Meaning Of Online Retailing
Online retailing is an electronic form of shopping goods from online stores where buyers and sellers meet virtually and create a marketplace.
Like offline retailing where buyers move from one store to another to choose and buy products, here buyers can surf various websites, add required products to their wish list, enter payment options and order the product which would deliver the goods within the stipulated time.
In online retailing, buyers can anytime visit sites and go through products even if they do not wish to purchase anything. Some online retailers also provide a return policy, so buyers have the option to return the product within a specific period if that does not suit their demand.
Moreover, almost every website provides cash on delivery option in its payment method which, again builds a level of satisfaction and trust towards delivery amongst buyers who are making a purchase order for the first time.
Features Of Online Retailing
Online retailing is growing in demand and many offline traders & retailers are shifting to online mode of business.
Below are a set of features of online retailing:
Buyers can land on product websites and can surf, scroll and select the product (or service) at no click! Websites are highly user-friendly and even new users can easily navigate and shop over them. There is no procedural complication.
Like discounts and sales provided in offline stores, Online retailers also display discounts and free items to attract buyers towards that product, and thus, this leads to a smooth deal between them!
Multiple Payment Option
When it comes to online retailing, most customers are worried about payment options. Not everyone relies on the online transaction or readily gives their payment details.
However, online retailing not only provide convenient and secure payment gateways but also gives a cash-on-delivery facility to calm the nerves of the buyers.
90% of the time that customers spend while shopping is on finding the right kind of product they are looking for.
Online retailing provides customers with a “search here” option that allows them to land exactly at that site or page that they are looking forward to. This saves a lot of time and effort for customers.
Reviews & Ratings
In addition to time and effort saving, the next sizable benefit that online retailing gives is product reviews.
Customers who have already purchased and used the product convey their ratings to the product which current potential customers refer to. This heavily affects their buying decisions as it acts as social support to them.
Advantages Of Online Retailing
Asset Light Model
From the retailers’ perspective, Online business is a highly cost-saving business as there is a low fixed and variable cost involved compared to physical stores. Here, sellers need not maintain large inventories or manage warehouses. The work timings are flexible.
Moreover, from buyers’ view, it is very convenient and time-saving as they can shop from the comfort of their homes. They have options to buy, cancel, pay, return, etc. from their home itself without making any to and fro trips to any offline store.
Better Customer Reach
Many websites come up with subscription or notification pages saying “Agree and Continue” OR “No, Thanks”.
Whenever customers click on “Agree and continue”, they get notifications about new product launches, new discounts, offers, and sales which they can update themselves with. Customers can anytime visit these stores as they have 24/7 openings and availability and order products anytime from anywhere.
Quick grievance address
Whenever customers come up with complaints regarding default in products, late delivery, payment gateway crash, etc.; there is a ready chatbot to deal with these queries and if the query of the customers remains unsolved, the problem is directed to a senior manager who then deals it. All these procedures sort customer grievances in no time!
Unlike big stores where customers are made to stand in queue for orders or face trouble in the crowd, Online stores provide personalized service to customers where they can select, surf, visit or revisit, buy, cancel and exit the sites anytime.
Disadvantages Of Online Retailing
Default in Delivery & Payment
Many times, the order placed is not delivered at all. On complaining, the website does not seem to respond. Also sometimes, the order is delivered to the wrong address. Moreover, sometimes the buyer does not make the payment claiming that he made it online whereas, the courier boy says Cash on delivery.
Right from the cost of handling the website to bringing your product to the top of the search bar, there is a big role of advertisement. Online retailers spend more than 50% of their budget on advertising. This involves product videos, digital marketing, campaigns, ads, etc.
This brings a financial crunch to retailers, especially when they are surviving in a highly competitive market like that of textile, cosmetics, etc.
Customers are already reluctant to share their credit/debit card details. Moreover, any mishappening in terms of default in payment, payment gateway crash, additional cost-cutting charges or security breach breaks the trust of customers.
The retailers not only lose their current customers but also log the way for upcoming customers who take a backseat after looking at reviews of previous users.
Before operating a website, a company has to go through numerous formalities. Even after it has established itself in the online market, it has to be bound by rigid operational laws and rules stated by the concerned authority.
Moreover, if it gets trapped in any case done by its client; it has to pay heavy penalties. This breaks customer trust and loyalty and directly pulls the company out of online retailing.
Examples Of Online Retailing
Amazon and Flipkart are classic examples of e-retail outlets that create a marketplace for buyers to search and shop for various products.
The vendors sell products of different categories like cosmetics, clothes, accessories, crockery, etc. The offers are of all prices and categories, adding customization benefits for buyers.
Thus, online retail is a new generation boon to buyers and sellers!