TABLE OF CONTENTS

Sr. No. Particulars Page No.

1. Introduction 1-19
2. Research Methodology 20-22
3. Literature Review 23-29
4. Data Analysis and Interpretation 30-43
5. Findings 44-45
6. Suggestion 46
7. Conclusion 47
8. Bibliography 48
9. Annexure 49-51

1
Chapter 1
Introduction

1.1 What is E-Commerce?

E-commerce is the activity of buying or selling of products on online services or over the
Internet. Electronic commerce draws on technologies such as mobile commerce,
electronic funds transfer, supply chain management, Internet marketing, online
transaction processing, electronic data interchange (EDI), inventory management
systems, and automated data collection systems.

What are Retail Stores?

Retail stores refers to a physical presence of an organization or business in a building or

other structure. The term is often used to refer to a company that possesses or leases retail
shops, factory production facilities, or warehouses for its operations. In other words, it’s a
place of business usually owned and operated by a retailer but sometimes owned and
operated by a manufacturer or by someone other than a retailer in which merchandise is
sold primarily to ultimate consumers.

Both E-commerce and Retail Stores works different and have different management
systems and also both of them have their strengths and weakness, advantages and
limitations, etc.
DEFINITION

Definition of E-Commerce
According to E. Turban and others, “E-commerce describes the process of buying and
selling or exchanging of products, services and information via computer networks
including the internet.”

Features of Ecommerce
1. Interactivity

Technologies used in eCommerce require consumer interactions in order to make an

individual feel as though he is an active participant in the transaction process. As a result,
eCommerce technologies can adjust to each individual's experience. For example, while
shopping online, an individual is able to view different angles of some items, add
products into a virtual shopping cart, checkout by inputting his payment information and
then submit the order.

2. Personalization

Technologies within eCommerce allow for the personalization and customization of

marketing messages groups or individuals receive. Pearson Education states that
companies can base such messages on individual characteristics of a consumer. An
example of personalization includes product recommendations based on a user's search
history on a Web site that allows individuals to create an account.
3.Information Richness

Users can access and utilize text messages and visual and audio components to send and
receive information. Pearson Education states that such aspects provide a rich
informational experience in regards to marketing and the consumer experience. An
individual may see information richness on a company's blog if a post contains a video
related to a product and hyperlinks that allow him to look at or purchase the product and
send information about the post via text message or email.

4. Universal Standards

Individuals, businesses and governments only use one set of technological, media and
Internet standards to use eCommerce features. Consequently, universal standards help
simplify interactions. An individual can see these standards while shopping online, as the
process to purchase items is similar on Web sites that use eCommerce technologies.
Similarly, when an individual creates an online account, the site generally requires an
individual to create a username and password so he can access his account.

5. Ubiquity

Because they are web-based, eCommerce technological features are available anywhere
you can connect to the Internet at any time, including homes, offices, video game systems
with an Internet connection and mobile phone devices. Because eCommerce is
ubiquitous, the market is able to extend its traditional geographic boundaries and
operating hours. An example includes the ability to access the Internet wherever there is a
Wi-Fi hotspot, such as a cafe or airport. Moreover, individuals who have cell phones with
data capabilitiescan access the Internet without a Wi-Fi connection.
6. Information Density

The use of eCommerce reduces the cost to store, process and communicate information,
according to Pearson Education. At the same time, accuracy and timeliness increase; thus,
making information accurate, inexpensive and plentiful. For example, the online
shopping process allows a company to receive personal, shipping, billing and payment
information from a customer all at once and sends the customer's information to the
appropriate departments in a matter of seconds.

7. User-Generated Content

Social networks use eCommerce technologies to allow members, the general public, to
share content with the worldwide community, according to Kurt Grashaw in an article for
the Web site Merchant Circle. Consequently, consumers with accounts can share personal
and commercial information to promote a product or service. When a company has a
professional social networking account, a member of the same social network has the
option of associating himself with the company or a product by saying he likes or
recommends it. When an individual update his status on a social networking account, he
may also mention a product or company by name, which creates word-of-mouth
advertising.

8. Global Reach

Technologies within eCommerce seamlessly stretch across traditional cultural and

national boundaries and enable worldwide access. Pearson Education states that instead
of just offering goods and services to a population within a specific boundary, businesses
can market to and serve an international audience. The Internet and multilingual Web
sites, as well as the ability to translate a Web page, allows international visitors all over
the globe to access company Web sites, purchase products and make business
interactions.
Categories of E-Commerce

E-Commerce is divided into various categories according to the business that is

performed over the electronic channels. The major different categories of E-Commerce
are:

1. Business to Consumer (B2C)

Business to consumer is the first type of e-commerce that is also the most common one. It
is also known as B2C model. In this type online business selling is offered to individual
customers. This type started to expand after 1995 and now became one of the most
common e-commerce.

The B2C model works by retailers and marketers that use clear data in various marketing
tools so can sell their products to the internet users.

The internet users can use the shopping cart for everything they need. Payment is mostly
done through credit cards or by payment gateways like the PayPal.

Direct interaction with the customers is the main difference with other business model.
B2C normally deal with business that are related to the customer. The basic concept of
this model is to sell the product online to the consumers.

Examples of B2C Business models are Amazon, Flipkart.com, Myntra.com and other
online shopping sites for consumer goods.
2. Business to Business (B2B)

Business to business, known as B2B model, is the largest e-commerce model that is
based on revenue which involves trillions of dollars. In this both the buyers and sellers
are business entities. B2B describes commerce transactions between businesses, such as
between a manufacturer and a wholesaler, or between a wholesaler and a retailer.

The volume of B2B transactions is much higher than the volume of B2C transactions and
any other transaction.

The primary reason for this is that in a typical supply chain there will be many B2B
transactions involving sub components or raw materials, and only one B2C transaction,
specifically sale of the finished product to the end customer.

Benefits of B2B model:

a) Encourage businesses online.

b) Products import and export.

c) Determine buyers and suppliers.

d) Position trade guides.

3. Consumer to Consumer (C2C)

Consumer to consumer (C2C) commerce involves the electronically facilitated

transactions between consumers through some third party.

The C2C model facilitates online transactions of goods and services between the
individual net users. But in this both the web users or both the parties cannot carry out
any transaction without the platform that is provided by an online market maker such as
the eBay.

Other C2C providers in India are Quikr and OLX which let sells old/ used products from
consumer to consumer.
4. Consumer to Business (C2B)

Consumer-to-business (C2B) is a business model in which consumers (individuals) create

value and businesses consume that value. For example, when a consumer writes reviews
or when a consumer gives a useful idea for new product development then that consumer
is creating value for the business if the business adopts the input. In the C2B model, a
reverse auction or demand collection model, enables buyers to name or demand their own
price, which is often binding, for a specific good or service.

Other Example, when a consumer wants to buy a new phone and there is an exchange
offer to sell the old phone for a new phone at discounted price or when any product
bought online is defective, the product goes back to the company or manufacturer.

5. Peer to Peer (P2P)

Peer to peer, peer-to-peer or usually said as P2P, is a communications model in which

each party has the same capabilities and either party can initiate a communication
session.

This type that is a technology that helps their customers to share a computer resource and
computer files to anyone they require without the need of a central web server.

In recent usage, peer-to-peer has come to describe applications in which users can use the
internet to exchange files with each other directly or through a mediating server. In some
cases, peer-to-peer communications is implemented by giving each communication node
both server and client capabilities.

Those who are going to implement this model, both sides demand to install the expected
software so that they could convey on the mutual platform.

This kind of e-commerce has very low revenue propagation as from the starting it has
been tended to the release of use due to which it sometimes caught involved in cyber laws
SWOT Analysis of E-commerce Industry

Most of the time we see that the use of electronic techniques for doing business add value
either by the reducing transaction cost or by creating some type of network effect, or by a
combination of both. In SWOT analysis (the acronym is short for Strengths, Weaknesses,
Opportunities and Threats), here we try to find out the strengths and weaknesses of
ecommerce in respect of Indian business environment. Then after we try to identifies
opportunities presented by that environment and the threats posed by that environment.

1. Strengths

i. Global market: E-commerce biggest strength is the boundary less access in other
word no brick structure is mandatory to do business or no specific boundary is
required. It enables all the companies to expand them to global level. The
widening of geographic retail markets may facilitate the development of global
retailers.
ii. Time saving: Transaction through internet is no doubt very fast. It saves time by
reducing physical movement. No time constraints: The concept of 25X7 shows
that online Transactions can be used anywhere any time as there are no time
constraints.

iii. Price/Product comparison: Information and to choose are some of the right which
every consumer has. On the same footing ecommerce provide platform to
consumers to compare price and product effectively and efficiently. It will tend to
have far greater bargaining effectively and efficiently. It will tend to have far
greater bargaining power with suppliers than traditional local or national retailers.

iv. Cost effective: Elimination of long chain of middle man, decreasing need of
having brick infrastructure and outsource logistic are helping a small business to
stand at par with giants.

v. Flexible target market segmentation: The success of business depends on right

choice of segmentation. Target market segment here in e- commerce is flexible
and can be modified any time. Fast Exchange of information: The buying is just a
click
 away from the seller. No physical movement is required, no hunting of right
product at right price is to done by the consumer this make the buying process
faster.

vi. Niche Market: It is a concept of sub segmentation where the products of rare
species are available without putting some special efforts by consumer. Almost
everything can be sold on internet. Even if products targeted to smaller markets
the buyer will be somewhere on net.

2. Weaknesses

i. Security: Security is a biggest challenge in to progress of e - commerce. Customer

always found them insecure especially about the integrity of the payment process.

ii. Fake websites: Many fake websites are available on net which promises better
service and secure dealing. These web sites can not only disgrace ecommerce but
also bring bad name to ecommerce.

iii. Fraud: Personal and financial details provided for trading purpose are misused by
hackers their personal undue interest. Fewer discount and Bargaining: Hardly
online businesses offer discounts and bargaining cannot be possible.

iv. Long delivery timing: The task of Delivery is usually outsourced, who do not care
about the timing of the seller. They provide their services as per their own
convenience. Sometime the delivery time may extend to days or weeks which one
cannot wait for.

v. Impossible of Physical Examination: product whose choice is merely depend on

its physical condition of the product with need personal touch before selection
arenot suitable for e-commerce business online product cannot be touched, wear
or sit on the products.

vi. Limitation of Product: Only a limited number of products can be available.

vii. Limited Advertising: Limited advertising opportunities are available because in e

commerce one cannot go for mass advertising. The advertising is limited only to
 computer literate person and out of them only those who are comfortable with e-
commerce applications.

vii. Customer’s satisfaction: There is no physical and personal or direct face to face
interaction between customer and the seller. Therefore, the scope of convincing
the customer does not exist.

