Research Project 18 - 20

Title of the Project:

A Study on Amazon Consumer Perception, Information
System, Business Strategies

Submitted by:
Name of Faculty Guide: Prof.Shatabdi Das Name of the Student : Sai Krishna Katakam
Designation : Professor Roll No.: 1523
Program : PGDM
Batch : RMM

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 Institute for Technology and Management
Plot No. 25 / 26, Institutional Area,
Sector – 4, Kharghar, Navi Mumbai

CERTIFICATE FROM THE FACULTY GUIDE

This is to certify that the Project title A Study on Amazon Consumer Perception,

Information System and Business Strategies is a bonafide work carried out by Mr. SAI

KRISHNA KATAKAM Roll No. PGDM182041523, a student of PGDM program 2018 – 2020 of

the Institute for Technology & Management, Kharghar, Navi Mumbai under my guidance

and direction.

Name of Guide : Prof Shatabdi Das

Designation : Professor

Date: 24/01/19 Place: Kharghar

Section: Page Number

Cover Page 1

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 Certificate from Faculty guide 2

1. Chapter 1: Introduction 5-28

1.1. Over View of the Sector
1.2. Emerging Players
1.3 Domestic Competition & Foreign Competition
1.4. Govt. Policies / Regulation of the sector
1.5 Industry Trends
1.6. Strategic Perspective
1.7. Sectoral Growth in Last 5 Years
1.8. Other Relevant Information
1.9. Introduction to the company
1.10. Background
1.11. Vison and Value
1.12. SWOT Analysis
1.13.BCG Matrix
1.14. PESTEL Analysis
1.15. Objective of the Study
2. Chapter 2.: Literature Review 29 – 38

3. Chapter 3: Research Methodology 39

3.1. Purpose of Study
3.2. Type of Investigation
3.3. Sample Size
3.4. Tools and Techniques
4. Chapter 4: Data Analysis and Interpretation 40

5. Chapter 5: Conclusion and Recommendations 46

6. References 49

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 LIST OF FIGURES

Figure 1.1 GDP Growth

Figure 1.5.1 Internet Penetration in India

Figure 1.5.2 Annual Web Sales

Figure 1.5.3 E-Commerce Share

Figure 1.5.4 Online Retail Share

Figure 1.12.1 SWOT Analysis

Figure 1.13.1 BCG Matrix

Figure 1.14.1 PESTEL Synthesis

Chapter-1
INTRODUCTION

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The e-commerce has transformed the way business is done in India. The Indian e-commerce
market is expected to grow to US$ 200 billion by 2026 from US$ 38.5 billion as of
2017Much growth of the industry has been triggered by increasing internet and smartphone
penetration. The ongoing digital transformation in the country is expected to increase India’s
total internet user base to 829 million by 2021 from 445.96 million in2017. India’s internet
economy is expected to double from US$125 billion as of April 2017 to US$ 250 billion by
2020, majorly backed by ecommerce. India’s E-commerce revenue is expected to jump from
US$ 39 billion in 2017 to US$ 120 billion in 2020, growing at an annual rate of 51 per cent,
the highest in the world.

E-commerce industry in India witnessed 21 private equity and venture capital deals worth
US$ 2.1 billion in 2017 and 40 deals worth US$ 1,129 million in the first half of 2018. E-
commerce startups in India received US$ 786.87 million of funding in the first half of 2018.
Online retail sales in India are expected to grow by 31 per cent to touch US$ 32.70 billion in
2018, led by Amazon, Amazon India and Paytm Mall. Online retail is expected to contribute
2.9 per cent of retail market in 2018.

A young demographic profile, rising internet penetration and relative better economic
performance are the key drivers of this sector. The Government of India's policies and
regulatory frameworks such as 100 per cent foreign direct investment (FDI) in B2B e-
commerce and 100 per cent FDI under automatic route under the market place model of B2C
e-commerce are expected to further propel growth in the sectors. As of August 2018, the
government is working on the second draft of e-commerce policy, incorporating inputs from
various industry stakeholders.

1.1 OVERVIEW
 India's Internet economy is expected to grow from USD 100-130 billion (about 5 per
cent of GDP) to USD 215-265 billion (7.5 per cent) by 2020 with e-commerce and
financial services projected to lead this growth.
 E-commerce is increasingly attracting customers from Tier 2 and 3 cities, where
people have limited access to brands but have high aspirations.
 Average online retail spending in India was US$ 224 per user in 2017.
 The online retail market in India is estimated to be worth US$ 17.8 billion in terms of
gross merchandise value (GMV) as of 2017.
 Online retail sales in India are expected to grow by 31 per cent to touch US$ 32.70
billion in 2018, led by Amazon, Amazon India and Paytm Mall.

