ecommerce master class course

Ecommerce Master Class.

Ecommerce Master Class ::

Main Index.

1.Ecommerce---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------3

1.a. Introduction to Ecommerce------------------------------------------------------------------------------------------------------------------------------------------------------------------------4

1.b. Ecommerce Business Models ------------------------------------------------------------------------------------------------------------------------------------------------------------------13

1.c. Ecommerce in India -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------23

1.d. Ecosystem -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------28

2.Online Retail -----------------------------------------------------------------------------------------------------------------------------------------------------------54

2.a. Introduction to Online Retail ---------------------------------------------------------------------------------------------------------------------------------------------------------------------55

2.b. Online Retail in USA ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------60

2.c. Current Retail Industry in USA ------------------------------------------------------------------------------------------------------------------------------------------------------------------80

2.d. Online Retail in India ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------85

2.e. Online Retail Market Size ------------------------------------------------------------------------------------------------------------------------------------------------------------------------90

2.f. Challenges in Pure-Play Online Retail ---------------------------------------------------------------------------------------------------------------------------------------------------------97

3.Online Retail Operations -------------------------------------------------------------------------------------------------------------------------------------------103

3.a. Building blocks of Online Retail ---------------------------------------------------------------------------------------------------------------------------------------------------------------104

3.b. Technology ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------105

3.c. Content & Imaging -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------128

3.d. Online Marketing ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------146

3.e. Fulfillment ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------171

3.f. Customer Support --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------187

4. Key Lessons ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------219

5. Looking Ahead -----------------------------------------------------------------------------------------------------------------------------------------------------194

5.a. M Commerce -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------195

5.b. T-Commerce -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------208

5.c. Social Commerce -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------215

5.d. Innovations----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------216

DAY 1

DAY 2

Ecommerce.

Ecommerce Master Class :: Ecommerce ::

Index.

1.a. Introduction to Ecommerce.

a. Ecommerce Definition.

b. Defining years of Ecommerce.

c. Parts of Ecommerce.

d. Advantages & Challenges of Ecommerce.

e. Effect on purchasing decision.

f. Successful Ecommerce Companies.

g. Successful Ecommerce People..

Ecommerce :: Introduction to Ecommerce ::

Ecommerce Definition.

“Ecommerce, which is short for electronic commerce, is the process used to

distribute, buy, sell or market goods and services, and the transfer of funds

online, through electronic communications or networks”

Source : Wikipedia

Electronic commerce is commonly referred to as Online commerce, Web commerce,

eBusiness, eRetail, eTailing, Ecommerce, ecom or EC


Defining years of Ecommerce.

Chronology of US Ecommerce.

Source : Wikipedia

1979

• Online

Shopping

Michael Aldrich

1981

• UK’s First B2B

online shopping

Thomson Holidays

1984

• First B2C online

shopping

Gateshead SIS/Tesco

1990

• World Wide

Web

Tim Berners-Lee

1994

• Netscape

releases the

Mozilla browser.

• Bezos launches

Amazon.com.

• eBay is founded

1998

Alibaba Group

is established

in China. And

it leverage

China's B2B

and C2C,

B2C(Taobao)

market.

1999

• Business.com

sold for US $7.5

million .

• Napster launches.

In 1979 he

invented online

shopping to enable

online transaction

processing

between

consumers and

businesses, or

between one

business &

another, a

technique known

later as e-

commerce.

The first business-

to-business (B2B)

computer network

was created by

Thomson Holidays

in 1981

10 Jan 1984

Gateshead

SIS/Tesco is first

B2C online

shopping.

Mrs Snowball, 72,

is the first online

home shopper.

He implemented

the first

successful

communication

between

a Hypertext

Transfer

Protocol (HTTP)

client

and server via the

Internet

Jerry Yang and

David Filo

publish "Jerry's

Guide to the

World Wide

Web" online,

which will evolve

into Yahoo. The

first version of

Netscape

Navigator is also

released.

The company, is

engaged in the

provision of

software,

technology and

other services on

the online

business-to-

business (B2B)

marketplaces.

It was originally

founded as a

pioneering peer-to-

peer file

sharing Internet

service that

emphasized sharing

audio files, typically

music, encoded

in MP3 format. The

original company ran

into legal difficulties

over copyright issues


Defining years of Ecommerce.

2000

• The dot-com

bust.

.

2002

• eBay

acquires

PayPal for

$1.5 billion.

• Niche retail

companies

Wayfair and

Netshops are

founded.

2009

• Zappos.com

acquired by

Amazon.com for

$928 million.