3. Opportunities

i. Changing Trend: People are very brand conscious. They are interested in buying
branded stuff rather than local. If such stuff is available cross border, they will not
mind it ordering through e-commerce. E- Commerce is fast and effective even
financial transactions can be made from any part of the world. People oftomorrow
will feel more comfortable to buy products through internet only.

ii. Increase Number of users: Daily number of internet users is increasing. People
feel more comfortable to shop online.

iii. Regular Global Expansion: E commerce can be operated anywhere any time
without any interruption. It always has a scope of expansion. All new population
and existing population who is not the user of e commerce are the target
expansion.

iv. High Availabilities: A weak long with and every click of the mouse business is in
operation. Those who are busy in day time and cannot spare time for them self,
have all the opportunity to shop as per their convenient time even during late
night hours.

v. Wide Business Growth: E-business has wide scope and broader vision to grow.
Business always took place in gap. Gap filling is a never-ending process hence the
growth of business is also never-ending process.

vi. Advertising: Advertising is cost effective as compare to conventional offline

system.
4. Threats

i. Competitor: Along with local competition, global competition also exists.

Competition is increasing day by day. Big companies have already entered in this
field. They are making people habitual at the cost of their companies. Changes in
environment, law and regulation: Change in trend, fashion and fad can distress E
Commerce side by side change in law and regulations can also affect it.

ii. Innovation: Customers now a day are always in a search of innovative products
and technique. Innovation will always work as an extra burden on the pocket of
consumer, be either in product, place, promotion and even price.

iii. Privacy Concern: Fears that information can be misused lead to spam e mail or
identity fraud. No Direct Connection: In e commerce there is no direct interaction
between customer and the seller. There is no scope of bargaining. People prefer to
buy physically as compare to online to experience personal feel.

iv. Fraud: Persons using unfair means to operate ecommerce can damage the
confidence and faith of common people.
CRM in E-commerce

Customer is the backbone of any organization. The objective of an organization is to meet

the requirements of the customers. Organizations are trying their best to retain customers
through CRM programs. "CRM (Customer Relationship Management) is an approachthat
recognizes that customers are the core of the business and that the company's success
depends on effectively managing relationships with them".

CRM is gaining popularity as it facilitates identifying profitable customers, attracting and

retaining them. Establishing good relationships with customers maximizes company's
profits and better market share.

Some techniques for maintaining good relationship with customers in e-business are:

1. Good Customer Care

This is one of the best strategies to create a good reputation for your e-commerce
business. The fact that you really care about your customers really impresses them.
Customer care is expressed in responding to queries, complaints, and feedback on time.
Every customer wants to be treated well. Setting up a good customer care channel or
platform will enable you to build a good relationship with them.

2. Good Customer Service

This entails all the activities you do to make sure the online transaction is complete. A
good customer service should leave the customer fully satisfied and eager to purchase
again in the future. The etiquette you show when communicating with customers, the
punctuality you keep when meeting, timely shipping, and quality products are some of
the things showing good customer service. Serving customers well put a smile on their
face, giving them a reason to shop from your store again.
3. Good Content

Some of the online marketing strategies include websites, blogs, Facebook pages,
Instagram pages, and other social media platforms. Publishing detailed and eye-catching
content on these platforms attracts prospective customers who may later turn into buying
ones. You can include appealing pictures, videos, animations, and other graphics on your
e-commerce page in order to catch the attention of potential buyers and establish a
relationship with them.

4. Special Offers

Customers love discounts. They will choose to buy from your e-commerce store if you
offer discounts on products. For previous customers, it is a good idea to offer a discount
every time they shop at your business website. This makes them fully attached to you and
your products. They will always be aspiring to shop again and again. This also gives you
an advantage of getting new customers that may be referred to you.

5. Handling Comments in a good way

When selling online, you will meet all kinds of people; satisfied customers, unsatisfied
customers, prospective customers, and window shoppers. Having good comments on
your site is a plus for your business. Nevertheless, having comments that express
unsatisfactory services can scare future buyers from you. Replying in an assuring tone
can retain customers for you.

6. Paying Attention to Feedback

Good customers always give back their feedback concerning the services they receive
from you. It is prudent to put them into your mind and work on the negative ones. Taking
feedback seriously helps you to avoid future mistakes, ensuring satisfaction for all your
customers. Satisfied customers will always buy from you again and again.
7. User-friendly Homepage

When creating a website for your e-commerce business, put in mind that different types
of people will access it. This means that you should ensure friendliness across all kinds of
customers. Make its usability simplified in such a way that products can be accessed
easily.

8. Direct Engagement on Social Media

Social media platforms are the major online marketing tools. Here, you post content
concerning your products on the pages. Once potential customers comment, make sure
you reply and engage them in a conversation. Talk to them in a mature and convincing
way that will leave them trusting you and aspiring to purchase your goods. Engaging
them also builds up their confidence and a sense of importance.

9. Regular Updates

When creating a website for your business, include a link through which your customers
can sign up for regular updates. They can enter their emails and passwords which should
remain private and confidential. Once they sign up, keep sending them emails and
newsletters explaining your concern for them and the new brands in store. Do not forget
to include an option to unsubscribe from the updates. This will ensure a constant
communication between you and your customers.

10. SEO Ranking

Occupying a top position on the Search Engine Optimization rank enables your
customers to access your e-commerce website faster. Every time they search for your
brand ofitems, your website will be the first one to appear, giving them a better reason to
open it. Accessing your site is just the first step of buying since it is from there that they
develop an interest in the products. You will have more customers with a top SEO rank.
A good relationship will then build from the transactions done.
How E-commerce works

Here's one example of how a sophisticated, fully computerized e-commerce system might
work. Not all e-commerce systems work exactly this way:

1. Sitting at her computer, a customer tries to order a book online. His/ Her Web
browser communicates back-and-forth over the Internet with a Web server that
manages the store's website.

2. The Web server sends her order to the order manager. This is a central computer that
sees orders through every stage of processing from submission to dispatch.

3. The order manager queries a database to find out whether what the customer wants is
actually in stock.

4. If the item is not in stock, the stock database system can order new supplies from the
wholesalers or manufacturers. This might involve communicating with order systems
at the manufacturer's HQ to find out estimated supply times while the customer is still
sitting at her computer (in other words, in "real time").
5. The stock database confirms whether the item is in stock or suggests an estimated
delivery date when supplies will be received from the manufacturer.

6. Assuming the item is in stock, the order manager continues to process it. Next it
communicates with a merchant system (run by a credit-card processing firm or linked
to a bank) to take payment using the customer's credit or debit card number.

7. The merchant system might make extra checks with the customer's own bank computer.

8. The bank computer confirms whether the customer has enough funds.

9. The merchant system authorizes the transaction to go ahead, though funds will not be
completely transferred until several days later.

10. The order manager confirms that the transaction has been successfully processed and
notifies the Web server.

11. The Web server shows the customer a Web page confirming that her order has been
processed and the transaction is complete.

12. The order manager sends a request to the warehouse to dispatch the goods to the
customer.

13. A truck from a dispatch firm collects the goods from the warehouse and delivers them.

14. Once the goods have been dispatched, the warehouse computer e-mails the customer
to confirm that her goods are on their way.

15. The goods are delivered to the customer.

All of these things are invisible—"virtual"—to the customer except the computer she sits
at and the dispatch truck that arrives at her door.
Digital Marketing

Digital marketing is the marketing of products or services using digital technologies,

mainly on the Internet, but also including mobile phones, display advertising, and any
other digital medium.

Digital marketing's development since the 1990s and 2000s has changed the way brands
and businesses use technology for marketing. As digital platforms are increasingly
incorporated into marketing plans and everyday life, and as people use digital devices
instead of visiting physical shops, digital marketing campaigns are becoming more
prevalent and efficient.

Types of Digital Marketing

The different types of Digital Marketing are as follows:

1. Search Engine Optimization (SEO)

Search engine optimization (SEO) is probably the first thing that comes to mind when
people think about different types of digital marketing. Online businesses basically live at
the mercy of Google, Bing, Yahoo, and other search engines. If you are doing SEO right
you can attract significant organic traffic to a website. The goal of SEO is to optimize
content in a way that makes it appear among the first results on a search engine results
page (SERP).

There are several methods you can use to rank high on a SERP, such as building a mix of
inbound and outbound links or optimizing the content for specific keywords. Probably the
hardest thing about SEO is to constantly follow the changes of search engine algorithms
and update your strategy and methods accordingly. SEO is essential for any website, as
these days every business optimizes their content for search engines. Therefore, without
SEO, it’s basically impossible to stay competitive in a market.
2. Search Engine Marketing (SEM)

SEO is not the only way to increase incoming traffic from search engines. Search engine
marketing (SEM) makes it possible to advertise a product in search engines and make it
appear among paid search results. Search engines usually display paid results above
organic results on SERPs. They almost look the same as organic results with only small
differences in appearance, for instance, Google shows a small “Ad” label next to the
related URL. On the screenshot below, you can see the paid search results for the “web
hosting” search query:

The most frequently used paid search services are Google AdWords and Bing Ads. They
allow you to buy ad space based on target keywords, location, viewer demographics, and
other data. Actually, search engine marketing is a pretty effective method, as search
engines only show your ad to the audience you want to target. In most cases, you need to
pay for SEM results according to the pay-per-click (PPC) advertising model, meaning
you are only charged when someone clicks your ad.
3. Social Media Marketing (SMM)

Without a doubt, social media is the queen of 21st-century digital content. Therefore, it’s
also one of the most important types of digital marketing you need to focus on—
especially if you want to promote a B2C business.

Social media is not simply a marketing channel but also a way for people to keep in touch
with their friends and family, get the latest news, or follow topics they are interested in.
There is a plethora of social media platforms you can choose from, such as Facebook,
Twitter, LinkedIn, Instagram, and many others. You need to find the ones that are
relevant to the niche you target and promote the business there.

