Online Shopping

PROJECT REPORT ON ONLINE SHOPPING: IT’s CURRENT SCENARIO AND FUTURE PROSPECT IN INDIA

BY :PUNEET BHARDWAJ

CONTENTS SR.NO | Key Points | Page | 1 | Introduction to Online Shopping | 4-5 | 2 | What is B2B and B2C | 6-7 | 3 | How online shopping evolved in India | 7-8 | 4 | Current scenario of online shopping in india | 9-13 | 5 | Rise of online shopping portals | 14-17 | 6 | Challenges faced by Indian customers | 18-20 | 7 | Why online shopping exists? | 20- | 8 | Future of online shopping | | 9 | Advantages of online shopping | | 10 | Disadvantages of online shopping | | 11 | Conclusion | | 12 | Bibliography | |

Introduction To Online shopping
Online shopping is the process whereby consumers directly buy goods or services from a seller in real-time, without an intermediary service, over the Internet. If an intermediary service is present the process is called electronic commerce. An online shop, eshop, e-store, internet shop, webshop, webstore, online store, or virtual store evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or in a shopping mall. The process is called Business-to-Consumer (B2C) online shopping. When a business buys from another business it is called Business-to Business (B2B) online shopping. Both B2C and B2B online shopping are forms of e-commerce.
The Electronic commerce or e-Commerce as is known today evolved as businesses (end to end process) started to shift from real time market to digital market. All of the business today as we see is done over the internet and anything which is not there is meant to be wiped off. Ecommerce, the online shopping system has brought down political and physical barriers giving everyone in the world an equal playing ground for their market, everyone can put their products on sale through the e-stores(website dedicated to selling of product, a virtual store).Speaking about the last decade we saw a great market, rise over the internet, online shopping was introduced wherein firstly computer scientists got interested in then it came to general public and gradually became a substitute for the real market place.
E-commerce, as is generally thought of, is not the birth child of “The Web” but it just got kick’ started by “The Web”.Online shopping developed with B2B as well as with B2C since everybody is on internet, and development is going on each and every second for grabbing a better share of the market. Even as we write this article on Ecommerce with our exhaustive research!!! May just be not enough.
The history of ecommerce would rightly be back-tracked by the time people felt the need to send “interactive content” to be displayed on television and Videotex came into being. Research was going on from the early 1960 and more corporations got interested in sending information and thus it matured while Michael Aldrich of Redifon Computers Ltd gave the concept of teleshopping and did good business in UK.
Online service of videotext, Minitel was launched in France in 1982 and was accessed using telephone lines, similar model failed in UK. It was a real success till WorldWideWeb.The researchers who were working on Videotex in US with services like “The Source” and “CompuServe” in 1979 (contemporary of UK based research: BBC with Prestel, BritisTelecom with Viewdata, ITV with ORACLE) got interested in creating a solution for customer-targeted payment processing whose target audience would be the software developers and shareware authors, they created Swreg in 1987 in US, thus enabling the first Online market for the developers community.
In 1990 Tim Berners-Lee a British scientist working at CERN laboratory wrote the first web browser WWW which then changed most research processes and ways of businesses seeing a whole new market to evolve (rather a whole new world “The web world”).
People saw new technologies evolving with new market and then around 1994 a company called Netscape released a browser, enabling anyone to type a name in the Navigator browser and visit a webpage (which might look dumb right now, but was a real exploration making them the real champs of the market and even challenging market leaders).Soaring stock prices, Pizza Hut taking orders online and a wide variety of products being available online.Then transactions and business started happening over the web urging every company to have a “.com”. To address security issues Netscape 1.0 introduced SSL encryption, for secure transaction. Online retailer “Amazon.com” launched selling each and everything online. “E-bay” the online auction house founded by computer programmer Pierre Omidyar. [Yipee everything on internet]United States postal service goes online, Acquisitions of majors overtaking smaller ones for technological advancement; the whole environment was so “technologically charged”. This went on till the year 2000 when finally the Bubble (The Dot Com bubble) burst with record high in stock prices.When money was involved in doing business over the internet “PayPal” was launched and practically has share of 70% till date, it provides facility for online payment.Aggressiveness in the market especially in the online shopping market giving way to new tricks like giving out Coupons for customer loyalty and in an attempt to keeps clients reverting back.

