MODULE 2

CONSUMER ORIENTED E-COMMERCE

E-Retailing:
E-retailing, short for electronic retailing. It is a subset of e-commerce. It refers to the process
of selling goods and services directly to consumers through online channels, primarily via the
internet. Examples: Amazon, Ebay, flipkart etc.
It involves the digital transactions of products and services, where customers browse, select,
purchase, and sometimes even receive or consume goods and services electronically. E-
retailing can take place through various online platforms such as e-commerce websites, mobile
apps, social media platforms, and online marketplaces.
E-Commerce V/S E-Retailing
• E-commerce: This term encompasses all types of commercial transactions conducted
electronically over the internet. It includes not just online retailing but also activities
like online auctions, digital banking, online ticket booking, etc. Basically, any business
or commercial transaction conducted electronically falls under e-commerce.
• E-retailing: This is a specific subset of e-commerce that refers to the buying and selling
of goods or services over the internet directly to consumers (B2C) or to businesses
(B2B). In simpler terms, e-retailing specifically focuses on online retail sales, where
businesses sell products or services directly to customers through websites or online
platforms.
Traditional Retailing
Traditional retailing refers to the traditional way of buying and selling goods and services
through physical stores or brick-and-mortar establishments.
In traditional retailing, customers visit stores in person to browse products, make purchases,
and take their items home with them immediately. This method of retailing predates the rise of
e-commerce and encompasses various types of retail establishments, including department
stores, supermarkets, specialty shops, malls, and small local stores. Traditional retailing relies
on physical storefronts, face-to-face interactions between customers and salespeople, and
traditional marketing and advertising strategies such as print ads, flyers, and signage.
Difference between Traditional Retailing & E-Retailing
Aspect Traditional Retailing E-retailing
Medium of Physical stores or brick-and-mortar
Transaction establishments Online channels primarily over the internet
Requires visiting physical stores during
Accessibility operating hours Customers can shop from anywhere, 24/7
Offers convenience of shopping anytime,
Convenience Limited by store hours and location anywhere
Customer Physical interaction with products, face-to- Virtual browsing, detailed product
Experience face assistance information, online support

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Aspect Traditional Retailing E-retailing
Inventory Physical inventories managed in stores and Virtual inventories managed in digital
Management warehouses databases
Marketing and Relies on conventional channels such as print Utilizes digital marketing strategies like SEO,
Advertising ads, TV commercials social media, online ads
In-store checkout with immediate product
Transaction Process access Online checkout with delivery to doorstep
Products available for immediate purchase Orders processed and shipped from
Fulfillment and take-home warehouses or dropshippers
Overhead costs include rent, utilities, and May have lower overhead with reduced
Cost Structure staffing physical infrastructure
Market Reach Typically serves local or regional markets Access to global markets

While traditional retailing occurs in physical stores with face-to-face interactions, e-retailing
takes place online, offering convenience, accessibility, and a different type of customer
experience. Both approaches have their advantages and cater to different consumer preferences
and shopping habits.
Benefits of E-retailing
1. Global Reach: E-retailing allows businesses to reach a global audience without the need for
physical stores in different locations. This significantly expands market potential and customer
base.
2. 24/7 Accessibility: Online stores are accessible 24 hours a day, 7 days a week, providing
customers with the convenience to shop at any time, regardless of store operating hours.
3. Convenience: E-retailing offers unparalleled convenience for customers, allowing them to
shop from the comfort of their homes or on the go using mobile devices. There's no need to
travel to physical stores, saving time and effort.
4. Greater Product Selection: Online stores can offer a wider range of products compared to
traditional retail stores, as they are not limited by physical space constraints. Customers have
access to a diverse selection of products from around the world.
5. Price Comparisons: E-retailing makes it easy for customers to compare prices across
different online stores, enabling them to find the best deals and discounts. This transparency
fosters competition and helps consumers make informed purchasing decisions.
6. Personalized Shopping Experience: E-retailers can leverage customer data and analytics
to personalize the shopping experience for each individual, offering tailored recommendations,
promotions, and content based on their preferences and browsing history.
7. Lower Overheads: Operating an online store typically incurs lower overhead costs
compared to maintaining physical storefronts. E-retailers save on expenses such as rent,
utilities, and staffing, allowing for potentially higher profit margins.
8. Efficient Inventory Management: E-retailing enables real-time inventory tracking and
management, reducing the risk of stockouts and overstocking. This leads to improved inventory
turnover and better utilization of resources.

