E-volution to Revolution
Retailing to etailing.

ABSTRACT
Marketers must embrace themselves for an e-services revolution, which information technology, changing lifestyles, and demographic shifts are fueling. The current Web-based models for e-services are part of an embryonic phase preceeding an era of rapid transformation, challenge, and opportunity. To prepare for this exciting future, it is necessary to understand the varying technology landscape and the psycho-social dynamics behind consumer adoption. Making bold decisions in how to deliver e-services and learning to partner with customers is essential.
Keywords: Retailing, Etailing, Issues, Challenges and Opportunities,B2C transactions.

Introduction: Electronic retailing, also known as e-Tailing, deals with selling products and services online via the World Wide Web. The term has been used in Internet discussions as early as 1995, it seems an almost inevitable addition to e-mail, e-business, and e-commerce. E-tailing is synonymous with business-to-consumer (B2C) transaction.
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 the Web, and Commerce Net/Nielsen Media reported that 10 million people had made purchases on the Web. E-tailing has resulted in the development of e-tailware -- software tools for creating online catalogs and managing the business connected with doing e-tailing. A new trend is the price comparison site that can quickly compare prices from a number of different e-tailers and link you to them.
India’s online population currently stands at 25 million and is predicted to grow four fold to a 100 million by 2007. eTailing stands at Rs. 850 crores in the year 2006-07 and contributes maximum to the Online Non-Travel Industry. It is expected to be Rs 1105 crores industry at the end of 2007-08. Owing to elimination of physical costs, the category offers the best deals for low-end as well as high end products. However, many customers complain about the untimely delivery of products ordered online.
Changing lifestyles and shopping habits coupled with superior options and selections make this interactive medium most attractive to this e-generation .The opportunities of the medium to business include advertising space to strengthen brand equity coupled with lower infrastructure costs, unlimited shelf space, a global audience that can be catered to without the restrictions of time zones and working hours.

Methodology: The qualitative filed research sought to explore the nature of obstacles within the retail industry and the implications of those changes. This is a preliminary study that seeks to highlight the nature of change, rather than to empirically test that change. The discussion based around a serious of 5 interviews with senior managers, etailing consultants and 50 shoppers in Mumbai from the different area of specializations and focusing on the emerging role of the retailing sectors. Such an approach seeks to develop a broad snapshot of the changes occurring with in the industry rather than to build details case studies of individual retailers. Through those interviews it was possible to observe a dramatic transformation in the nature of etailing sectors.
Reasons for e-tailing becoming a hot opportunity can be attributed to many factors viz.
Demographics – In India’s Demographics are likely to continue to favor the Indian retail sector even over the next 10-15 years. India currently has one of the youngest populations in the world. Nearly 60% of Indians are below the age of 30 years and 40% are below 25 years. It is generally thought to be easier to alter the habits of young consumers, including in the area of shopping. Even in 2010, the estimate is for close to 40% of Indians to be below 25 years of age.
India is expected to be one of the few countries to witness a sharp increase in its work force from 2010 as the proportion of dependent population in the total population drops significantly during the next five to ten years. If gainfully employed, this increased proportion of the working-age population is likely to have significantly less free time and will probably be prepared to pay for the convenience that modern format retailing aims to deliver.






