E-Retailing

UNIT E-RETAILIN
13 G
Structure
1. Objectives
2. Introduction
3. E-Retailing
1. Components of E-Retailing
2. Advantages of E-Retailing
3. Shortcomings of E-Retailing
Challenges in
13.
3 E-Retailing Brick and
13. [Link] Retailing
Integration of Brick and Mortar with
4 E-Retailing
2. Opportunities from Integration
6. Multi Channel Retailing
7. Challenges for Adoption of Digital Commerce
8. Essentials of Online Retailing
9. Future of E-Retailing
10. Let Us Sum Up
11. Key Words
12. Terminal Questions

13.0 OBJECTIVES
After reading this unit, you will be able to:
● describe e-retailing;
● discuss advantages and shortcomings of e-retailing;
● discuss the components of e-retailing ;
● describe the challenges in e-retailing ;
● explain brick and mortar retailing;
● discuss multi channel retailing; and
● explain the pre-requisites for online retailing.

13.1 INTRODUCTION
In earlier units of this course, you have studied the tools and applications of
information technology which are used by the retailers to run their retail stores
and to serve their customers in the best possible way. There are various IT tools
which are used by the retailers like POS, RFID, visual display of merchandise,
electronic payment system and social networking etc. IT has revolutionised the
business process and it has brought changes in the business operations. Internet
has provided an extra edge to the customers New-a-days, buyers prefer to shop
as per their convenience and comfort from their homes for various reasons. 205
While surfing internet, we often see many advertisements
IT Application in regarding various offers and schemes of products for online purchases. This is
Retail
termed as e-retailing (popularly known as e-tailing). E-retailing simply means
retailing over internet or selling of retail goods on the internet. In simple words,
we can say that e- tailing refers to shopping through the internet or other media.
In this unit you will learn about e-retailing, its components, advantages and
shortcomings, challenges faced by e- retailers, role of IT in e-retailing, and brick
and mortar retailing. You will further learn about multi channel retailing,
pre-requisites for online retailing and future of e-retailing.

13.2 E-RETAILING
Electronic retailing (e-tailing) is a buzzword for any business-to-consumer (B2C)
transactions that take place over the Internet. Business-to-consumer (B2C)
transactions refer to transactions that occur between a business or company
(dealing in goods and services) and a consumer. E-tailing refers to the sale of
goods online (Figure 13.1 shows online retailing). Companies like Amazon and
Dell created the online retail industry by putting the entire customer experience.
These experiences may run from browsing products to placing orders to paying
for purchases on the Internet. The success of internet buying and selling
encouraged more traditional retailers to create an online presence to augment
their brick-and-mortar outlets (business that have physical presence rather than
virtual or online). Although e-retailing is an independent business model with
certain specific constituents like; trust model, electronic transaction process, etc.
In real sense it is a subset of e- commerce by nature.
In current context, we shall explain how a retailer of a brick-and-mortar outlet
can use e-retailing in meeting the needs of the customers and increase sales
revenue.

Figure 13.1:
E-Retailing
Source:
13.2.1 Components of [Link]
E-Retailing
Electronic retailing or e-tailing refers to the direct sale of products, information
and service through virtual stores on the web which is designed around an
electronic catalogue format and auction sites. There are thousands of storefronts
206 or e-commerce sites on the Internet that are extensions of existing retailers or
start-ups.
 There are certain essential ingredients for an electronic retailing business to be E-Retailing
successful. You must consider these components well in advance before setting
up an electronic storefront. Let us learn the components of E-Retailing. These
are as follows:
● Attractive business-to-consumer (B2C) e-commerce portal: The
interfaces and navigation should be user friendly and pleasing. The site
should have a strong sense of branding.
● Right revenue model: Revenue model should be accurate and there is
transparency in terms of service levels and pricing.
● Penetration of the Internet: As the e-commerce portal is in addition to the
existing brick-and-mortar infrastructure aimed to bring in customer loyalty.
The retailer should keep in mind the local internet penetration for better
success.
● E-Catalogue: It is a database of products with prices and available stock.
The retailer can provide value added service by giving price and feature
comparison between products. This would enhance the value of the
e-commerce portal for the customers. The retailer can indicate special
benefits available to customers under the loyalty programme thus making
the customer feel special.
● Shopping Cart: The customers can select the products that they wish to
purchase and fill their shopping cart. The Shopping Cart can be designed in
a way that it could allow the customer to store their preference and previous
purchase history for easy selection. This adds value to the shopping
experience and save time. Finally, as in a real store, at the time of checkout,
the system calculates the price to be paid for the products. The experience
should be seamless and without errors.
● A payment gateway: Customer makes payments through his/her credit card
or e- cash. The payment mechanism must be fully secure.
● Support Services in E-Retailing: The electronic retail business requires
Communication
●support services, as a prerequisite for successful operations. These services
are required
backbone toPayment
support the business, online or offline, throughout the
●
complete transaction- processing phases. The following are the essential
mechanism
support
● services: Order
●
fulfilment
Logistics