• RueLaLa.com,

acquired by GSI

Commerce for

$180 million.

2010

• Groupon

reportedly

rejects a $6

billion offer

from Google.

2011

• US eCommerce and Online Retail sales

projected to reach $197 billion.

• Diapers.com acquired by Amazon.com

• GSI Commerce, acquired by eBay for

$2.4 billion.

Chronology of US Ecommerce.

Source : Wikipedia

By 2001 the bubble was

deflating at full speed. A

majority of the dot-coms

ceased trading after

burning through

their venture capital, many

having never made a

″net″ profit. Investors often

referred to these failed

dot-coms as "dot-bombs

PayPal is an

American-based

global e-

commerce business

allowing payments

and money transfers

to be made through

the Internet. Online

money transfers

serve as electronic

alternatives to

paying with

traditional paper

methods, such as

checks and money

orders.

In July 2009, the

company announced it

would be acquired

by Amazon.com in an

all-stock deal worth

about $1.2 billion.

Since its founding in

1999, Zappos has grown

to be the largest online

shoe store

Groupon is a deal-of-

the-day website that

features discounted

gift certificates usable

at local or national

companies.

As of October 2010,

Groupon serves more

than 150 markets in

North America and

100 markets in

Europe, Asia and

South America and

has amassed 35

million registered

users

In late 2008, Today, Diapers.com is the largest

pure play retailer online for everything baby.

Diapers.com expanded its selection into far-

reaching baby categories, including

clothes, car seats, strollers, and toys.

GSI Commerce is an eBay company specializing

in creating, developing and running online

shopping sites for brick and mortar brands and

retailers.


The parts of E-Commerce.

Online Travel

Online Retail

Digital Downloads

Other Online

Services

Financial Services


Advantages & Challenges of Ecommerce.

Advantages

• Being able to conduct business 24 x 7 x 365

• Access the global marketplace

• Opportunity to reduce costs by cutting intermediaries.

• Very easy access to information

• Speed of Doing Business

• Challenges

• System And Data Integrity Issues

• Physical product, supplier & delivery uncertainty

• Limited and selected sensory information ( Touch and Feel )

• Online Frauds.


Effects on Purchase Decision.

Store 1

Store 2 Store 1

Store 1

Store 2

Search

Engines

Targeted AdsStore 1 Online

Website

Store 1 Online

Website

Purchase Decisions have got very informative but very

complicated for retailers.


Successful Ecommerce Companies.

and many more….

YOU COULD BE ONE !!!


Successful Ecommerce People.

Larry Page

Google

Sergey Brin

Google

Jeff Bezos

Amazon

Pierre Omidyar

Ebay

Eric Schmidt

Google

Ronald Burkle

Yahoo

Mark Cuban

Broadcast.com

Jerry Yang

Yahoo

Omid Kordestani

Google

David Filo

Yahoo

Ram Shriram

Google

Todd Wagner

Broadcast.com

Peter Thiel

Paypal

Niklas Zennstrom

Skype

Janus Friis

Skype

Jack Ma

Alibaba.com

Mark Zuckerberg

Facebook

Simon Nixon

MoneySupermarket

Andrew Gower

Runescape

Reid Hoffman

LinkedIn

Zhang Chaoyang

Sohu

Steve Chen

Youtube

Elon Musk

Paypal

Chad Hurley

Youtube

Duncan Cameron

MoneySupermarket

Marc Andreesen

Netscape

You can be one of them.

YOU COULD

BE ONE !!!!

Ecommerce :: Ecommerce Business models


Index.

1.b. Ecommerce Business Models

a. Internet Business Models.

b. Business Models in Ecommerce

c. Business Models Explained - B2B, B2C, C2C, C2B, G2C

d. Case Study : Industry Structure.

Ecommerce :: Ecommerce Business models ::

Internet Business Models.

Brokerage Model

Advertising Model

Infomediary Model

Merchant Model

Manufacturer Model

Affiliate Model

Community Model

Subscription Model

Utility Model

Business-to-business (B2B)

In this segment, companies

conduct business with each other

such as manufacturers selling to

distributors and wholesalers

selling to retailers.


Business models in ecommerce.

Business-to-consumer (B2C)

Here, businesses selling to the

general public typically through

catalogs utilizing shopping cart

software.

Consumer-to-consumer (C2C)

Here, websites offer free

classifieds, auctions, and forums

where individuals can buy and

sell thanks to online payment

systems.

