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Monday, May 27, 2013

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sonu  was in a rush. The meeting in trivandrum was supposed to finish at 4:30pm, but had continued
until 6pm. With his daughter, nisha, 21st scheduled to begin at 8pm in Kochin  he needed to
get to the airport quickly. In his panic, he threw his gear into the waiting taxi  –  breaking his mobile
phone’s screen. The next morning he went to the local electronics store. Having spent half an hour
with the salesman he settled on his chosen phone. As he went to pay his daughter called him over.
Taking advantage of the stores free wifi, nisha had just discovered that the same phone was being
sold by a mubai firm for Rs3000  - Rs4000 less than the local store. Sonu  immediately thanked the
salesman, made an excuse, left the store and bought the phone online.

E-commerce refers to the sale or purchase of goods or services, conducted over computer-mediated networks. The goods and services are ordered over those networks, but the payment and the ultimate delivery of the good or service may be conducted on or off-line.Although  lower  online  prices  are  a  key  driver  of  e-Commerce,  the  main  motivation  is  increased product  range.

 Online retailers are becoming more creative in terms of their products and services.New technologies continue to influence the e-commerce industry creating new forms of e-commerce such as mobile commerce (commerce mediated through mobile devices) or social commerce (the use of social networks to drive commerce).

 What is driving the growth of E-commerce?

1  Lower prices:

For  a  small,  geographically  isolated  country,  the  internet  represents  a  window  to  the  world.
Consumers  have access  to a vast array of goods from international retailers,  often at lower prices
than  at  their  local  store.  With  reduced  search  costs,  and  recent  technological  and  banking
innovations, it is now even easier to purchase goods online
‘Shopbots’  such  as  and  automatically  search  major  retailers,  allowing  consumers  to  compare prices and other attributes (such as shipping time and product availability) amongst retailers.

2  Increased product range online:

The  ability  to  locate  and  purchase  a  vast  array  of  goods  previously  unavailable  at  conventional
retailers  arguably  provides  a  greater  motivation  for  the  rise  of  e-Commerce  than  lower  prices
(Brynjolfsson et al., 2003).

3  Product availability:

Consumers  are  also  motivated  by  product  availability . Instead  of  driving  to  the  store  relying  on
unverifiable information, consumers preferred to purchase goods online, where their availability was

4.Recent  technological  and banking  innovations

Recent  technological  and banking  innovations  have further  facilitated the  growth of  e-Commerce.
With the advent of Visa debit cards, children as young as 13 and consumers who are averse to credit
cards now have the ability to purchase goods online or over the phone. More significantly however,
is the recent proliferation of internet capable devices, such as  smartphones, tablets and computers.
With the rapid rise in internet connectivity, consumers are likely to become more comfortable with
online purchase

 Effect on consumers

The rise of e-Commerce has had an enormous impact  upon consumer behaviour. Reduced search
costs  and  increased  product  varieties  have  changed  consumer  demand  and  increased  consumer
welfare. This has resulted in the rejection of the ‘Pareto’ principle of sales concentration as sales of
niche products become significantly more important in online markets

1. E-Commerce Enable shoppers to interact with each other to provide recommendations and advice

 Who's doing this now? – allows shoppers to view recommendations from friends, celebrities, and experts and make recommendations of their own.  When someone buys something you recommended you receive a 10% affiliate fee
Tesco – the Share and Earn program provides customers with additional loyalty points for sharing a product on Facebook and then having other shoppers click on that link to make a purchase.

2.E-Commerce Provide enhanced, personalized service by requiring shoppers to provide additional information and a specific opt-in

Who's doing this now?
  • Neiman Marcus – The NM Service app allows customers to interact directly with sales associates and notifies associates when the customer enters the store.
  • Modcloth – enables shoppers to communicate with stylists who use the customers' past purchase information to make recommendations.

3. Help customers find the perfect fit

Who's doing this now?
  • Upcload – allows shoppers to use their webcam to take their measurements so that they can find the perfect fit.
  • Sayduck – Offers a mobile Augmented Reality-based platform for iOS for showcasing products from furniture brands and retailers.
It is becoming increasingly important for retailers to connect customers, provide them with customized services, and enable them to provide feedback on which products and services they would like you to offer in the future.
What can you do to empower your customers and provide them with a superior shopping experience in the coming year and beyond? Share your thoughts in the comments below!

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