Source Internet and Mobile Association of India
No real estate costs: E-tailers do not have to maintain expensive showrooms or warehouses in prime locations. They operate through their web sites and thus save drastically on the real estate costs. The real estate costs in the metropolitan cities are sky high. Besides this, maintenance costs of a virtual store vis-à-vis a physical store is much less. These cost benefits are then passed on to the customers by offering them discounts (which actually go up to 30%). This enables the customers to get commodities at cheaper rates, which is a big attraction for them.
No Inventory hassles: The most, troublesome but critical, job of a traditional retailer is to maintain adequate inventory i.e., there should be no under stocking or overstocking for which lead times play a vital role. On the other hand web dealer has longer lead times and hence fewer inventory hassles.
Mass Media: A supermarket has limited area of operation. It caters to customers of a city (and/or its suburbs), but a web site can be accessed from any part of the country or for that matter from any part of the world, thus increasing the potential customer base.
Better interaction with the customers: One of the greatest benefits of online commerce is its ability to establish interaction en-masse. Interaction refers to the ability of reaching customers on an individual basis and react appropriately to responses of individual customers. Interaction is a vital tool for mass customization. Examples are many and include online marketing of flowers, software books and education. This has also led to greater satisfaction among the online buyers. According to a research agency, 82% of the online buyers have been found to be satisfied with their purchases.
Increase credit card usage and credit availability The increase in credit card usage has been one of the drivers of consumption in the modern retail format and is likely to continue to be so. Credit disbursements on cards and spending per card have been increasing steadily, which augurs well for consumption at modern retail stores. We estimate around 50-60% of consumers use cards for making purchases at stores. Penetration of credit cards is still low at around 13-15 cards per 1,000 people and has the potential to grow, which would further spur consumption at modern retail stores. Despite the rapid growth in credit card sales in India, penetration remains low.
Gaps in online retailing
While it is clear that consumers are adopting the Internet as a shopping medium, gaps remain between the shopping experience in the physical world and the shopping experience online. Unlike the United States which has a long cultural history of catalog shopping, but many Indian shoppers want to touch, feel and examine the product before they buy it. Cultural issues aside, consumer protection laws in India are nowhere as good as those in other countries, and online shoppers are justifiably wary about the product claims made by anonymous Internet vendors.
Weak financial structure: Three elements determine the profitability of an e-tailing operation: Average transaction size, Gross margins and Marketing costs.On each parameter, the odds are stacked against e-tailers in India. According to a study, out of the 4 million Internet users only 6% have ever shopped online. Average transaction size was a paltry Rs 272. Gross margins in 'Internet appropriate' categories of books and music are only 15-30% as compared to 60% in the US.Now, order size multiplied by the margins hardly cover marketing costs let alone any profits.
Every time an e-tailer fulfils an order he incurs a huge variable cost of 30% - 100% to deliver the goods at home. Thus the most optimistic projections suggest that ' on every Rs 100 sales that an e-tailer makes, he loses Rs 50.' E-tailers are beginning to realize that conventional retailing, which aggregated customers under one roof, still makes far better economic sense. After all, it was the customer who incurred the costs of delivering the goods.
In contrast, ensuring delivery to customers at infinite locations changes the cost of doing business completely. The marketing cost (include the cost of delivery and fulfillment) as a percentage of sales is a killing 119 %.
Mounting competitive pressures: The market for online buying is still at a nascent stage. The turnover of the sector is relatively small and many players have already entered into it. Thus many e-tailers are eyeing a small market, exerting more pressure on operating margins.
Shopping is still a touch--feel—see---hear experience: Unlike the Americans, Indians do not suffer from 'time-poverty' and shopping is still considered to be a family outing. Hence this type of an environment creates a problem of customer retention. In e-tailing, customer retention by 5% leads to increase in profits by 25%. Most people buying on the net do it out of curiosity and a repeat purchase is unlikely.
Inadequate information provided when the customers discern: Certain products like clothes, cosmetics etc. involve higher customer involvement. Most customers are comfortable buying books and music on the Internet because the information required making a purchase decision is simple.
But not so when a customer has to buy, say a blue Trouser. Here the customer wants to know: Which shade of blue is it? How does it feel on skin? How easily does it crease? This problem does not crop up in traditional retailing. In cyber space, on the other hand, the buyer is normally starved of crucial information. Only the seller knows about the true quality of trouser. This is a clear case of “information asymmetry".
Technical issues: Some of the other most frequently discussed limitations of the Internet medium for online retailing are security and privacy concerns, speed of access, disconnection during transaction, mass penetration, and lack of navigation standards.
Delivering the goods cost-effectively: At present, every single transaction challenges e-tailers to deliver the goods quickly, cheaply and conveniently. The existing model for home delivery works well for letters and flat packages but not for e-tailing’s high volumes and wide variety of package shapes and sizes. But this is largely a technical and logistical problem, and it will be possible (though perhaps expensive) to solve it by developing new sorting and scanning equipment and by deploying larger delivery vehicles.
Strategies for online retailing
Increasing consumer comfort level: While many consumers are visiting online retailers, few are buying. Online retailers need to improve convenience and value for consumers and assist them in overcoming their fears around security. Retailers must also provide reluctant consumers with compelling reasons for accepting the Internet as a new way to shop. Some of these reasons might include the use of consumer assurance brands and enhanced levels of convenience, customization, selections, service and pricing.
Effective CRM implementation: The e-business CRM connection occurs at the interaction of website and customer experience. These relationship attributes in turn influence the three main customer attitudes: customer satisfaction, trust and perceived quality. The following figure shows how the customer e-business interaction leads to customer relationship attributes, which in turn influences customer attitudes. These attitudes then lead to the CRM goals, which lead back to the customer e-business interaction.
Resolving technology limitations: Many online retailers say their ability to provide enhanced consumer experience is limited by a lack of bandwidth and problems with reliability. Advances in the technological infrastructure will enhance convenience and add a richness of experience to Internet shopping that may now be lacking.
Rapidly scaling internal operations: To respond to the rapid growth of e-commerce, online retailers and their suppliers have to scale up their internal operations. While this requires less investment than in a traditional store environment, significant management resources and investments are still required in fulfilment, customer service, and database technology and management.
Engineering comprehensive convenience: Customers cite many convenience problems with today's online retail environment. Chief among them are the need for consumers to keep re-entering personal data on different sites, the wide variation in customer service and the lack of co-ordination in multichannel retailers.
Developing low-cost distribution: Pricing at online retailers does not yet ret1ect the full potential of electronic commerce. This is partly due to the fact that Web-based fulfilment systems are still evolving. Much of online distribution piggybacks on existing offline systems. Retailers interviewed believe that more effective integration of Web-based technology would significantly reduce costs and online prices
Resolving perceived channel conflicts: Many offline retailers believe they risk cannibalizing sales in existing channels by going online.E-tailing in India can be a success if the e-tailers change their business models and comprehend their customers more. Retailers who achieve scale in their customer bases sooner rather than later will be able to reap the rewards of early investment. These rewards include the ability to develop supplemental revenue streams more easily and higher sustainable margins.
Directions for Further Research

This research paper will hopefully guide further research into this important area. This article draws on literature, media articles, and preliminary interview examples from the retailing industry. .Further research needs to examine conditions other than involvement that have the potential to moderate the effects of online pricing, online customers shopping behaviors and online promotions. Further research on pricing, impact of online advertising should be expanded to explore the use of etailing advertising practices. We hope that our efforts will provide a framework for future investigations and broaden the scope of research.

Conclusion
The Internet has been used for commercial purposes for several years now. We are still working to understand its impact within a competitive environment that is becoming increasingly difficult to interpret and respond to in terms of Internet strategy. We find that, when competing in online markets, firms should improve their first impact interface with customers and the way they provide information to them. E-tailers should increase their ability to offer their customers easy, quick and user friendly information, avoiding the trap of price comparison. Easy and quick access to information can be an important item of differentiation among retailers.


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