What is B2B
"B2B" is contemporary shorthand for a longtime sales practice called business-to-business. B2Btransactions primarily target companies and other wholesale buyers, while transactions targeting individuals are called B2C, or business-to-customer. Many organizations have both B2B and B2C components, but it's not unusual for a company to specialize in B2B services or sales. In fact, the vast majority of products and services sold are considered to be B2B in nature. One major reason for the popularity of B2B sales and services is sheer volume. An individual customer may visit a clothing manufacturer's website catalog and order two pairs of shoes or a sweater. The buyer for a national chain of clothing stores, however, may order 5,000 pairs of shoes and 2,000 sweaters. Without a B2B component, the manufacturer would have lost out on a very lucrative sale. This is why many companies provide B2B options alongside the B2C offerings at their websites and other outlets.
B2B sales are also generated by providing a specialized product line or service not available to the general public. This form of B2B transaction is very common in the manufacturing world. A company which produces shaving cream in cans, for example, may need a specific plastic nozzle. Several plastic injection molding companies would send sales representatives to pitch their particular designs. These nozzles would be useless for individual customers, but a manufacturer may order thousands of them. With the growth in electronic communications, B2B has taken on even more importance. Instead of simply focusing on business-to-business sales, modern corporations are conducting other financial transactions online. B2B communications are now being used to promote investment, trade stocks and form financial alliances. Because the price of these transactions is far beyond the reach of most individuals, there is no equivalent business-to-customer option available. Some B2B transactions handled electronically can literally run into the billions of dollars.
How B2B differs from B2C
The most obvious difference between B2B and B2C is the customer requirement. B2C focuses on individual customer transactions, whereas B2B focuses on other businesses as the consumer. This difference creates different needs for B2B applications.
One difference between B2B and B2C is the type of order. For example, when you order office supplies or parts, you usually order the same products as well as the same amounts at fairly regular intervals. Repeat and standing orders are a common B2B requirement. Type of payment is also a different requirement for B2B transactions. When your company makes a purchase, you rarely use a credit card for payment. More likely, you will have varied forms of payment such as lines of credit and open orders. B2B applications are designed with these requirements in mind.
Another difference is the type of search function in B2B applications. A catalog to browse through is not necessarily a requirement, depending on the type of B2B purchase you want to make. When shopping for specific items, your company may benefit from a configuration and bid function rather than browsing and searching an online catalog.
Lastly, the type of connection between B2B and B2C differs. When you are connecting to a B2B application to make a purchase, you are normally connecting to one partner (a buy-side or sell side application) or several trusted partners (an e-marketplace or Trading partner agreement application). Because you are dealing with a relatively static list of trading partners, virtual private network (VPN) technology may be used to provide secure access to selected applications inside your firewall, thus avoiding the need to replicate data and applications outside your firewall. In summary, B2B applications have these unique characteristics that set them apart from B2C applications:
1.Different types of purchases and authorizations
2.Unique contracts, terms, and conditions for different business customers
3.Participation in customer's supply chain
4.Variety of customer sizes, demands, and requirements

How is Online Shopping Evolving in India?
Online shopping has had a rather slow and tumultuous journey in India, it has not picked up as much as it should have primarily due to the fact that internet penetration itself is quite low and secondly (and importantly) the online shopping experience has been bad to say the least.Although their are grass root problems, I still believe that Online Shopping in India is evolving fast and has the potential to grow exponentially in the times to come, as the internet penetration reaches far and wide across the rural area.
Traditionally, Indians are conservative in their approach to shopping. They want to touch and feel the products and test its features before buying anything.In fact, selected price-savvy customers would also like to squeeze in an economical deal for themselves with appropriate price negotiation with the vendor. They are not the ones to accept the price at the face value. Well, nothing wrong in that as well ;)With the passage of time came an era of less popular tele-shopping which dealt in limited range of products such as Astrology and spirituality products (such as Rudraksha Mala, Hanuman Kavach, Bal Raksha, etc), Health and fitness equipments (such as Tread Mill, Leg Massager, Height Increaser, Sauna Belt, etc) and even some of the Cooking ranges (including Juicers and Mixers, Vegetable Choppers, etc). But, most of these products could be termed as low-intensity and niche products which could interest only a limited target of people.
Most of us are also a witness to the recent mall culture where all the products are available under a single roof and at competitive price points. Little needs to be analyzed about it over here as most of you might have visited a mall at least for once as a past time on a weekend, if not for shopping preciselyNext in line is the concept of virtual mall or online shopping which is already existent at its preliminary stage in India and is gradually growing exponentially. The market opened up with innovative online shopping initiatives from eBay, Rediff shopping and futurebazaar.com just to name a few.
In a sort of change of version from tele-shopping to a broader form of online plus television shopping saw the emergence of a 24-hour shopping channel from Network 18 – TV 18 Home Shopping Network.As per the report, this fast growing channel has spread speedily with market presence across a range of products. It accounts for 4.5% of all digital camera sales in the country and largest seller of Reebok merchandises. In fact, the report further says that Home Shop 18 sells 480 brands under its portfolio.It is akin to mentioning that, “I am wary about implications of carrying out online transactions to pay my utility bills fraught with risks of phishing and hacking fraud. But, since I wouldn’t prefer to stand in those long and cumbersome queues (and keep pondering as to ‘Mera number kab aayega?’) with my busy schedule, I would like to latch-on to online bill payments. I could as well write an article for Trak in those 30-40 minutes which I spend standing waiting in those serpentine queues.
Thus, with modernization and fast paced life, came the constraints of time and eventually increasing dependence on online shopping. This has led to online shopping coming off age in India. People have commenced shopping through the convenience of online portals from the comforts of their drawing rooms.With case study of Home Shop 18 narrated above also points towards a new trend of convergence of online and TV shopping. It is needless to say that shopping has been revolutionized by its wide spread presence across the various mediums such as TV, online portals and even cell phones now that even internet can be accessible through affordable category smart phones.Given above all the facts, Indian marketers are also increasingly becoming conscious about the viability of returned goods, if customer is not satisfied with the product. This may not sound true over here, but it is a part-and-parcel of the game involved in online shopping.It is estimated that about a fifth of the buy orders get returned for the goods bought online. As such, most of the online sales are carried out on the condition of ‘If not satisfied with the product, full money to be returned’. Another factor is that most buyers pay on delivery which also keeps their options to return good open, if they do not like a particular product.
Current Scenario Of 'Online Shopping' In India
Online shopping is the buzz, the sensation in the current scenario. Getting anything by a click of the mouse right from fashion accessories to jewellery, apparel, electronic items, crockery, home appliances, personal care products, and more has led to the popularity of the 'online shopping mall' phenomenon. It is the easiest and fastest way of shopping. At an online shopping mall, you can catch a glimpse of new product releases, combo deals, packages, discount offers, seasonal products, etc. and accordingly grab the best deal. Time is not the constraint; you can shop anytime - the facility is available round the clock. Besides saving your time of visiting an offline store and staying away from the hassles involved, you can gain an additional advantage, i.e., saving a lot on the money factor.
Another plus point of online shopping is that you can compare products in terms of brands, specifications, features and prices and buy the right ones. It is discount shopping that attracts customers to shop online. There are a number of shopping platforms. Focus on one particular portal that provides complete products and offers the best deals. Get yourself registered to avail various benefits. For example, you can feed in your contact details so that you need not enter the same every time you shop. With every purchase, you earn redeem points. Many an online shopping mall offers special/combo deals and great discount offers. There are counted few platforms that facilitate group bargaining, helping buyers collectively avail maximum discounts in addition to enjoying voice video text chat, meeting new shoppers, earning redeem coins, winning prizes, and more.
The scope of discount shopping is not only limited to one particular section. Many an Internet literate individual encompassing the young and the old alike of both the sexes prefer online shopping. For the same you need to have a bank account. You can use your credit card or debit card to buy the desired products. Most online platforms provide payment facilities in all available modes right from Internet banking, paying by cash, paying cash at the time of delivery, etc.At a shopping mall, you can explore similar products representing some of the biggest brands at the national and international level. If you are fortunate, you can avail discounts over more than fifty per cent. You can always find something new and interesting. So shop online and stay benefited!
Online Shopping in India has few takers. Though it has always been touted as the next big thing ever to happen, Indians have been quite skeptical about its services and growth factors. Largely the reason seems to be the lack of well designed and maintained websites of good retailers. Time and again, there seems to be a growing breed of potential Consumers who are willing to buy online products. But, the question arises whether the Indian business has matured to move up the IT curve and consider B2C(Business to Consumers) a viable revenue model. Its seems like a territory largely untouched and underutilized, except in the travel and ticketing sector, where it is making giant strides. Online shopping has become into a practice, which is now recognised by lots of human beings all over the world. In India, shopping has always been an activity, which has been undertaken with a gusto, which is quite unrivalled by any other activity.
The Indian subcontinent has lots of human beings who have realised the advantages of forsaking shops and venturing into the online world with their credit card numbers and their wishes.
Hence, the rise of online shopping in the Indian subcontinent has been meteoric in the recent years. The number of shopping websites has increased and so has the total number of persons who prefer shopping online.