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9. Convenient Payment Options: Online stores offer a variety of payment options, including
credit/debit cards, digital wallets, and online payment platforms, making transactions
convenient and secure for customers.
10. Ease of Expansion and Scalability: E-retailing allows businesses to scale their operations
more easily by adding new products, expanding into new markets, or optimizing their digital
presence. This flexibility facilitates growth and adaptability to changing market conditions.
Overall, e-retailing offers a innumerable of benefits that contribute to enhanced customer
satisfaction, increased sales opportunities, and improved efficiency for businesses operating in
the digital marketplace.
Limitations of E-Retailing:
1. Lack of Personal Interaction: E-retailing lacks face-to-face interaction between
customers and salespersons, which can lead to a less personalized shopping experience
and difficulties in clarifying product details or inquiries in real-time.
2. Security Concerns: Cybersecurity threats such as data breaches, hacking, and
fraudulent activities pose risks to customer information, payment details, and overall
trust in online transactions.
3. Logistics and Delivery Issues: Challenges in timely delivery, shipping costs, and
occasional product damage during transit can affect customer satisfaction, especially in
international or remote deliveries.
4. Customer Service Challenges: Resolving customer issues or providing immediate
assistance might be challenging due to the absence of physical stores. Delayed
responses or dissatisfaction with customer service can impact customer loyalty.
5. Product Perception: Customers may face difficulty assessing product quality texture,
or fit accurately when buying items online, leading to higher return rates due to
mismatches between expectations and reality.
6. Digital Divide: Not everyone has equal access to the internet or technology, creating
disparities in online shopping accessibility and limiting market reach for some
demographics or regions.
7. Return and Refund Processes: Complex or restrictive return policies and procedures
can deter customers from making purchases due to concerns about returning
exchanging items.
8. Dependence on Technology: E-retailing heavily relies on stable internet connectivity
and technological infrastructure. Technical glitches, website downtime, or serve issues
can hinder the shopping experience.
9. Market Saturation and Competition: Intense competition among e-retailers can lead
to price wars, increased advertising expenses, and challenges in standing out among
numerous online sellers.
10. Legal and Regulatory Compliance: E-retailers must comply with various laws and
regulations concerning data protection, consumer rights, taxes, and international trade,
adding complexity to operations.
Key success factors of E-retailing
The success of e-retailing, or electronic retailing, relies on several key factors that contribute
to its effectiveness and competitiveness in the digital marketplace. Here are some of the key
success factors:

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1. User-Friendly Website Design: An intuitive and well-designed website or mobile app is
crucial for attracting and retaining customers. It should offer easy navigation, fast loading
times, and clear product descriptions to enhance the shopping experience.
2. Mobile Compatibility: With the increasing use of smartphones and tablets for online
shopping, ensuring mobile compatibility is essential. A responsive design that adapts to various
screen sizes and devices improves accessibility and user experience.
3. Product Selection and Quality: Offering a diverse selection of high-quality products across
various categories is important for attracting and retaining customers. Regularly updating the
product catalog and providing accurate product information helps build trust and credibility.
4. Competitive Pricing: Pricing plays a significant role in e-retailing success. Offering
competitive prices, discounts, and promotions helps attract price-conscious consumers and
encourages repeat purchases.
5. Effective Digital Marketing: Leveraging digital marketing channels such as search engine
optimization (SEO), social media marketing, email marketing, and online advertising helps
drive traffic to the website and increase brand visibility.
6. Personalization and Customer Engagement: Tailoring the shopping experience to
individual preferences through personalized recommendations, targeted promotions, and
interactive features enhances customer engagement and loyalty.
7. Efficient Order Fulfillment and Delivery: Ensuring timely order processing, accurate
inventory management, and efficient shipping and delivery processes are crucial for meeting
customer expectations and minimizing order fulfillment errors.
8. Secure Payment Options: Providing secure payment gateways and multiple payment
options, including credit/debit cards, digital wallets, and online payment platforms, instills
confidence in customers and facilitates seamless transactions.
9. Customer Service and Support: Offering responsive customer service and support through
various channels, such as live chat, email, and phone, helps address customer inquiries, resolve
issues, and build long-term relationships.
10. Continuous Improvement and Innovation: Staying abreast of industry trends, emerging
technologies, and consumer preferences and continuously improving the e-retailing platform
and processes are essential for maintaining competitiveness and sustaining long-term success.
By focusing on these key success factors, e-retailers can optimize their operations, enhance the
shopping experience, and effectively compete in the dynamic and competitive e-commerce
landscape.
Reasons for failure of E-retailing
E-retailing, like any business model, can face various challenges and potential reasons for
failure. Here are some common factors:
1. Poor User Experience: If the e-commerce platform is difficult to navigate, slow to load, or
lacks clear product information and descriptions, customers may abandon their shopping carts
and look elsewhere.