Sharing quality content on social

media sites is an excellent way to
engage viewers and position a
brand as an authority in a specific
niche. It’s also important to place
social sharing buttons below each
blog post and content page so that
visitors can share it across their
network. In addition, every social media platform offers different solutions for organic
and paid advertising. Paid Twitter and Facebook ads, hashtag campaigns, and influencer
marketing are among the most popular methods of social media marketing.

4. Content Marketing

Content marketing is another type of digital marketing you can use to promote a business
online. It’s an indirect way of marketing, as you publish content that the audience finds
naturally while browsing the web. The main goal of content marketing is to make viewers
interact with the content by reading, sharing, and commenting on it. You can use it
together with other types of digital marketing such as SEO or SEM as well. For instance,
you can build the content around targeted keywords in order to achieve an optimal result.
High-quality content also allows you to persuade an audience about the expertise of a
business in a certain niche. Gaining the trust of customers is one of the most important
long-term goals of digital marketing. You can publish shareable content either in the form
of blog posts, white papers, reports, or webinars or by guest blogging in popular
publications in the same niche.

5. Email Marketing

Email marketing is a different kind of engagement, as you connect with customers within
their own mailboxes. Although email marketing is one of the oldest types of digital
marketing, it’s still very successful. It’s an excellent way to increase brand loyalty and
upsell to existing customers.

According to the Radicati market research group’s latest email statistics report (2017-
2021), the number of emails sent and received per day by businesses is still growing, at
an average rate of 4.4%.

Creating newsletter campaigns, you can send them confirmation emails, thank-you emails,
and email notifications about product updates.
These days there are many awesome tools you
can use to run professional email campaigns,
from marketing automation platforms such as
MailChimp to newsletter plugins for popular
content management platforms like WordPress.

6. Online Advertising

Digital marketers have been using online advertising since the first days of the web.
Displaying banners or ads on other websites belonging to the same niche is the most
common form of online advertising. You can use online platforms such as Google
AdSense that allows you to automatically serve ads on other content sites. Ad networks
usually let you configure the parameters of the sites your ads appear on based on
keyword, location, audience demographics, and other data.
Bigger online magazines frequently have their own advertising departments as well.
Therefore, it can also be a good solution to contact them and buy an ad space on their
website. Some niche magazines, such as A List Apart web design magazine, also have
sponsorship programs that allow you to feature a brand, logo, and other visuals on their
platform for a certain period of time (usually a week).

7. Landing Page Marketing

Targeted landing pages can work excellently with other types of digital marketing and
increase conversion rates significantly. In the broader sense, a landing page is any web
page on which visitors first land when they arrive at a website. In this sense, homepages
frequently function as landing pages as well. However, many brands create specific
landing pages for their marketing campaigns, too.

Digital marketers link landing pages to ads displayed as banners on other websites or
appearing on search engine result pages. Thus, when users click an advertisement, they
are directed right to the landing page designed for the specific marketing campaign.
There are
several tricks you can use to create a converting landing page such as eye-catching
headlines, a clean and mobile-friendly design, and highly visible call-to-action buttons.
Below, you can see the landing page of the Slack messaging app on which you can see all
the necessary elements of a well-performing landing page:

8. Smartphone Marketing

People use their smartphones all the time, therefore these days smartphone marketing is
also among the most important types of digital marketing. This is especially true if your
target audience is the younger generation. In fact, you have many options to reach your
prospects through their smartphones. According to the recent report of the Esendex
business communication provider, text messages have had a 94 percent global average
open rate in 2018. As a result, smartphone marketing is an incredible opportunity to
promote a business online.

Besides sending text messages to subscribers, you can further engage an audience by
providing them with free mobile apps for Android and iOS devices. Your app can also
perform specific actions that increase visibility. For instance, it can send users real-time
push notifications that appear on their smartphones when new content is available on the
website. Popular messaging platforms such as Messenger and Telegram also allow you to
create marketing bots with which you can acquire new customers in a human-cantered
way.

9. Viral Marketing

Viral marketing makes use of all types of digital marketing mentioned in this article. The
essence of viral marketing is to create a post, video, meme, or another short-form content
type that spreads across the web like a virus. To make a successful viral marketing
campaign, you need to promote the same content across multiple channels such as
Twitter, YouTube, blog posts, newsletters over a short period of time.
10. Affiliate Marketing

Affiliate marketing makes it possible to reduce your marketing workload by outsourcing

it to external service providers. With affiliate marketing, you only pay for conversions,
after your affiliate closed a deal and the customer purchased the product. Affiliate
marketers do all the related marketing activities from banner placements to landing pages.
Probably the best thing about affiliate marketing is that it has no upfront cost and you can
decide on the terms and rates you pay to the affiliates.

Probably the most notable online affiliate program is Amazon Associates that lets anyone
promote Amazon’s products and earn a commission after closed deals. Smallerbusinesses
can also make use of affiliate programs—it’s an especially popular type of digital
marketing in the tech sector. However, you should only start an affiliate program if you
have the means to properly monitor and educate the affiliates.
E-commerce in India

Though the e-commerce industry in India is riding the wave of popularity in recent times,
its inception can be traced back in the early 1990s with Rediff. IRCTC, the first company
to create a successful e-commerce portal, was introduced in 2002. However, the
revolution of smartphones and easy availability of cheap data have amplified the current
Indian e- commerce scene. A recent report by the Internet and Mobile Association of
India reveals that India’s e-commerce market is growing at an average rate of 70 percent
annually and has grown over 500 percent in the past 3 years.

Following are the factors that accelerated the growth of e-commerce in India:

1. Growing Number of Internet Users- Today, with more than 100 million Internet users,
India has achieved a critical mass of users who are familiar with web services. In
addition, over the past few years, relatively sophisticated online travel agent such as
Make My Trip which started turning these initial web users into web consumers have
dominated e- commerce in the past, industry giants such as Amazon and new e-tailers are
participating more heavily in this Conversion of Web users to Web consumers.

2. Localization of Internet content- Content on Internet is available today in local

languages. Google India spokesperson says that web content search in Hindi has grown at
a very high pace in the past year.

3. Rising Middle Class with Disposable Income- With the rise of small and medium
enterprises, foreign direct investments, and India’s own powerful multinational
corporations creating millions of new jobs, a new generation of globally-minded Indian
consumers has been created. These consumers are spread across the country.
Furthermore, access to many global and domestic brands is limited to metropolitan
regions, such as Delhi, Mumbai, and Bangalore. Therefore, the growing middle class is
increasingly turning to e-commerce as the primary outlet for sophisticated consumer
products and services.
4. User Experience- The primary driver for e-commerce anywhere is the user experience.
Custom prefer a trusted relationship with an e-commerce brand, and the convenience a
reliability of any e-commerce business has to outweigh the benefits of traditional retail
outlets as the number of e-commerce companies has grown, companies have started
giving more importance to and investing in the user experience. Best practices that have
driven e- commerce globally are now a key focus of successful Internet companies
including merchandising, customer service, user interface design, and guaranteed
delivery and return policy. In this competitive drive to differentiate via user experience
ultimate winner is the Indian online consumer.

5. Growth of Mobile Commerce- Online retailers are able to reach in non-metro cities
mainly due to the usage of mobile internet in the country. M-commerce facilitates buyers
to assess the product online and buy with the click of a button. Sellers can display
products on websites and buyers select the products through the mobile phones and other
handheld devices. According to Internet and Mobile Association of India, the number of
mobile internet users in the country stood at 173 million in December 2014. It is set to
grow manifold by 2020.

6. Cash on Delivery- Many e-commerce sites have started offering facilities of cash on
delivery these days which is the major reason for growth of e-commerce in India.
Currently, cash on delivery constitutes nearly 70 per cent of all transactions for online
retailers.
Market Size

Propelled by rising smartphone penetration, the launch of 4G networks and increasing

consumer wealth, the Indian e-commerce market is expected to grow to US$ 200 billion
by 2026 from US$ 38.5 billion in 2017 Online retail sales in India are expected to grow
by 31 per cent to touch US$ 32.70 billion in 2018, led by Flipkart, Amazon India and
Paytm Mall.

During 2018, electronics is currently the biggest contributor to online retail sales in India
with a share of 48 per cent, followed closely by apparel at 29 per cent.

Investments/ Developments

Some of the major developments in the Indian e-commerce sector are as follows:

 Flipkart, after getting acquired by Walmart for US$ 16 billion, is expected to

launch more offline retail stores in India to promote private labels in segments
such as fashion and electronics. In September 2018, Flipkart acquired Israel based
analytics start-up Upstream Commerce that will help the firm to price and
position its products in an efficient way.
  Paytm has launched its bank - Paytm Payment Bank. Paytm bank is India's first
bank with zero charges on online transactions, no minimum balance requirement
and free virtual debit card

 E-commerce industry in India witnessed 21 private equity and venture capital

deals worth US$ 2.1 billion in 2017 and 40 deals worth US$ 1,129 million in the
first half of 2018.

 Google and Tata Trust have collaborated for the project ‘Internet Saathi’ to
improve internet penetration among rural women in India.

Government Initiatives

Since 2014, the Government of India has announced various initiatives namely, Digital
India, Make in India, Start-up India, Skill India and Innovation Fund. The timely and
effective implementation of such programs will likely support the e-commerce growth in
the country.
Some of the major initiatives taken by the government to promote the e-commerce sector
in India are as follows:

 In order to increase the participation of foreign players in the e-commerce field,

the Indian Government hiked the limit of foreign direct investment (FDI) in the E-
commerce marketplace model for up to 100 per cent (in B2B models).

 In the Union Budget of 2018-19, government has allocated Rs 8,000 crore (US$
1.24 billion) to BharatNet Project, to provide broadband services to 150,000 Gram
Panchayats

 As of August 2018, the government is working on the second draft of e-commerce

policy, incorporating inputs from various industry stakeholders.

Achievements

Following are the achievements of the government in the past four years:

 Under the Digital India movement, government launched various initiatives like
Udaan, Umang, Start-up India Portal etc.

 Under the project ‘Internet Saathi’, the government has influenced over 16 million
women in India and reached 166,000 villages

 Udaan, a B2B online trade platform that connect small and medium size
manufacturers and wholesalers with online retailers and also provide them
logistics, payments and technology support, has sellers in over 80 cities of India
and delivers to over 500 cities.

