Online Retail management

Submitted to

Prof. Sujoy Bhattacharya

Submitted by
PM Abdullah 09BM8080
Abhinav Kanaujia 09BM8081
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Table of Contents

Contents Page

Introduction to Online Retail 3

Process of online retail 3

Advantages of online retail 4

Disadvantages of online retail 4

Categories of Online retail 5

Model of online buying 5

Indian scenario of online retail 6

Future aspects of online retail 8

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What is Online Retail?

Online retail is the process whereby consumers directly buy goods or services from a seller in
real-time, without an intermediary service, over the Internet. It is a form of electronic commerce.
An online shop, e-shop, e-store, internet shop, web shop, web store, online store, or virtual store
evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or in a
shopping mall. The process is called Business-to-Consumer (B2C) online shopping.

Process of online retail

1. Login to website
2. Order origination
a) Order receipt
b) order tracking
c) customer and call center management
3. Data center
a) Order processing
b) customer analysis
c) Inventory analysis
4. Warehouse
a) warehouse operations
b) inventory management
c) order picking and packing
5. Distribution
a) Fleet management
b) return and reverse logistics
c) sorting
6. Local delivery and receipt of product
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(Source: McKinsey Quarterly Number 2, 2000)

Advantages of online retail

• Convenience – Online retail stores are usually available 24 hours a day

• Information and reviews, such as instructions, safety procedures, demonstrations, or
manufacturer specifications
• Price and selection

Disadvantages of online retail

• Product category risk, Enjoyment of retail shopping lost

• Privacy and security issues
• Access to the Internet and computer necessary
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Types of online retailing

Four main types of online retail business models:

1. Virtual merchant – Single channel Web firms that generate almost all revenues from
online sales (Example: Amazon.com)
2. Bricks-and-clicks – Companies that have a network of physical stores as primary retail
channel, but also online offerings (Examples: Wal-Mart, Sears)
3. Catalog merchant – Established companies that have a national offline catalog operation
as largest retail channel, but also have online capabilities (Example: L.L. Bean)
4. Manufacturer direct – Single or multi-channel manufacturers who sell directly online to
consumers without intervention of retailers (Example: Dell)

Model of online buying

(Source: Sahney et.al, 2008)

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The above model is developed through the Technology Acceptance Model which is described as
given in the following diagram.

(Source: Wikipedia)

Indian scenario of online retail

According to Network 18’s recent survey “Indian’s do not buy online often” Indian’s do prefer
to gift online as it makes their life much simpler. They can avoid the hassles of selecting;
packaging and posting the gift through the online channel. Many Indian’s also like to do a brief
online research on the products they might like to buy, but eventually they buy it from regular
stores.

That’s why some leading Indian e-tailing websites have also positioned themselves differently
like: Infibeam’s tagline starts with “Gifts to India”, Naptol “Online shopping and price
comparison India”.
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India’s online retail industry is trailing at Rs 1105 crores ($ 0.23 billion) whereas UK’s online
retail market stands at a whooping £9 billion ($15 billion). Despite of the small size and its
seasonal nature (Diwali, New Year, Holi, Rakhi etc) in Indian online retail we cannot discount it
as a niche business. The online retail has seen a 30% increase year on year from the last few
years.

With India poised to have third largest net users by 2013, the growing economy and worsening
traffic conditions; we certainly would have more online purchasers in India. Hence all the largest
business houses in India have either entered or are planning to enter the online retail space. We
already have Reliance Rmoney mall, Pantaloon’s Futurebazaar.com, Videocon’s
eDigiworld.com, Vishal mart’s Vishalmegamart.com and we have Tata coming up with its own
e-mall.

Despite of the small market size, Indian retail industry has lot of players in this online space due
to the small market barriers. Here is the list of the top five Indian retail websites ranked
according to daily page views.

Ebay.in:

No wonder that worldwide leader in retail Ebay is doing great in India too. Backed by a powerful
brand, loyal customers, and experience in online retail it has generated good transaction in India.
It came to the Indian scene with a bang by acquiring Baazee.com in June 2004 for Rs 230 cr.
Their graph in compete or alexa shows that though they have a large loyal customer base, they
are not attracting new visitors. Maybe it’s time to revamp their strategy a little

Flipkart.com:

This site is launched in sept 2007 by employees of Amazon.com”. With traffic comparable to
that of ebay.in this website also came across some good reviews from the users.
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Infibeam.com:

This site is very good in content and design. Infibeam was in news recently when it acquired
picsquare. Infybeam’s Car retail section is also a unique in this space which is helping them to
gain a lot of eyeballs.

Shopping.rediff.com:

Rediff is loaded with simple and elegant web 2.0 features. Users give quite satisfactory response
to rediff shopping. Rediff can do better by using alexa shows as only 1.7% of the customers
visiting rediff.com visit shopping.rediff.com.

Naaptol.com :

Positioned as a comparison website, Naaptol do sell online too. Naaptol have multiple revenue
sources like advertising, selling online and passing on leads for local stores. The site is very rich
on content and the design seems to be flawless. Refined web 2.0 features are also present in the
website.

Future aspects of online retail

Electronic retailers must also answer the queries of customers quickly and accurately (while
learning their buying habits and preferences) and make good use of the data generated during
transactions. Moreover, e-tailers must integrate on-line orders and returns with off-line ones, and
do so in a way that makes household delivery of small orders economically viable.