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2.Lack of Trust: Customers need to feel confident in the security of their personal and
financial information when making online purchases. If there are concerns about data security
or the legitimacy of the e-retailer, customers may hesitate to complete transactions.
3.Inadequate Marketing and Promotion: Without effective marketing strategies to attract
potential customers to the website, e-retailers may struggle to generate sufficient traffic and
sales.
4.Limited Product Range or Poor Product Quality: E-retailers need to offer a diverse range
of products that meet customer needs and expectations. If the product selection is limited or
the quality of products is subpar, customers may not return for repeat purchases.
5. Logistics and Fulfillment Issues: Timely delivery and efficient order fulfillment are critical
components of the e-retailing experience. Problems such as delays in shipping, inaccurate order
fulfillment, or damaged goods can lead to customer dissatisfaction and negative reviews.
6.Competition: The e-commerce landscape is highly competitive, with numerous players
vying for customer attention. E-retailers need to differentiate themselves through unique value
propositions, competitive pricing, or exceptional customer service to stand out in the crowded
market.
7. Technical Glitches and Website Downtime: Technical issues such as website crashes,
payment processing errors, or inventory management problems can disrupt the shopping
experience and drive customers away.
8. Failure to Adapt to Changing Trends: E-retailers must stay abreast of evolving consumer
preferences, technological advancements, and industry trends. Failure to adapt and innovate
can result in a loss of relevance and competitiveness in the market.
9. Poor Customer Service: Responsive and helpful customer service is essential for resolving
issues, addressing inquiries, and building long-term customer relationships. E-retailers that
neglect customer service may struggle to retain customers and foster loyalty.
10. Financial Mismanagement: Inefficient cost management, unsustainable pricing
strategies, or excessive spending on marketing without adequate returns can lead to financial
difficulties and ultimately, business failure.
Successful e-retailing requires a holistic approach that addresses these and other potential
challenges to deliver a seamless and satisfying shopping experience for customers.
Features of E-retailing
1.Online Catalog: E-retailers typically provide an online catalog showcasing their products or
services. This catalog serves as a digital storefront where customers can browse and explore
various offerings.
2.Product Information: Detailed product descriptions, specifications, images, and videos are
provided to help customers make informed purchasing decisions. Rich product information
enhances the online shopping experience and boosts customer confidence.
3. Search and Navigation: E-retailing platforms incorporate search functionality and intuitive
navigation systems to help customers find products quickly and easily. Filters, categories, and
sorting options are often employed to streamline the browsing process.