Government to Citizen

This comprises G2G (Government-to-

Government), G2E (Government-to-Employee),

G2B (Government-to-Business), B2G (Business-

to-Government),G2C (Government-to-Citizen),

C2G (Citizen-to-Government) are other forms of

ecommerce that involve transactions with the

government from procurement to filing taxes to

business registrations to renewing licenses.

Consumer to Business (C2B )

In this case, a consumer posts his project

with a set budget online and within hours

companies review the consumer's

requirements and bid on the project.

The consumer reviews the bids and selects

the company that will complete the project.

Business-to-business (B2B)

In this segment, companies conduct

business with each other such as

manufacturers selling to distributors

and wholesalers selling to retailers.


Business models explained. B2B.

•Alibaba.com is the world's largest online business-to-business trading platform for small

businesses.

•The company was founded by Jack Ma and 18 people in 1999.

• It claims it had more than 65 million registered users in more than 240 countries and

regions as of March 31, 2011.

•The company‟s serves to bring together importers and exporters from more than 240

countries and regions.

•IndiaMART.com is India's largest online B2B marketplace for Small & Medium Size

Businesses, connecting global buyers with suppliers.

•The company offers a platform & tools to over 1 million suppliers to generate business

leads from over 5 million buyers, who use the platform to find reliable & competitive

suppliers.

•The company has over 4500 employees located across 90 offices in the country.

Business-to-consumer (B2C)

Here, businesses selling to the general

public typically through Catalogs

utilizing shopping cart software.


Business models explained . B2C.

• Diapers.com, founded in 2005 by Marc Lore and Vinit Bharara.

• It is the largest online specialty retailer for baby products.

• Delivers consumables, such as diapers, wipes, and formula, to parents with free 1-2

day shipping and a focus on customer service.

• In late 2008, Diapers.com expanded its selection into baby clothes, car seats, strollers,

and toys.

•Today, Diapers.com is the largest pure play retailer online for everything baby.

• Flipkart.com is among India‟s largest online retailers.

• Established in 2007 by Sachin and Binny Bansal, it is among India‟s largest eRetailers.

• Started as an online bookstore, but has since diversified into media, consumer

electronics, computers, healthcare and home appliances.

Consumer-to-consumer (C2C)

Here, websites offer free classifieds,

auctions, and forums where individuals

can buy and sell thanks to online

payment systems.


Business models explained . C2C.

•eBay.com is an American internet consumer-to-consumer corporation .

• It manages an online auction and shopping website in which people and

businesses buy and sell a broad variety of goods and services worldwide.

•Founded in 1995, eBay is now a multi-billion dollar business with operations

localized in over thirty countries.

Government to Citizen

This comprises G2G (Government-to-

Government), G2E (Government-to-

Employee), G2B (Government-to-

Business), B2G (Business-to-

Government),G2C (Government-to-

Citizen), C2G (Citizen-to-Government)

are other forms of ecommerce that

involve transactions with the

government from procurement to filing

taxes to business registrations to

renewing licenses.


Business models explained . G2C.

•Whatever you want or need from the U.S. government, it's available

on USA.gov.

•Electronic filing of Income tax return and Fringe Benefit tax Return

•Know your PAN-Enables a tax payer to ascertain his PAN

•Bulk PAN Query-Enables registered institutions to query PAN in batch mode

•Registration of e-Return Intermediaries

•Refund status query

Consumer to Business (C2B )

In this case, a consumer posts his

project with a set budget online and

within hours companies review the

consumer's requirements and bid on

the project.

The consumer reviews the bids and

selects the company that will complete

the project.


Business models explained . C2B.

•Elance is a global Internet platform where businesses hire independent freelance

professionals.

•Freelance professionals create online profiles and portfolios, submit proposals for jobs

that interest them, and manage both work and receive payment through the site.

•ApnaPaisa value proposition for consumers is their comprehensive customized

comparison quotes, which are rendered in simple, user-friendly and appealing manner.

•Consumers save time as they get a one-stop shop for researching, comparing and

buying online from or contacting the service providers for virtually all the products in the

market.

Industry Structure in Online Retail

Michael Porter


Case Study.

Ecommerce :: Ecommerce Business models :: Case Study ::

Porter analysis on Internet Industries.

-+/-

-

-

-

-

+

-

-

+

-

--

-

The game lies in understanding the threats of – & leveraging the + „.- +

Ecommerce :: Ecommerce Business models :: Case Study ::

Case Study: Indian Market

-+/-

-

-

-

-

+

-

-

+

-

--

-

Market Leadership has

been changing with new

formats and players

Travel is a Classical

Case in Indian Market

Indian Internet

Consumers shifted the

online proposition to

Price. LTV management

has been a Serious

Challenge

IndiatimesShopping to

Fabmall to Flipkart to

????

