As the internet started out to diffuse and be need through the developed world a number of years previously, online retail has turned into a hot topic that folks considering. E-tailing, that your selling firm do not need to provide physical car parking, cashiers, racks, aisles, or a building. In effect, the most common physical constraints behaving upon the store no longer applied. For instance, the cost of retail space constrains our ability to offer variety to your client. Besides, the lack of physical establishment could make cost savings and compromise on customer satisfaction.

While we didn't need to take our structures online, we've carried habitual means of thinking in to the online world. For example, web sites inform their customers to "place" their acquisitions in a "shopping cart software". Certainly there is absolutely no longer a physical need to give a shopping cart for the client. The reasons to still provide it are metaphor, mental script and convenient. The purpose of this newspaper is to focus on how constraints implied by physical retailing change from those implied by online retailing and just why this difference matters for both practice and theory.

Background Of Study

E-tailing, electronic retailing is the selling of retail goods on the web and found in Internet discussions as soon as 1995, the word seems an almost inevitable addition to e-mail, e-business, and e-commerce. E-tailing is synonymous with business-to-consumer (B2C) transaction. According to a Jupiter Research study, online spending for retail products and services will increase at a 12 percent gross annual average clip through the finish of 2010. People bought goods and services worth $81 billion from online retailers in 2005, a body expected to bounce to $95 billion in 2006 and to $144 billion this year 2010.

Literature Review


Primary source

Journal article: Charles F. Hofacker (2008), "E-tail constraints and tradeoffs", Journal of Direct Marketing, Vol. 2, pp. 129-143.

Secondary sources

Internet searching with the address:-

  1. http://searchcio. techtarget. com/sDefinition/0, , sid182_gci212079, 00. html#

  2. http://www. infoworld. com/t/business/us-e-tailing-sales-have-brisk-growth-through-2010-571


Customer service design

E-tail service design has been dominated by the need to evaluate service quality and the role that service quality performs in satisfaction and do it again patronage. Off range retail, constraints on retail customer support quality are usually human-resource centered, as retail employees have a huge effect on the service quality proportions of responsiveness, guarantee, trustworthiness and empathy. Online retail service compared is broken into two stages, the client connection phase occurring online and the fulfillment period taking place offline.

Here, I concentrate on the first stage which is the client interaction phase. There are three important requirements on the first stage, the site must offer a persuasive hedonic experience, it must be useful in providing retailing functionality (eg: search, evaluation, deal) and it must be easy to use. To be able to simultaneously meet all three of the requirements, there are three steps to follow. First, generate a hedonic experience but keep the site useful. Second, keep simplicity for any interface or tool and logical on adding options and efficiency while avoid complexity. Third, the move express for creating a hedonic experience and keep simplicity need to be well plan and monitor.

Service operations

Online retail operation design is seriously conflict with offline operations design. For example, warehouses designed for retailing need to support large pallets and fork lifts while warehouses for e-tailing are individuals scaled in order to assist in pick-and-pack operations concerning smaller requests. The challenges that always face by online retailing are begins with the response time of the net server, steps to the amount of time the customer must wait before order boats, and also contains the time the shipping and delivery process will take. Well working with those challenges with lead to a success for the web retail.


Retail atmosphere is a function of the physical store setting up, which is largely determined by cost of real estate and the many physical objects required to create different looks, aromas, colors and lighting. Online constraints tend to be related to the display image resolution and the hardware that is present at the buyer end of the route. The hedonic experience of a site can be improved with symbolic, nonverbal and escapist elements created by images, colors, fonts and recently, streaming press such as videos and music.


One clear difference between online and offline costs is the greatly reduced menu costs (administrative cost to the organization of changing a price) for the past. Reduced menu costs mean that retailers can utilize dynamic or custom-made charges strategies. However, there's a danger to personalized pricing that may lead customers reacted vociferously when they discovered that different consumers were paying different prices for the same item.

The approach of incorporating various products into bundles sold as a single unit can be use in online retailing. The cost to the e-retailer of incorporating products is low, especially for information products, can be bundled with reduced or no additional expense to the seller. An e-retailer can reduce customers' perceived risk by providing a bundle, but the classic motivation behind bundling occurs when there's a negative relationship in reservation prices between bundle elements.


Retail assortment is limited by the cost of holding inventory near the customer and the space necessary for it, while e-tail range is more a subject of taking care of fulfillment and the customers' anticipations of fulfillment service levels. Online product inventory can be stored everywhere and in truth might not exactly even maintain the e-retailer's possession. The reduced cost of online inventory management when compared with the offline situation causes a totally different strategy formulation, known as the "long tail" strategy, which leverages flavor heterogeneity and high assortment levels. The essence of the long tail strategy is to market a small amount of a huge amount of products alternatively than a huge amount of a small quantity of products.

