Retaining the 'human' side of electronic-retails

(The author, international award-winning development and
management economist, formerly
a Gold Medalist in Economics at Gauhati University)

Dr B K Mukhopadhyay

(The author is a Professor of
Management and Economics, formerly at IIBM (RBI) Guwahati. He can be contacted at m.bibhas@gmail.com)

Electronic-retailing or simply 'E-tailing' uses web-space for creating virtual shops where intended products and services are displayed through images, listing adequate features, price, and above all the value that it creates for customers along with other businesses like suppliers and distributors to name a few. The benefits of running E-Tails, i.e., setting up virtual shops instead of the traditional stores include A) Reducing the hassle of creating, renting, maintaining space occupied by physical retail outlets, B) Instant and easy access to a shopping space from anywhere and anytime, C) Saving transit and logistics for customers, D) If the e-tail is global with foreign distribution networks, the scale of the market is ever-growing every day. The details thrive on customer satisfaction and review ratings above all.

Apart from customer analytics, identifying and acting on newer forms of demand and needs, the e-tails make the best use of available omnichannel (i.e., a multichannel approach whereby consistent information and experience is provided to customers at both physical stores and online platform of the company) and working with innovative partners with their demand forecasting and inventory optimisation strategies on an ongoing basis.

Electronic word of mouth (E-WOM) marketing is, therefore, something constantly emphasised in these businesses. For the e-tails who are constantly advertising and pushing new products, introducing product lines, advertising offers and also informing customers and clients about any changes in their company policy and new value creation - the use of cross-platforms, multimedia, brand names, and hashtags likely will produce more electronic Word-of-Mouth (WOM), i.e., more likes and positive comments.

The rush to get to the customers' doorstep ASAP

'Same-day delivery' gives an e-tail a greater competitive advantage, e.g., for a conventional physical store/ supermarket – 'location' is a critical factor, similarly for an e-tail, 'delivery time' and 'convenience' are factors that are of primary significance. Timing is critical. Therefore, maintaining a strong network and relationship with fulfilment centres in regional hubs would mean faster delivery while also having to pay minimal shipping costs. The other thing to factor in would be the facility location which should ideally be considering proximity to air and ground small-parcel shipping hubs for speedy delivery. These factors show how instant, reliable shipping with a cost advantage will bid farewell to full truckload shipping.

Amazon, for example, by and large, has set the bar for customer expectations. There are local variations of it in many markets today. But also at the same time, e-tail capabilities of Flipkart or Myntra in India - and Alibaba, Taobao or Jindong (JD) in China have skyrocketed their sales, performance and scale of activities within a very short period of time redefining the face and future of e-tails.

1. 'I would like to return my item/s'

'Returns management' or reverse logistics invites a big discussion for corporates who are engaged in e-tail. Research shows that around 25-30 per cent of all goods purchased online are returned, hence the ability to handle returns can improve customer retention. Customer satisfaction doesn't end when the product or service is returned, but also the following steps – i.e., returns management, returning payments, acknowledging the steps involved one at a time to ensure transparency and goodwill.

E-tails that also offers door-to-door food and beverage have to stay up to date (and make required investments in R&D accordingly) with warehousing and shipping advancements that have improved significantly over the past decade. Research by the Food Marketing Institute (FMI) suggests that spending on food and beverage would reach $100 billion by 2022. Most of the online delivery service companies tend to shop frozen and refrigerated items last to make sure these remain fresh at delivery. To maintain cold-chain integrity, shoppers store all items in separate insulated bags while choosing items and during delivery. SMEs do a lot of these businesses, and a lot many have been successful in South Asia and East Asia.

C) 'Like us. Follow us. Tag us on social media

Taking selfies outside brand stores and posting them online using hashtags, for example, not only promotes brand awareness and promotion but also increases consumer understanding and enhances conversion rates. Though a picture is worth a thousand words, yet, according to research by Forrester, one minute of video is worth 1.8 million words. The global marketing landscape is constantly shifting and evolving – in response to consumer demand, rapid technological innovation with AI and machine learning picking up consumer behaviour and demand patterns at a whole new different level supported by a deluge of content and platforms.

A report by Microsoft shows that since 2000, the average person's attention span has dropped from twelve seconds to eight seconds. Research supports the so-called 'goldfish effect' of social media – 33 per cent of viewers stop watching a video after 30 seconds, 45 per cent by one minute and 60 per cent by two minutes. Another distraction – 85 per cent of Facebook videos are watched without sound, suggesting consumers prefer muted ads. On one hand, it is difficult for the companies to come up with an advert that will make the users pause the screen as they scroll along given the excessive volume of ad content, and on the other hand, it is equally difficult for the users to know how to select amongst very similar ads offering almost identical products and services.

D) 'Who' says 'What' about Your business online

Customers spreading the word about a business online, particularly if good, is definitely better than the stubborn, lifeless and overpaid billboard. When word-of-mouth marketing is done right, the business may not need to keep an exorbitant Ad budget; customers will share their stories (good or otherwise) across their social media and connections if they are happy with the customer service, quality of products or services, quick and hassle-free delivery. This is leveraged heavily by E-Tails and online streaming platforms where the choice of product purchase is heavily influenced by 'recommendations' for friends and family which is further influenced by user reviews of experiences online.

The business associated with E-tails also realizes that, unlike the cliché Marketing 4Ps, the real power of marketing today instead lies in 3E - Engage, Equip, and Empower. Firstly, companies learning to directly engage with customers (current and prospective) by asking them to tweet or post on Facebook to share a link with others, are some of the many ways how to target customers could be engaged. Secondly, equipping customers with a voice or a platform to share what they think and how they feel about a product or service.

From travel sites, massage to restaurants, leaving feedback online on a company's site – makes customers the King. Finally, empowering customers in different ways to express and share their opinion and immediate reaction supported by user reviews and promotions visible in their personal media activities.

1. Opportunities in the E-Tail industry

There are also significant micro-level barriers to firms, such as in the case of emerging omnichannel sales models or new modes of delivery. These challenges are nothing new for some markets but the current crisis and the new role of e-commerce for individuals and firms calls for progressive policy action. The state commerce/ small business development departments need to identify the many benefits of supporting SMEs going into the e-tailing business, and the consequent effects on the supply chain and regional job creation.

Leading e-tails at this time of history entails embracing an open leadership style where managers are more accessible to employees. Managers are increasingly tech-savvy and need to ensure proper training and development is provided to employees to keep them updated with the latest advancement in deep learning, machine learning, remote sensing, and AI to better streamline workplace productivity and faster response turnover. Most e-tails aim to be cost leaders rather than differentiators, however, the last mile delivery is still carried out by human labour (and a tiny percentage of these deliveries are by drones in some markets) and this needs continuous attention to ensure staff (largely self-employed, freelancers) are trained regularly and stays motivated. It is essential, therefore, that they are not ignored as they still represent the company's image directly since customers are ultimately asked to 'rate your delivery experience' alongside 'rate your order/item'.