The act of buying things from websites and not shops certainly took a long time to blend in with the shopping mindset of the Indian customer. The current scenario is one, which is witnessing a change in this mindset. There have been many websites that have been launched with the objective of selling products to customers. Products belonging to various product sectors are now being sold on these websites and the range is quite a large one right from expensive laptops and LCD televisions to mundane grocery items. The frequency of B2C transactions has certainly increased over time in the Indian subcontinent. There are many shopping websites, which are now witnessing a decisive surge in traffic (this statement is being made while keeping in view the performance of shopping websites in the last five years). With an increase in the number of persons visiting these websites, they have also become ideal platforms for advertisements and banners of different brands.Online shopping in India, is certainly witnessing a period, which entails things such as rising number of online sales and fantastic revenue and profit figures.

There have been many products, which have caught the fancy of online shoppers and one of them is a handset. Handsets, irrespective of the brand, are being sold in magnanimous numbers on different websites. All the major market players in the telecommunications sector, FMCG sector, services, mobile sector etc. are doing quite well with the sales that they are getting from this online platform. The money that is earned is being put to good use by using it in the betterment of the respective R&D departments.

Hence, the rate at which new handsets, equipped with advance features, are getting launched, is increasing with every single day. There are many handsets, which are all set to be launched. Their parent companies, in the current scenario, are putting their money on the level of sales derived from websites rather than shops and showrooms. Apart, from the businesses doing well, the customers are also given many fantastic features. Some of them include things such as free gifts with every online purchase while some involve special offers that are quite economical and affordable.
Hence, it certainly makes sense to shop online rather than wander around from shop to shop in search for the desired product. Online shopping in India, has certainly put up a glorious case study of new concepts becoming into success stories (in this case, the concept is none other than online shopping). In recent times, although, Indians can look forward to a glimpse of development in this sector.
Indian customers shopped online more frequently in the fourth quarter of 2008 than in the same period the previous year, despite the bleaker economic climate, a survey conducted by Mastercard Worldwide reveals.The survey, which covered 5,037 respondents across 10 markets, found the average frequency of online purchases increased to 2.9 in the fourth quarter of 2008, up from 2.6 during the same quarter in 2007.However, the average spending on online shopping in India saw a slight decline.
Not only did consumers shop online more frequently despite the economic climate, with the exception of Korea, Singapore and Hong Kong, all other markets surveyed showed an increased intention for future online shopping compared to a year earlier.The majority of the online shopping in India was planned, with 83 per cent of shoppers admitting they tend to plan in advance and conduct research on their planned purchases.Most online shoppers either bought items impulsively “hardly ever” (36 per cent) or “just a couple of times” (38 per cent).
The top reason for impulsive buying was the discounted prices (67 per cent) that online channels afford.The findings suggest the economic crisis could have made online shopping more attractive. One key reason for shoppers being motivated into such purchases may be the ability to compare prices across multiple outlets, achieving the important objective of “value for money”.
In India , 54 per cent of respondents had used the Internet for online shopping. The top three popular online purchases included airline tickets (54 per cent), home appliances and electronic products (48 per cent) and CDs/DVDs/VCDs (44 per cent).When it came to impulsive shopping, Indians seemed to prefer home appliances and electronic products (51 per cent) and CDs/DVDs/VCDs (44 per cent).
“Online shopping is growing in popularity, as consumers realise the convenience and ease of shopping online. Interestingly, among all the markets surveyed, India is the only one where the 18-29 year age group has the highest average spend on online shopping.As businesses look to grow their online retail presence, they need to be aware of the preferences and concerns that drive online shoppers,” said T V Seshadri, vice president and country general manager, South Asia, MasterCard Worldwide. Top Three Products of online shopping in India Sr No | Commodity Or Servics | 1 | Airline Tickets | 2 | Electronic Products and Home Appliances | 3 | Cosmetics |