13.2.2
WhetherAdvantages of E-Retailing
it is conventional brick and mortar retail store or extension of the
existing business or a new start-up, there are many advantages from e-tailing.
E-tailing provides lots of opportunities to all types of retailers. Let us learn
advantages of E-Retailing. These are as follows:
i) Price and selection: Online shopping provides quick deals for many items
with many different vendors. E-tailing provides the facilities of online price
comparison which makes selection quite easy and fast.
ii) Opportunities to reach new markets: E-retailing gives retailers an
opportunity to reach new markets which is physically not possible.
iii) Provides home shopping experience: E-Retailing overcomes some
limitations of the traditional formats. For instance the customers can shop
with the ease and comfort of their homes (Figure 13.2 shows advertisement
for online shopping).
207
IT Application in
Retail

Figure 13.2: Online Shopping

Source: [Link]
iv. Extension to leverage: For the existing retailers, it is an extension to
leverage their skills and grow revenues and profits without creating new
business.
v. Valuable insights: E-commerce software also traces the customers’
activities on the internet. It enables e-retailers to gain valuable insights to
the customers shopping behaviour.
vi. 24 hours shopping: Online stores are usually available 24 hours a day.
Many customers who have internet access both at work and at home go for
online shopping. Moreover, increasing fuel costs, large mall crowds and
time constraints are motivating buyers to shop online. Retailers can get the
order from any customer living any place at any time of the day. E-tailing
vii. removes the barriers of time and space.
Reasonable cost: E-Commerce channels are definitely efficient and they are
highly cost-effective retailers. Retailers do not have to pay a heavy price
(rent) for shops in costly shopping malls.
13.2.3 Shortcomings of E-Retailing
The online retailing (e-retailing) process suffers from various drawbacks. There
are some drawbacks of E-Retailing. Let us learn them one by one.
i) It lacks an emotional shopping experience that the customer can get in a
personal shopping store.
ii) It is exposed to intangible merchandise (i.e., virtual display of merchandise).
Therefore, it does not provide sensory support to the customer. The
customer cannot hold, smell, feel, or try the product.
iii Online customers are reluctant to part with their credit card debit cards or net
) banking details on net, fearing they may be misused. It arises security issues.
Customers are not yet convinced about the foolproof status of this method.
iv) It provides impersonal services which the Indian customers are not exposed
to. They are rather used to the tangible personalised services which they
may miss in online retailing services.
v) It is lacking in family shopping experience. The Indian customers enjoy
shopping at the weekends, and particularly during festive seasons and
marriage occasions.
208 vi) There is always a sense of fraud in the mind of customers while shopping
online as customers are unable to inspect the product before purchase.
 The advantages of e –Retailing outweighs its drawbacks. Thus it is showing a E-Retailing
positive inclination rate across the boundary.

Check your Progress A

1. What is e-tailing?
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2. List any three advantages of e-retailing.
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3. Discuss in brief the major components of e-retailing.
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13.3 CHALLENGES IN E-RETAILING

