THE E-COMMERCE IMPERATIVE ONLINE VERSIONBy: VARUN LUTHRA

INTRODUCTION

Change is a constant, but technology is what dictates the pace of those changes.

This holds true for commercial real estate as much as anything else and there is no other property type where change is currently playing out so quickly as in the retail arena.

The retail marketplace will change more over the next five years than it has over the past twenty.

These shifts are being entirely driven by the accelerated encroachment of e-commerce.

THE RISE OF E-COMMERCE

Over the past few years, an average of half a billion new smartphone users annually have come online worldwide.

Today almost every big company has adopted these technologies to increases sales, to make branding all over the globe.

Online shopping in India saw a 128% growth in interest from consumers in 2012 as compared to the previous year, according to a new report. The growth was only 40% between 2010 and 2011, said the report compiled by Google and TNS Australia.

In the US, as the economy began to emerge from the recession in 2010, the trend became clear. While overall retail sales increased by about 5.6% in 2010, online sales growth increased by 15.3%.

ANNUAL RETAIL SALES GROWTH

REASONS BEHIND THE GROWTH OF E –COMMERCE

Busy Lifestyle: The lifestyle of people is so busy that they are unable to go to the crowded markets every time for shopping.

High Disposable Income: With growing job opportunities the income sources have also increased.

Awareness of Products: People are much more aware nowadays regarding the products available in the markets. Because of this reason they feel confident while shopping online.

Rising Computer Educational Level: Due to the efforts of Government and Private Educational Institutions in India, computer education is getting new horizons.

Increased Usage of Internet: With more than 100 million Internet users, the country is beginning to achieve a critical mass of users who are familiar with web services. In addition, over the past few years, relatively sophisticated online travel agents (“OTAs”), such as MakeMyTrip – which started turning these initial Web users into Web consumers – have dominated Indian e-commerce.

ESSENTIALS FOR MAKING ONLINE SHOPPING EFFECTIVE

It must be Secure: Every customer wants to make safe and secure transactions while purchasing online. If the website is secure, customers will tend to purchase more from it.

Appealing and Informative Design of Website: The website which has designed for online shopping purpose must be designed in such a way that it will attract more and more customers towards it by the offers, patterns, quick services etc.

Deliver High and Quick Quality Services: One of an important feature to make your online shopping websites better than others is to deliver high and quick quality services.

AMAZON: THE REAL CATEGORY KILLER

While smaller retail chains and independents have long referred to the mega-stores of Walmart, Target and countless other hypermart operators as category killers, the category killer of the new MIllenia is clearly Amazon.

Half direct retail, half internet clearinghouse for thousands of independent vendors that sell their goods through their system, Amazon is the e-commerce leader.

Their total sales volume over the past year is just under $64 billion, with Q2 sales expected to possibly reach as high as $16.2 billion.

It’s hard to argue with success and you can measure Amazon’s success by the growing size of its real estate footprint.

AMAZON’S $2 BILLION INDIA-SPECIFIC INVESTMENT A DAY AFTER FLIPKART’S FUNDING Merely a day after India’s largest e-commerce marketplace, Flipkart

made the official announcement that it has raised US $1 billion, rival and e-commerce behemoth Amazon has gone one up by announcing a US $2 billion India-specific fund.

Flipkart’s fund raise is the biggest till date for an Indian company, led by its existing investors, Tiger Global and Naspers and including Accel Partners, DST Global, ICONIQ Capital, Morgan Stanley Investment Management, and Sofina.

INFERENCES

THE TOP 5 TECHNICAL CONSIDERATIONS FOR EVALUATIN E-COMMERCE PLATFORMS

Scalability: Will the site perform efficiently through traffic peaks and valleys? Scalability may be one of the most overused terms in IT marketing. Software makers would have you believe that every application ever written was destined to be scalable from inception.

The Product Catalog: Will today’s catalogue schema meet tomorrow’s demands? Your product catalogue is the online repository for every item you sell. It has to effectively promote the items you most want to push, and simultaneously help your customers find the items they are looking for.

Business User Control: Will my application directly empower my merchandisers, marketing managers, and other business owners? Many IT managers long for a world where there are no demanding business users. They long for the end of business requests that seemingly come from left field, or arrive urgently at the last minute.

Reporting and Analytics: Do I have all the features I need to understand my online business? Your e-commerce Website stores a treasure trove of information about your customers, their behaviour, and their preferences.

Integration: How easily can the application integrate with my other systems? The e-commerce Website, once a standalone silo, is now a highly integrated application that touches many other systems and processes.

CONCLUSION / THE ROAD AHEAD

The research reveals that most of the people who are engaged in making the decision of purchasing, are in the age group of 21-30 years.

While making the website for online shopping it must be designed in a very planned and strategic way.

Retail routinely goes through seismic shifts; the rise of the suburban shopping mall; the ebb and flow of the department store sector; the emergence of the category killers; the ascent (and now the shrinking) of the big boxes.

E-commerce is nothing new, but its growth has finally reached a tipping point and we are in the midst of one of those seismic shifts. As challenging as this may seem, those retailers who see this as an opportunity will be the ones that end up on top.

Meanwhile, owners of industrial properties also need to understand the nature of the beast if they want to capitalize on the current wave of demand from mega-distribution users.

Shopping centre vacancies will continue to fall at a modest rate as overall retailer growth plans are up, however, there has been a massive shift in terms of who is expanding.

The rise of e-commerce has meant stiff competition for mid-priced hard goods retailers. Most are focusing their immediate efforts on building their e-commerce platforms and are streamlining their bricks and mortar presence.

Concepts that don’t, or only minimally compete, with e-commerce is where we are seeing some of the strongest bricks and mortar growth. Restaurants lead the way, grocery stores are hot (new smaller concepts are expanding though many traditional players are contracting) and service related retailers are the strongest sectors.

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