Mode Of Payments:
Online shoppers commonly use credit card to make payments, however some systems enable users to create accounts and pay by alternative means, such as: * Debit Card * Various types of electronic money * Cash on delivery (C.O.D., offered by very few online stores) * Cheque * Wire transfer/delivery on payment * Postal Money Order * Reverse SMS billing to mobile phones * Gift Cards * Direct debit in some countries
Some sites will not allow international credit cards and billing address and shipping address have to be in the same country in which site does its business. Other sites allow customers from anywhere to send gifts anywhere. The financial part of a transaction might be processed in real time (for example, letting the consumer know their credit card was declined before they log off), or might be done later as part of the fulfillment process.
While credit cards are currently the most popular means of paying for online goods and services, alternative online payments will account for 26% of e-commerce volume by 2009 according to Celent.

Rise of Online Shopping portals
As marketers are constantly looking for means to increase points of contact with the consumer, and companies are looking for cheaper means to get information and products to their users, the Internet market is bound to grow. The amount may be minuscule in the global context, but Indian online shoppers’ population is steadily making its presence felt quite remarkably
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Companies like the Future Group, Reliance Retail, RPG Cellcom, Tata Woolworths are gearing up to launch their own online shopping portals. Small retail players like Vishal Retail, Subhiksha and Spinach too are gearing up to make e-tailing as a future revenue generator
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Subhiksha's aim is to deliver across 400 towns they have their shops in. Other than shopping, the website will be designed to provide buyers with information such as new store opening, offers and promotions and so on. Vishal Retail is also looking at internet shopping, as they plan to launch their online shopping portal in the next 4-5 months. The prices on the portal will be 5-15 % lower than what a consumer pays in their stores.

Internet and Mobile Association of India (IAMAI) state that the ecommerce market is expected to reach the Rs 9,210 crore mark by the end of 2007-08 , a growth of 30% over the current year.

Reliance Retail is on the verge of rolling out its integrated e-tailing website that will include Reliance Fresh, Digital, Trendz and other verticals. The company will set up its own call centre and a separate team for it.

As cities like Bangalore, Hyderabad and Pune are going Wi-Fi these sectors have a huge opportunity for online shopping. Retailers are also setting up facilities of value adds and experience to attract the customers where they introduce virtual shopping and a potential buyer can get a feel of moving around in a mall, and can click on the items he/she wants to buy. Retailers are viewing IT as one of the areas, which could strengthen their market position and market share. Their main focus areas are supply chain management , point of sale systems, strategic merchandising and facilitating customer relationships.

Challenges faced by Indian Consumers
While online shopping is a good place for bargain-hunting and to get products at a very price, it some how has not worked its charm in India. The main reason for this is that Indian consumers do not get any real value or incentive from this trend. Also they are wary about fraud, delivery and customer service which is not far from the truth. Following are some of the few challenges we face:

1. Spread of Internet

The biggest problem in making online shopping a success in India is the limited spread of internet services. Due to low usage rate of internet online shopping will take time to become a common way to shop.

2. Inefficient and delayed service:
Many cases of delayed delivery, damaged or inferior goods, quality issues and even instances of cheating where the goods were never shipped have been reported. The much proclaimed ease and convenience comes with a heavy price and overall, Consumers do not have a good experience with the results of Online shopping.
3. Limited choice:
Online consumers in India are facing a narrow range and limited choice of merchandize. Even the leading sites like 'ebay.in', 'indiaplaza.in', 'indiatimes' or 'rediff' have very limited range of items and therefore are hardly attractive. 4.Language Barrier

As most of the online shopping portals are in English, so this has also posed a great problem in front of the prospective buyers. In a country like India where English is not in mother tongue, its such a wide use in internet many times creates problem due to lack of understanding on the part of the customers.

5.Plastic money

Less prevalence of credit card is on more reason for the consumer remaining away from this modern means of shopping. Although many sites are also accepting cheques, cash on delivery and bank demand drafts but still a larger section of the service provider rest on this plastic money.

6. Limited choice

Online consumers in India are facing a narrow range and limited choice of merchandize. Even the leading sites like 'ebay.in', 'indiaplaza.in', 'indiatimes' or 'rediff' have very limited range of items and therefore are hardly attractive.

7. Overpricing of Products:
Most of the goods are overpriced and if at all any products are priced at a reasonable rate, its quality is compromised. Besides that, there is no features like exciting prices, killer deals, delivery guarantee, after sales support nor replacement warranty.
Are there takers for Online Shopping?
YES, there has always been demand for e-commerce in this country as people have less and less time to shop. Today consumers are looking for real good deals and they cannot be fooled and nor can you hoodwink them. If the Online Shop retails are able to provide value, quality, after sale support, timely delivery and reasonable deals people are willing to invest. This can be seen by the number on Indian consumers who order books and other products from international portals like Amazon.com, even if they have to pay hefty handling charges for the distance.
People are on a look out for Indian portals that does not just create a hype at the initial stages of its launch, but one that can consistently deliver quality services.

