THUONGMAI ENGLISH

UNIVERSITY FALCUTY

PROS AND CONS OF

E-TAILING
CLASS CODE: 2222ENPR5011

LECTURER: TRAN ANH THU

PRESENTED BY
GROUP 5
 GROUP’S MEMBER:
NGUYEN THI DIEU LY (LEADER)
NGUYEN THI THAI LINH
NGUYEN VAN LOC
NGUYEN QUYNH NGA
NGO MINH NHAT
 Table of Contents

1. Introduction..............................................................................................4
2. Content.....................................................................................................4
2.1. What’s the e-tailing (definition).........................................................4
2.2. The situation of e-tailing....................................................................4
2.3. Pros and cons of e-tailing...................................................................5
2.3.1. Pros of e-tailing.............................................................................................5
2.3.2. Cons of e-tailing............................................................................................7
3. Conclusion................................................................................................9
4.References............................................................................................12
1. Introduction
Electronic retailing or e-tailing, as it is generally being called now, is the direct
sale of products, information and service through virtual stores on the web, usually
designed around an electronic catalog format and auction sites. There are thousands
of storefronts or e-commerce sites on the Internet that are extensions of existing
retailers or start-ups. Penetration of computers and proliferation of the Internet has
given rise to many new forms of businesses, such as business process outsourcing,
call center-based customer relationship management, medical transcription, remotely
managed educational and medical services and of course, electronic retailing. Today,
we are going to give you a profound sight into electronic retailing pros and cons.

2. Content
2.1. What’s the e-tailing (definition)
Electronic retailing, also known as e-tailing, deals with selling products and
services online via the Worldwide Web. Internet retailing or ‘e-tailing’, as it is
usually referred to, covers retailing using a variety of different technologies or media.
It may be broadly a combination of two elements. One is combining new
technologies with elements of traditional stores and direct mail models and the
second is using new technologies to replace elements of the store or direct mail retail.

Types of electronic retailing (E-tailing). There are two types of e-tailing

Business-to-Consumer (B2C) E-Tailing [the most common of all e-commerce
companies and the most familiar to most Internet users] and Business-to-Business
(B2B) E-tailing [involves companies that sell to other companies]

2.2. The situation of e-tailing

Today e-retailing makes up eight percent of the overall trading volume in
Europe already. Depending on the scenario, this share could rise up to 40 percent in
developed countries and up to 30 percent in today’s emerging markets. Jürgen
Gerdes, CEO Post – e-retailing - Parcel at Deutsche Post DHL: “In the future,
logistics will take over the role as an enabler for online retailers even more than
today. We as a logistics company have a good overview on companies in various
industries in almost all countries of the world. That’s why we increasingly become an
advisor and partner for success.”

According to analysis done by Global Automotive Research Center (GARC),

Chennai, there is a possibility that the e-tailing market will register 12% compound
annual growth (CAGR) in the next six years. It is predicted to reach the value of
$55.22 billion by 2022. Since Asia Pacific is the largest e tailing market, it is also
expected that it will be the leading market source in 2022.

In recent years, e-tailing in Viet Nam has been shooting up dramatically and it is
anticipated with bright prospects even we are still in the global pandemic. The
COVID-19 pandemic has made consumers stay at home more, with some areas
restricted to travel, and limited opening of shopping malls, leading to a rapid and
strong growth in online shopping. The data shows that Vietnam's e-tailing will
achieve an impressive growth of 18% in 2020, the market size will reach 11.8 billion
USD, accounting for 5.5% of the total retail sales of goods and national consumption
service revenue. With such impressive growth, Vietnam is said to be quickly
becoming the leading "appealing piece of cake" for e-tailing in Southeast Asia.

2.3. Pros and cons of e-tailing.

2.3.1. Pros of e-tailing

2.3.1.1. Less expensive

As compared to organised retailing, e-tailing is less expensive as it saves wages

of salesmen and premises cost and maintenance. These expenditures are low as
compared to internet cost. For example, compared to traditional offline retailing, e-
tailing doesn’t require businesses to spend a lot of money for business showrooms,
outlets, shops, and renting commercial areas – just to make them more visible to the
public. Payment costs compared to conventional methods are also reduced by 10% -
20% if the seller has the feature to assist buyers in making payments via bank.

With e-tailing, all the business promotions happen online. Hence, you will be
able to operate your business using your online shop in order to advertise, promote,
and process purchases and other transactions with your customers. In addition, it also
has significantly lower operating costs compared to having a physical store. And,
customers no more have to go to the store in person and spend money on
transportation, gas, parking fee,… and because retailers use internet platforms to sell
goods and they can save much money and the final price that customers have to pay
will go down significantly.