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4. Shopping Cart: E-retailers utilize virtual shopping carts that allow customers to add items
for purchase. The shopping cart keeps track of selected items, quantities, and total costs
throughout the shopping session.
5. Secure Transactions: E-retailing platforms implement robust security measures to ensure
safe and secure transactions. Secure sockets layer (SSL) encryption, payment gateways, and
adherence to industry standards such as PCI DSS (Payment Card Industry Data Security
Standard) protect sensitive customer information during online transactions.
6. Multiple Payment Options: E-retailers offer a variety of payment options to accommodate
diverse customer preferences. These may include credit/debit cards, digital wallets, bank
transfers, cash on delivery (COD), and alternative payment methods such as PayPal or
cryptocurrencies.
7. Order Management: E-retailers have systems in place to manage orders efficiently from
placement to fulfillment. This includes order tracking, status updates, and notifications to keep
customers informed about the progress of their orders.
8. Personalization: E-retailing platforms leverage customer data and analytics to personalize
the shopping experience. Personalization techniques may include recommended products
based on past purchases, personalized promotions, and tailored content suggestions.
9. Customer Reviews and Ratings: E-retailers often feature customer reviews and ratings for
products, allowing shoppers to benefit from the experiences and opinions of others. Positive
reviews can build trust and confidence in the e-retailer and its offerings.
10.Customer Support: E-retailers provide customer support channels such as live chat, email,
or telephone to assist customers with inquiries, issues, or feedback. Responsive and helpful
customer support enhances the overall shopping experience and fosters customer satisfaction
and loyalty.
11. Mobile Optimization: Given the increasing prevalence of mobile devices, e-retailers
prioritize mobile optimization to ensure seamless shopping experiences across various devices
and screen sizes.
12. Post-Purchase Engagement: E-retailers engage with customers post-purchase through
order confirmations, shipping notifications, and follow-up communications. This helps
reinforce customer satisfaction and encourages repeat purchases.
These features collectively contribute to the convenience, accessibility, and efficiency of e-
retailing, making it an increasingly popular channel for consumers to shop online.

Models of E-retailing
1. Business-to-Consumer (B2C): This is the most traditional e-retailing model, where
businesses sell products or services directly to individual consumers. Examples: include
online retailers like Amazon, myntra, flipkart etc.
2. Business-to-Business (B2B): In this model, businesses sell products or services to
other businesses. Examples: Maruti Suzuki, an automobile manufacturing company

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 amy log on to the website of MRF, a tyre manufacturing company and place an order
for its requirements.
3. Consumer-to-Consumer (C2C): When a consumer sells a good or service to another
consumer over the internet, it is referred to as a C2c e-commerce model. Where one
seller (consumer – not business person) sells old household items to a large number of
buyers (consumers) on the net. Example: OLX, facebook marketplace .
4. Peer-to-Peer (P2P): This model involves individuals lending or renting out their own
goods or services directly to other individuals. Examples include platforms like Turo,
Zoomcar.
5. Direct-to-Consumer (D2C): In this model, brands bypass traditional retail
intermediaries and sell their products directly to consumers through their own online
channels. Examples: Amway.
6. Subscription-Based: Subscription-based e-retailing involves offering products or
services on a recurring basis in exchange for a subscription fee. Examples include
subscription boxes Amazon Prime, Netflix (streaming entertainment).
7. Marketplace: Marketplace e-retailing platforms bring together multiple sellers and
buyers in a single online marketplace. Examples include Amazon Marketplace, Etsy
(handmade and vintage goods), and Airbnb (lodging rentals).
8. Dropshipping: Dropshipping involves selling products to customers without holding
inventory. When a customer places an order, the retailer purchases the item from a
third-party supplier who then ships it directly to the customer. Examples include
Shopify stores that utilize dropshipping suppliers from AliExpress or other platforms.
9. Brick-and-Click: This hybrid model involves traditional brick-and-mortar retailers
integrating online sales channels into their existing operations. Examples include
retailers like Jio mart, Spar which offer both in-store shopping and online ordering with
options for delivery or store pickup.

E-Services
• "E-services" is a term used to refer to electronic services, which are essentially services
that are provided or facilitated through electronic means, typically over the internet or
other digital platforms.
• These services are often delivered remotely, without the need for physical interaction
between the service provider and the recipient.
• E-services encompass a wide range of activities and transactions, including online
banking, e-commerce, online education, digital entertainment streaming, telemedicine,
government services, and more.

Categories of E-Services
1. Web enabled Services: Web-enabled services refer to services or applications that are
accessible and usable via the World Wide Web. Example: E-banking, e-trading , google
maps.