You have learnt about components, advantages and shortcomings of E-Retailing.
Let us learn the challenges in E-Retailing.
E-retailing is totally a new concept in India and online retailing is a tedious task
here. E- tailers face so many problems and challenges in this process. The
following are the major challenges faced by e-tailers :
I) Resolving channel conflict: If a seller is a click-and-mortar (both web and
physical presence) company, such as Levi’s or GM. It may face a conflict
with its regular distributors when it sells directly online. This is known as
channel conflict. This situation can alienate the regular distributors. Channel
conflict has forced some companies (e.g., [Link]) to limit their B2C
efforts. Others (e.g., some automotive companies) have decided not to sell
direct online. An alternative approach is to try to collaborate in some way
with the existing distributors whose services may be restructured. For
example, an auto company could allow customers to configure a car online.
It requires that the car be picked up from a dealer, where customers would
arrange financing, warranties, and service. IT tools can facilitate resolution
of channel conflict.
II) Resolving conflicts within click-and-mortar organizations: When an
established company decides to sell direct online, it may create a conflict
within its existing operations. Conflicts may arise in areas such as pricing of
products and services, allocation of resources (e.g., advertising budget) and
logistics services provided by the offline activities to the online activities
209
(e.g., handling of returns of items bought online). As a result of these
conflicts, some companies have completely
IT Application in separated the “clicks” (the online portion of the organization) from the
Retail
“mortars” or “bricks” (the traditional brick-and-mortar part of the
organization). Such separation may increase expenses and reduce the
synergy between the two. The decisions about how to organize the online
and off-line operations and whether or not to separate them, can be
facilitated by IT tools. In addition, Group Decision Support System (Group
DSS) can be used to resolve conflicts.
III) Organising order fulfilment and logistics: E-tailers face a difficult
problem of how to ship very small quantities to a large number of buyers.
This can be a difficult undertaking, especially when returned items need to
be handled. IT-supported decision models can help with scheduling,
routing, shipments, inventory management and other logistics-related
decisions.
IV) Determining viability and risk of online e-tailers: Many pure online
e-tailers faced the problems with customer acquisition, order fulfilment, and
demand forecasting. Online competition, especially in commodity-type
products such as CDs, toys, books, or groceries, became very fierce, due to
the ease of entry to the marketplace. So a problem most young e-tailers face
is to determine how long to operate while they are still losing money and
how to finance
V) Identifying the [Link]
appropriate In deciding on new
models: EC dot-com
Many initiatives, or on an entire
companies were
dot-com
selling goods at or below cost, with the objective of attractingcan
company, a risk analysis is needed. A DSS modeling be
many
helpful
customersin such
and cases.
advertisers to their sites. One early dot-com model was to
generate enough revenue from advertising to keep the business afloat until
the customer base reached critical mass. This model did not work. Too
many dot-com companies were competing for too few advertising dollars,
which went mainly to a small number of well-known sites such as AOL and
Yahoo. In addition, there was a “chicken-and-egg” problem. Sites could not
get advertisers to come if they did not have enough visitors. To succeed in
VI) e-Commerce,
Requirement ittois Change
necessaryBusiness
to identify appropriate
Process: The revenue
process models.
of procurement,
storage and logistics in e-businesses is different from that in traditional
brick-store businesses. The e-retail organization has to carefully redesign
and integrate various processes to suit the new e-business. Traditional
sections of departments and management hierarchy may pose hindrances
and bottlenecks in the process of order processing and shipments. For
example, the traditional business may require the goods to be present at the
warehouse and inspected before being shipped to the customer. In electronic
retailing, shipping of goods from one place to another to a customer would
not be possible. The retailer may appoint a local supplier at the city where
the customer resides and instruct the supplier to deliver the goods. This
would require by passing certain business rules and a lot of faith on the local
supplier. It would require business confidence that the supplier would follow
the instructions and deliver the same product in good quantity and perfect
quality. Merchandise planning and demand analysis is also difficult in
e-retailing, as compared to traditional retail businesses. IT can play a great
role in defining these processes and ensure compliances.
VII) Legal Issues: Proper laws have not yet evolved for Internet based
transactions. Validity of e-mails, digital signatures and application of
copyright laws is being checked by various government authorities. E-mail
and digital signatures are now being recognized as valid for any legal
purpose. Value Added Tax (VAT) is yet another area that creates problems.
210 Taxes on goods and services are still an issue. Since the taxes are levied and
shared by multiple government agencies at local, state or federal level, there
are no clear rules to guide retailers. In e-retailing, the
 place of billing, the place of dispatch of goods and the place of delivery all E-Retailing
differ. If these three places fall in different jurisdictions of governments,
levy and submission of taxes would be a problem. IT needs to understand
these implications and built in a proper system to take care of them and
ensure compliance.
VIII) Security and Privacy: Security is one of the major challenges in the
digital world. Despite a lot of security arrangements, such as passwords and
firewalls, we come across the news of website hacking and data pilferages.
The Internet being on public domain is more susceptible to unauthorized
peeping. People are suspicious about disclosing information regarding their
credit cards and personal details on the Net because of a fear that they can
be misused. Cyber criminals have exploited the Internet weaknesses and
have broken into computer systems, retrieving passwords and banking
information. Security of payment gateway is a major concern, which has to
be taken care of by the retailer by putting up proper security layers. IT has
to ensure proper established framework that can have multiple layers of
security. IT should also ensure inter-operability between systems.