 According to the UN’s e- governance index, India has jumped 11 positions to 107
in 2016 from 2018 in 2014.

 The government introduced Bharat Interface for Money (BHIM), a simple mobile
based platform for digital payments.
Road Ahead

The e-commerce industry been directly impacting the micro, small & medium enterprises
(MSME) in India by providing means of financing, technology and training and has a
favourable cascading effect on other industries as well. The Indian e-commerce industry
has been on an upward growth trajectory and is expected to surpass the US to become the
second largest e-commerce market in the world by 2034.

Technology enabled innovations like digital payments, hyper-local logistics, analytics

driven customer engagement and digital advertisements will likely support the growth in
the sector. The growth in e-commerce sector will also boost employment, increase
revenues from export, increase tax collection by ex-chequers, and provide better products
and services to customers in the long-term.
Chapter 2
Research methodology
2.1: Objectives
1. To do a comparative analysis of e-commerce and retail stores.
2. To do SWOT Analysis of both of the channels.
3. To learn the management of e-commerce and retail stores.
4. To study the marketing strategy of e-commerce and retail stores.
5. To study the consumer preference between e-commerce and retail buyers.

2.2 : Research Method

To research, I decided that the most appropriate approach would be to prepare a
questionnaire that would be filled out by my relatives, friends from my college and at my
locality in Mumbai. To encourage the peoples not to reject the questionnaire outright, and
to increase the response rate, the questionnaire was prepared in Google Forms so that
they could fill in even on their mobile phones. This study started out as an exploratory
study but developed into an explanatory study since I start out with first gaining
knowledge about E- commerce and Retail Stores to further being able to gain knowledge
about consumer buying preference from either of them.

2.3 : Data Collection

Primary Data
Primary data for the research was collected through questionnaires. When collecting
primary data one can choose to do interviews, observations, experiments, and
Questionnaires. Due to the purpose of our research, only the questionnaire method would
be able to approach the topic and be able to collect the answers in a satisfactory manner.
In the research the primary data is mainly concerned with analysing the respondent in
order to later on classify the respondent. Further on, the primary data will be used to
analyse the factors and how these are related to the respondent.

1
Secondary Data
I have mainly used documentary secondary data combined with multiple source data.
Documentary secondary data has been the data Collected through different types of
research conducted within the topic, articles that are written on related to soaps and
consumers this type of data has been the fundamental source for gaining knowledge
within the topic in order for us to be able approach the research problem. The secondary
data that was used for the research is data that has also led to the conclusion of which
factors that will be examined. The multiple source data that we have used has been in
order to choose which product we would use for our research in order to be able to find
the product that is most widely bought.

Sampling Unit
The respondents who were asked to fill out the questionnaire in the Mumbai Region are
the sampling units. These respondents comprise of the persons who purchase variety of
products from one or more E-commerce Sites or Retail Stores. The people have been
interviewed using questionnaire and asked to give their feedback.

Sample Size
The Sample Size is of 50 respondents.

1.2 : Limitation of study:

1. The present study is confined to one state that is in Maharashtra and
its results cannot be generalized in other states.
2. Only friends, family and neighbours have considered for the
survey. They may not be representing whole Mumbai.
Therefore, results may not be valid foe lower income group.
3. In some case, respondents gave wrong information willing or avoided
to impart information. They took no interest during interview.
4. There are only 50 respondents who are not sufficient for whole result.
Chapter 3

Retail Stores

3.1Definition of Retailing
According to Philip Kotler, “Retailing includes all the activities involved in selling goods
and services to the final consumers for personal, non-business use.”

3.2Scope of retail management

Retailing, one of the largest sectors in the global economy, is going through a transition
phase not only in India but the world over. Retailers play a very significant role in the
distribution channel. His role can be clearly understood by analysing the functions
performed by him. Following are some the functions performed by a retailer:

• Merchandising- Merchandising and buying is the key function for any retailer as this
department is responsible for the procurement of merchandise to be sold in the stores by
sourcing it from vendors or manufacturers. The retailer has to perform key tasks like
selection of vendors, costing of merchandise procured, allocation of merchandise to the
stores (in case of chain stores), developing distribution plans and calculating gross
margins.

• Marketing- In retail marketing functions may be centralized and may include different
departments like advertising, sales promotion, public relations etc. Marketing function
looks at ways of understanding the customer and his behaviour, is buying patterns etc. to
develop strategies and plans that guide retailer's strategies. The size of the retail
organization would determine whether the various functions would be in one department
or would be divided into various combinations.

• Store Operations- Retail professionals in the store operations area have to monitor the
overall store operations and profits. They may occupy positions including Head of Store
Operations Regional Manager and District Manager and so on. They have several
responsibilities such as managing staff functions, handling a department or a floor or
entire store or may be a group of stores.

32
• Human Resource Management- Human Resource in retail may range from recruiting
and hiring employees to broader areas like identifying training needs at various levels
within the organization and then designing and implementing the programs. Retail is a
people- focused business and calls for long working hours at both the front and back end.

• Accounting and Finance- Retailer also has to take care of all accounting and finance
function like accounting for income, paying expenses compiling and maintaining
financial records, money management and cash flow control, banking, credit policies etc.
Auditing of stores for merchandise and money is another responsibility of this
department.

• Supply of Information- The retailer provides useful information, informs and educates
customers about product features and benefits. The information is provided through
advertising displays and signs and sales personnel. Retailing is the final stage in
marketing channels for consumer products. The retailer also provides feedback about
consumer requirements to the manufacturers and wholesaler.

• Risk Bearing- A retailer has to bear different type of risks in relation to goods. While in
stores, goods are exposed to various risks like deterioration in quality, spoilage and
perishability, etc. The products are confronted to natural risks like fire, flood, earthquake
and other natural calamities. Other type of risks like change in customer's tastes also
adversely affects the retail sales.

• Visual Merchandising- Visual merchandising is associated with creating the overall

look of the store. Retailers are responsible for building and placement of design elements,
enhance business image and differentiate themselves from the competitors. Visual
merchandising function is gaining importance as it attracts customers and stimulates
demand, leading to increase in sales.

• Supply Chain Management and Logistics- Supply chain management and logistics are
fast emerging as key focus in retail. They are both integral factors affecting cost and their
effective management enhances profitability. Depending upon the size of the
organization, retailer has to perform the functions of supply chain management analysing
and negotiating contracts with suppliers, manufacturers and distributors, capacity and
production planning, resource allocation etc.
 Chapter 4

4.1 SWOT Analysis of Retail industry

1. Strength

A. Purchasing power: An increasing number of Indian consumers are ascending the

economic pyramid to form an emerging middle class.

In 2010, there were about 470 million people in the emerging middle class. As per PwC
estimate, this segment will grow to 570 million by 2021.

B. Population demographics: India’s working population is expected to be 117 million

over the next decade as compared to China’s four million.

In the following decade, from 2020, the former will add 98 million to its workforce,
while China will contract 51 million.

C. Low retail penetration: The penetration of organized retail in India is still very low at 6
to 8%, especially when compared to developed nations such as the US and the UK which
have retail penetration of 85% and 80%, respectively.

D. ASPIRING MIDDLE CLASS: With a population of 100 million, the tier II and III
cities in India are larger than countries such as Germany and the UK. Besides, the
untapped rural population holds immense potential for retailers. It is estimated that by
2021, approximately 67% of Indians will still live in rural areas.

2. Weakness

A. Political uncertainty and regulatory requirements:

The announcement of FDI in retail has open the political pot. The Government faces stiff
opposition with its allies threatening to withdraw support. In case, this policy is finally
implemented, there is another important aspect for the companies to overcome. The way
the policy is currently drafted, a retailer can set-up stores only in those states which have
agreed or will agree in the future to allow FDI in multi-brand retail. Poor infrastructure
and supply chain management:
Infrastructure will play an important role in deciding how this sector will evolve and
retailers will manage the supply chain.

Due to poor infrastructure, multiplicity of taxes, high cost of fuel, dependence largely on
the road transportation, etc., logistics still remains a high percentage of the cost of a
product, in certain cases going beyond 15 to 20%.

B. Less conversion level:

Despite high footfalls, the conversion ratio has been very low in the retail outlets in a
mall as compared to the standalone counter parts.

It is seen that actual conversions of footfall into sales for a mall outlet is approximately
20- 25%. On the other hand, a high street store of retail chain has an average conversion
of about 50-60%. As a result, a stand-alone store has a ROI (return on investment) of 25-
30%; in contrast the retail majors are experiencing a ROI of 8-10%.

3. Opportunity:

Retailers in India have been experimenting to arrive at a successful formula, but

there is no ‘one size fits all’ strategy. The market is still undergoing a lot of changes, both
from the regulatory as well as demand side.

A. Rural retailing: India’s huge rural population has caught the eye of the retailers
looking for new areas of growth.

ITC launched India’s first rural mall “Chaupal Saga” offering a diverse range of products
from FMCG to electronic goods to automobiles, attempting to provide farmers a one-stop
destination for all their needs.”

The Godrej group has launched the concept of ‘Agri-Stores’ named “Aadhar” which
offers agricultural products such as fertilizers & animal feed.

B. Customer-centric approach

C. Changing the regulatory scenario

Recently, the Indian Government made the following two significant announcements that
will go a long way in developing the Indian retail sector

a. Permitting foreign investment in multi-brand retail trading.

b. Simplifying the rules for single brand retail trading to make it more business-friendly

4. Threat:

A. AVAILABILITY OF LAND AND REAL-ESTATE:

Retail space and rentals are key considerations in multi-brand retail and getting a feasible
rate in the desired location is important. There retailers who have exited cities because of
the high rentals that put more pressure on profitability.

B. HUMAN CAPITAL:

With attrition still very high in the industry, human capital management continues to
remain one of the top three agenda points for the retailer. The attrition in the industry can
be anywhere between 20 and 25% in non-food and grocery business to as high as 60% in
the food and grocery segment.

C. Shopping culture:

Shopping culture has not developed in India as yet. Even now malls are just a place to
hang around with family and friends and largely confined to window-shopping.
4.2 Store Based Retailing

Store Based Retailing is a tangible retailing channel where the customers buy
products after their practical exposure in store. They like to see, feel and touch the
product before making an actual purchase.

