fashion of e-retailing is increasing day by day, youth are the movers who want to try this facilities and in metro cities online buying is increasing very rapidly. Now they use online banking facility, book their movie ticket, railway ticket, recharge their mobile online. But in two tier cities online facilities are not popular. They still buy railway ticket, movie ticket with the help of broker or personally standing in a queue. One reason is that they do not believe on these facilities due to some cases of leak of personal data and second one is penetration of internet user is very low in two tier cities. Consumers preferences are changing rapidity and becoming highly diversified. It is difficult for the retail stores to satisfy all the needs of the customers. The most of the consumers 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 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=j 0NfykUTdG&sig=NTFC9z2Ty8SohyupmGsLyYfTRyU&hl=en&ei=qGeaS7jKH9G3rAe96unEAg&sa=X&oi=book _result&ct=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=true