4. BRICK AND MORTAR RETAILING

You have studied about e-retailing, its components, advantages, disadvantages
and challenges in e-retailing. Now you will learn about brick and mortar retailing
and opportunities arise from integration of brick and mortar retailing with
e-retailing.
Brick and mortar retail store means a retail store that deals with its customers face
to face in physically constructed office building or store that the retailers owns or
hire on rent. Local grocery retail store is the example of brick and mortar
retailing. In simple terms we can say that brick and mortar retail store operates
from a constructed building and have physical presence rather than virtual or
online presence. It may be a store built of physical material such as bricks and
mortars where customer can drive to and enter physically to check, touch, see
and purchase merchandise. Generally brick and mortar term is used as the basis
for the term clicks and mortar, a business that deals on the web as well as from
physical locations.

1. Integration of Brick and Mortar with E-retailing

Today‘s shopper expects convenience. Merchants integrating brick-and-mortar
stores, ecommerce sites and catalogues will increase repeat purchase rates and
achieve higher levels of customer satisfaction. In any multi-channel retail
consumer interaction, traffic and sales are being driven from one channel to the
other. In “web-to-store” or “store-to- web” situations, the limitations of one
channel are mitigated by the strengths of the other.
i) Centralised Order Fulfillment: The centralised order fulfilment includes:
This calls for greater integration with both these business processes so as to
●
maximize Common merchandise
the revenue data base
opportunities. for item
For this data,the
purpose hierarchy acrossto focus
retailer needs
channel
in the following business process areas:
● Merchandising operation through integrated platform for pricing,
promotions and offers
● Corporate wide CRM
● Offer consistent pricing and promotions
211
● Choice for customers to order through any channel and pick at any
channel
IT Application in ● Distributed Order Management, consolidates all channel order and
Retail
fulfill from Distribution center
● Put away stocks and cross-dock stocks
● Re-allocate & Re-distribute the stocks based on demand in the
●
channels
Transport planning for courier to customer in web/ mobile/ Store
●
channel sales
Customer returns on any channel is accepted irrespective of the
channel that was the purchase made on, and is accounted in inventory
●
through POS or Web Payment gateway
Customer returns through Web/Mobile, the web/mobile should accept
ii) theChain
Supply returns as a separate transaction
Synchronisation: It includes: or along with shopping list of
purchase
● Integration to store pickup order, inventory and billing
● Vendor to supply for all channels
● Visibility of inventory in all channel
● Near real-time POS data for inventory position for accuracy
● Ability to update channels on stock out items
● Ability to transfer the store pickup orders to delivery order if stock out
iii) Merchandising planning: It includes:
● Demand planning & forecasting for web / mobile / direct store
● Regular Ordering system for different categories
● Category sales planning for all channels and contribution to total
financial plan
● New product introduction in all channels
● Inventory planning for all channels based on the sales trends. (min
/max/ re order)
● Visual images selection for SKU for display in Mobile and Web
iv) Customer Profile: It includes:
● Single window registration for all channels
● Common Identity for every customer / family across the channel
● All channel bills pertain to customer to integrate in common database
● Schemes on rewards, pre calculated value before merge into common
database
iii) Metrics and Measurement: It includes:
● Measure across channel for consumer growth & satisfaction
● Effective loyalty program to track across channel
● Surveys to gather additional insight across channels
● Measure by category and not by channels
● Inventory reports on efficiency in utilization of inventory across
channels
● Category performance reports across channels
● Marketing analysis reports to add value in all channels & enhance
212 customer experiences and conveniences
13.4.2 Opportunities from Integration E-Retailing