Store based retailing can be further classified as follows:

Store Based Retail

Form of Ownership: Merchandise Offered:

1. Independent Retailer 1. Convinience Stores
2. Chain Retailer 2. Supermarkets
3. Franchisee 3. Hypermarkets
4. Leased Department 4. Speciality Stores
5. Consumer Co-operative 5. Factory Outlets

A. Classification on the Basis of Ownership:

1. Independent Retailer- An independent retailer is someone who is completely

responsible for his or her own business. The retailer owns or has bought an
independent store and has built the business from the ground up by assessing all
needs of the store, which can include staffing, marketing, merchandising, sales,
etc. The independent retailer maintains a good relationship with the customers.
Small scale retail business: Single owners can easily start and manage small
business units profitably with the help of one or two assistants. It can be a grocery
store, stationery shop, or a cloth store, etc.
2. Chain Retailer- When two or more retail outlets are under a common ownership it
is called a retail chain. For example: One of a number of retail stores under the
same ownership and dealing in the same merchandise. It is called chain retailing.
Chain Stores are groups of retail stores engaged in the same general field of
business that operate under the same ownership or management, chain stores are
retail outlets owned by one firm and spread nationwide. For example, Van
Heusen, Food world, Shopper’s stop etc.

3. Franchisee- A franchise is a contractual agreement between franchisor and a

franchisee in which the franchisor allows the franchisee to conduct a business
under an established name as per the business format. In return the franchisee has
to pay a fee to the franchiser. For example: Pizza hut, McDonalds, etc.

4. Leased Department- These are also known as Shop in Shops. When a section or a
department in a retail store is rented to the outside party it is called leased
department. The licensor permits the licensee to use the property and in turn the
licensee pays a fee to the licensor for using his property. This is one of the best
ways to expand the product offering and is carried out in India in case of perfumes
and cosmetics.
Nowadays, it is seen that the high traffic areas like malls, airports, multiplexes,
etc. are having presence of small retail outlets or counters that are a part of larger
retail chains and they have on display a small part of product sold.

5. Consumer Co-operatives- A consumer co-operative is a retail organisation owned

by its member customers. The objective is to provide commodities at a reasonable
price. For example: Sahakari Bhandar, Apna Bazaar etc.
B. Merchandise Offered:
1. Convenience Stores- These are relatively small stores located near the residential
area. They offer limited line of convenient products such A ` store is a small store or
shop that sells items such as candy, ice-cream, soft drinks, lottery tickets, cigarettes
and other tobacco products, newspapers and magazines, along with a selection of
processed food and perhaps some groceries, etc. Such stores enable the customers to
make quick purchase and offer them few services. They stock a limited range of high-
turnover convenience products and are usually open for extended periods during the
day; Prices are slightly higher due to the convenience premium.

2. Supermarkets- These are retail organisations that provide low-cost high-volume

self-service operation to meet consumer requirements. Most of the super market
charge lower price. Example: Reliance Fresh, DMart, etc. They are the large self-
service outlets, catering to varied shopper needs. These are located in or near
residential high streets. A supermarket, also called a grocery store, is a self-service
store offering a wide variety of food and household merchandise, organized into
department. It is larger in size and has a wider selection than a traditional grocery
store and it is smaller than a hypermarket or superstore. Supermarkets usually offer
products at low prices by reducing their economic margins.

3. Hypermarkets- A hypermarket is a superstore which combines a supermarket and

a department store. Hyper markets are huge retail stores that offer various products
such as clothes, jeweller, stationery, electronic goods at cheaper price. Example: Big
Bazaar, Star Bazaar, Giant Stores etc. They focus on high volume.

4. Specialty Stores- A specialty store is a store, usually retail, that offers specific and
specialized types of items. They offer a narrow product line that concentrates on
specialized products such as jeweller, fabrics, furniture etc. Customer service and
satisfaction are given due importance. For example, a store that exclusively sells cell
phones or video games would be considered specialized. A specialty store specializes
in one area.
5. Departmental Stores- A departmental store is a large-scale retail institution that
offers several products from a pin to plane such as clothing, grocery etc. Retail
establishment that sells a wide variety of goods. Departmental stores are the largest
form of organized retailing today, located mainly in metro cities, in proximity to
urban outskirts. They lend an ideal shopping experience with an amalgamation of
product, service and entertainment, all under a common roof. Examples include
Shoppers Stop, Pantaloon, etc.

6. Factory Outlets- A retail store that sells discounted price items that are irregular,
outdated or have been produced in excess quantities. A factory outlet store
specializing in selling goods from a particular business might be located in physical
proximity to its manufacturing facilities or in association with other factory outlet
stores. E.g.: Nike, Adidas has factory outlets where they sell their outdated products
at a very cheap price.
4.3 Retail Strategy

Retail strategy is a clear and definite plan outlined by the retailer to tap the market. It is a
basic plan to build a long- term relationship with the customers. The process of strategy
formulation in retail is the same as that of any industry. It starts with the retailer defining
or stating the mission for the organization and this mission is at the core of existence of
the retailer.

Steps in Developing Retail Strategy

For the purpose of developing retail strategies, retailers are required to follow a step by
step procedure or planning process. Considering the importance of strategic decisions for
the future success of the business, a systematic approach is essential.

Defining the mission or puprose of the organization

Setting Objectives

Conduction a situation analysis

Identifying Strategic Alternatives

Obtain and Allocate Resources

Develop a Strategic Plan

Implement the Strategy

Evaluation and Control of Strategy

1. Defining the Mission or Purpose of the Organization- Management begins the
planning process by identifying the organization's mission or purpose. The mission
statement describes what the firm plans to accomplish in the markets in which it will
compete for customers it wants to serve. A mission statement normally includes the
following elements:
The products and services that will be offered
• Geographic areas that would be covered.
• The customers that would be served

The manner in which resources and assets of the organization would be utilized to
create customer satisfaction. The mission statement provides a clear sense of direction
for the organization and distinguishes the firm from all others. Most of these retailers
have more detailed mission statements that are provided to all the stakeholders.
Mission statements often reflect an
organization's values or corporate culture. Corporate culture establishes the values of
greatest importance to the organization. These are values on which emphasis is
constantly placed. Often these values reflect the personal goals of top management. A
firm's values are often stated in the company motto, as shown in the following
examples:
McDonald's Quality, Service, Convenience, and Value. This slogan is emphasized to
all employees as they are brought into the organization.

2. Setting Objectives- Objectives are statements of results to be achieved. They are a

translation of the mission statement into operational terms. Objectives may include
profitability, sales of volume, market share, or expansion results. Management sets
both long-term and short-term objectives. Retailing is too dynamic to establish
specific targets much beyond five years. Good objectives are measurable, are specific
as to time, and indicate the priorities for the organization. Examples are: Sales volume
targets, profits to be achieved, returns on investment, market share targets etc.
 3. Conducting a Situation Analysis- Once mission has been defined, objectives are set,
the management must decide on a plan for achieving them within the context of the
firm's mission. This plan is based on an analysis of the strengths and weaknesses of
the organization and the threats and opportunities in the environment. This
assessment of internal strengths and weaknesses and external threats and
opportunities is referred to as a situation analysis, popularly known as SWOT analysis
(strengths, weaknesses, opportunities, and threats).
Internal factors are those variables largely under the control of store management.
Such factors include financial resources, physical assets (for example, buildings,
display and fixture), management skills, sales force composition, merchandise lines
carried, the reputation of the firm, and employee attitudes toward the company.
External factors are those over which store management has very little or no control.
These include the legal environment, the economic and social environments, the
competitive environment, and the technological environment. Management examines
trends in these environments and determines whether the trends pose threats or
opportunities, or whether they have no relevance for the organization.
The result of the situation analysis can be used to identify the major strategic
alternatives, make adjustments in strategy and so on. Along with SWOT, PEST
analysis and the BCG Matrix can also be used by the retailer.

4. Identifying Strategic Alternatives- After determining the strengths and weaknesses of

the organization, the retailer needs to consider the various options/ alternatives available
for tapping a particular market. In broad terms, a retailer may consider pursuing one or
more of four major strategic options:

i. Market Penetration- This strategy is adopted by the retailers when he seeks to achieve
growth with the existing products in the market segment, he operates in. Market
penetration is often used by retailers because it builds on the firm's existing strengths,
which include knowledge of current customers and their preferences and the firm's
familiarity with the merchandising lines. Such a strategy is designed to increase:
Number of customers - adding new stores or modifying marketing mix to get new
customers in the stores
• Quantity purchased by customers- by encouraging salesman to do cross-selling. For
e.g. A salesman who has just sold DVD player convinces the customer to buy CDs,
DVDS etc.
• Purchase frequency - by resorting to promotional offers and giving freebies and
discounts

ii. Market development- A strategy of market development focuses either on

attracting new market segments or completely changing the customer base. Market
development normally involves more capital, and greater risk than a market
penetration strategy. Examples of market development efforts include reaching new
segments and market expansion. For instance, McDonalds has, over the years, added
chicken, breakfast items, salads, pizza etc. to their menu. This helps attract consumers
who are looking for something non-fried, less filling with lower calories, and more
nutritious than many traditional fast-food offerings.

iii. Retail format development- A retail format development is introducing a new

retail format to customers. Example: Fast-food retailers like McDonald's and Subway
offer limited menus in smaller locations inside major stores (e.g., Wal-Mart) or petrol
pumps.

iv. Diversification- Diversification is the growth that the retailer seeks by developing
new products for new markets or an entirely new retail format directed towards a
market segment that the retailer currently does not serve. An example of
diversification is ITC shifting from tobacco products to apparels.
5. Obtain and Allocate Resources- The retailer needs various resources like human,
material as well as financial. All the three categories of resources are very important for
the success of the retail enterprise.

Financial resources take care of monetary aspects of the businesses like shop rent,
salaries or employees and payments for merchandise. Material resources include
infrastructure equipment etc. Human Resource management involves many issues like
recruiting and selecting, training, compensating etc. Resources plan must he consistent
with the overall strategy of the retail organization. Human resources management also
involves a variety of issues such as recruiting, selecting, training, compensating and
motivating personnel.