So keeping in mind all these factors, lets wait and watch what the new Retail Online Portals are preparing to offer...
What can be done to make it popular?
1. Creating E-commerce awareness:
One of the biggest challenges for Online Shopping has been the skepticism surrounding security aspects of e-commerce, which has lowered confidence levels. Online sellers need to focus on factors which will help transform the skeptical Indian consumer into someone who experiments with buying online by strengthening transaction security to gradually build up confidence in online payment.
2. More payment options:
Retailers need to create newer options for consumers like cash-on-delivery, money transfer, cheques or demand drafts, end-to-end payment; wherein the buyer can choose to directly pay the seller online(like PayPal in the US). EBay has the facility implemented which is called 'PayPaisa'. Though credit card payments and Sodexo Passes are very popular now-a-days, there is still a lot of inhibition.
3. Greater Security awareness:
Security issues still continues to be a major drawback and trends like AVS (Address Verification System), PIN for credit cards, smart cards, digital signatures, e-cards, and easier intra- and inter-bank transactions online need to be made more prominent. Teaching Consumers to transact only on secure internet connections is also necessary.
4. Highlight the convenience with backed-up efficient services:
Though there are plenty of people who will readily embrace the new trends of Online shopping, a few many will still shun the idea due to lack of knowledge and fear of security issues. In order to hook them, Companies need to highlight more positive advantages of online shopping by providing good services, quality products and good deals and rates.

Results need to speak for itself of a major difference and positive trend of consumers switching willingly to Online Shopping.

