E-Retailing

Internet Retailing or ‘e-retailing’ (less frequently also known as e-tailing) is basically an online shopping retail store using different technologies or media. It may be broadly be a combination of two elements.

» Combining new technologies with elements of traditional stores and direct mail models
» Using new technologies to replace elements of store or direct mail retail.

Internet retail also has some elements in common with direct mail retailing. For eg, e-mail messages can replace mail messages and the telephone, that are used in the direct mail model as means of providing information, communication and transactions while on-line catalogues can replace printed catalogues. As with direct mail businesses, critical success factors include:
• Use of customer databases
• Easy ordering
• Quick Delivery

Operational elements that the Internet retail model shares with both the retail store and direct mail model includes:
» Billing of customers
» Relationships with suppliers

There are, therefore, many elements that Internet retail and more traditional retail models have in common. Indeed many of the most successful Internet retailers have been those that have been able to successfully transfer critical elements from traditional retailing to the Internet, such as customer service and product displays.


                                                                  Click on the image for enlarged view

Facts and Figures:

E-tailing accounts is about 10 per cent of the overall e-commerce market. According to the Internet and Mobile Association of India (IAMAI) and Indian Marketing Research Bureau (IMRB) report, the e-tailing market was worth Rs 850 crore in 2006-2007 and it is expected to grow by 30 per cent, touching Rs 1,105 crore in 2007-2008. Globally, the market for online shopping has increased by 40 per cent in the last two years, according to the latest Nielsen Global Online Survey on Internet shopping habits.

As a matter of fact, industry body Assocham has pointed out that the volume of products sold online are expected to grow by 150 per cent in 2008. Additionally, the increasing PC and Internet penetration is helping accelerate the share of e-commerce in India.

Advantages of E-tailing

* Sheer convenience.
* Wider choice.
* Better value.
* Unique gifting opportunity.
* Saves time and strain.
* Integrated source of information.
* Micro targeting.
* Mass personalization.
* Know customer preferences.
* No Real Estate Cost

E-Tailing Business Models

* Virtual Merchant
* Clicks & Mortar.
* Catalog Merchant.
* Online Malls.
* Manufacture Direct


Channel Comparison with Traditional Retailing Practices


                                                                  Click on the image to see a clear view

Information Technology (IT) in Retail

Why information technology IT is needed?
Information Technology (IT) has become a key business driver in today’s world. Retailers are also trying to reap in the benefits of the technology. Thus technology has become a critical and competitive tool for surviving in the business. Retailers are using software systems to manage and plan their inventory, to reduce the procurement costs, electronic ordering, electronic fund transfer, e mail communication and for many other things. IT is poised to take a much bigger role in Retail Industry however the high implementation cost of IT projects has restricted many Retailers to go for proper IT solution. IT growth areas in Retail are mentioned below.

Supply Chain Management:
Supply chain is one of the focus areas for the Retailers and immense opportunity of business process improvement and scope of technological empowerment is there in this area. In today’s tough economic climate customers have become price sensitive and there is a price draught in the market . Retailers are struggling to control the cost and in this the environment effective Supply Chain Management can act as a big contributor. It helps them to integrate with their suppliers and through collaborative planning retailers can reduce the cost. SCM solutions will enable Retailers to track their inventory movement from supplier’s premises to the point of sale. It gives a better visibility in the area of demand planning, forecasting and inventory management. Worlds largest Retailer Wal–Mart has adopted a state of the art SCM system which not only tracks the inventory but also it increases the efficiency of the process. Wal–Mart has also introduced the Radio Frequency Identification (RFID) of merchandise.

CRM:
CRM continues to be a growth area for IT in Retail sector. Advancement in this field helps to maintain sophisticated customer database and systems that can maximize multi channel returns. This helps the retailers to understand the customers demand pattern and enables them to offer a tailor made shopping experience.

Internet:
Internet has unfolded lot of opportunities to the Retailers. Retailers can do business over internet. It can also be used as a communication medium. Successful Retail community uses internet technology for reliable communication between Retailers, customers and suppliers.

Business Intelligence:
Business Intelligence is an effective analytical tool which helps the Retailers to understand the eco system of retail business . It helps the business community to take mission critical business decisions which will help them to navigate in the right direction. In today’s world Retailers equipped with such data mining or data warehousing tool which has the micro level understanding of customer demand.