Customer-to-customer value creation

To a much increased extent than previous marketing, the network structure of the internet empowers the buyer as a developer of communications and other content. There is a long history in our field of studying word-of-mouth procedures, and marketers have flipped their attention to the web environment where word-of-mouth can be further amplified by software that indexes, organizes, stores and retrieves it. While we do not necessarily think of it as such, consumers are producing "content" in word of mouth processes and in that sense online word of mouth is a category of consumer made content.

Text, image and hyperlink design

In the physical world, the merchant and manufacturer show control over the demonstration of the product. The manufacturer handles the packaging, however the dealer executes the aesthetic merchandising and signage offering the framework for the package deal. Online, there's a also a sharing of control however the e-tailer controls the product representation, instead of the product display, because the product per se is not physically present in front of the client. Instead, the e-tailer chooses how to represent the presence of the product within the information mix for the site: images, text and hyperlinks among other elements. The e-tailer is constrained by the distribution of display and windows size, and display screen resolution, in the target market, but almost all of all by the likely reactions of the market to create elements.

Page design

The main constraint in planning any particular e-tail website is human being attention. Individual cognitive costs can in fact be quantified and assessed during page handling. To browse a full page, consumers must move their eye fixation point, read, comprehend and perhaps move the mouse to scroll. It is fair to say that advertising analysts have explored the techniques consumers process specific Web pages more than retailing scholars.

Overall, site structure

Offline, the physical size and shape of the retail space and the laws of physics constrain store design. In comparison, the layout of an website is relatively arbitrary since any site can be made to connect to any other web page. Despite this truth, research on e-tail site framework has been largely limited by physical metaphors. While there is a lack of physical constraints on e-tail site design, the expenses of cognitive work and search time for the visitor stand for real issues to the web marketing expert. Given these costs, used linking is constrained by sort of micro-competition for clicks between links on the same page.

Network topology

"Location" is a key varying in offline retailing. It has long been known (Huff, 1964) that travel distance is a measure of cost to the buyer and an important determinant of retail patronage. If we can maintain an analogy between physical space and the geometry that exists in a hypermedia environment with links, we can explore the notion of location on the net. In this analogy, the effort of any click is equivalent to a movements across a fixed distance, and so a page that is two clicks away is twice as far as a full page that is merely one click away. In that case the visitor's effort is precisely double for two clicks as compared to one. Understanding the consumer's travel costs is evidently important to understanding the nature of online competition.


It shows up that long position interests of retailing scholars have been put on online retailing. This is both a good and a terrible thing. The positive side of the sensation is that people can borrow from the abundant group of results and theories and find out which of these can be applied to e-commerce. The negative area is that our experience has resulted in blinders in terms of what types of phenomena should be looked into in online retailing, and in the theoretical methods to which we have limited ourselves.

The online world is one where the customer is relatively empowered. Customers are energetic; they don't merely pay attention and react passively. Instead they communicate their viewpoints, and their identities, online. The created in these kinds of C2C exchanges represents one of the central narratives of the internet, yet you can find very little about them in the retailing literature. Perhaps, associated with that the consumer-to-consumer matching function that Amazon uses to hook up reviewers with potential buyers is merely possible through software-mediation; physical space does not allow it. The level of research for retailing phenomena is more physical as the level of research for e-tailing phenomena such as customer-to-customer exchange is more reasonable. It requires some other kind of theory.

Likewise, constraints pertaining to physical stores and the physical density of consumers, or the shortage thereof, make long tail retailing infeasible offline. Perhaps, that is why this key online craze has slipped under the radar of retailing scholars.

There is a stringent limit to the number of possible store layouts enforced by the level of human physiques and real property; such constraints do not apply to hypertext, which includes now been in popular use for more than a decade. Regardless of the rich books in physical store variables such as atmospherics and layout; or simply because of it; retailing academics have focused on factors that are analogous to physical factors - like website image - and also have not viewed the rational environment created by hyperlink networks.

Each and every e-tailer, big and small, represents a potential test in web design. As has been discussed, there are difficult tradeoffs facing these myriad e-tailers. Should we highlight transactions or interactions or community? Do we try to create a fun, or a good, environment? Do we give the consumer powerful but complicated tools, or keep everything as simple as possible? These questions play out at the level of the individual hyperlink, the web page, and the site and It is suggested that they might make for interesting and worthwhile research subject areas.

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