Why online shopping exist?
Why does electronic shopping exist? For customers it is not only because of the high level of convenience, but also because of the broader selection; competitive pricing and greater access to information. For organizations it increases their customer value and the building of sustainable capabilities, next to the increased profits.
1.Information load
Designers of online shops should consider the effects of information load. Mehrabian and Russel (1974) introduced the concept of information rate (load) as the complex spatial and temporal arrangements of stimuli within a setting. The notion of information load is directly related to concerns about whether consumers can be given too much information in virtual shopping environments. Compared with conventional retail shopping, computer shopping enriches the information environment of virtual shopping by providing additional product information, such as comparative products and services, as well as various alternatives and attributes of each alternative, etc.
Two major sub-dimensions have been identified for information load: complexity and novelty. Complexity refers to the number of different elements or features of a site, which can be the result of increased information diversity. Novelty involves the unexpected, suppressing, new, or unfamiliar aspects of the site. A research by Huang (2000) showed that the novelty dimension kept consumers exploring the shopping sites, whereas the complexity dimension has the potential to induce impulse purchases.
2.Consumer expectations
The main idea of online shopping is not in having a good looking website that could be listed in a lot of search engines and it is not about the art behind the site. It also is not only just about disseminating information, because it is all about building relationships and making money. Mostly, organizations try to adopt techniques of online shopping without understanding these techniques and/or without a sound business model. Rather than supporting the organization's culture and brand name, the website should satisfy consumer's expectations. A majority of consumers choose online shopping for faster and more efficient shopping experience. Many researchers notify that the uniqueness of the web has dissolved and the need for the design, which will be user centered, is very important. Companies should always remember that there are certain things, such as understanding the customer's wants and needs, living up to promises, never go out of style, because they give reason to come back. And the reason will stay if consumers always get what they expect. McDonaldization theory can be used in terms of online shopping, because online shopping is becoming more and more popular and website that wants to gain more shoppers will use four major principles of McDonaldization: efficiency, calculability, predictability and control.
Organizations, which want people to shop more online for them, should consume extensive amounts of time and money to define, design, develop, test, implement, and maintain website. Also if company wants their website to be popular among online shoppers it should leave the user with a positive impression about the organization, so consumers can get an impression that the company cares about them. The organization that wants to be acceptable in online shopping needs to remember, that it is easier to lose a customer then to gain one. Lots of researchers state that even when site was a "top-rated", it would go nowhere if the organization failed to live up to common etiquette, such as returning e-mails in a timely fashion, notifying customers of problems, being honest, and being good stewards of the customers' data. Organizations that want to keep their customers or gain new ones try to get rid of all mistakes and be more appealing to be more desirable for online shoppers. And this is why many designers of webshops considered research outcomes concerning consumer expectations. Research conducted by Elliot and Fowell (2000) revealed satisfactory and unsatisfactory customer experiences.
3.User interface
It is important to take the country and customers into account. For example, in Japan privacy is very important and emotional involvement is more important on a pension's site than on a shopping site. Next to that, there is a difference in experience: experienced users focus more on the variables that directly influence the task, while novice users are focusing more on understanding the information.
There are several techniques for the inspection of the usability. The ones used in the research of Chen & Macredie (2005) are Heuristic evaluation, cognitive walk through and the user testing. Every technique has its own (dis-)advantages and it is therefore important to check per situation which technique is appropriate. When the customers went to the online shop, a couple of factors determine whether they will return to the site. The most important factors are the ease of use and the presence of user-friendly features.
4.Market share
E-commerce B2C product sales totaled $146.4 billion in the United States in 2006, representing about 6% of retail product sales in the country. The $18.3 billion worth of clothes sold online represented about 10% of the domestic market. For developing countries and low-income households in developed countries, adoption of e-commerce in place of or in addition to conventional methods is limited by a lack of affordable Internet access
The Future of Online Shopping
Online sales will continue to rise. Every webpage designed to sell a product or market a service should understand the future of online shopping.There are several major variables that make online sales attractive to the worldwide market. These variables include:
1) Value of Products/Services offered
2) Dependability and Reputation of the Seller
3) Ease and Security of payment
4) Ease and Security of shipping.
Younger and wealthier shoppers are driving a wave of online sales. Many of these people - having some web familiarity and disposable income - have learned to shop online for price comparisons and other comparative data. If shoppers find a superior situation, especially regarding the above 4 crucial variables they will usually become online buyers.Online buyers establish shopping habits. They abandon bricks and mortar stores and malls as value, dependability, security and convenience of online buying improves.
Although the online buyer cannot return an item as quickly in some situations as the buyer who can walk in and out of a Wal-Mart or Sears when the parking lot isn't crowded or there is no line at the returns desk, there are many other reasons to buy online.Sellers of low-mass products - small books, DVDs, lightweight clothing have a marked edge in sales because shipping is relatively low in cost. The seller of these items doesn't need to pay the overhead of a store, staff, parking lot, utilities, etc. They pay only storage and shipping which is becoming increasingly automated.
Although people are rightfully afraid of bankcard fraud, I believe all card services will continue to improve security and improve buyer dispute processes.Fraudulent emails sent to credit card holders (and all business accounts for that matter) will continue to be a big problem. As both merchants and shoppers become aware of these fraudulent practices it will be more difficult to exploit people with business accounts at PayPal or Amazon.
There is a probability, partly because of the price of fuel, that delivery services will consolidate to some extent in the future so that you will receive one or two regular deliveries per day of all goods you have purchased - including groceries - along with mail and newspaper, etc.Each person may also have a receiving station service in the future whereby the shopper picks up everything from one large, secured lockbox. If a delivery is very large or has accumulated over days, a key would be left with directions to a nearby, larger overflow box. Security, insurance, and energy costs would all be cut by these changes.
Grocers have experimented with many forms of advertising, delivery, billing and credit. All of these ideas are improved with online transactions. Shopping from several grocery chains will be easier when you get free delivery and easy to find price comparisons. You will even be able to subscribe to discount announcements of various products.
Online education - especially college level offerings - has been slow to respond to the potential sale of services by internet. Online degrees will become more common, less expensive, and more legitimized with standardized and secured testing procedures of students. The knowledge areas in the cognitive domain can be done completely by internet. Educational offerings in the behavioral and affective domains will be greatly augmented by online offerings and testing as well.
Larger purchases will also be more prevalent on the internet, especially for mass produced items like automobiles. You can test-drive several models locally, then cruise websites regionally for price, color, accessories, delivery costs, taxes or other charges. This is already being done, but with advances in registration and licensing as well as online financing and insurance - you may spend 25 minutes on a website and be legally driving your new car in the time it takes to meet the delivery-person curbside.
Internet download of tickets and coupons is becoming widespread, and this will continue. Insurance policies and other documents can be downloaded as well.
Internet social life is here - even simplifying the dating and matching processes. This computerized internet socializing saves time and money. While it may lack some of the intangibles, it also allows a more fully objectified set of tangibles, as well as leaving time for the intangibles that happen after screening.The internet will also become easier to use: fewer viruses, popups, host and server problems. This adds up to faster, easier, safer and less expensive shopping.
Advantages Of Online Shopping
1.Convenience
Online stores are usually available 24 hours a day, and many consumers have Internet access both at work and at home. Other establishments such as internet cafes and schools provide access as well. A visit to a conventional retail store requires travel and must take place during business hours.Searching or browsing an online catalog can be faster than browsing the aisles of a physical store. One can avoid crowded malls resulting in long lines, and no parking. Consumers with dial-up Internet connections rather than broadband have much longer load times for content-rich web sites and have a considerably slower online shopping experience.Some consumers prefer interacting with people rather than computers because they find computers hard to use. Not all online retailers have succeeded in making their sites easy to use or reliable. On the other hand, a majority of stores have made it easy to find the style one is looking for, as well as the price range that is acceptable making the shopping experience quick and efficient. The internet has made shopping an almost effortless task.
In most cases, merchandise must be shipped to the consumer, introducing a significant delay and potentially uncertainty about whether or not the item was actually in stock at the time of purchase. Most successful sites will say whether or not a product is in supply Bricks and clicks stores offer the ability to buy online but pick up in a nearby store. Many stores give the consumer the delivery company's tracking number for their package when shipped, so they can check its status online and know exactly when it will arrive. For efficiency reasons, online stores generally do not ship products immediately upon receiving an order. Orders are only filled during warehouse operating hours, and there may be a delay of anywhere from a few minutes to a few days to a few weeks before in-stock items are actually packaged and shipped. Many retailers inform customers how long they can expect to wait before receiving a package, and whether or not they generally have a fulfillment backlog. A quick response time is sometimes an important factor in consumers' choice of merchant. Customers can choose the type of shipping they want from overnight, to a few days. The quicker the delivery the higher the shipping cost. A weakness of online shopping is that, even if a purchase can be made 24 hours a day, the customer must often be at home during normal business hours to accept the delivery. For many professionals this can be difficult, and absence at the time of delivery can result in delays, or in some cases, return of the item to the retailer. Automated delivery booths, such as DHL's Packstation, have tried to address this problem. When shopping in a retail store, customers can handle and inspect the actual product before they purchase it.
In the event of a problem with the item – it is not what the consumer ordered, or it is not what they expected – consumers are concerned with the ease with which they can return an item for the correct one or for a refund. Consumers may need to contact the retailer, visit the post office and pay return shipping, and then wait for a replacement or refund. Some online companies have more generous return policies to compensate for the traditional advantage of physical stores. For example, the online shoe retailer Zappos.com includes labels for free return shipping, and does notcharge a restocking fee, even for returns which are not the result of merchant error. (Note: In the United Kingdom, online shops are prohibited from charging a restocking fee if the consumer cancels their order in accordance with the Consumer Protection (Distance Selling) Act 2000.) | |
2.Information and reviews
Online stores must describe products for sale with text, photos, and multimedia files, whereas in a physical retail store, the actual product and the manufacturer's packaging will be available for direct inspection (which might involve a test drive, fitting, or other experimentation).
Some online stores provide or link to supplemental product information, such as instructions, safety procedures, demonstrations, or manufacturer specifications. Some provide background information, advice, or how-to guides designed to help consumers decide which product to buy.Some stores even allow customers to comment or rate their items. There are also dedicated review sites that host user reviews for different products.In a conventional retail store, clerks are generally available to answer questions. Some online stores have real-time chat features, but most rely on e-mail or phone calls to handle customer questions.