Web Only Brands have

been born in India as its

easier to reach out to

customers

Smaller Brands would

find it lucrative

The game lies in understanding the threats of – & leveraging the + „.- +

Ecommerce :: Ecommerce in India


Index.

1.c. Ecommerce in India.

a. Evolution of Indian Ecommerce Industry.

b. A Typical Day in a Heavy Internet Users life in India.

c. The Current Ecosystem.

Ecommerce :: Ecommerce in India ::

Evolution of Indian Internet & Ecommerce Industry.

1995

VSNL introduces

internet in India

via dialup in 6

cities on Aug

14,1995

1996

• Rediff.com launched

by Ajit Balakrishnan.

• India‟s first cyber café

called “Cybercafé”

launched in a

Mumbai hotel

1997

• First online banking

site launched by

ICICI Bank.

• Naukri.com

launched

• Sabeer Bhatia‟s

Hotmail sold to

Microsoft for $400

million in USA.

1998

• VSNL‟s monopoly on

internet ends

• Sify becomes India‟s

first ISP

• Launch of Nasscom by

Dewang Mehta, a

chartered accountant

by profession to

promote IT industry

• Cybercafés start

mushrooming

1999

• Indiaworld sold

to SIFY for $115

million

• Webdunia,

India‟s first and

most successful

Hindi portal

launched

2000

• IT ACT 2000 passed

by the Indian Govt.

• Baazee.com

launched based on

the EBay model.

• Indya.com launched

with Rs 4.5 crore

campaign blitz

• Yahoo & MSN launch

Indian sites

Source : Wikipedia

Rediff.com

India (NASDAQ: REDF)

is a news, information,

entertainment, and

shopping portal. It was

founded in 1996

Ajit Balakrishnan,

Chairman and CEO of

Rediff.com

Naukri.com is a job site

operating

in India founded by

Sanjeev Bikhchandani

in March 1997

Hotmail service was

founded by Sabeer

Bhatia and Manojit Rout.

The name "Hotmail" was

chosen out of many

possibilities ending in "-

mail" as it included the

letters HTML ("HoTMaiL).

Sify Technologies

Limited (formerly Sify

Limited and Satyam

Infoway Limited)

(NASDAQ: SIFY) is an

Indian broadband internet

provider established in

1998, based

in Chennai, India

Webdunia.com is a

Hindi News Website

which provides variety

of news in hindi from

India and International

news, it has top

stories on business,

bollywood gossip,

sports updates

Baazee.com was an

online marketplace

started by Avnish

bajaj on the lines on

ebay.com in the US.

Ebay eventually

bought over the

company in 2004.

Tata

Communications

Limited (formerly

VSNL), is

a telecommunicati

ons

company located

in Mumbai.


Evolution of Indian Internet & Ecommerce Industry.

2001

• Indian Railways

launches online

ticketing site,

irctc.com

• India‟s first cyber

crime police station

opens in Bangalore

2002

• HomeTrade

fiasco– brokerage

site launched with

Rs 65 crore blitz

goes bust

.

2003

• AirDeccan

becomes first

airlines to offer

online ticketing in

India.

2004

• EBay buys out

Baazee.com &

Monster.com buys

Jobsahead.com

• First Indian Dotcoms

IPOs are successful–

indiabulls.com &

indiainfoline.com

Source : Wikipedia

Indian Railway

Catering and

Tourism

Corporation (IRCT

C) is a subsidiary

of the Indian

Railways that

handles the

catering, tourism

and online

ticketing

operations of the

railways.

Home trade modus

operandi was really

oversimplified. It

claimed to be a

professed fresh dealing

in governing securities

(Gilts) and would

attractiveness the

generalized

unrestricted, brokers,

sub-brokers dealing in

Gilts.

But the polity securities

never existed.

Air Deccan, is a low-

cost airline brand. It is

headquartered

in Mumbai, India

It was started by

Captain G. R.

Gopinath

Air Deccan was the

first airline in India to

fly to second tier cities

Indiabulls is an Indian

company with its

presence in the Real

Estate, Infrastructure,

Financial Services,

Securities, Retail,

Multiplex and Power

sectors.

CarWale.com services

include new car

research, on-road price

of new cars, used car

valuation guide and used

car classifieds. CarWale

also facilitates new car

sale through tie-

ups with manufacturers,

dealers, financiers and in

surance firms.

