Non-Store Retailing

Introduction

Nonstore retailing is a form of retailing in which sales are made to consumers without using physical stores. The non-store retailers are known by medium they use to communicate with their customers, such as direct marketing, direct selling and vending machines or e-tailing. Non store retailing is patronised to time conscious consumers and consumers who can't easily go to stores, or compulsive buyers. Most non-store retailers offer consumers the convenience of buying 24 hours a day seven days a week and delivery at location and time of their choice. Nonstore sales are now growing at a higher rate than sales in retail stores. Non-store retailing now accounts for more than 15% of all consumer purchases, and it may account for over 1/3 of all sales by the end of the century. The high growth rate is primarily due to the growth of electronic retailing. The growth of catalogue retail sales and sales in other nonstore retailing formats such as TV home shopping, direct selling, and vending machines are slower.

A Classification Method for Retail Institutions

Electronic Retailing

Electronic retailing (also called e-tailing and Internet retailing) is a retail format in which the retailer and customer communicate which each other through an interactive electronic network. After an electronic dialogue between the retailer and customer, the customer can order merchandise directly through the interactive network or by telephone. The merchandise is then delivered to the customer's address.

The World Wide Web can serve one or more of these roles for a retailer:

* Project a retail presence.

* Generate sales as the major source of revenue for an online retailer or as a complementary source of revenue for a store-based retailer.

* Enhance the retailer's image.

* Reach geographically dispersed consumers including foreign ones.

* Provide information to consumers about the products carried, store locations, usage information, answers to common questions, customer loyalty programmes and so on.

* Promote new products and fully explain and demonstrate their features.

* Furnish customer service in the form of E-mail, "hot links", and other communications.

* Be more personal with consumers by letting them point and click on topics they choose.

* Conduct a retail business in a cost efficient manner.

* Obtain customer feedback.

* Give special offers and send coupons to web customers.

* Describe employment opportunities.

* Present information to potential investors, potential franchisees and the media.

In India Non-Store retailing represented by direct selling and etailing is estimated at Rs 1,100 crores. Only 19 percent of all retailers have an eretailing initiative. The number of retailers with plans to e-tail within one year and those with no plans are almost equal. Significantly, 10 percent of the retailers have discontinued their e-retail initiatives. The main reasons for retailers to stay away from e-tailing is predominantly non-viability of business and resource constraints. It is estimated that 5 percent or more of retail sales of goods and services such as apparel, banking, books, computer hardware and software, consumer electronics, gifts, greeting cards, insurance, music, newspapers/magazines, sporting goods, toys, travel and videos will be made online. In the case of products where it is difficult to provide 'touch and feel' information electronically, such as clothing, perfumes, flowers and food electronic retailers may not be successful. Branding may help overcome many of the uncertainties in purchasing merchandise without touching and feeling it. For example, if customers purchase a size 30-inch waist / 32-inch inseam pair of jeans, they knows they will fit when bought from an electronic retailer.

In some products and services, such as travelling or hotels, electronic retailers might

even be able to provide superior information compared to store retailers. The critical issue related to selling successfully for electronic retailers is whether they can provide

enough information prior to the purchase and make sure the customers will be satisfied with the merchandise once they get it. There are many buying situations in which electronic retailers can provide sufficient information, even though the merchandise has important 'touch and feel' attributes.

A Comparison of E-tailing and Other Formats

MODEL COMPARISON FOR GROCERY

Hypermarket

Supermarket

Kirana

Online

Call-in

BENEFITS TO THE

RETAILER

Breakeven volumes high medium low medium medium

Scalability high high low high medium

Up front investment high medium low medium medium

GM based on volumes high high low medium medium

End customer experience medium high low medium medium

BENEFITS TO

CUSTOMERS

Pricing low high high high High

Services low high low high High

Atmosphere medium high low medium medium

Convenience low medium high high High

Range high medium low high Low

End customer experience medium high low medium medium

Amazon.com is a good example of a business that is totally Internet-driven. You can buy