Once integration is achieved, the retailer can provide value-added services to the
customers which work across channels. After the integration, there are some
opportunities, let us learn them one by one.
i) In-store pick up: In-store pick up is a process allowing your customers to
order online and pick up in your physical store. During the process,
communication with the customer primarily happens via email and instructs
the shopper the steps necessary to complete the transaction. In most cases,
the order is fulfilled at the “brick-and- mortar” store the same business day
the order is placed online, with best practices showing most orders filled
within a two-hour period. The primary value to consumers is that they
receive their items almost immediately after purchasing. By using in- store
pick up, consumers pick up their merchandise at a special designated area.
Thus they may avoid heavy crowds at the checkout counter. This is a core
reason why in-store pick up is so popular during the holiday season, when
last minute ordering is often done online. The consumer also benefits from
not having to pay shipping costs. Sometimes the associated shipping cost of
a product can be a critical factor to cart abandonment. In-store pick up
reduces this risk. The retail business also benefits from the incremental
purchases that are made when a customer goes to the physical store to pick
up online purchases.
From a technology perspective, in-store pick up needs to have some level of
inventory integration to work effectively. The integration of data is critical
in being able to display to the consumer the availability of products at their
closest geographic store. After a user selects the “in-store pickup” option
and enters his pin code, the system needs to cross-reference available
store-level inventory data. This ensures that the product is available within
an acceptable distance. ‘PVR Cinemas’ is a very handy example to this. The
customers can view the availability of seats, choose the location of the seats
vacant or available and book the tickets online. The customer is given a pin,
showing which tickets can be obtained from ticket counters or ticket vending
machines (kiosk). This inventory accuracy is crucial to deliver a great
shopping experience. Integration does not have to work in real time, but
needs to execute multiple data checks throughout the day. Work your
in-store pick up product availability based upon thresholds. For example,
once an inventory level reaches three in a store location, do not display as
available for in-store pick up. In-store pick up should not be executed for all
products. Focus on products with high shipping costs and products that a
consumer would typically want immediately.
ii) In-store returns: Returning a product purchased online can be an extremely
frustrating experience. Between determining if the retailer will pay for the
shipping, waiting in line at the post office and waiting for a refund, the
returns process is known for giving consumers headaches. Accepting online
product returns in a physical store is a tactic to make the returns experience
pleasant and easier for the customer. By displaying an in-store returns
option on your site’s home page, product page and within the shopping cart,
a retailer reduces consumer purchase hesitation and will likely drive
conversion improvement.
Similar to in-store pick up, in-store returns generate incremental in-store
purchases. After receiving their refund, consumers frequently shop for and
purchase additional items while in the store. These actions can lead to order 213
values that are actually greater than the initial online purchase and drive
higher lifetime consumer value. The key to executing in-store returns is to
have order management from the web and the physical stores driven from
IT Application in iii) Emailed in-store coupons and promotions: Email is predominantly used
Retail
as a mechanism to drive web-store promotions. Multi channel businesses,
however, are realizing the value of emailing “in-store” or hybrid promotions
to their mail lists. ”In-store” email promotions allow the consumer to print
an email promotion (say Rs.100 off a Rs.1000 purchase) and have it
accepted at the retail store. For businesses wanting to further track multi
channel purchasing, consider generating unique barcodes for each email that
provide added levels of insight and security. Hybrid emails allow
promotions to be leveraged in-store and online via a purchase code. By
giving the consumer the ability to choose how they want to utilize the
promotion, a retailer builds a stronger service connection with the shopper.
iv) Store locator: Now standard among e-commerce stores, a store-locator
function must be able to find the closest stores based upon pin code while
providing door-to- door directions online. If retailers have a physical store
All ofnetwork but do are
these initiatives notgeared
provide store
toward locatoronefunctionality,
achieving objective i.e. retailers are
closing the
sale. dramatically behind the innovation curve.
Check your Progress B
1. List the challenges which are faced by e-retailers.
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2. Explain brick and mortar retailing with example.
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3. Define click and mortar retailing.
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13.5 MULTI CHANNEL RETAILING
Due to high competition in retail sector, it is very difficult to serve the customers
with a single channel of retailing. Retailers are increasingly multiplying their
channels, adding Web platforms and call centers to brick-and-mortar stores to
reach more and more customers. Interestingly, customers do not use one channel
exclusively to complete their purchases anymore. As a matter of convenience,
many customers use the multiple channels to complete the purchase process.
Consumers also are mixing different channels for different activities. For
example, a multi channel customer might research a product at home by visiting
a retailer’s online store, doing comparisons and reading reviews about the
product. If this user has specific queries that are not answered online, he may
then call the retailer’s call center. After completing his research, he may go back
214 to his computer, place an order online and then track the order status or shipping
details. Or he may place the order online and then pick up the product from a
nearby
store instead of having it shipped from a warehouse. Look at figure 13.3 which E-Retailing
shows the channels used for retailing.