2005

• CarWale.is

founded by Mohit

Dubey and his

three friends in

October 2005

2006

• BookMyShow

Launched in Aug

2006

Bookmyshow.com

provides cinemas,

event organizers and

consumers a complete

range of solutions

through call centers,

Internet ticketing, kiosk

and a mobile ticketing

platform.

One of the major

movie & events ticket

seller in India.


Evolution of Indian Ecommerce Industry.

2007

• Flipkart went live

in 2007 with the

objective of

making books

easily available to

anyone who had

internet access

.

2009

• Fashion and You is

a private invitation

only shopping club,

based in Gurgaon,

India

Source : Wikipedia

2012

• PepperFry, the

eCommerce startup

from the ex-Ebay

heads, Ambreesh

Murty and Ashish

Shah, has gone live

Flipkart is among

India‟s largest online

retailers. It is

an electronic

commerce company

headquartered

in Bangalore,

Established in 2007 by

Sachin and Binny

Bansal, Flipkart started

as an online bookstore,

but has since

diversified into media,

consumer electronics,

computers, healthcare

and home appliances.

It was founded

by Harish Bahl and

Pearl Uppal in

November, 2009

Fashion and You is a

private invitation only

shopping club featuring

collections by top

designers for men,

women and children

2010

• Snapdeal

launches.

Company was

founded by Kunal

Bahl and Rohit

Bansal.

Snapdeal is a daily

deals' website that

features discount

offers across

lifestyle segments

such as dining,

health & beauty,

entertainment and

travel. It also offers

discounts on

products like

electronics,

perfumes, watches,

bags, sunglasses

and mobiles.

2008

• HomeShop 18

launches on 9

April 2008

HomeShop18 is the

online & on-air

retail marketing and

distribution venture

of Network 18

Group that was

launched as India‟s

first 24 hour Home

Shopping TV

channel on 9 April

2008. It is part of

the Network 18

Group.

Pepperfry focuses on Lifestyle segment that do not have an organized market or standardized pro

ducts.

The site currently hosts products in personal accessories and clothing, jewellery

and furniture categories.

2011

• Zovi.com launches

ZOVI.com is an

apparel brand

available exclusively

online. Zovi sells

premium apparel

designed with top-

notch components to

our customers

across men's and

women's categories.


A Typical Day in a Heavy Internet Users life in India.

Source : „India Goes Digital‟ - Avendus


The Current Internet Ecosystem.


Ecommerce :: Ecommerce in India :: Ecosystem :: Access ::

Internet Penetration.

•80 million users, a long way to go

•There are an estimated 80 million Internet users in India today

• It represents only a penetration of 7% of the population (17%

of urban population).

•This is significantly lower than global benchmarks (average

31% of total population).




Internet Users in India

•One report has suggested 70 million.

•Google put out a number of a 100 million sometime back.



Sources of Growth.

•Number of PCs is not a constraint

•Broadband availability and cost are the major

constraints.

•PC broadband penetration to reach 15.6% of

households by 2015.

•Mobile broadband to be the primary driver of overall

Internet penetration - 3G to reach 22% of the population

by 2015


Ecommerce :: Ecommerce in India :: Ecosystem ::

Demographics.

Tier I cities dominate, but penetration increasing fast

across tier II/III cities and towns


Ecommerce :: Ecommerce in India :: Ecosystem :: Demographics ::

User profile and how it has changed over time.


Younger consumers driving growth & the number of Internet savvy people in

higher age groups will continue to rise - improving the potential for commerce.

Ecommerce :: Ecommerce in India :: Ecosystem :: Demographics ::

Customer Classification.

Source : IAMAI

Significant growth of internet in the middle income class,

thus making internet more broad based..



Government Actions in ecommerce.

•25% of income tax filings are now online

•UIDs and the impact on electronic payments


Government Initiatives driving penetration as well

as helping build trustworthy cyber environment . Cyber Crime,

Online Payment Security and stronger consumer forums could help further


Venture Capital Action in ecommerce.

•Growing entrepreneurship

•Improved support systems

•A whole lot of money


There has been growth in entrepreneurship and investments have followed


Online advertising market in India.

Online Advertising eco-system is developing but a long way to go

Source : Pitch-Madison Media Outlook 2011


Payment Credit and Debit Cards.

• Credit card penetration in India has actually

seen a decline of late.

•This is due to the tightening of norms by

banks for the issue of credit cards, after

delinquency rates shot up in 2009.


