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Cover Story | March 2016

E-tailing: A boon to fashion retailing

Apparel e-tailing has experienced significant growth across the country due to increasing lack of leisure time, changing lifestyles, convenience and flexibility of shopping from home and the easy option of free home delivery, feel Monika Negi and Dr Alka Goel.

With the advent of the Internet, apparel sales have started to move online. Internet has already affected the world of apparel and textiles. Driven to provide consumer convenience, the majority of apparel manufacturer and retailers have created a virtual version of some aspects of their current physical environment. Internet is one component which has recently become the key ingredient of quick and rapid lifestyle. Be it for communication or explorations, connecting with people or for official purposes, Internet has become the central hub for all. The changing lifestyles of the country’s urban population have also led many people relying on the Internet for their shopping needs. Modern retail has seen a significant growth in the past few years with large scale investments made by Indian corporate houses. Multi-brand retailing has currently been banned for foreign investment.

For global retailers who have not been seeing large organic growth, India provides a lucrative market for them to grow their top line and profitability. A few apparel manufacturers and retailers have used the Internet to go beyond their existing offerings, providing the consumer with a value-added Internet experience such as customised online apparel catalogs and custom-fit clothing. The potential impact of the Internet on the consumer, and on the industry, lies not in what the consumer sees and does on a computer, but in how retailers and manufacturers leverage the Internet to meet both expressed and latent consumer needs. With over 10 million Indian consumers shopping online for commodities other than electronics, this sector is growing at a great pace. Opportunities for web exclusive brands are coming up in apparel, accessories, shoes etc. and also gathering momentum across all market segments with each passing day. However, The convenience of shopping from the comfort of one’s home and having a wide product assortment to choose from has brought about increased reliance on the online medium.

E-marketing

Electronic marketing refers to the application of marketing principles and techniques via electronic media and more specifically the Internet. The terms e-Marketing, Internet marketing and online marketing, are frequently interchanged, and can often be considered synonymous.

E-marketing must be defined to include the management of the consumer’s online experience of the product, from first encounter through purchase to delivery and beyond. The traditional brick and mortar marketing depends on four ‘Ps’ i.e. product, price, promotion and place but the changing outlook in the area of e-marketing can be explained on the basis of seven ‘Cs’ i.e. contract, content, construction, community, concentration, convergence and commerce.

Categories of e-marketing

‘e’ is gaining momentum and most of the things are getting digitally enabled. Thus, it becomes very important to clearly understand different categories of e-commerce or e-marketing.

Business to consumer (B2C): This model involves organisations as business houses and consumers and customers. This model applied to any business or organisation that sells its products or services to consumers over the Internet for its own use.

Business to business: It describes the transaction between businesses, such as between a manufacture and a wholesaler, wholesaler and retailer. In this form, the buyers and sellers are both business entities and do not involve an individual consumer. For example, an apparel manufacturer makes several B2B transactions such as buying fabric, trimming, and sewing threads, packaging material for the apparel. The final transaction, a finished garment sold to the consumer, is a single (B2C) transaction.

Consumer to business: It is an electronic commerce business model in which consumers (individuals) offer products and services to companies and the companies pay them. This kind of economic relationship is qualified as an inverted business type. For example in blogs or Internet forums where the author offers a link back to an online business facilitating the purchase of some product (like a book on Amazon.com), and the author might receive affiliate revenue from a successful sale. This kind of economic relationship is qualified as an inverted business type.

Consumer-to-consumer: Consumer-to-consumer (C2C) marketing is the creation of a product or service with the specific promotional strategy being for consumers to share that product or service with others as brand advocates based on the value of the product.

The 7 ‘Cs’ of e-marketing

The Internet allows for the entire sales cycle to be conducted on one medium, nearly instantaneously.

From making the consumer aware, the brick-and-mortar marketing depends on 4 ‘Ps’ those are price, product, place and promotion oppose to this the area of e-marketing can be explained on the basis of 7 ‘Cs’.

Contract: The e-marketer’s first goal is to communicate a core promise for a truly unique value suggestion appealing to the target customers.

Content: It refers to whatever appears on the website itself and on hot linked websites. If chosen appropriately, it can increase both the rates at which browsers are converted into buyers and their transactions.

