Electronic retailing or e-tailing is a B2B or B2C sales of goods and services via the internet. Because of such a way of functioning, e-tailing is understood as a subset of e-commerce. Amazon is one of the most popular, successful, and largest examples of online retailing or electronic retailing.
The omnipresence of online channels has compelled different brick-and-mortar businesses to opt for e-tailing strategies to optimize their reach, leads, and sales. Businesses involved in offering products or services are tailoring their business models using the internet and different distribution channels like internet webpages, warehouses as well as product shipping centres.
What is Electronic Retailing (E-Tailing)?
Electronic retailing is a concept of selling goods and services using electronic media via the internet. It is also termed e-tailing or e-retailing.
The process of e-tailing requires the company to capture internet sales by building out different sorts of distribution channels.
It is the direct sale of information, products, or service via virtual stores available on webs and sites as thousands of e-commerce sites are present on the internet which are behaving like an extension of existing start-ups.
Some ingredients are essential for e-retailing success such as an attractive B2C (business to business) e-commerce portal, right revenue model, penetration of the Internet, etc.
Key Success Factors of Electronic Retailing
There are some critical success factors for Electronic retailing which are required to be taken into consideration for a long time as follows:
1. Strong Branding
2. Unique Merchandising
As electronic retailing is a subset of e-commerce, many other competitors may also use it for their business growth. Unique merchandising helps brands in establishing their uniqueness in the target niche.
3. Value Addition
Adding value into the lives of the customers and consumers is one of the key factors of e-tailing. Brick and mortar businesses that use e-tailing for promoting their products or services should always try to add value to the lives of their audiences.
4. Competitive Pricing
Standing out of the competition needs distinct strategies, and it also exists in electronic retailing e-tailing practices. Having competitive pricing lets businesses beat other competitors that are also using or not using e-commerce for their brand.
5. Better CRM
CRM or customer relationship management is one of the key practices of e-tailing or e-commerce, as it helps in developing and nurturing relationships with customers.
6. Better Distribution Efficiency
The success of an e-tailing business model also depends upon its efficiency in channelizing the distribution of goods and services. In an e-tail business, it is a must to optimize distribution efficiency.
7. Soothing Website Design
Great website designs ensure the smooth channelization of all the processes upon which e-tailing depends. Ensuring a good user experience for the site users is important for optimizing conversions.
8. Transparency in Services
Transparency is key for the success of any business, and it is true for e-commerce or e-tailing as well. Transparent e-commerce businesses enjoy more trust and sustainability.
9. Customer Service
Ensuring good customer service along with a customized shopping experience is crucial for the success of the e-tailing business model.
Challenges of Electronic Retailing are
Some of the challenges that e-tailers involved in e-commerce businesses face are-
1. Unproven business models
90 per cent of companies close down at the beginning of the business because they do not provide enduring sources of profit and are recommended as dot-com businesses.
2. The Requirement to change business process
The e-retail organization must be careful at redesigning and integrating various processes for the new e-business.
3. Channel conflicts
The interest gets conflicted at many places through the internet or brick stores.
4. Legal issues
Though moral laws have not yet evolved for internet transactions, e-mail and digital signatures are being recognized.
5. Security and Privacy
This is the major challenge in the digital world to overcome hacking and data pilferages.
How Electronic Retailing works?
It is well known that electronic retailing comprises an extensive range of companies and industries.
Strong branding is needed for successful e-tailing as the website might be easily navigable and updated regularly to satisfy consumers’ needs and add value to the consumer’s life.
A strong distribution network is also needed for e-retailing, which should be prompt and efficient as the consumers can not wait for the delivery of goods and services for a long time. To win a consumer’s trust and loyalty, transparency in a business depicts a vital role.
Through a subscription-based model like Netflix, both the B2B and B2C earn revenue due to the products’ selling with a monthly subscription to get access; revenue might also be earned by advertising on an online platform.
Types of Electronic Retailing
There are two types of electronic retailing – B2C and B2B, let’s discuss in-depth:
1. Business to Consumer (B2C) Electronic Retailing
This retailing is the most common retailing of all e-commerce or electronic commerce companies for most Internet users.
A group of retailers covers companies who sell their finished goods and products directly through the website. The product’s delivery can be from the company’s warehouse or the manufacturer, and maintaining a good customer relationship is the primary key for a successful B2B.
2. Business to Business (B2B) Electronic Retailing
In this business-to-business b2b retailing the companies sell their products and goods to the consumer as they sell to other companies.
The relatives like this include consultants, software developers, freelancers, and wholesalers. From the plants to business manufacturing, the products are sold out by the wholesalers.
In return, these businesses may sell the products to the consumer, and a B2B company should sell products to a B2C company. Example for B2B is sites like Amazon and Flipkart.
Advantages & Disadvantages of E-tailing
Business to business b2b and business to consumer b2c e-tailing has many advantages and disadvantages for the contemporary business models around the world. Let us understand both the advantages and disadvantages one by one-
- From electronic retailing, the consumers get access to save both their efforts and their time due to online services.
- On an online website, the consumer can get a wide range of products as per their need that is why due to electronic retailing the comparison between the products can be managed before purchasing.
- The facility is available 24*7; the consumer can order their preferred products at any time whenever they want.
- In an online shopping environment, the consumer can get considerable discounts in comparison to the markets.
- Whatever the product is, all the information is available, which helps the consumer make their buying decision easy to manage.
- Due to the electronic retailing facility, payment options are straightforward to deal with as they avail the term as to payment on delivery for the customer to shop.
- Because of electronic retailing, a new brand can quickly sell its products to the consumer worldwide, which is a remarkable feat that helps build the brand a lot faster.
- The quality of the products may not be as satisfactory as thought; the consumer can not make sure of its quality in online shopping.
- The bargaining power of consumers here is not fulfilled before making the final payment which is a tendency of every individual.
- To trust easily on the payment gateways is not possible for the consumers as they fear the misuse of credit cards or any other payment method that happened during electronic retailing.
- In online shopping, you can watch your product you cannot feel or see your product as it is not possible in this case you have to make your decision by looking at the description given about the products and goods.
- After also purchasing, the consumer cannot get it as they have to wait for their product because it is not readily available on online electronic retailing platforms.
- The consumer does not carry any faith in the seller on offering the product because it is impossible during online shopping.
- If the site crashes down, the consumers are unable to buy from the store, so it is necessary to host the website on the right platform.
- The customers get late replies about the queries they mention for the product or the product’s use; customer service is essential to solving all the problems and queries.
The electronic retailing business model gets optimized online presence via different marketing strategies to optimizing the shopping experience, and hence they are the need of the hour in this digital age.
Incorporating the right e-tailing practices can easily improve reach, lead generation, and conversion of brick and mortar businesses.
How important do you find the role of e-tailers for the growth of c-commerce businesses?