3.Price and selection
One advantage of shopping online is being able to quickly seek out deals for items or services with many different vendors (though some local search engines do exist to help consumers locate products for sale in nearby stores). Search engines, online price comparison services and discovery shopping engines can be used to look up sellers of a particular product or service.
Shipping costs (if applicable) reduce the price advantage of online merchandise, though depending on the jurisdiction, a lack of sales tax may compensate for this.
Shipping a small number of items, especially from another country, is much more expensive than making the larger shipments bricks-and-mortar retailers order. Some retailers (especially those selling small, high-value items like electronics) offer free shipping on sufficiently large orders.
4.Variety
The choices you can get for products are amazing. One can get several brands and products from different sellers at one place. You can get in on the latest international trends without spending money on airfare. When you shop online, you can shop from retailers in other parts of the country or even the world without being limited by geographic area. These stores offer a far greater selection of colors and sizes than you will find locally. Apart from that, How many times have it happened that you spend your money reaching a local shop only to find that the product you need is out of stock? Some online shops have a provision to accept orders without stock and ship it across to you when the stock becomes available. You also have the option of taking your business to another online store where the product is available. Online shops make comparison and research of products and prices possible. Online stores also give you the ability to share information and reviews with other shoppers who have firsthand experience with a product or retailer.
5.Send Gifts
Online Shopping makes sending gifts to relatives and friends easy, no matter where ever they stay. Now there is no need of making distance an excuse for not sending a gift on occasions like Birthday, Wedding Anniversary, Marriage, Valentine’s Day, Mother’s Day etc.

6.Fewer Expenses Many times when we opt for conventional shopping we tend to spend a lot more than the required shopping expenses on things like eating out, traveling, impulsive shopping etc.
7.No Crowds If you are like me, you would like to avoid the crowds when you do the shopping. Especially during Festivals and Special events the crowds can really give a head ache. Crowds force us to do a hurried shopping most of the time. For me grumpy or irritating people and those who smell bad are a huge turn off. Crowds also create a problem when it comes to finding a parking place nearby where you want to shop and going back to your vehicle later loaded with shopping bags.
8.Compulsive Shopping
Many times when we go out on Shopping we end up buying things which we do not require because of the shop keepers up selling skills. Sometimes we even compromise on our choices because of the lack of choices in those shops.
9.Buying old Or Unused Stuff At Low Prices Online Shops make it possible for us to buy old or unused stuff at rock bottom prices. If we want to buy antiques there is no better options than online stores.
10.Discreet Purchases Some things are better done in privacy. Online shops are also best for discreet purchases like adult toys, sexy lingerie and so on. Online Shops enable me to purchase under garments and lingerie without the embarrassment that there are several people watching me and my choices.So, what do you think? Have I not given enough reasons on why online shopping is the best? In fact I love to buy Perfumes online. Another of my favorite items online is Precious and Semi precious Gemstones.

Disadvantages Of Online Shopping
1.Fraud and security concerns
Given the lack of ability to inspect merchandise before purchase, consumers are at higher risk of fraud on the part of the merchant than in a physical store. Merchants also risk fraudulent purchases using stolen credit cards or fraudulent repudiation of the online purchase. With a warehouse instead of a retail storefront, merchants face less risk from physical theft.
Secure Sockets Layer (SSL) encryption has generally solved the problem of credit card numbers being intercepted in transit between the consumer and the merchant. Identity theft is still a concern for consumers when hackers break into a merchant's web site and steal names, addresses and credit card numbers. A number of high-profile break-ins in the 2000s has prompted some U.S. states to require disclosure to consumers when this happens. Computer security has thus become a major concern for merchants and e-commerce service providers, who deploy countermeasures such as firewalls and anti-virus software to protect their networks.
Phishing is another danger, where consumers are fooled into thinking they are dealing with a reputable retailer, when they have actually been manipulated into feeding private information to a system operated by a malicious party. Denial of service attacks are a minor risk for merchants, as are server and network outages.
Quality seals can be placed on the Shop web page if it has undergone an independent assessment and meets all requirements of the company issuing the seal. The purpose of these seals is to increase the confidence of the online shoppers; the existence of many different seals, or seals unfamiliar to consumers, may foil this effort to a certain extent. A number of resources offer advice on how consumers can protect themselves when using online retailer services. These include:99999999
Sticking with known stores, or attempting to find independent consumer reviews of their experiences; also ensuring that there is comprehensive contact information on the website before using the service, and noting if the retailer has enrolled in industry oversight programs such as trust mark or trust seal.
Before buying from a new company, evaluate the website by considering issues such as: the professionalism and user-friendliness of the site; whether or not the company lists a telephone number and/or street address along with e-contact information; whether a fair and reasonable refund and return policy is clearly stated; and whether there are hidden price inflators, such as excessive shipping and handling charges. Ensuring that the retailer has an acceptable privacy policy posted. For example note if the retailer does not explicitly state that it will not share private information with others without consent. Ensuring that the vendor address is protected with SSL (see above) when entering credit card information. If it does the address on the credit card information entry screen will start with "HTTPS".
Using strong passwords, without personal information. Another option is a "pass phrase," which might be something along the lines: "I shop 4 good a buy!!" These are difficult to hack, and provides a variety of upper, lower, and special characters and could be site specific and easy to remember.
Although the benefits of online shopping are considerable, when the process goes poorly it can create a thorny situation. A few problems that shoppers potentially face include identity theft, faulty products, and the accumulation of spy ware. Whenever you purchase a product, you are going to be required to put in your credit card information and billing/shipping address. If the website is not secure a customers information can be accessible to anyone who knows how to obtain it. Most large online corporations are inventing new ways to make fraud more difficult, however, the criminals are constantly responding to these developments with new ways to manipulate the system. Even though these efforts are making it easier to protect yourself online, it is a constant fight to maintain the lead. It is advisable to be aware of the most current technology and scams out there to fully protect yourself and your finances. One of the hardest areas to deal with in online shopping is the delivery of the products. Most companies offer shipping insurance in case the product is lost or damaged; however, if the buyer opts not to purchase insurance on their products, they are generally out of luck. Some shipping companies will offer refunds or compensation for the damage, but it is up to their discretion if this will happen. It is important to realize that once the product leaves the hands of the seller, they have no responsibility (provided the product is what the buyer ordered and is in the specified condition).

