E-tailing Paradigm: A Diagnostic and Prognostic Study of E-tailing Practices in Bangalore Metropolitan Area

Abstract

The electronic retailing (e-tailing) market in India is still considered to be in its infancy, despite having been around for one decade. The share of online retailing in the $180 billion Indian retail market is insignificant despite the deep penetration of the internet incrementally over the years. It has becomeimperative to convert "online visitors” to "online customers”.

As the e-tailing concept in India is still relatively new, there is a limitation to availability of information. While substantial amount of research has gone into retailing in India and elsewhere, not much research has been undertaken on the dynamics of the e-tailing paradigm in India. The current literature available appears to be inadequate to cover the entire gamut of the e-tailing paradigm.

The e-tailing literature from across the world suggests that understanding the important components of online consumer behavior is the key to success in e-tailing. A clear and thorough understanding ofthe behavioral components can help e-tailers improve the adoption of consumer online purchasing by implementing methods and technologies that help fill in the gaps between the physical worldshopping experience and the experience online.

E-tailing is a humongous concept. To understand the various facets of e-tailing it was necessary to adopt a four-pronged approach towards unraveling its many dormant traits. The buyer-oriented first study, focused on e-tail customers for validating the research model. The seller-oriented second study involved making an assessment of "net readiness” across Bangalore-based retailers and e-tailers. The third study, another buyer oriented study, involved a study of retail visitors in Bangalore city to gain insight into their motivation for visiting physical retail stores and to explore the potential of switching offline shoppers to an online mode. The technology-oriented fourth study involved benchmarkingemulative features of e-tail websites from across the world.

As a part of the first study, a novel model based on the generic "Technology Acceptance Model (TAM)” and Indian idiosyncrasies was developed and empirically tested to understand whether‘credibility', ‘security', ‘privacy', ‘communication', and ‘gullibility' affect a customer's ‘perceived trust', and whether ‘perceived trust', ‘perceived value-for-money', ‘perceived navigability', and ‘perceived quality of e-service features' affect a customer's ‘confidence for buying', and whether ‘confidence forbuying' and ‘technological comfort' affect ‘actual online buying'. This was done because it was feltthat there is a necessity to integrate constructs from e-tailing practices with TAM to present a modelof acceptance of e-tailing to provide a rich understanding of the acceptance and technology use ofthis specific class of technology.

The findings of the first study indicate that ‘security', ‘communication' and ‘gullibility' are the antecedents of ‘perceived trust'; ‘perceived trust', ‘perceived value-for-money', and ‘perceived quality of e-services' are the antecedents for ‘confidence for buying'; and ‘confidence for buying' is an antecedent for ‘actual online buying'. The findings further suggest that ‘credibility' and 'privacy' do not affect ‘perceived trust' and ‘perceived navigability' does not affect ‘confidence for buying'. Further, ‘technological comfort' has no bearing on ‘actual online buying'.

The second study on retailers and e-tailers in Bangalore has brought out the first detailed set ofnet readiness scores. This is probably the first of its kind in India itself. Such studies have beenconducted in countries like Bulgaria and New Zealand before. The overall results portray a verydismal picture of net readiness in retail units in Bangalore. This indicates that e-mode of business in not of much significance to this sector. It would require a multi-pronged strategy to change themindset and bring them under the fold of e-tailing. The level of net readiness for e-tailing units in Bangalore, on the other hand, presented a much more encouraging picture. The results indicate that Bangalore-based e-tailers have as good a technology as compared to the best in the world. However, leadership, organizational competencies, and governance exhibited by them are not upto the international standards.

The third study was designed to capture e-tail perceptions from visitors at retail outlets in Bangalore. The findings of this study isolated some factors and results that can be astutely used by prudente-tailers to enhance their website sales. The types of products that hold promise in the online worldand the maximum amount of money willing to be spent for a single online purchase sale transaction were also revealed in the study. The study also indicated some pointers for driving conversion from offline to online mode.

The fourth study, albeit a qualitative study, was designed to benchmark emulative features ofrenowned e-tail websites from across the world. The study revealed that no e-tail website is perfect when measured in terms of the parameters prescribed by Website Optimization Inc., a leading 3rd party rater. This was indeed a startling revelation. Qualitative content analysis of 20 short-listed e-tail websites indicated some emulative features of highly reputed e-tailers that can serve as guidelines for design of the "ideal e-tail website”.