6. Develop the Strategic Plan- This is the stage, where the retailer determines the strategy
by which he will achieve the objectives set. He defines the target market and the retail
mix that will serve his audience.

The target market is that segment of the consumer market that the retailer decides to
serve. There is no definite or best way for deciding upon and selecting the target market
in which to compete. The retailer usually begins by looking at the entire market in terms
of both the size and consumer segments to which it might appeal. From these segments,
he identifies a smaller number of segments that looks most promising - these are the
possible targets. The retailer then zeroes in on these possible targets and applies a set of
screening criteria to help select the final targets. A number of variables like the growth
potential of each likely target market, the investment needed to compete, and the strength
of the competition, etc. are normally evaluated for each segment in order to arrive at the
ones which are most compatible with the organization's resources and skills. In order to
be successful in segmenting the market, the retailer must ensure that it is:

• Measurable- The segment should be measurable and identifiable.

• Accessible- His marketing efforts on a particular market segment should have a
positive impact on eliciting the desired responses.
• Economically viable- The money spent on a particular segment should bring the
desired results
 Once the retailer has chosen the target market, the retail mix needs to be determined.
This involves determining the merchandise mix, the pricing policy and the types of
locations that the retail store will be located at, the services that will be offered at the
store and the communication platform that will be adopted by the retailer.
Further the positioning strategy is formulated. Positioning is developing the image of
the retailer in the customers mind.

7. Implement the Strategy- The key to the success of any strategy lies in its
implementation. To implement a firms desired positioning effectively, every aspect of the
store must be focused on the target market. Merchandising and displays must appeal to
the target market, advertising must be effective, personnel must be well trained and
knowledgeable, customer service must be designed with the target customer in mind.

8. Evaluation and Control of Strategy- Once a strategy is implemented, managers need

feedback on the performance of the new strategy. The effectiveness of the long-term
competitive strategyof the firm must be evaluated periodically. Such an evaluation covers
all elements of the plan. This type of evaluation ensures that the efforts are in harmony
with the overall competitive strategy of the business. Management can also use the
process to decide what changes, if any, should be made in the future to ensure that the
combination of retailing mix variables supports the firm’s strategy.
4.4 Store Location Selection
One of the most important decision that a retail has to make is on the location of the retail
outlet. This is because the retailer can still change the merchandise mix, pricing strategy,
promotional offers and so on but it is very difficult for him to change location. There are
3 basic reasons why the decision regarding the choice of retail location is utmost crucial:
 Location is typically one of the most influential considerations in a customer's
store-choice decision. Most consumers similarlyshop at the supermarket closest to
them.
 Location decisions have strategic importance because they can be used to develop
a sustainable competitive advantage. If a retailer has the best location, that is, the
location that is most attractive to its customers, competitors cannot easily copy
this advantage.
 Location decisions are risky. Typically, when retailers select a location, they
either must make a substantial investment to buy and develop the real estate or
must commit to a long-term lease with developers. Retailers often commit to
leases for 5 to 10 years or even more.

Importance of Retail Location

The basic reasons why the decision regarding the choice of retail location is utmost
crucial are:
• Customer Convenience- Location is one of the prime considerations in customers
store choice decision Most consumers prefer to shop at stores that are closest to them.
Example- a grocery store medical store, car garage etc.

• Sustainable Competitive Advantage- Location decisions have strategic

importance because they can be used to develop a sustainable competitive advantage.
If a retailer has the best location, that is, the location, that is, most attractive to its
customers, competitors cannot easily copy this advantage. Thus, business location is a
unique factor which the competitors cannot imitate.
 • Huge Investment- Location decisions are risky. Generally, when retailers select a
location, they either make a substantial investment to buy and develop the real estate
or commit to a long-term lease (5 to 10 years) with the developers.

• Cost Factor- Location is a major cost factor because it involves large capital
investment, affects transportation costs as well as human resources cost like salaries.

• Revenue Factor- Location is a major revenue factor because it affects the amount
of customer traffic and also, the volume of business of the retailer.

Types of Retail Locations

A retailer has several options to choose the location of his store, each type has its own
strengths and weaknesses. In order to choose a particular location type, the retailer must
evaluate a series of trade-offs. These trade-offs generally involve the size of the trade area
the occupancy cost of the location, the pedestrian and vehicle customer traffic generated
in association with the location, the restrictions placed on store operations by the property
managers, and the convenience of the location for customers. The trade area is the
geographic area that encompasses most of the customers who would visit a specific retail
site.
1. Freestanding Sites- Freestanding sites are unplanned areas occupied by retail stores.
They are stand-alone buildings or isolated stores unconnected to other retailers; however,
they might be near other freestanding retailers. The road side eateries or dhabas situated
alongside main roads and national highways in India are examples of free-standing
locations.

The advantages of freestanding locations are:

 Convenient to customers. (easy access and ample parking)

 low rent.
 Visibility to attract customers driving by; little or no competition, low occupancy
costs; and fewer restrictions on hours of operation, or merchandise.
Limitations of freestanding locations are:

 Freestanding locations have a limited trade area.

 There are no other nearby retailers to attract customers interested in shopping at
multiple outlets on one trip.
 These locations have higher occupancy costs because they do not have other
retailers to share the cost of the outside lighting, parking lot maintenance, or trash
collection.
 They generally have higher pedestrian traffic, limiting the number of customers
who might drop in because they are walking/driving by.
If we consider a city like Mumbai, no one would be willing to spend time and money
on travelling to visit just one store. Hence, this type of location is not very much
preferred.

1. City or Town Locations

In the twenty-first century, some retailers are finding urban locations attractive
particularly in cities that are redeveloping their downtowns and surrounding urban
areas City/urban locations have lower occupancy costs than enclosed malls, and
locations in central business districts often have high pedestrian traffic during the
day. However, vehicular traffic is limited due to congestion in urban areas, and
parking problems reduce consumer convenience. Unlike freestanding locations,
store signage can be restricted in these locations. Young professionals are moving
into these areas to enjoy the convenience of shopping, restaurants, and
entertainment near where they live. Some of the common city locations are:
a. Central Business District- The central business district (CBD) is the traditional
downtown business area in a city or town. Due to its daily activity, it draws many
people and employees into the area during business hours. Example: Colaba
Causeway, Linking Road in Bandra etc.

The CBD is also the hub for public transportation, and there is a high level of
pedestrian traffic. They also have a large number of residents living in the area.
However, limited parking and longer driving times can discourage suburban
shoppers from visiting stores in a CBD. Shoplifting is also a concern, requiring
increased security costs and/or inventory losses.

b. Main Street- Main Street refers to the traditional shopping area in smaller
towns or to a secondary business district in a suburb or within a larger city. Streets
in some of these areas have been converted into pedestrian walkways. Main
Streets share most of the characteristics of a primary CBD, but their occupancy
costs are generally lower.

Main Street locations do not draw as many people as the primary CBD because
fewer people work in the area and the fewer stores generally mean a smaller
overall selection. In addition, Main Streets do not offer the range of entertainment
and recreational activities available in the more successful primary CBD5.
Finally, the planning organization for the town or redevelopment often imposes
some restrictions on Main Street store operations

c. Inner City- The term inner city (in the United States) refers to a high-density
urban area that has higher unemployment and lower median income than the
surrounding metropolitan area. Some retailers have avoided opening stores in the
inner city because they believe it is riskier and achieves lower returns than other
areas. As a result, inner-city consumers often have to travel to the suburbs to shop,
even for food items.

Although income levels are lower in inner cities than in other neighbourhoods,
inner-city retailers often achieve a higher sales volume and higher margins,
resulting in higher profits.
2. Destination Location

A destination location is a store that provides entire gamut of merchandise, or a

one-stop shop for retail shopper. It not only provides a wide range of merchandise but
also entertainment and pleasurable shopping experience. Some of the destination
locations are:

a. Shopping Centres- A shopping centre is a group of retail and other commercial

establishments that are planned. developed, owned. and managed as a single property.
By combining many stores at one location the development attracts more consumers
to the shopping centre than would be the case if the stores were at separate locations.
The developer and shopping centre management carefully select a set of retailers that
are complementary to provide consumers with a comprehensive shopping experience,
including a well-thought-out assortment of retailers.

The shopping centre management maintains the common facilities such as the
parking area an arrangement referred to as common area maintenance (CAM) and is
responsible for providing security, parking lot lighting, outdoor signage for the centre
advertising and special events to attract consumers, and so on. The shopping centre
management can also place restrictions on the operating hours, signage, and even the
type of merchandise sold in the stores. Most shopping centres have at least one or two
major retailers, referred to as anchors. To get these anchor retailers to locate in a
centre, developers frequently give them special deals, such as reduced lease costs. For
example, Elco market in Bandra.

b. Shopping Malls- These are enclosed, cli e-controlled, lighted shopping centres with
retail stores on one or both sides of an enclosed walkway. Parking is usually provided
around the perimeter of the mall. They often are considered tourist attractions.

Shopping malls have several advantages over alternative locations.

 Shopping malls attract many shoppers and have a large trade area because of the
number of stores and the opportunity to combine shopping with entertainment.
  They provide an inexpensive form of entertainment
 Older citizens get their exercise by walking the malls, and teenagers hang out and
meet their friends
 Children are taken for recreation.
 Mall management ensures a level of consistency that benefits all the tenants. For
instance, most major malls enforce uniform hours of operation.
However, malls also have some disadvantages:

 Mall occupancy costs are higher than freestanding sites, and most central business
districts.
 Some retailers may not like mall management's control of their operations, such
as strict rules governing window displays and signage.
 Competition within the mall can be intense. Several specialty and department
stores might sell very similar merchandise and be located in close proximity.
 Freestanding locations are more convenient because customers can park in front
of a store, go in and buy what they want.

Factors Affecting Retail Location Decisions

1. Demographic Characteristics- Demography is the study of population characteristics
that are used to describe consumers. Retailers can obtain information about the
consumer’s age, gender, income, education, family characteristics, occupation, and many
other items. These demographic variables may be used to select market segments, which
become the target markets for the retailer. Demographics aid retailers in identifying and
targeting potential customers in certain geographic locations. Linking demographics to
behavioural and lifestyle characteristics helps retailers find out exactly who their
consumers are. Retailers who target certain specific demographics characteristics should
make sure that those characteristics exist in enough abundance to justify locations in new
countries or regions.
2. Economic Characteristics- Businesses operate in an economic environment and base
many decisions on economic analysis. Economic factors such as a country’s gross
domestic product, current interest rates, employment rates, and general economic
conditions affect how retailers in general perform financially. For example, employment
rates can affect the quantity and quality of the labour pool available for retailers as well
as influence the ability of customers to buy.