2.3.1.2. Convenient for E-tailers and consumers

The World Wide Web offers easier and more convenient business transactions
compared to offline retailing. This allows businesses to provide more complete
information on their website compared to the information in the brochures that is
being handed out by sales representatives. Furthermore, the sales process is only
done with a few clicks, starting from the inquiry stage to the closing of the deal –
which is obviously a much faster and convenient process.

As mentioned earlier, another advantage of e-tailing is that e-tailers do not have

to rent an office to do business. Hence, they can be at their home while running their
e-tailing company – thereby saving their time and effort, and the need to travel to and
from their shop or office.

For the customers, shopping on e-tailing markets will help them save a
significant amount of time. Customers can order anything they need online, even
groceries to cook. E-shops are open 24/7/365, so they can shop at any time. There is
no issue with ordering in the evening or even during the night. The period required to
choose, buy, and pay for an online product is 15 minutes or less. Products are often
delivered within a maximum of one week, but it can be days or hours, depending on a
sort of service. If they order goods that is heavier, the delivery person will bring it to
their doorstep.

2.3.1.3. Easy to interact

This is another advantage of e-tailing. With this type of interaction, e-tailers can
personally connect with their consumers, and consumers can give their appropriate
feedback accordingly, making it an excellent customer service tool.

And with the numerous media available for your customers, such as social
networks, videos and emails, the customer is also given multiple options on how to
communicate with the company. Once the product is delivered to the customer the
feedback from the customer is very much important. This is primarily because of the
absence of a real shopping store environment. The entire experience of the customer
during the process would be an indicator of the efficiency of e-tailing. This
experience of the customer can be accessed through proper customer service for
feedback and the problems faced by the customer should be corrected by the e-tailer.
Late delivery, wrong product, damaged product, etc can be some of the customer
complaints that the e-tailer would have to sort out. And when sellers sort out the
issues well, they will get more satisfaction from customers which is the key to higher
revenue.

With this interaction, businesses can effectively assess in more ways how they
can improve their services or products, which in the end, will certainly guarantee a
much higher rate of satisfied customers.

2.3.1.4. Product and price comparison

In e-tailing, sellers can compare the products using tools or on their own. This
gives them a good idea of product alternatives available, the standard rates if the
product need is unfulfilled.

Comparison is faster online and covers many products - It helps to save time
when making this comparison, as all details are available on the shopping site. In the
physical store, sellers may not be able to get access to so many details, they only have
better knowledge about their own inventory.

This is one more benefit for the customer too. When people see many items
ready for purchase, they feel more confident about spending. Because they can
compare about prices of all same product and absolutely they can find the best deal
that they can afford, no worries for being scammed or getting into “the day robbery”.

2.3.2. Cons of e-tailing

2.3.2.1.Weak customer experience

One of the disadvantages of e-commerce sites is that potential customers are

unable to have a “hands-on” or personal experience with the product before they buy
it. And shopping is still a touch-feel-see-hear experience. For instance, in India,
shopping is still considered to be a family outing and people do not feel the lack of
time while going out shopping. Indian shoppers want to touch, feel and examine the
product before buying it. And in reality, this is not only happening for only India. So,
e-tailing faces the problem of customer retention. While it is clear that consumers are
adopting the internet as a shopping medium, gaps remain between the shopping
experience in the physical world and the shopping experience online.

2.3.2.2. Difficulty Building Customer Relationships

The business-to-consumer marketplace relies heavily on creating positive customer

relationships. This helps create repeat customers, boost cross-sales, and build brand
trust and loyalty.

E-tail and other e-business ventures have a more difficult time building solid,
lasting customer relationships because they are not communicating face-to-face with
customers. Good service is good service, and if you can provide good service, good
value, and good products, you will be able to build brand loyalty in any business.
However, e-tailers lack the ability to connect physically with customers, offer them
face-to-face expertise and guidance, or help them in-store through the sales process.
A dedicated sales staff that can speak with customers and walk them through the
products you are selling is a major advantage physical stores have, especially when it
comes to selling big-ticket items.

2.3.2.3. Security and credit card fraud are also huge risks when dealing with
online shopping.

Consumers run the risk of identity fraud and similar hazards every time they
enter their details into a site. If your site doesn't convince shoppers that the check-out
process is secure, they could get scared out of buying. In addition, online transactions
are mostly made by debit card, credit card, and internet banking and in very few
cases with cash on delivery option. Yes, the website owners try to take every
available precaution to protect the card details but what if the site is hacked by
cybercriminals.

On the other hand, businesses run the risk of phishing attacks and other forms of
cyberattacks. If one of your employees opens just one malicious link, it could
compromise your website functionality, financial information, or worst of all, your
customers' information. For example, some consumers might not only be leery of the
solidness of an e-tailer but also be hesitant to share credit cards and other personal
information over the Internet with someone they can’t see.