Figure 13.3: Channels used for retailing

While many retailers add different channels one-by-one to respond to rapid
changes in the marketplace and in customer expectations, disparate channels are
no longer able to drive customer satisfaction or revenue. This is due to Retailers’
inability to provide consistent user experience and service levels. Certain
channels such as Web call for more product data whereas a mobile store front
expects integration with location services.
Integrating multiple channels poses several challenges, due to different systems
that work using different technologies, organization structure that is already
established and the need to manage inventory across channels. It is important to
identify business needs and align integration road maps to satisfy these needs
before embarking on a multi channel integration initiative. Making product and
pricing information and inventory visibility uniform across channels poses huge
challenges that should be dealt diligently. Figure 13.4 shows the components of
multi channel retailing.

Figure 13.4: Multi channel

retailing 215
IT Application in
Retail 13.6 CHALLENGES FOR ADOPTION OF DIGITAL
COMMERCE
In a country like India where a large number of semi urban and rural customers
exist, they generally want to see, touch and compare merchandise before
purchase. Customers are not much familiar with internet and digital commerce is
a tough task here. Let us learn main challenges for adoption of digital commerce.
i) Effectively using digital media: Overall, retailers are not able to leverage
Internet and Mobile as branding as well as customer acquisition medium.
They look at online sales and in-store sales as two different worlds.
Retailers typically consider their online presence as a means to overcome
the physical limitations of offline promotions, particularly catalogue and
newspaper inserts, not as an integrated channel.
ii) Provide complete experience to consumers across digital channels:
Retailers do not feature all the products available in stores online, and this
presents a cut off to the customers. They are not able to find the products
that they are looking for. Moreover, consistent product information across
all channels of marketing is not available. The customers do not get all the
information about a product like images, product features, and hence
influencing purchase capabilities which are required to drive sales using
iii) digital channels.
Managing technology is not a retailer’s expertise: Technology is often a
capital intensive department and retailers are often weary of getting into an
area which they are not experts in. It is important for retailers to be able to
acquire and manage technology without requiring technical expertise or
huge investments.
iv) Showcase products and offers: Consumers want to know of all the
products and offers available from a retailer. They also want to be able to
quickly find the product or offer that they are interested in. So product
discovery and showcasing is a critical challenge for most retailers.
v) Expensive & difficult to manage Payment systems & logistics: Getting a
flexible payment solution and logistics solution for retailers’ digital
commerce requirements is a complex job. It is hard to find affordable and
reliable solutions that will take care of such core requirements such as
payment and shipping.
vi) A consumer lost online, is a consumer lost: Many retailers view online and
offline retail sales as different domains. The reality is that a customer who is
looking for a particular retailer and does not find that retailer or finds a
competitor or gets a not-so-good impression about that retailer on the
13.7Internet
ESSENTIALS
might choose OF ONLINE
not to do businessRETAILING
with that retailer.
Retailing over internet is not as simple as running a brick and mortar retail store.
It is totally different and challenging task. Look at figure 13.5 which shows
building blocks for running a store online.

