.E- Retailing.

A new business tool to capture the existing

market

Dissertation submitted in partial fulfillment of the

requirements of the two year full-time Post Graduate
Diploma in Retail Management
Programme

Submitted by
.Nagendra

Pratap Singh

Roll No: FT (RM)-08-114

Batch: 2008-2010
Institute For Integrated Learning in Management
Graduate School of Management
16, Knowledge Park
Greater Noida 201 306
March 2010
1

Contents
Pag
e No.

1.Executive Summery
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5
2.Objective
..
6
3.About Retail
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7
4.Prediction for Retail Sector
..
10
5.About E-Retailing
..
11
6.E- Commerce Market

12
7.Advantages

18
8.Fraud and Security Concern
.
21
9.Problem faced by customer

25
10.Rcommendation

30
11.Conclusion
..
31
12.Bibliography
..
32
2

DECLARATION FORM

I hereby declare that the Project work

entitled E- RETAILING (A NEW BUSINESS TOOL TO CAPTURE THE
EXISTING MARKET) submitted by me for the partial fulfillment of the
Post Graduate Diploma in Retail Management Program to Institute for
Integrated Learning in Management, Greater Noida is my own original
work and has not been submitted earlier either to IILM GSM or to any
other Institution for the fulfillment of the requirement for any course of
study. I also declare that no chapter of this manuscript in whole or in
part is lifted and incorporated in this report from any earlier / other work
done by me or others.

Place

Date :

Signature of Student

Name of Student

Address

: Nagendra Pratap Singh

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

Acknowledgement
Acknowledgement is not only a ritual but also an expression of
indebtedness to all those who have helped in the preparation process of
the project. One of the most pleasant aspect is collecting the necessary
information and compiling it is the opportunity to thank those who
actively contributed to it.

I would like to express my sincere appreciation to Prof. Ajeet Sharma his

kind help, guidance, support
and encouragement throughout my
project . This project will help me to curve my personality in the best
manner, which is needed for professional career. In fact this project is
the mirror of my aspiration.

Signature
4

Name:- Nagendra Pratap Singh

Course:- PGDM(RM),2008-2010

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 Eretailing/ E-tailing anyone can buy anything from a pen to car with in a
second. In this project I try to find out that whether this service is
helpful to the customer or will increase problems to the customers. This
project is done on secondary data, I have analysed the secondary data
from different sources like Internet, newspaper magazines etc . In the
project in the starting I have given little intro of RETAILING in INDIA and
the formats of RETAIL in India like MALLS, HYPER MARKET, Convenience
store etc.
E-retailing working has been also shown in the project how the eretailing is beneficial to the customers and securities concern on ERETAILING .I have given the advantages of E-retailing and how this
5

modern world is getting changed or rather say getting more and more
from the usage of internet. Top 10 companies which are based over eretailing 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 sq ft (46 m2) in size.
Organized Retail Unorganized Retail

ORGANIZED RETAIL: Organized retailing refers to trading

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

UNORGANIZED RETAIL: Unorganized retailing, on the other

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

RETAILING FORMATS IN INDIA

MALLS: The largest form of organized retailing today. Located
mainly in metro cities, in proximity to urban outskirts. Ranges from
60,000 sq ft to 7,00,000 sq ft and above. They lend an ideal
shopping experience with an amalgamation of product, service and
entertainment; all under a common roof. Examples include
Shoppers Stop, Pyramid, and Pantaloon.
Shopping-centre development has attracted real-estate developers
and corporate houses across cities in India. As a result, from just 3
malls in 2000, India is all set to have over 220 malls by 2005. Today,
the expected demand for quality retail space in 2009 is estimated to
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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 sq ft to 2,000 sq ft and large
supermarkets ranging from of 3,500 sq ft to 5,000 sq ft. having a
strong focus on food & grocery and personal sales .

 CONVENIENCE STORES: These are relatively small stores

400-2,000 sq. feet located near residential areas. They stock a
limited range of high-turnover convenience products and are
usually open for extended periods during the day, seven days a
week. Prices are slightly higher due to the convenience premium.
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
10

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
11

the Web, and CommerceNet/Nielsen Media reported that 10 million

people had made purchases on the Web.
E-retailing uses internet as a medium for customers to shop for the
goods or services. It can be either pure-plays or bricks-and-clicks. Pureplay 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.
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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-toweight 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 E-Commerce market ranks first and
13

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
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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 email, 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: Rediff.com, Jaldi.com, Fabmart.com,
Tsnshop.com and Satyamonline.com.

15

 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.

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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.
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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
18

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

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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 in-stock items are actually packaged and shipped.
20

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).
21

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-andmortar retailers order. Some retailers (especially those selling small,
high-value items like electronics) offer free shipping on sufficiently large
orders.

22

Fraud and security concerns

Given the lack of ability to inspect merchandise before purchase,
consumers are at higher risk of fraud on the part of the merchant than
in a physical store. Merchants also risk fraudulent purchases using
stolen credit cards or fraudulent repudiation of the online purchase.
With a warehouse instead of a retail storefront, merchants face less risk
from physical theft.
Secure Sockets Layer (SSL) encryption has generally solved the problem
of credit card numbers being intercepted in transit between the
consumer and the merchant. Identity theft is still a concern for
consumers when hackers break into a merchant's web site and steal
names, addresses and credit card numbers. A number of high-profile
break-ins in the 2000s has prompted some U.S. states to require
disclosure to consumers when this happens. Computer security has thus
become a major concern for merchants and e-commerce service
providers, who deploy countermeasures such as firewalls and anti-virus
software to protect their networks.
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
23

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
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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
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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 shut-ins as their typical
purchasers.[citation needed] Items which can fit through a standard

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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 colour integrity appears important. Nonetheless,
Tesco.com has had success delivering groceries in the UK, albeit that
many of its goods are of a generic quality, and clothing sold through the
internet is big business in the U.S. Also, the recycling program
Cheapcycle sells goods over the internet, but avoids the low value-toweight 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
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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
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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.
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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-tailers 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
30

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 Etailers are present on comparison shopping sites is of paramount
importance especially since people now visit these sites before they
place the order. Being present on well known sites such as
compareindia.com andwize.com is a very good idea. Also they
encourage customer to write the product reviews nothing
authenticates their offering to an undecided customers like a good
product review.

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RECOMMENDATIONS
Now a days customer wants to save there time from any thing so
they like to buy things online but due to security reasons they
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
upto the mark in our country.
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 Still Indian customers are not aware about this kind of facility is
available to them, they still like to buy things after visiting the
shops. Companies which are in that business need to increase
awareness among people by advertisement and customer should
also be informed that how to purchase goods online.
Generally customer complains that most of the companies are
failed to provide products on time, they even not sure that
whatever they ordered will surely reached to them. So Delivery
time should be taken into consideration.
If any complain registered by the customer then it should be
solved within time and companies should try to find out quick way
of solving the frauds complains. It will hwlp company to win the
faith of customers.
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
33

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 donot 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.

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BIBLIOGRAPHY
www.google.com
www.Ask.com
www.wikipedia.com

http://books.google.co.in/books?
id=zrFlIcn7enwC&printsec=frontcover&dq=e+retailing&source=bl&ots=j0NfykUTdG
&sig=NTFC9z2Ty8SohyupmGsLyYfTRyU&hl=en&ei=qGeaS7jKH9G3rAe96unEAg&sa=
X&oi=book_result&ct=result&resnum=3&ved=0CBAQ6AEwAg#v=onepage&q=&f=tr
ue

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