Online Retail shadow over Physical Retail


Mobile Retail edited

Evolution of Indian Retail Industry

  • Barter System was known as the first form of Retail.
  • Followed by Kirana Stores and Mom and Pop Stores.
  • Finally manufacturing era necessitated the small store and specialty stores.
  • It was a seller’s market at this point of time with limited number of brands available.
  • 1980s experienced slow change as India began to open up economy.
  • The latter half of the 1990s saw a fresh wave of entrants with a shift from manufacturers to pure retailers.
  • Post 1995 saw an emergence of shopping centres.
  • Emergence of hyper and super markets trying to provide customer with 3 Vs – Value, Variety and Volume.
  • Expanding target consumer segment.

E-commerce Retail: The Vision

san jose e-commerce website

  • Greatly reduced search and transaction costs would result in customers using Web to find lowest prices.
  • Market entry costs would be much lower than those for physical storefronts, and online merchants would be more efficient than offline competitors.
  • Traditional offline physical store merchants would be forced out of business.
  • Some industries would become disintermediated as manufacturers built direct relationship with consumer.
  • Internet has created new venues for multichannel firms and supported a few pure-play merchants.

The Major Segments of Retail Industry are :

  • Food
  • Fashion
  • Consumer Durables
  • Fashion Accessories
  • Leisure and Entertainment
  • Health, Beauty and Pharma
  • Furniture
  • Telecom
  • Books and Music

Internet has brought nearly the entire world just a click away. The western culture has affected each and every aspect of our Indian society. The life is becoming fast not only in the metros but also in the normal cities. The number of nuclear families is increasing and both husband and wife are working, as they have less time to go to the market for purchasing every now and then. Some other reasons like these, say shortage of time, traffic jams, late working hours, versatility of plastic money and above all the approach of internet at the door step of whosoever desires it. Online retailers have improved their service and are providing more and more convenience to the customers. From advance payment options they moved on to payment on delivery. From fixed delivery timings they have moved on to convenient delivery timings at the choice of the customer. India has opened the doors for foreign direct investment in retail.

Online retailers are moving towards enhancing the convenience factor and thus attracting the shoppers to use this channel. Moreover the growth of the mobile communication has led to the growth of the online retailing as people are more accessible to internet 24 x 7. Without having to move from one shop to other for comparing the benefits of the product, the shopper gets the benefit of comparing the features and cost analysis at one place. Most of the sites are providing this facility wherein shopper can choose the product which exactly suits him. 

Today online shoppers aren’t just expecting – they are demanding – that websites deliver compelling content, a smooth performance with quick page load times and a user-friendly, memorable shopping experience.

Indians still like to have a feel of product and spend time in buying. A lot of on-line portals have come up in India backed by major retail distributors but, for many it seems to have been just a one time setup. Post this there hasn’t been enough drive to propagate the brand and services of the portals among potential clients. When consumers search, they have multiple options available, and many use search to navigate the Web rather than type in or bookmark specific sites.





Shopping is a multistep process. Online consumers love to browse. Many spend a fair bit of time visiting several sites just to gather information. They may also compare the offerings of several competitors before hitting the “buy now” button.

CRM (Client Relationship Management) will be an increasingly vital spine to retail and shopping centre businesses as a way to know and target which are the most valuable customers in a fragmenting and competitive market. It also can significantly enhance the in-store experience for some shoppers, identifying customers when they enter a store to personalize the service they receive.

Clearly mobile is the medium that is bridging the gap between online and offline. How retailers deploy mobile websites will go a long way to determining whether a customer will view their offer as a seamless one or not.

A combination of strong economic growth, better logistics and retail infrastructure, as well as the entry of key international retailers has undoubtedly aided the development of the sector.

A successful online offering is largely reliant on sound, consistent and efficient logistics infrastructure and, on a more basic level, a dependable supply of power.

Contingent on market maturity, retailers have to consider same-day direct delivery, click and collect, returned goods, delivery across country and regional borders. Merchandise is now coming and going at a much faster pace, and retailers are becoming increasingly adept about how much inventory is required in-store.

The Success Factors of the Industry are :

  • Effective Forecasting
  • Strong Balance Sheet
  • Stock Control
  • Market Position
  • Proximity to market
  • Creating Systems in Retail
  • Hiring the Right Employees
  • Marketing
  • Buying the Right Merchandise
  • Customer Service


For retailers in India, online shopping is gaining recognition as it entails many benefits for them. Some of these include, No real estate costs, Enhanced customer service, Mass customization, Global reach, Niche marketing and specialized stores. In the next 5 years, online retailing in India will strengthen even further. However, long-standing sustainability directly depends on factors like changes in the market, innovations and interactivity by market players.

Owing to increased penetration of credit cards and easy access of computing facilities to a wider population, Internet retailing in India has witnessed a promising growth. Moreover, bargain-hunting consumers are latching on this trend as Internet retailers are known to offer products at special discounted prices compared to store-based retailers. Consumers in the countrycan now truly expect a well streamlined, efficient and world-classshopping experience supported by the best technology.



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Ayesha Patel


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