Ecommerce :: Ecommerce in India :: Ecosystem :: Payment Issues ::

Cash On Delivery. COD.

The Indian Innovation.

•Eliminates consumer drop-offs which occur due to “LACK of TRUST”

•Mitigates the primary disadvantage of e-commerce - „lack of touch

and feel‟.

•Transfers the risk from the consumer to the supplier. I think Indian

ecommerce needs this to develop confidence in ecommerce


Ecommerce :: Ecommerce in India :: Ecosystem :: Payment Issues ::

Online Payment Facilitators in India.


Indian market has a strong appetite for new and innovative

Payment Systems.


Ecommerce Supply Chain & Delivery.

Ecommerce Industry due to its need to keep large assortment and

multipoint delivery

makes supply chain and logistics very challenging and different for retail

Ecommerce :: Ecommerce in India :: Ecosystem :: Ecommerce Supply Chain ::

Comparison of different supply chain & Logistics options.

Source : „India Goes Digital‟ – Avendus

Supply Chain & Logistics


Delivery Examples.

Delivery is becoming a differentiator in Indian Market.




Owned vs. Outsourced delivery.

In the short to medium term, it seems increasingly likely that e-commerce companies will

follow a two-pronged strategy:

A ) Developing their own delivery channel for the metros.

B) Relying on outsourced parties for tier 2 and 3 cities where they are subscale.




Online Retail

Ecommerce Master Class :: Online Retail ::

Index.

2.a. Introduction to Online Retail.

a. What is Online Retail

b. Why Online Retail

Online Retail :: Introduction ::

What is Online Retail

Online Retail is a form of electronic commerce whereby consumers directly buy

goods or services from a seller over the Internet without an intermediary service.Source : Wikipedia

An online shop, eshop, e-store, Internet shop, webshop, webstore, online store, or

virtual store evokes the physical analogy of buying products or services at

a bricks-and-mortar retailer or shopping centre. The process is also called

business-to-consumer (B2C) online shopping.

Online Retail :: Introduction ::

Why E-Retail: The Reasons remain the same over years

E retail Consumer Value Proposition.

Online Retail :: Online Retail in USA


Index.

2.b. Online Retail in USA

a. History of Online Retail US

b. Proposition of Online Retail in US.

c. Share of Revenues by Segments : US

d. The Growth & Share story.

e. Challenges faced initially by US. brick n mortar stores on Online medium.

f. Top US. E-Retailers by revenues

g. Retailers entering online space.

h. Managed Services Companies.

i. Case Study : Walmart Vs Amazon

j. Current Retail Industry in USA some trends

k. Top US Failures & Learning.

Online Retail :: Online Retail in USA :: History of Online Retail US. ::

Online Retail boom started in 1994 in US.

2

41.6 %

17

6.0 %

18

16.0 %

29

5.6 %

118

4.9 %

24

8.9 %

20

8.4 %

57

11.6 %

53

7.8 %

Source: Internet Retailer „10

Launched macys.com in 1997.

Launched jcpenney.com in 1994.Launched gap.com in 1997. Launched toysRus.com in 1998.

Starts victoriassecret.com in 1995.

Launched staples.com in 1997.Launched ae.com in 1998.Launched staples.com in 1996.

Launched staples.com in 1998.

WEB SALES AS A % OF TOTAL SALES

INTERNET RETAILER TOP 500 RANKING

Within 4 years all major stores went online.

Convenience

Hard To Find

Price

Online Retail :: Online Retail in USA ::

Proposition of Online Retail in US.

Online Retail :: Online Retail in USA :: Proposition of Online Retail in US ::

Convenience : The Consumer Proposition

Convenience

Books, Music,

Movies,….

Sit @ Home

and Get it

Selection

Deep

Research

Value Proposition , Categories and Formats.

Hard to Find

Antiques, Coins,

Radio Controlled

Toys ….

C2C Commerce

Cannot get it

Anywhere Get it

here

Local became

National with

second hand goods


Hard to Find: The Consumer Proposition.


Inventory Clearance

Discount

Price

Electronics,

Computers,

Price Discovery

Auction, Volume

Aggregation


Price: The Consumer Proposition.



Share of revenues by Segments. US

Mass merchant does not include marketplaces like ebay.com

Online Retail :: Online Retail in USA :: Share of revenues by Category. US ::

Detailed Category Division. US.

Source: Internet Retailer.US 2011


The Growth and Share Story…..

“Lets hold the plans to open another two retail stores, lets invest

the same capital to build a online web store for „GLOBAL‟ sales”

…a top US offline store.