In 2018, Amazon, one of the biggest e-tailing markets in the world, admitted
that they had "accidentally disclosed names and email addresses due to a technical
error". After that, Amazon customers from around the world immediately accessed to
Twitter in an attempt to verify if the email they received was real or spam. Some
users who received the email also complained about the short notice and lack of
detail.

2.3.2.4. Shipping problems

E-tailing stores run successfully because they can ship their products from
anywhere to everywhere with ease. It has a strong network that helps it in its
endeavor. In a physical store, a buyer chooses a product, purchases it and leaves the
store with the item.

This is not so on an online store where the customer has to choose and buy, and
then wait for the product to arrive at his doorstep within the stipulated time frame.
Shipping is an integral part of commerce and if you do not have appropriate
infrastructure then it can cause serious issues and become a disadvantage of e-
commerce.

For example, late delivery is one of the most common issues of shipping. While
ordering a product the customer is assured that it will reach him in a maximum of
seven days or a particular period time. In most cases that does not happen and you are
kept waiting for it. Ultimately when the information reaches you that the product will
be delivered on this day the portal is not specific about the timings. There are several
instances when a person who is going to collect the parcel had to wait for hours for
the delivery. His whole day is wasted and he could not go outside as per his original
schedule. Such a situation makes the customer angry as he feels unnecessarily
harassed.

3. Conclusion
E-tailing includes some advantages to the consumer that no other form of
retailing can provide. The hypertext nature of the medium allows for more flexible
forms of transactions (the growth of C2B and C2C illustrate this point). It allows for
ease of comparison across broad product categories with the evolution of shopping
bots and allows for more flexible pricing mechanisms (dynamic pricing). These
evolutions can create less friction in marketplaces, and therefore increase the use of
the web as a retail environment. This will benefit marketers who provide products
with real (perceived) value, and consumers in general. This will penalize marketers
who have thrived in marketplaces that had "information" barriers to entry, where lack
of information for customers restricted their choices and led to inefficient pricing and
localized monopolies.

Solutions for disadvantages:

Payment and Security Issues

Credit card transactions are becoming the preferred mode of payment for the
web at this point. Credit card providers take a percentage of the transaction, and this
is higher for the web than for a traditional retail store. They can rationalize this as the
web is perceived as a higher risk, as the e-tailer does not capture the signature of the
purchaser.

Recommend using other developing payment media:

Smart Cards: Much discussion has taken place with regards to the development
of "smart cards" in order to facilitate transactions. Smart cards would allow for
smaller transactions and provide some anonymity (ensuring privacy) to the purchase
if that is what the consumer is looking for.

PayPal is an option that can facilitate person 2 person transactions, such as those
that occur on eBay (note, eBay now owns PayPal). This option allows sites and
individuals that do not accept credit cards to process transactions. For PayPal to
work, both parties need to have accounts, but it is a secure online payment service
since credit cards numbers are not transmitted across the internet.

Logistics and Distribution Issues

E-tailing can facilitate the transaction, but unless the transaction involves a
digital product (software, music, etc.) the delivery of the product needs to be
considered. Many e-tailers have focused on significant marketing efforts to attract
customers in order to execute transactions, but have not focused on the less
glamorous, but equally important, aspect of keeping the customers, by facilitating
flawless delivery. Not only is it important to follow through and make sure delivery
is facilitated, but companies can use the web to enhance delivery via customer service
by allowing customers to track the status of the transaction. So it is not simply a case
of allowing for delivery, but enhancing the delivery experience with the web.

The E-tailing companies should have their own professional staff in shipping
products, or they can co-operate with several high-quality shipping companies, for
example, Fed-ex, Instacart,…Therefore, customers can trust and continue to support
your business next time.

Customer service issues

According to the Microsoft State of Global Service Report, 61% of consumers now
view customer service as “very important”. An excellent customer experience will
help build trust and encourage repeat purchases. However, a negative customer
experience can result in a loss of sales, a damaged reputation, and negative online
reviews.

How to improve your e-tailing customer service?

- Ask for feedback.

You need to develop the habit of asking for feedback. While it might not always
be positive, it is always helpful. If you truly want to offer the best customer service,
knowing what your customers think about your brand, business, products, and service
are of the utmost importance.

- Offer options.

The fact that a customer is shopping for your products online is proof in itself
that they enjoy having various options. When it comes to customer service, make
sure you give them the same opportunity to choose. Instead of giving them a boring
contact form, offer additional options, like live chat support, text message customer
service, and toll-free numbers to call.
4.References
https://www.nibusinessinfo.co.uk/content/advantages-and-disadvantages-online-
retailing

https://www1.udel.edu/alex/online/market5.html

https://www.investopedia.com/terms/e/electronic-retailing-e-tailing.asp

https://alumni.ueh.edu.vn/xu-huong-kinh-doanh-ban-le-truc-tuyen-thoi-ky-
covid/

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