Construction: The promises made by e-marketers are not unique to the Internet, but the medium’s interactive capabilities make it easier for them to deliver on their promises quickly, reliably, and rewardingly.

Community: Through site-to-user and user-to-user forms of interactivity (such as chat rooms), e-marketers can develop a core of dedicated customers who become avid marketers of the site too.

Concentration: Target the customer through online behavioral profile. Advertisers have known for some time that behavioral targeting (a.k.a., profiling) is vastly superior to simple demographic targeting. Knowledge of a consumer’s past purchases interests, likes/dislikes, and behavior in general allows an advertiser to target an advertisement much more effectively.

Convergence: Broadband technology will allow the convergence of television and the Internet. Dubbed “interactive TV,” in its simplest form, will consist of a television with some interactive capabilities. Basically, a user will see a television screen that is three-quarters traditional television, but with a frame that has Internet capabilities.

Commerce: The last emerging fundamental of e-marketing is commerce, whether it includes offering goods and services directly, or marketing those of another company for a fee, thus helping to cover the fixed costs of site operations and to offset customer acquisition costs.

Components of a successful online marketing strategy

An online marketing strategy in this digital age, can help to reach increasing numbers of potential clients. To fuel business growth and take business to the next level six key components should be focused are:

Website: It is the face of the company; the website design needs to be professional, clean, and easy for all visitors to navigate.

Blog: Statistically, companies that blog get 55 per cent more visitors to their websites than companies that don’t blog. The blog should be easy for readers to subscribe through email, easy to share through social media, easy to interact by commenting on posts.

Search engine optimisation: Many potential customers start at the search engines when they need what you sell. To be found, use search engine optimisation techniques to help the website, blog, and social media accounts rank high in the search engines.

Email marketing: The information provided should be useful, relevant and on a regular basis to convert potentials viewer into customers

Social media presence: Facebook, Twitter, YouTube, and Google.+ are not just for individuals. These provide an opportunity to create a community around the company through interaction with the people who are interested.

Analytics: Measuring the results and trends of the website, blog, email campaigns, search engine ranking, and social media reach plays a crucial role in any online marketing strategy.

Retailing

Retail is the final stage of any economic activity. According to Philip Kotler, ‘Retailing includes all the activities involved in selling goods or services to the final consumers’ for personal, non business use. Today, with the emergence of large supermarkets, hypermarkets and various other formats like the department stores, the retailer is the closest to the consumer. The opening up of international borders, making the world a global village, advances in technology and the growth of consumerism have had a tremendous impact on retail. According to Global emerging markets survey India was identified as the most sought –after emerging market.

Presently India is one of the fastest growing retail markets in the world. India’s retailing industry is essentially owner manned small shops account for more than 90 per cent. Modern Retail has seen a significant growth in the past few years with large scale investments made by Indian corporate houses.

The Indian retail industry was estimated to reach Rs 47 trillion ($ 792.845 billion) in 2015. A significant portion (90.4 per cent) of Indian retail is unorganised. Of the total Indian retail market, approximately 8 per cent is made up by the organised retail segment. This segment is estimated to grow at a rate of almost 30 per cent annually and hence at a much faster pace than the overall retail market which is forecast to grow by 16 per cent annually.

According to BCG, the organised retail in India was expected to reach approximately $262 billion by 2020 which was $44 billion till 2012.

According to CCI the major portion of organised sector is occupied by apparel with 33 per cent followed by mobile and telecom, food and grocery with 11 per cent. Foreign apparel brands including luxury brands have set up shop in India through Franchisee/ Joint Venture route and have expanded rapidly in the last few years.

e-Tailing

With the technological advancement customers are getting more facility and easy to access platforms. By using electronic technology through the Internet the activities between costumers and producers had become more active. This led to more competition, more marketplaces, and faster transaction. Apparel etailing has experienced significant growth across the country due to increasing time-poverty, changing lifestyles, convenience and flexibility of shopping from home and option of free home delivery.

Pros and cons of online shopping

Thousands of people are using e-retailing, to shop a wide variety of items. The new start-ups in e-retailing can be launched from a small room with one PC attached with the outside world through the Internet with many advantages but the online retailing (e-retailing) process is not an ultimate in the field of retailing methods; it also suffers various drawbacks that are the qualifications of traditional marketing.