216
 E-Retailing

Figure 13.5: Building blocks for running a store online

There are some very important points which should be kept in mind while
deciding to go for online for retail. Let us discuss the essential points one by one.
a) The Commerce Platform: It is very important to select appropriate
platform for digital commerce foray. The choice a retailer makes at the
beginning will have a long term impact. The choices one needs to make are:
a) Service Model vs. Owning the platform
b) Using a standard platform vs. building your own platform
c) Using Open source vs. proprietary platforms
b) Logistics Partner: It is very important that orders received get executed
within the promised time window. The logistics partner should be able to
integrate his systems with retailers’ systems so that orders flow through
uninterrupted and supply chain visibility is available to the customers. In
certain payment options such as Cash-on-Delivery (COD), the partner
should be able to collect the payment. Reverse logistics includes handling
customer returns and non-delivered goods.
c) Payment Gateway: Retail store should be able to accept the customer
payments using various methods. Most common include:
a) Credit Card and Debit Card Payments
b) Net banking
c) Using Digital Gift vouchers
d) Cash on delivery
e) Payment at Store in cash
d) Digital Marketing Agency: In order to drive customer traffic to retail
online store, retailer needs to engage a Digital Marketing Agency. The
scope of work for such agency includes:
a) Content Creation for catalogue including photographs, videos and
detailed product specifications
b) Writing reviews, blogs
c) Search Engine Optimisation to make easier for customers to find retail
store and merchandise
d) Managing the loyalty programme
e) Running campaigns on leading portals using advertising networks such
as MSN, Google, etc.
217
IT Application in f. Engaging with customers on social media platforms such as Facebook,
Retail
Twitter, Google+ etc.

Figure 13.6: Retail operations platform

Source: (IDC, 2011)

Model for online retailing

a) Common process models: For online retailing there are some common
process models and these are:
i) Web Store linked to one store: The online store front uses catalogue
of the items available at one particular store in the chain. The orders
received are executed through POS. Integration is in batch mode.
ii) Web Store linked to warehouse: The catalogue exposed on the online
store reflects stocks available at the warehouse. Execution takes place
from the warehouse itself. Integration may be event driven/real time or
in batch mode.
iii)Each physical store has a web store front: Here, each Point of Sale
(POS) is linked to the web stores and customers may place order online
but pick up from the store. In some variant, it allows pre-booking of
new models/ items on the web front end. Payments may be online of
b) offline.
Models for web stores: For web stores, some models are:
i) EBO on Popular Platforms: Many brands / retailers launch their
online store on popular portals such as [Link] or [Link].
This gives them shorter time to launch and get online footfalls due to
the traffic delivered by the portal. As a part of marketing campaigns,
highly effective to get noticed but difficult to sustain due to high
investment required to maintain high visibility.
ii) Store at the Marketplace: Many a brands / retailers set up their online
stores on E-commerce Hubs or Marketplaces such as MartJack
Exchange or Amazon. This gives them access to technology
infrastructure which is very scalable along with advanced tools to
218 manage the content as well as to run targeted campaigns. The
operating costs are moderate.
 iii) Stand alone Stores: Mature retailers prefer to make their own E-Retailing
platform a destination for online shoppers. The technology platform
can be on software- as-a-service model or can be owned by the
retailer. Integration with the supply chain systems is must.
iv) Pure play: These are the retailers who do not have physical stores.
They may have physical supply chain of their own or it is managed by
their suppliers.
Social Commerce: The retailer opens his store on social platforms
v)
such as Facebook.
Who owns Multi channel Retail in the organization?
In some organizations, IT owns the multi channel commerce. There are few
where marketing owns the same. In mature organizations, the multi channel team
is a part of the operations.
Analytics for Multi channel Commerce
The metrics used for digital commerce is different from the offline retail. Tools
such as Google Analytics provide you with ready to use tools (look at figure
13.7).

Figure 13.7: Analytics for multi channel commerce

Check your Progress C

1. What is multi channel retailing?
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IT Application in 2. List the essentials of online retailing.
Retail
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3. Explain in brief the models for web stores.
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13.8 FUTURE OF E-RETAILING

You have already learnt about E-Retailing, challenges in E-Retailing, Brick and
Mortar retailing, multi channels retailing and essentials of online retailing. Let us
learn about future of E-Retailing.
E-tailing is a new concept in India. With limited internet users, this industry
(e-tailing) is growing very fast and there is much to be achieved yet. Many
growth drivers are in favour of e-tailing- demography, economy, changing
lifestyle, exposure to new ideas etc. Indian’s generally do not shop online. They
shop merchandise after touching, seeing and after price comparison. Many times
they gather information on the net. Indian e- tailing websites like [Link] are
offering shopping along with price comparison. Future of e-tailing in India is
bright with many sites like [Link], [Link], [Link],
[Link] etc. are providing good services and major retailers like
VishalMegaMart is also entering in this line. FMCG’s like Amway is giving
additional option to shop online, this shows the shifting trend towards e-tailing.
With the advent of new innovations like Web 3.0 retailing system will go in
hand-in-hand. In this highly competitive environment customers want full value
from their shopping with full convenience and ease. Online shopping is not only
more convenient for customers with hectic lifestyles but also gives a better deal
for their money. Figure 13.8 shows online shopping.