Challenges faced initially by US. brick n mortar stores on Online medium???

How will we

reserve

Inventory ?

How do we plan

Supply for our store

plus online ?

We have no idea

about Online

Technologies !

How will we

Integrate with

our ERP ?

We don‟t have a

Online Merchandising

Plan !

What is

Online

Marketing ? How do we ship

Individual Orders?

How do we

Manage Returns?

Does it seem like a same story everywhere ?


Top US. E-Retailers by revenues.

Online Sales: $34,200,000,000

2010 Growth: 39.5%

Online Sales: $2,500,000,000

2010 Growth: 8.7%

Online Sales: $4,095,000,000

2010 Growth: 17.0%

Source: Internet Retailer US


Retailers entering online space and dominating the online retail space.

But Amazon still remains the market leader…. Source: Internet Retailer US

Online Retail :: Online Retail in USA :: Managed Ecommerce Solutions ::

A Lot of Retailers opted with outsourcing it to Managed Service Companies

A lot of retailers opted to outsource the area of non competence

and left it to specialist

GSI Commerce® is a leading

provider of ecommerce and

interactive marketing services

for the world‟s premier brands

and retailers.

Retail versus Online Retail.


Case Study.

Walmart. vs Amazon.

Round 1. Market Performance.

Walmart. vs Amazon.

Round 2. Products & Prices.

Food For thought

If the cost of monthly shipment and cost of trips to retail shops equals Amazon

would always be cheaper and occupy the pricing proposition completely

Walmart. vs Amazon.

Round 3. Brand Performance.

Amazon by proving higher brand ranking and customer service has proven that

this model can deliver to consumer expectations

Walmart. vs Amazon.

Round 4. Expansion & Innovation.

Walmart. vs Amazon.

Projected Revenue.

Key Take Away

•Amazon is projected to surpass

Wal-Mart in sales revenues in the

year 2024.

Online Retail :: Online Retail in USA :: Trends to Watch for ::

Research it Anywhere, Buy it Anywhere Get it Anywhere…..

“Multichannel is the New Reality”

A few category retailers in US. shut down stores as

unable to compete with online retailers & competitors.

Online Retail :: Online Retail in USA :: Trends to Watch for ::

E Retailer have affected a few industry very hard…..

Online Retail :: Online Retail in USA :: Top US eRetail Failures ::

Top US. eRetail Failures and Learning

Webvan (1999-2001)

Pets.com (1998-2000)

Ideas that could not sustain the dot com burst.

Pets.com : Online Pets Store

•Pets.com was never able to give pet owners a compelling reason to buy supplies online.

•When you need kitty litter, you need kitty litter.

“TIMELY FULFILLMENT IS CRUCIAL in some Categories and is the Key Value”.

Webvan.com : Online Grocery: To Fast To Soon.

•In a mere 18 months, it raised $375 million in an IPO,

•expanded from the San Francisco Bay Area to eight U.S. cities,

•Building a $1 billion high-tech warehouses. Webvan touted a 26-city expansion plan.

•But considering that the grocery business has razor-thin margins to begin with, it was never able to attract

enough customers to justify its spending spree.

•The company closed in July 2001, putting 2,000 out of work.

Online Retail :: Online Retail in USA :: Top US-UK eRetail Failures ::

Top US. eRetail Failures and Learning

Kozmo.com (1998-2001)

Ideas that could not sustain the dot com burst.

Kozmo.com : Online Mass Merchant.

•On Kozmo.com order a wide variety of products & get them delivered to your door for free within an hour.

•Kozmo expanded to seven cities, delivery cost was too much to deliver a DVD and a pack of gum.

•Kozmo eventually initiated a $10 minimum charge, but that didn't stop it from closing in March 2001 and

laying off 1,100 employees.

“BEWARE OF Key COST Element before making it the key Value Proposition”.

Boo.com (1998-2000)

Boo.com : Online Fashion Retailer.

•Founded in the United Kingdom as an online fashion store, Boo.com had a complicated Web site, relied

heavily on JavaScript and Flash, was very slow to load at a time when dial-up Internet usage was the norm.

• Boo spent wads of cash to market itself as a global company but then had to deal with different languages,

pricing, and tax structures in all the countries it served.

• Sales never reached expectations. Boo.com eventually burned through $160 million before liquidation in

May 2000.

“Too AHEAD AND Too BEHIND IN TECHNOLOGY ARE BOTH DANGEROUS”

Online Retail :: Online Retail in India


Index.