2.Lack of full cost disclosure
The lack of full disclosure with regards to the total cost of purchase is one of the concerns of online shopping. While it may be easy to compare the base price of an item online, it may not be easy to see the total cost up front as additional fees such as shipping are often not be visible until the final step in the checkout process. The problem is especially evident with cross-border purchases, where the cost indicated at the final checkout screen may not include additional fees that must be paid upon delivery such as duties and brokerage. Some services such as the Canadian based Wishabi attempts to include estimates of these additional cost, but nevertheless, the lack of general full cost disclosure remains a concern.
3.Privacy
Privacy of personal information is a significant issue for some consumers. Different legal jurisdictions have different laws concerning consumer privacy, and different levels of enforcement. Many consumers wish to avoid spam and telemarketing which could result from supplying contact information to an online merchant. In response, many merchants promise not to use consumer information for these purposes, or provide a mechanism to opt-out of such contacts.
Many websites keep track of consumers shopping habits in order to suggest items and other websites to view. Brick-and-mortar stores also collect consumer information. Some ask for address and phone number at checkout, though consumers may refuse to provide it. Many larger stores use the address information encoded on consumers' credit cards (often without their knowledge) to add them to a catalog mailing list. This information is obviously not accessible to the merchant when paying in cash.
4.Ordering the Wrong Item
When shopping in traditional brick and mortar stores, it is quite difficult to accidentally purchase the wrong item (although it as been seen) because the sales process typically involves you physically carrying the item up to the sales counter and paying for it. In online shopping, where the consumer never physically handles the item before the process is complete and the item delivered, it is certainly possible to purchase the wrong product.
Most often this occurs when the customer uses the website to make the purchase and clicks on the wrong item or when the consumer contacts customer service to make the buy and provides a different product number or code than the one for the product they really want. Other times, the consumer clicks on the correct product and provides an accurate product number but he may still make a mistake if there are size options or different colors to choose from. This problem can be rather troubling because the consumer will be disappointed when the wrong product shows up.
5.The Wrong Product Was Delivered
Even when online shoppers do not make mistakes during the ordering process, it is still possible for the consumer to receive the wrong product. This often occurs when the orders are filled by hand and a mistake is made in the online retailer's warehouse. A warehouse worker may ship the wrong item completely or may ship the correct item in the wrong size or color.
Again the consumer will likely not know a mistake was made until the product arrives. Usually, the online retailer will likely take responsibility for returning the incorrect item and will ship the correct item as soon as possible. However, in some cases, this may not completely correct the problem. For example, a consumer who purchased an item for a specific event or as a gift, may not receive the replacement item in time.
6.Returning An Incorrect Item
In situations where the online shopper orders the wrong item as well as situations where the online retailer mistakenly ships the wrong item, there may still be a need to return something. Although this may not seem to be a big problem, it can be particularly irritating for some consumers. Online shoppers who choose to do their shopping online specifically because they work odd hours may have a great deal of difficulty returning products.
The usual process of shipping the item back to the online retailer will generally involve taking the item to a post office. Depending on the hours you work, it may be difficult to get to a post office during regular business hours and may require taking time off from work to return the product to the retailer.
Online shopping, just like anything else in life, as times where not everything goes to plan. Make sure to shop at reputable merchants who have proven customer service and your chances of being a satisfied Online customer are very good.
Conclusion

Online shopping has come up as a boon for all type of consumers and it has something to offer for everyone. Despite of this fact that it is highly convenient and time saving and to certain extent it is also cost cutting exercise as one need not to step out of his / her home for doing shopping. The main area of concern is the limited internet usage and language problem. A lot of stress need to be given on these two parameters so that this IT revolution can be of use to everyone in India and then only it can be a success in true sense of terms. Otherwise, it will just end up being a style statement of few who wants to be away from the crowd and then it will loose its applicability in the real world.

Bibliography
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