3. Demand- The demand for a retailer’s goods and services will influence where the
retailer will locate its stores. Not only must consumers want to purchase the goods, but
they must have the ability or money to do so as well. Demand characteristics are a
function of the population and the buying power of the population that the retailer is
targeting.

4. Levels of competitions vary by nation and region. In some areas, retailers will face
much stiffer competition than in other areas. Normally, the more industrialized a nation
is, the higher the level of competition that exists between its borders. One of the
environmental influences on the success or failure of a retail establishment is how the
retailer is able to handle the competitive advantages of its competition. A retailer must be
knowledgeable concerning both direct and indirect competitors in the marketplace, what
goods and services they provide, and their image in the mind of the consumer population.

5. Infrastructure- Infrastructure characteristics deal with the basic framework that allows
business to operate. Retailers require some form of channel to deliver the goods and
services to their door. Depending on what type of transportation is involved, distribution
relies heavily on the existing infrastructure of highways, roads, bridges, river ways, and
railways. Legal infrastructures such as laws, regulations and court rulings and technical
infrastructures such as level of computerization, communication systems, and electrical
power availability also influence store location decisions. Distributions play a key role in
the location decision especially for countries and regions. There is a significant variance
in quantity and quality of infrastructures across countries.
4.5 Factors influencing Retail Shoppers
The behaviour of retail shoppers is a subject of study across the world. The basic
difference however, continues to be the maturity of markets and formats. While retail in
the West has evolved unit terms of formats over the past hundred years, organized retail
in India is still a new phenomenon. Shopping has in fact, been termed as a science.
In India, retailers and retail formats are still evolving. Ten years ago, if a consumer
wanted to buy soap, his only option was the local baniya or the Sahakari Bhandar or the
fair price shops run by the government. Today, he can still buy the bar of soap from the
same places, but also has an option of going to a Food World, Big Bazaar, Food Land, or
and Apollo Pharmacy or from the neighborhood baniya who has developed a swank new
self-service store. Where will he buy? What are the reasons for his choosing one store
over the other?

We now examine the factors which influence the customer’s decision-making process:

1. Range of Merchandise- The range of merchandize is perhaps the most important

reason for customers to patronize a particular outlet. The initial curiosity of the store may
draw a consumer to a retail store, but converting him into a buyer and retaining him over
a period of time is largely dependent on the quality and the range of merchandise offered
by the store. The range of merchandise offered plays an important role in case of
categories like durables, books and music, apparel and other lifestyle products.

2. Convenience of shopping at Particular Outlet- The element of convenience is fast

gaining prominence in the world of organized retail. This is especially true in case of
items like grocery/ fruits and chemists, where customers buy goods from retail store that
ismost convenient and accessible.

3. Time to travel- The time required to reach a particular retail location is critical. This is
especially true in the case of metro cities like Mumbai, where there is lot of congestion
and traffic, leading to high travel time. This has resulted in many local areas developing
in terms of shopping, to facilitate buying. Now there are multiple outlets for a brand,
departmental stores and malls mushrooming all over the country.
4. Income Levels- Consumers with high income has high self-respect and expects
everything best when it comes to buying products or availing services. Consumers of this
class don’t generally think twice on cost if he is buying a good quality product. On the
other hand, low-income group consumers would prefer a low-cost substitute of the same
product. For example, a professional earning handsome pay package would not hesitate
to buy an iPhone but a taxi driver in India would buy a low-cost mobile.

5. Social Status- Social status is nothing but a position of the customer in the society.
Generally, people form groups while interacting with each other for the satisfaction of
their social needs. These groups have prominent effects on the buying behaviour. When
customers buy with family members or friends, the chances are more that their choice is
altered or biased under peer pressure for the purpose of trying something new.
Dominating people in the family can alter the choice or decision making of a submissive
customer.

6. Personal Elements- Here is how the personal elements change buying behaviour:
Gender: Men and women differ in their perspective, objective, and habits while deciding
what to buy and actually buying it. Researchers at Wharton’s Jay H. Baker Retail
Initiative and the Verde Group, studied men and women on shopping and found that men
buy, while women shop. Women have an emotional attachment to shopping and for men
it is a mission. Hence, men shop fast and women stay in the shop for a longer time. Men
make faster decisions, women prefer to look for better deals even if they have decided on
buying a particular product.
Wise retail managers set their marketing policies such that the four Ps are appealing to
both the genders.

• Age: People belonging to different ages or stages of life cycles make different
purchase decisions.
• Occupation: The occupational status changes the requirement of the products or
services. For example, a person working as a small-scale farmer may not require a
high- priced electronic gadget but an IT professional would need it.
 • Lifestyle: Customers of different lifestyles choose different products within the
same culture.
• Nature: Customers with high personal awareness, confidence, adaptability, and
dominance are too choosy and take time while selecting a product but are quick in
making a buying decision.

7. Psychological Elements- Psychological factors are a major influence in customer’s

buying behaviour. Some of them are:
• Motivation: Customers often make purchase decisions by particular motives such as
natural force of hunger, thirst, need of safety, to name a few.
• Perception: Customers form different perceptions about various products or services
of the same category after using it. Hence perceptions of customer leads to biased
buying decisions.
• Learning: Customers learn about new products or services in the market from
various resources such as peers, advertisements, and Internet. Hence, learning largely
affects their buying decisions. For example, today’s IT-age customer finds out the
difference between two products’ specifications, costs, durability, expected life,
looks, etc., and then decides which one to buy.
• Beliefs and Attitudes: Beliefs and attitudes are important drivers of customer’s
buying decision.
4.6 Organization Structure in Retail

The organization structure identifies the activities to be performed by specific employees

and determines the lines of authority and responsibility in the firm. The first step in
developing an organization structure is to determine the tasks that must be performed.
These tasks are divided into four major categories in retail firms: strategic store
management, administrative management (operations), merchandise management, and
store management.

Once the tasks have been identified, the management needs to take into consideration its
own requirements and targets and how they can be achieved. It needs to consider the
requirements of the target market and the needs of its own internal customers
(employees). An organization structure is them developed after taking into account all
these factors.

Factors Affecting Organizational Design

Some of the factors influencing Organizational Structure in Retail are:
1. Organizational size- The larger an organization becomes, the more complicated its
structure. When an organization is small, such as a single retail store, a two‐person
consulting firm, or a restaurant, its structure can be simple. Instead of following an
organizational chart or specified job functions, individuals simply perform tasks based on
their likes, dislikes, ability, and/or need. Rules and guidelines are not prevalent and may
exist only to provide the parameters within which organizational members can make
decisions.

2. Scale of Operations (Local, Regional, National or International)- An organization that

operates locally may have a simple structure. However, if the retailer expands his
business and opens several outlets nationally or internationally, the structure may get
complex with many involve many people. The type of structure that develops will be one
that provides the organization with the ability operate effectively, whether locally or
internationally, that’s one reason larger organizations are often mechanistic-mechanistic
systems are usually designed maximize specialization and improve efficiency.
3. Strategy- How an organization is going to position itself in the market in terms of its
product is considered its strategy. A company may decide to be always the first on the
market with the newest and best product (differentiation strategy), or it may decide that it
will produce a product already on the market more efficiently and more cost effectively
(cost‐leadership strategy). Each of these strategies requires a structure that helps the
organization reach its objectives. In other words, the structure must fit the strategy.

4. Environment- The environment is the world in which the organization operates, and
includes conditions that influence the organization such as economic, social‐cultural,
legal‐ political, technological, and natural environment conditions. Environments are
often described as either stable or dynamic.
• In a stable environment, the customers' desires are well understood and probably
will remain consistent for a relatively long time. Examples of organizations that face
relatively stable environments include manufacturers of staple items such as
detergent, cleaning supplies, and paper products.
• In a dynamic environment, the customers' desires are continuously changing—the
opposite of a stable environment. This condition is often thought of as turbulent. An
example of an industry functioning in a dynamic environment is electronics.
Technology changes create competitive pressures for all electronics industries,
because as technology changes, so do the desires of consumers.

5. Type of departmentalization- The small or independent retail stores may combine

many sectors together under one division/ department, while larger stores create various
divisions (departments) for each particular function along with many layers of
management. The most appropriate structure depends on the organization's strategy
(innovation, cost minimization, imitation), its size, the technology it uses (unit
production, mass production, or process production and the degree of environmental
uncertainty the organization faces.
4.7 Store Layout

Store layout is the design of a store's floor space and the placement of items within that
store. It is the last element which is integral to the internal look of the store is the store
layout. A store layout is the design in which a store's interior is set up. It is one of the key
strategies in its success. Therefore, a lot of time, effort and manpower go into its design.
Retailers use layout to influence customer's behaviour by designing the store's flow
merchandise placement and ambience.

Layouts also help retailers understand how much revenue per square foot they are
making: using this information, they can properly assess the strengths and weaknesses in
their merchandising mix. An ideal layout strikes the balance between the merchandise to
be displayed and productivity.

The layout of the store would vary across retailers. In some cases, the high demand
merchandise may be placed at the rear end of the store, so that the customers will move
through the store and the merchandise before they reach the required merchandise.

Types of Layout

Typically, store layouts maybe classified into:

1. Grid

2. Loop (Racetrack)

3. Free-Flow
1. Grid

We’re all familiar with the grid. Nearly every convenience store, pharmacy, and grocery
store utilize this familiar layout. Reams of merchandise are displayed on a predictable
pattern of long aisles where customers weave up and down, browsing as they go. The
grid maximizes product display and minimizes white space. This layout is all about
product, product, product. A standard grid layout looks something like this:

Pros

 Best for stores with lots of merchandise, especially when products are varied

 Lots of exposure to products, as the layout encourages customers to browse

multiple aisles

 Familiar for shoppers

 Predictable traffic flow means you can put promos where you know customers
will see them

 Lots of infrastructure suppliers, such as shelving, are available as this layout is used
so much

 Best practices within this layout are well researched

Cons

 Least likely to create an experiential retail space; this layout is a dime a dozen

 Customers may be frustrated they can’t shortcut their way to what they need

 Customers may not understand your product groupings, leading to frustration and
questions (or worse, departure)

 Few visual breaks and lots of merchandise can make customers feel overwhelmed

 Cramped aisles often lead to customers bumping into one another.