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2. Matchmaking Services: It connects individuals based on preferences or interests,
facilitating relationship, networking or collaborations through online platform.
Example: Shaadi.com, Jeevansathi.com, Royal Matrimonial etc
3. Information selling on web: It involves monetizing knowledge or expertise by
offering valuable content, data or expertise through online platform. Example: E
publishing, e-advertising like quora , Wikipedia, scribd etc. Information selling on web
can be done in ethical & unethical way. Unethical ways of selling information on the
web involve practices that exploit or deceive consumers, violate privacy rights, infringe
on intellectual property, or promote harmful activities. Examples: Plagiarism and
Copyright Infringement, Data Harvesting without Consent, Misleading Advertising,
Scams and Fraudulent Schemes, Unethical Use of Customer Data, Spamming and
Unsolicited Marketing etc.
Disadvantages/consequences of Selling information in Unethical way:
Damage to Reputation: Engaging in unethical practices can tarnish the seller's
reputation and credibility. Negative reviews, complaints, and public backlash
can spread quickly online, leading to a loss of trust and potential long-term
damage to the seller's brand.
Legal Consequences: Unethical information-selling practices may violate laws
and regulations related to consumer protection, privacy, intellectual property
rights, and unfair competition. Sellers may face legal action, fines, lawsuits, or
regulatory penalties, resulting in financial losses and legal liabilities.
Loss of Customers: Consumers are increasingly wary of unethical behavior
and may boycott or avoid businesses known for engaging in deceptive or
dishonest practices. Losing customers due to unethical behavior can lead to
decreased sales, revenue, and market share.
Erosion of Trust: Unethical sellers undermine trust in the digital marketplace,
making it harder for consumers to distinguish between reliable and unreliable
sources of information. This erosion of trust can have broader implications for
online commerce, affecting consumer confidence and engagement.
Negative Impact on Consumers: Unethical information-selling practices can
harm consumers by providing misleading or inaccurate information, exploiting
vulnerabilities, invading privacy, or engaging in fraudulent activities.
Consumers may suffer financial losses, identity theft, or emotional distress as a
result.
Reputational Damage to Industry: Unethical behavior by individual sellers
can reflect poorly on the entire industry or market sector. Negative publicity
surrounding unethical practices can damage the reputation of legitimate
businesses and undermine consumer confidence in the industry as a whole.
Social and Ethical Consequences: Unethical information-selling practices
may contribute to broader social issues such as misinformation, fraud,
discrimination, or exploitation. They can perpetuate harmful stereotypes,
reinforce inequality, or enable illegal activities, leading to negative societal
impacts.

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 Long-Term Sustainability: Unethical practices are unlikely to be sustainable
in the long run. They may lead to short-term gains but often result in reputational
damage, legal liabilities, and loss of goodwill that can hinder the seller's ability
to operate successfully in the future.
Regulatory Scrutiny and Intervention: Increased scrutiny from regulators,
consumer advocacy groups, and industry watchdogs can result from unethical
behavior in the information-selling industry. This scrutiny may lead to stricter
regulations, compliance requirements, or enforcement actions that can further
disrupt business operations and increase costs.
4. E-entertainment Services: E-entertainment services refers to electronic entertainment.
It refers to the diverse range of entertainment content and services accessible through
digital platforms and technology. It encompasses streaming movies , TV shows, music
gaming, live events & more available on smartphones, computers and other devices.
Example: Netflix , Amazon prime, apple music, Spotify, you tube live etc.
5. E- auctions: "E-auctions" refer to auctions that are conducted electronically over the
internet or through specialized software platforms. It is a process of buying and selling
products or services by offering them up for bid, taking bid and selling the item to the
highest bidder. Example: Ebay, uBid, Bidz, Bid4Assets etc .
6. Other specialised services:
 Online Banking and Financial Services: Banks and financial institutions offer
e-services for online banking, mobile payments, online trading, and financial
management. Examples include PayPal, KBL plus, Googlepay etc.
 Online Education and E-Learning Platforms: These services provide access
to educational resources, courses, and training programs over the internet.
Examples include Coursera, Udemy, edX etc.
 Telemedicine and E-Health Services: These services allow patients to consult
with healthcare professionals remotely, access medical advice, schedule
appointments, and manage prescriptions online. Examples include E-sanjeevini
(initiative by GOI) ,Teladoc Health etc.
 E-Travel Services: Online platforms and apps for booking flights, hotels, rental
cars, and vacation packages. Examples include Make-my-trip, Oyo,
TripAdvisor etc.
 E-Government Services: Governments offer various online services for
citizens, including tax filing, online forms, permit applications, and voter
registration. Examples include Digilocker, MyGov (India).
 Cloud Computing and Storage Services: These services provide online
storage, computing power, and software applications on a pay-as-you-go basis.
Examples include Amazon Web Services (AWS), Microsoft Azure, Google
Cloud Platform, Dropbox, and Google Drive.

