Retailigence

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Online Retail Trends

Posted by retailigence on February 11, 2012

The increase in the number online shoppers has taken the industry analysts by surprise. Traditionally online shopping was done more for travelling, but with the passage of time, the scope of online has considerably widened. Nowadays, be it music to electronic products, perfumes to razors, undergarments to suits, a provision is there to shop for all these products online.

The benefits of online shopping far outweigh the cons. The main advantage has been that with the passage of time, online transactions have become more secure. Online shopping sites have done extensive sales promotion activity which has resulted in an overall increase in shoppers. One can find product like underwear, lens, hukka etc etc on internet very easily. The websites are highly interactive and user friendly such that now it is much easier working through a website rather than negotiating with the salesman. One added advantage of online shopping is that you do not need to find any parking space for your car in the virtual world.

One thing which is of vital importance is that the concept of online retailing is fast catching up in rural India. It should not be forgotten that nearly 65% of the Indian population resides in villages. Another thing is that people who are into online shopping are highly brand conscious. And as the phenomenon of online retailing is growing, more and more companies are looking to hire which translates into more employment opportunities. Across border buying is on the rise in recent times. The unmarried person is always more keen to experiment with technology and in India the marriage age is continuously getting delayed. These two facts taken together encourage the online shopping trends. This is one main reason why hordes of online shopping sites which have come up recently. The Indians love discounts and keeping this in mind some sites have started offering collective decision making and collective buying, which results in bigger discounts for customers. Companies need to spend heavily on infrastructure to keep pace with the changing trends. As the industry is still on its growth trajectory, large scale consolidations are still not on the horizon.

In a world where it is generally believed that women are more involved in shopping than men, it is surprising to note that more number of men are hooked to online shopping than females. And treating this to be of vital importance various websites like Menzkart.com have come up which addresses primarily the needs of men. Keeping the online shopping trends in mind, every major company, be it Jockey, Calvin Klein or Gillette is trying its best to make its online presence felt.

There are two very interesting facts which need to be mentioned here:

1. Nearly half of the online users depend heavily on social networking sites to make their online purchase decision and

2. A portion of the users spend nearly 1/10th of the monthly income on making an online purchase every month.

With the advent of broadband connections and internet penetration the number of users has increased geometrically and this will create an opportunity to have big user base and they will make online retailing a big market. This sector will experience a big boom in coming years and it has been predicted that online retail business will be the biggest threat to traditional retail other than FDI.

E-tailers or online retailers in turn have two major advantages when we talk of online shopping:

1. It helps in mass customization and

2. It helps in niche marketing.

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Future Prospects of E-Commerce in India

Posted by retailigence on February 10, 2012

The real challenge to an average retailer in India is not from FDI, but from E-Commerce sites like flipkart.com, snapdeal.com, eazybuy.com, menzkart.com. The various growth drivers for e-commerce in India are busy lifestyles, increasing disposable income, lower prices available at online stores as they save on distribution and elimination of set up costs of physical entities. This in itself is sufficient to provide a push for online shopping. Another main factor encouraging e-commerce is that the people are now comfortable using credit cards on the internet. And mobile has truly come out to have multi functional benefits. It is now very easy to use mobile phone for activities other than casual talks and message forwarding. Electronic flow of information has increased manifold.

A few points which speak in favor of e-commerce are:

1. Marketing is very important and it is generally believed that online people are easier to target. The savings in marketing costs can be passed on and prices can be reduced.

2. Now it is actually possible to get a product at less than what the manufacturer is selling it for.

3. FDI will help improving the efficiency in supply chain.

4. FDI will also help in boosting the confidence levels of the customers in which foreign players will play an important role.

5. The industry is still in the growth phase so profit margins are still likely to be high. The B2C e commerce is likely to be the main engine driving growth in the immediate future.

6. Spontaneous activity has reduced considerably and consumers now try to make better use of the time spent online.

7. Facebook has touched nearly 45 million in India and we are still not talking of the mobile phone users.

8. Websites are starting to come up in local languages which will help increase the penetration level.

Jockey Fashion Trunk Online shopping is still in the growing stages and has still touched only a few sectors like automobiles, stocks and shares, real estate, travel and tourism, gifts, hobbies, matrimony and employment. Even some websites sells products like men underwear, lens etc. The reason for the numbers not being as large as the businesses wish it to be is the lack of certain key elements in the existing business models. So there is a scope of improvement in this area.

             The main reasons responsible for this sudden growth of e-commerce in India are the emergence of blogs as a means for the information dissemination, bigger web presence of SMEs and corporate because of low marketing and infrastructural costs, a safe and secure business environment due to improved fraud prevention technologies, and most importantly the youth finds online transactions to be easier.

            There is  no doubt that the cost of running an e commerce  is still high but with a billion and counting population which is slowing being hooked up to the e-commerce the growth potential is too significant to be easily ignored. The existing users count more than the users who have recently joined. India can become industrialized and modernized if it can extensively apply IT to enhance productivity and international competitiveness, develop eCommerce and e-governance applications.

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Retailing v/s E-tailing

Posted by retailigence on February 8, 2012

Retailing is the function when any firm provides a product or service to the customer. Delete the ‘R’ from retailing and you get e-tailing. To an observer this might sound like a casual game, but the fact is, e-tailing is serious business. The retail model is widely understood and practiced around the globe. Many people assume that the e-tailing model is just an extension of the retailing model; however nothing could be farther from the truth.

The first major difference is that when we talk of retailing we also know that the competition is known and well defined. Any related business which is in proximity or within the driving distance would be the natural competitor. This is not the case with e-tailing because when a shopper goes in for online shopping, the online store is forced to compete not just at the national level, but sometimes even at the global level. The human to human contact is negligible in e-tailing.

When we talk of retailing, one important factor which comes into play is that the retailer generally has a long term relationship with the customer and the retailer is well aware of the needs and wants of the customer. He is also aware of the wallet size and which products are preferred by the customer. He is in a position to provide better service to the customer. This personal contact is lacking in case of e-tailing. But this shortcoming is gradually being addressed as now the e-tailers look to maintain vast amounts of data about their actual and potential customers. This is one reason that online shopping is gradually picking up in developing countries.

Technology is of paramount importance to the success of e-tailing. It is the lifeline for the success of any e-tailing business. Continuous upgrading of technology is also important. One can find products like underwear, shoes, lens, bags, cosmetics etc on  e-tailing plateforms

 It also needs to be considered that the e-tailing businesses have lesser gestation periods. Physical infrastructure is not required. Setup costs are considerably less and wider markets become accessible. This is unimaginable with retailers.

 Shoppers have more control over the shopping experience in case of e-tailing as compared to retailing. The Internet provides all related information at the doorstep of the customer. With e-tailing, the option of price control just goes out of the window.

 It is a well documented fact that the most of the costs attached to a product are added after the process of production is over. And a significant portion of these costs is the marketing, selling and warehousing costs. These costs are significantly less in case of e-tailing, which in turn translates into better pricing.

 The speed and convenience of interaction is much more in case of e-tailing. And this often results in better sales volumes for the e-tailers.

The majority of the Indian population today is young ,disposable income is higher as compared to previous generations, both the partners are often working, lifestyle is more hectic, leaving lesser time for visiting the retail store. As people are more tech savvy nowadays, e-tailing is a made to order solution to address these challenges. Nearly all products from briefs to razors, from Gillette to Jockey products are available when the consumer goes in for online shopping. E-tailing is a step into the future.

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