2. Loop (Racetrack)

The loop, or racetrack layout takes the grid’s fairly predictable traffic flows a step further and
creates a deliberate closed loop that leads customers from the front of the store, past every bit
of merchandise, and then to the check-out. Customers are exposed to the most merchandise
this way, but the path they take is controlled.

A basic loop layout is shown below:

Pros

 Maximum product exposure

 Most predictable traffic pattern; easiest to place promotions and have highest
assurance they’ll be seen

 Can be experiential — may work with retail where a journey makes sense and time
spent in store doesn’t need to be brief

Cons

 Customers don’t get to browse at will

 May waste customer’s time who knows what they’ve come for; they may avoid
this shop in the future when buying intent is specific

 Not suited for shops that encourage high traffic turnover, or carry products that
people need to spend little time considering before purchase

Free-flow

The free-flow layout philosophy is almost a rejection of the others. With free-flow, thereis no
deliberate attempt to force customers through predictable traffic patterns; wandering is
encouraged. Therefore, with free-flow, there are far fewer rules, but that doesn’t mean there
aren’t any — don’t forget about the commonalities that are based on natural human
behaviour.
Free-flow has been called the simplest store layout because there’s no defined pattern, but
arguably that’s what makes it the most complex. How you organize your merchandise in
a free-flow store is limited only by your square footage and your imagination. With so
few rules, it’s easy to go wrong. However, the biggest mistake you can make if you
decide to go with this layout is thinking there are no best practices — human preferences
and behaviour still matter and need to be considered for this layout to be successful for
your shop.

Pros

 Great for small spaces

 Also works within areas of loop and spine layouts (more on that below)

 Creates more space between products

 Less likelihood customers will bump into one another

 Better suited to higher-end shops with less merchandise

 Most likely to create an experiential retail space

Cons

 Often less space to display product

 Easy to forget there are best practices that still should be followed; breaking the
unwritten rules can turn people off and away from your store

 Can be confusing for customers

Chapter 5

Bricks and Clicks Business Model

Brick-and-Click is a business model in which

a company operates both an online store (the
clicks) and an offline store (the bricks) and
integrates the two into a single retail strategy.

Examples of Bricks and Clicks business

models in India are Croma, Lenskart.com,
Vijay Sales, Reliance Trends, etc.

Advantage of Bricks and Clicks Model

1. Better After Sales Service

2. Access to Wider Market
3. Improve Customer Trust
4. Expand Target Market
5. Save Time
6. Save Cost

Bricks and Clicks is the solution to those Retails who wants to enjoy benefits of both Retail
Stores as well as Online Shopping Sites which also benefits Consumers.
Chapter 6
Data Analysis & Interpretation

In this Survey, responses from 50 people were taken. Out of which, 28

(56%) were males and 22 (44%) were females. The age group of all
respondents was between 18 to 24 years

1. Do you generally prefer Online shopping or Retail stores?

Interpretation:
According to the data, 28 out of 50 (44%) people prefer Online Shopping
while 22 (56%) people still prefer shopping in Retail Stores.
2. Please choose the reasons for retail shopping:

Interpretation:
According to the data collected, the reason for shopping in Retail Stores is because 58%
people prefer to touch the product which is the highest voted in the options. Another
major reason is no shipping frustration (40% of people choose retail because of this
reason).

Other reasons are: -

 No product disappointment (38%)- which means you get what you see.
 in-store discounts (36%)- sometimes there are sales on festivals and other
occasions where people prefer to go to stores and buys stuffs like clothes,
electronic products, etc.
 Better Return Policy (34%)
 Spend time with friends and family (26%)
3. Please choose the reasons to shop online:

Interpretation:
According to the data, most people prefer to buy Online is because of 27/7 availability.
62% people shop online because of the same reason.
Other reasons for shopping online are: -
 Shipping directly to home (50%)- People like home delivery provided by online
retailers.
 Saving on Transportation Cost (48%)- Travelling often cost money because
people often travel via Bus, Auto, Car (fuel cost), etc.
 No more Waiting in line (40%)- There are usually huge queue in malls
and supermarkets during checkout especially on sales and weekend days.
 Finding items which might not be seen in Retail Stores (32%).
 Different modes of payment (24%)- You can pay via Debit Card, Credit Card,
Net Banking, UPI, E- wallet and via EMI.
4. Do look for deals or compare prices before you make your purchase?

Interpretation:
According to the survey results a majority of people look for deals or compare prices
before making a purchase. The results are:

1. 68% of people look for deals while making a purchase while

2. 32% just buy the product from the place of convenience.
5. How often do you buy new products?

Interpretation:
According to the data collected:
 50% People buy new products on certain occasions like festivals
 26% people purchase frequently and
 24% of people purchase it rarely.
6. How often do you use internet?

Interpretation:
The data collected shows that:
a) 50% of people use internet for more than 5 hours
b) 32% of people use it for between 2-5 hours a day and
c) 18% of people use it 1 hour or less than 1 hr a day.
7. Does it interest you to know, what your friends/family are buying?

Interpretation:
a) 70% of people are interested in people in what their friends’ relatives are buying
because it helps them shop from their product/ brand personal reviews.

b) 30% don’t care about what their friends and family are buying.
8. Which websites do you generally prefer if you shop online?

Interpretation:
a) 60% of people prefer Amazon while shopping online while
b) 22% Prefer Flipkart
c) 12% of people prefer Paytm mall
d) Others Prefer sites like:
i. Myntra,
ii. Alibaba,
iii. Jabong
9. Do you prefer to buy Groceries online?

Interpretation:
a) Only 24% of people prefer to buy groceries online while
b) 76% of people buy from offline or retail stores like malls or
unorganised retail near their locality.
10. Does salesperson recommendation in malls or retail stores influence
your purchase?

Interpretation:
56% of people gets influenced by recommendations by sales person in
Retail Stores while 44% of people don’t get influenced by salesperson
recommendation in Retail Stores.
Chapter 7
Conclusion

Certainly, the results of the survey conducted are interesting. There’s almost a 50-50 split
between choosing to shop between Online or at a Retail Store while in other developed
country, majority of people choose Online over Retail. This may be due to Rural India
where most people don’t have access to Internet.
Maybe in future, people will prefer Online over Retail but as of now the Retail Stores are
the one people buys from the most and trust the most.
Government is trying their best to provide free Internet in India by collaborating with
Google and providing free Wi-Fi services in Railway Stations. Government is also
providing free Wi-Fi service in public places like Bus Stops and Parks. Internet is
becoming cheaper day by day due to increase in competition between Telecom
companies. As of now, majority of people still prefer in Retail Stores but the tables will
surely turn in coming years.

We also learned the following difference between E-Commerce and Retail Stores:

Retail Stores E-Commerce

Mostly dependent on information Information exchange is done via
exchange from person to person. internet through electronic
communication.
It’s not easy to establish and maintain A uniform strategy can be effortlessly
standard practices/ strategy. established.

Difficult to operate a store 24/7. Easy to operate a website 24/7.

Need a physical place to open a retail Doesn’t need a physical place to start the
store. business.

Difficult to provide variety of Easy to provide wide range of product.

products.
Doesn’t require internet to start the Heavily dependent on internet.
business
Chapter 8
Findings

In this survey the findings are:

1. Majority of people still prefer Retail Store over Online Shopping despite having
many advantages of Online Shopping but the difference is almost 50-50.
2. There are many reasons why people prefer Retail Stores over Online buying
and vice versa
3. Majority of People buy new products on occasions like festivals
4. People use internet a lot (5+ hours a day)
5. People still have interest in what other people are buying
6. Majority of people compare price before buying a new product
7. Amazon India is the most preferred E-Commerce site when it comes to
buying new products Online
8. Very few people buy groceries online
9. People get influenced by the recommendations or suggestions given by
Sales person in Retail Stores.
Chapter 9
Bibliography & Webliography

 Dr. Praveen Nagpal & Prerna Sharma, Retail Management by Sheth

Publishers PVT. LTD. First Edition
 Nishika Kukreja, Dr. Praveen Nagpal &Prerna Sharma, E-Commerce and
Digital Marketing by Sheth Publishers PVT. LTD. Second Edition
 http://www.yourarticlelibrary.com/retailing/10-major-factors-responsible-for-the-
growth-of-organised-retailing-in-india/7574
 https://www.citeman.com/8193-factors-influencing-the-retail-shopper.html
 https://www.mbaknol.com/retail-management/factors-affecting-retail-
location- decisions/
 https://www.ibef.org/industry/ecommerce/infographic
 https://www.seoptimer.com/blog/types-of-digital-marketing-promote-business/
 https://www.explainthatstuff.com/ecommerce.html
Questionnaire:

1. Name:

2. Gender:

 Male
 Female

3. Do you prefer Online shopping or at Retail stores?

 Online
 Retail stores

4. Please choose the reasons for retail shopping (choose all that applies)
 Prefer to touch the product
 Better return policies
 In-store discounts
 Spend quality time with friends and family
 No shipping frustration (spend more for “free shipping”)
 No product disappointment
 Other

5. Please choose the reasons to shop online (choose all that applies)
 Saving on transportation cost
 Modes of payment
 No more waiting in line and pushing through crowds
 Finding items which might not see in stores
 24/7 availability
 Shipping directly to home
 Other
6. How often do you buy new products?
 Frequently
 Occasionally (on special occasions like festivals)
 Rarely
How often do you use internet?
 Less than 1 hour a day
 2 to 5 hours a day
 More than 5 hours a day
7. Does it interest you to know, what your friends/family are buying?
 Yes, it helps me shop (decide) from their personal brand reviews
 No, I don't care.

8. Do look for deals or compare prices before you make your purchase?
 Yes
 No

9. Which websites do you generally prefer if you shop online?

 Flipkart
 Amazon
 Paytm mall
 Other

10. Do you prefer to buy Groceries online?

 Yes
 No

11. Does salesperson recommendation in malls or retail stores influence your

purchase decision?
 Yes
 No