Advantages

Online shopping is becoming increasingly popular for a variety of reasons. There are many benefits which make online shopping an excellent option for many busy shoppers. Some of these benefits include:

Convenience: One of the most obvious benefits of online shopping which cannot be overlooked is convenience. Buy almost anything you could imagine without ever leaving your house, around the world. Online stores are open 24 hours a day and are accessible from any location with an Internet connection.

Price: As online stores don’t have to pay rent for a storefront in a nice part of town and tend to sell much larger quantities of goods, they can offer to sell products for a much lower price. Another advantage is online price comparison of particular product.

Comparison: Another great benefit of online shopping is the ability to comparison shop easily. Instead of running around to several different traditional stores and trying to remember the prices and features, the shopper can simply open two or more browsers to easily compare more than one item.

Selection: Another advantage of online shopping is the variety of good for selection. Because online stores don’t need to attractively display their items on shelves, they can keep a larger amount of inventory on hand.

Disadvantages of online shopping

Online shopping offers many advantages to companies and customers but it also caused many problems. Some of them are:

Hands-on inspection: One thing that online stores can’t replace is the experience of actually seeing and touching the item you are considering buying.

Shipping: Some major online retailers now offer free shipping for their products, but many require you to meet a minimum order cost to qualify or only offer this incentive at certain times of year.

Wait time: Waiting for your item to arrive is another downside of online shopping. In the case of online shopping, you may have to wait days or even weeks for the item to arrive at your door.

Privacy: Privacy of personal information is a significant issue for some consumers. When you shop online, you waive certain privacy rights to the online retailer.

Categories of apparel e-tailing

Apparel e-tailing has started to boom. Shopping on the net is gaining attraction with consumers beyond metros and Tier I cities as well and gaining momentum across the country. Apparel e-tailing has taken three distinct routes:

* Multi-brand route: Few players have cashed in on early-bird benefits and captured a significant online market share.

* Single brands route: Brands like Zodiac, Madame, Fabindia, Mustard and La Senza, to name a few, have made their products available online.

* Niche route: Numerous pure-play e-tailers are entering into niche segments to cash in on these untapped categories. Lise Charmel, Chantelle, Mimi Holliday and Cosabella, are some of them.

According to comscore, media Metrix 2011 report Amazon, apple.com worldwide, Samsung group, Flipkart.com, Homeshop18.com, Naaptol.com, Bookmyshow, Myntra.com, Priceindia.in and alibaba.com corporation were the top ten online retail sites in India. These sites contribute app. 58.6 per cent of total online retail. Amazon sites with 14.7 per cent of contribution enjoys the top most position, followed by apple .com worldwide, Samsung group and flipkart.com with 7.4 per cent, 5.9 per cent and 5.8 per cent retail respectively. The retail of other online sites ranges between 4.9 to 4.3 per cent.

Conclusion

Technology has also played a major role in addressing some key concerns of apparel retailing on the web. High resolution graphics, streaming videos of garments donned by models, virtual dressing rooms and 360° viewing and zoom tools have made online shopping an interesting exercise. Customers can key in their vital measurements to find the right fit, and can also browse through multiple brands for the perfect dress. Players like Yempe.com, India’s first online fashion brand, trying to get the first-mover advantage, aim to create experiences and craft consumer memories, apart from offering private-label fashion brands. It has integrated, advanced and highly user-friendly facilities like ‘Virtual Dressing Room’ where users can “try” the merchandise before the actual purchase.

Online shopping is a drastic shift for traditional shoppers as they can’t “touch and feel” the products. Lack of common taxation rules further hinder growth in this segment. Inter-state movement of products often poses a problem given the different taxation rates. However, brands and retailers have to understand that it is not merely about setting up a portal and creating an e-catalogue.

The E tailing revolution has being a great success. The success accredited to the advantages, it has offer to the different stakeholder: manufacturer, retailer and consumer. With the technological advancement, this boom likely to enhanced with: Quick delivery, more facility, easy to access platforms. Latest upcoming trend is the mobile commerce Mobile commerce is the next logical step for Indian merchants. With the growth of mobile phones and increased issuing and use of debit and credit cards, mobile commerce will deliver strong growth over the coming years.

References

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The authors are Ph D Scholar and National Fellow at G.B.P U A&T Pantnagar. They can be contacted at: Email: monikagbpuat@gmail.com and alkagoelp@gmail.com

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