2.c. Online Retail in India

a. Traditional Retailing Scenario in India.

b. Modern Retailing in India.

c. Modern Retailer Issues.

d. Indian Retailers Jumping to Internet E-Retail.

e. Online Retail Market Size in India.

f. Current Share of market size by segments.

g. Products bought online within & across the world .

h. Challenges in Pure-Play Online Retail.

i. Indian Eretail Landscape.

Online Retail :: Online Retail in India ::

Traditional Retailing Scenario in India.

3. The Product Advantage

Though the range of products sold by them is

only limited, they have the advantage of

selling in small denominations which majority

of the customers favor.

This keeps them the most understanding retailer

than the modern retail.

1. The Location advantage

Grab it from the next door shop is always

possible as the spread of traditional store is so

strong.

This is one advantage which the modern

retailers would be interested in adapting.

Almost every street in the country has a retail

identity.

2. The Familiarity Advantage

The traditional retailers are the familiar

one to generations.

Interestingly, this familiarity leads to building the

strongest relationship as well as the trust

mutually.

4. The Credit Advantage

Another interesting area is that they offer

monthly credit to the customers.

“This not only helps the salaried class but also it

relieves our worries for keeping the change

ready every time we purchase”.


Modern Retailing.

1. Greater product assortment across categories

2. Technological advantage with modernization at its best.

3. Nation-wide large retail chains offering similar assortment in most of

the categories.

Modern Retail Market Share:

Indian retail business values at around

US$ 550 billion as of now. 4 per cent

accounts for the organized sector.

Source :ibef.org

India‟s Challenge is that we are handling two revolution i.e.

Modern Retail and Online Retail together where as in US it

happened one after another


Modern Retailer Issues.

Currently retail stores are facing a lot of hurdles in running their businesses

And they are not too mature in comparison to E-Retail. We are looking at

both Internet Retail and Modern Retail maturing together

2009


Indian Retailers getting into eRetail.

fulfillmntcust carecontenttech mkting

Offline Retail Online Retail

Store retailers are now getting into online retail as consumers are moving

online.


Online Retail Market Size in India.

The market is growing significantly but early days.

Online Retail is still very small percentage of

the ecommerce pie and significantly under

penetrated in comparison to US Market


Current share of the online market by segments.

Niche Retailers have garnered significant market share

in last 3 years.


Products Bought Online within and across the world.

Source: Ebay Reports

The Impact of E-retail is increasing across geographies

and product lines

Online Retail :: Online Retail in India :: Challenges in Online Retail ::

Security & legal challenges: The Road is Usual i.e. with Hiccups

The Road is Usual i.e. with Hiccups

Avnish Bajaj Case : Bazee.com CC Avenue : Hacking caseET, Dec 21, 2004May 05, 2011

Online Retail :: Online Retail in India :: Challenges in Online Retail :: Legal Issues ::

Examples of Security & legal challenges..

Interpretation of marketplace is totally not known, and

CYBER LAWS are not developed in India

Security Challenges exists in all

developing industry and E-retail

is not away from it

Online Retail :: Online Retail in India :: Challenges in Online Retail :: Heavy Competition::

429+ significant players now operating…

and many more….

Source : Iksula Consulting

Online Retail :: Online Retail in India :: Challenges in Online Retail :: Taggle.com story ::

“It Also Happens in India”

Seems like a last man standing game has

started in pure play internet retailers.


Indian E-Retail Landscape: A Summary.

Vertical


Online Apparel Industry in India:

A peep Into the future.


Case Study.

Online Retail :: Online Retail in India :: Online Retail Market Size in India :: Case Study ::

Retail Category – Apparels

Step 1: Market size estimation

•Apparel Market will be Rs 28,880 Crore in size by 2015

•Rs 4,70,000 Crore ($104,450 million) by 2020 .

Step 2: Estimation of online penetration in the sector

Assumption:

•China‟s 2010 penetration level (3.6%) by 2015

• US‟s penetration level (10%) by 2020.

•20% by Market Share is also a fair Estimate

Step 3: Share of the Market Leader

Assumption:

•Market leader commands 8-20% market share in west and in China, a

few players have market shares in excess of 40%.We have assumed a

conservative estimate of 15% market share for the market leader .

•This translates into gross revenues (or GMV) of Rs 1600 Crore (~$350

million) in the year 2015. "This could be larger then a LOT of Large

Retailers at that time also

If you are the market leader ( Rs Crore)

15%

1575

Share of the market leader

Potential Revenues


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