Page 191 - DMGT553_RETAIL_STORE_MANAGEMENT

Retail Store Management

Notes E-tailing is gaining ground. In the year 2003, clothing and apparel segment clocked online
revenues to the tune of $3.6 billion. Online retailing is classified into three main categories:
1. Click: The businesses that operate only through the online channel fall into this category.
Prominent examples in this category include: Dell, Amazon.com and e-Bay.
2. Click and Brick: The businesses that use both the online as well as the offline channel fall
into this category. Common example includes: Barnes and Noble’s.
3. Brick and Mortar: This is the conventional mode of retailing. The businesses that do not
use the latest retailing channels and still rely upon the conventional mode belong to this
category.
E-tailing offers the consumers huge amounts of information in the form of web sites with useful
links to similar sites that allows consumers to compare products by looking at individual items.
The convenience of online shopping is unmatched indeed. Shopping out of your home or office
reduces the stresses of waiting in lines and dealing with irritating sales people. However,
E-tailing causes problems with fit, since the consumer cannot try the items on. Return policies
may also act as turn offs and items can be difficult to return. The shipping and handling costs
may turn the customers away. E-tailing requires technology savvy customers and this puts a
limit on its potential reach. We can see that E-tailing is emerging as an interesting phenomenon
in the retail industry that is on a rise despite the disadvantages associated with it.
According to a Recent Study

1. Presently there are 4 million Internet users in India and the number is growing.
2. Computer Hardware, cinema, Books, Music cassettes/CDs, travel tickets and gifts are sold
through the net in a big way.

10.4.1 Advantages of E-tailing/Multi-channel Retailing

E-tailing offers unique advantages to the consumer that no other form of retailing can match.
The hypertext nature of the medium allows for more flexible forms of transactions (growth of
C2B and C2C) to flourish. It allows for easier comparisons across broad product categories with
the evolution of shopping bots and similar mechanisms. The medium also offers flexible/
dynamic pricing mechanisms to the consumer. These evolutions reduce any friction in the
online market place and stimulate the use of the web as a retail environment. In the long-run,
this will benefit the marketers as well as the consumers. Further, this will penalize the marketers
who thrived in market places that had entry barriers in the form of a lack of freely available
information. Earlier, such a situation restricted the customers in making informed choices and
led to inefficient pricing and localized monopolies. Reasons for e-tailing coming up as a hot
avenue in the retail sector can be attributed to multiple factors such as:
No Real Estate Costs: E-tailing does not require a retailer to invest in warehouses, showrooms
or other commercial properties at 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 can be
prohibitively high. Moreover, maintenance costs of a virtual store are negligible in comparison
to a physical store.
Easy and Comfortably: The Internet offers easy and comfortable access to all the required
information by a customer. Over the Internet, product information is just a few clicks away,
easily accessible from the comfort of a home. Traditional retailing is quite cumbersome in
contrast to e-tailing. It involves frantic search for the required product, running up and down the
retail store, asking the poorly trained store assistants for help. The process involves significant
wastage of valuable time. Simply put, shopping on the Internet for fifteen minutes is equivalent

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