Figure 13.8: Online

shopping
220
Source: [Link]
 According to a study by Indian Council for Research on International Economic E-Retailing
Relations (ICRIER), India’s unorganised retail sector is expected to grow at
about 10 per cent per annum with sales rising from USD 309 billion in 2006-07
to USD 496 billion in 2011-12. The study further suggests that organised retail is
likely to grow at a much faster pace of 45-50 per cent per annum and quadruple
its share in total retail trade to 16 per cent by 2011-12. The study also revealed
that the majority of unorganised retailers indicated their preference to continue in
the business and compete rather than exit. This represents futures scenario in
which both unorganised and organised retail not only coexist but also grow
substantially in size.

9. LET US SUM UP
Electronic retailing (e-tailing) is a buzzword for any business-to-consumer (B2C)
transactions that take place over the Internet. E-retailing simply means retailing
over internet or selling of retail goods on the internet. In simple words, we can
say that e- tailing is nothing but shopping through the internet or other media.
There are certain essential ingredients for an electronic retailing business to be
successful like attractive business-to-consumer (B2C) e-commerce portal, right
revenue model, e-catalogue, proper payment gateway and support services in
e-retailing etc. E-tailing provides so many advantages like price selection,
opportunity to reach new markets, extension to leverage and 24 hours presence
etc. There are so many challenges which are faced by e-tailers like channel
conflict, legal issues, security and privacy issues etc. To be successful retailer, it
is important to integrate the brick and mortar retail store with e-retailing. It
provides lots of opportunities. In present era, no single mean of retailing is
sufficient to serve the customers, therefore retailers are using multi channels for
their retail stores. Most of the conventional brick and mortar stores have now
become the click and mortar store and enjoying the benefits of this integration of
brick and mortar store with e- retailing. But retailing over internet is not as
simple as running a brick and mortar retail store. It is totally different and
challenging task. There are some very important points which should be kept in
mind while deciding to go online for retail like selection of appropriate platform,
integration with logistics partner and proper payment gateway etc. E-tailing is a
new concept in India. With limited internet users, this industry (e- tailing) is
growing very fast and there is much to be achieved yet. Many growth drivers are
in favour of e-tailing- demography, economy, changing lifestyle, exposure to new
ideas etc. Online shopping is not only more convenient for customers with hectic
lifestyles
E-Retailing but also gives a better deal
: for their activities
Retail money. over internet.

[Link] and Mortar

KEY WORDS
store : Retail store which deals with its customers
in a physically constructed building rather
virtually.
Click and Mortar store : Retail store which deals with its customer
both in physically and virtually.
Multi channel : A marketing strategy that offers customers
retailing a choice of ways to buy products.
Business-to-Consumer (BLC) : A transaction, that occurs between a
Transaction company and a consumer.
Online Payment : Payment through debit or credit card over
internet. 221
IT Application in
Retail 13.11 TERMINAL QUESTIONS
1) What is e-retailing? Explain the components of e-retailing
2) What is meant by online retailing? Discuss the advantages and shortcomings
of e- retailing.
3) “E-tailing is a new concept in India and online retailing is a tedious task
here” Comment on this statement.
4) Explain brick and mortar retailing with examples.
5) Is it fruitful to integrate brick and mortar retail store with e-retailing?
6) Describe the multi channel retailing with examples.
7) Explain the essentials of online retailing?
8) Discuss the various models for online retailing.

Activity: Visit any retail store and mention the channels they are using for
their retail activities and try to find that is this store a click and
mortar retail store?

REFERENCES/ FURTHER READINGS

Girdhar Joshi, “Information technology for retail”, Oxford University Press,
2009.
[Link]
0E- tailing_Paper.pdf
[Link]
[Link]
[Link]
etailing- [Link]
[Link]
with- eCommerce
[Link]
[Link]
[Link]
- buying-and-merchandising/
[Link]
[Link]
.html [Link]
[Link]
q [Link]

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