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Business to Business E-Commerce
B2B e-commerce, short for Business-to-Business electronic commerce, refers to the buying
and selling of goods or services between businesses through online platforms or electronic
networks. In B2B e-commerce, transactions occur between two businesses rather than between
a business and individual consumers (as in B2C or Business-to-Consumer e-commerce).
Example: A company that manufactures electronic components. They need raw materials such
as copper wires, plastic casings, and circuit boards to produce their products. Instead of
physically visiting multiple suppliers or relying solely on phone calls and emails to place
orders, they can use a B2B e-commerce platform.

Nature of B2B E-commerce:

1. Business Focus: B2B e-commerce is centered around facilitating transactions between
businesses, rather than between businesses and individual consumers (B2C). It involves the
buying and selling of goods, services, or information between two or more businesses.
2.Complexity: B2B transactions are often more complex compared to B2C transactions. They
may involve larger order volumes, customized products or services, negotiated pricing, and
longer-term contracts.
3.Relationship-driven: Building and maintaining strong relationships between businesses is
crucial in B2B e-commerce. Trust, reliability, and effective communication play key roles in
fostering long-term partnerships.
4. Integration with Business Processes: B2B e-commerce platforms are typically integrated
with businesses' internal systems and processes, such as enterprise resource planning (ERP)
systems and inventory management systems. This integration streamlines operations and
facilitates seamless order processing and fulfillment.
5. Customization and Personalization: B2B transactions often require customized solutions
to meet the specific needs of business customers. This may involve tailored products, services,
or pricing arrangements.
6. Multiple Decision-makers: B2B purchasing decisions typically involve multiple
stakeholders within a business, including procurement managers, department heads, and
executives. Decision-making processes may be more complex and require consensus among
various parties.

Advantages of B2B E-commerce:

1.Increased Efficiency: B2B e-commerce streamlines the buying and selling process, reducing
the time and effort required for transactions. It enables businesses to place orders, process
payments, and manage inventory more efficiently through digital platforms.
2.Expanded Market Reach: Online B2B platforms provide businesses with access to a wider
market beyond their geographic location. This enables businesses to reach new customers and
suppliers, leading to potential growth opportunities.

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3.Lower Transaction Costs: B2B e-commerce often reduces transaction costs associated with
traditional procurement methods, such as manual order processing and paper-based invoicing.
Digital transactions can be automated, leading to cost savings for both buyers and sellers.
4. Improved Customer Experience: B2B e-commerce platforms offer features such as
personalized account management, product customization, and self-service options. This
enhances the overall customer experience by providing convenience and flexibility to buyers.
5.Enhanced Productivity: Digital procurement processes in B2B e-commerce can improve
productivity by eliminating manual tasks and reducing errors. Businesses can focus on strategic
activities rather than administrative tasks, leading to increased efficiency.
6. Better Insights and Analytics: B2B e-commerce platforms capture data on customer
behavior, purchasing patterns, and market trends. This data can be analyzed to gain valuable
insights that help businesses make informed decisions, optimize pricing strategies, and identify
opportunities for growth.
7. Facilitates Collaboration: B2B e-commerce platforms facilitate collaboration between
businesses and their partners, suppliers, and distributors. Centralized communication channels
and shared data enable seamless collaboration, leading to improved supply chain management
and coordination.
8. Scalability and Flexibility: B2B e-commerce platforms are scalable and adaptable to the
changing needs of businesses. Whether a business is small or large, B2B e-commerce solutions
can accommodate growth and evolving requirements.
B2B e-commerce offers numerous advantages. These benefits contribute to the growth and
success of businesses engaged in B2B transactions.
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Section A:
1. Give the meaning of E-retailing.
2. What do you mean by e-services?
3. Give two examples of Web based e-services.
4. What e-entertainment?
5. Give any two disadvantages of selling of information.
Section B:
1. Distinguish Traditional retailing and E-retailing.
2. What are the benefits of e-retailing?
3. Explain features of e-retailing.
4. What are the key success factors in e-retailing?
5. What are the categories of e-services offered?
Section C:
1. Define e-service. What are the merits and demerits of e-services?

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2. Give the meaning of B2B e-commerce. Explain nature & advantages of B2B e-
commerce.
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