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 Figure 1.1 GDP Growth

A latest report suggests that larger disposable incomes and the convenience provided by
online shopping are the two main factors working for E-commerce in India. E-commerce has
also brought about a silent social revolution of sorts and Indians are seeing a boom in e
commerce entrepreneurship.

This has been facilitated by emergence of some really good e-commerce platforms that offer
comprehensive one stop e commerce solutions. Launching an e-commerce site using such an
advanced platform hardly takes a few hours and along with pre integrated payment gateway
and logistics solutions. Using a mobile ready e-commerce platform has also enabled the
entrepreneurs to take advantage of 0mni channel sales.

The most trending items in e-commerce verticals are lifestyle products, although we witness a
niche being created ever so often. E commerce has arrived in India and is here to stay.

1.2 EMERGING PLAYERS

 Amazon
 Amazon
 Myntra
 BigBasket
 Jabong
 Snapdeal
 Ebay
 PaytmMall
 Bookmyshow
 Yatra

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1.3 DOMESTIC COMPETITION & FOREIGN COMPETITION

TOP national players.

Amazon - Amazon the perfect example of a Startup that has grown thousand times in last 10
years. The journey of Amazon is amazing, it was started with the small eCommerce website
that sells books and presently it is the largest e-commerce website of India. Recently Amazon
has received funding of 10 billion dollars which the company will use to enhance your
technology, delivery bringing new product on the website.
 
Paytm: Paytm the third largest eCommerce company, journey of the paytm started from
mobile wallet that provide features like online recharge of mobile. 2 years back paytm has
entered in the e-Commerce industry by launching its E-Commerce platform paytm Mall.
From Paytm Mall customer has the opportunity to buy apprials, electronic products, mobiles
and tablets. Paytm was founded on Jan 1st 2010 and has become leading E-Commerce
company within 7 years. In the year 2017 paytm have raised 4.4 billion US dollar funding
from softbank. With this step softbank has become the major shareholder the Paytm and also
received seat in paytm board. 

Jabong: Jabong is pleased at the 4th position and the list of top 10 eCommerce companies of
India. Jabong was launched in the year 2012 by the rocket internet and recently e-commerce
market consolidation happened in India and jabong was takeover by Amazon. Even after the
merger of jabong and Amazon, jabong is running the website as separate entity. Jabong
theme revolves around fashion from where you can buy ethnic wear, clothing, footwear,
bags, sunglasses and makeup products.

Myntra: Myntra is another prominent e-commerce company that sells fashion related

products. It was founded in the year 2007 by Mukesh Bansal. In 2014 Amazon has acquired
Myntra to expend their business. Amazon has took this decision because maximum people
are buying fashion products online.In Present scenario, consolidation has happened and
Amazon, Jabong and mantra are working as a one unit and trying to capture market share of
growing e-commerce industry of India

Zomato: Zomato is another eCommerce company that has achieved amazing growth in last
few years. Zomato is a platform through which you can order food online, the partner
restaurant will deliver the food at your doorstep on behalf of Zomato. Initially zomato started
as a Discovery platform that only provide information about restaurants and later it enter in
the food delivery business. Recently zomato has launched gold membership in India and in
which zomato team has tie up with prominent restaurants of Delhi, Mumbai, Bangalore. If
you are Zomato gold member, then featured restaurants will provide you one meal free on the
meal you buy, means if you buy paneer Tikka from one restaurant then you can avail free
item of the same value.

MakeMyTrip: MakeMyTrip is leading e-commerce company that basically sells air tickets,

bus tickets, holiday packages, train tickets. MakeMyTrip started in the year 2000 and has
head office in Gurgaon. Company was founded by deep Kalra who was man alumina of
Indian Institute of Management. Company is listed in NASDAQ and has 1805 working in
different teams of company. Recently MakeMyTrip has acquired ibibo group to become
largest player in Indian travel Industry

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Swiggy: Swiggy which is a food Tech e-Commerce player has achieved a tremendous growth
in last 2 years. The real time tracking of the delivery of food is the major backbone of swiggy
business. Swiggy has their own delivery setup, when customer order from swiggy, then its
delivery boy pick the food from the restaurant and deliver the same to the customer. Swiggy
has been providing services in all the metro cities of India that is Delhi,Mumbai, Pune. In
recent funding Swiggy have received 100 million US dollars from Naspers and Meituan. 
 
BookMyShow: BookMyShow is placed at 10th position the list of top 10 eCommerce
companies in India. BookMyShow you can buy movie tickets, tickets of a sports event etc. It
was started the you are 1999 and has ruled the ticket booking industry from last few years.
Recently paytm has added the ticket booking facility on the platform I am giving tough
competition to book my show. With this fight both are companies are giving some discount
on online ticket booking and hence benefited the customer. Company has head office in
United States and in India their office in Mumbai.

EBay is another prominent E-Commerce company of India, basically eBay asian American
E-Commerce company that has started operation in India under The E-Commerce segment
with the domain name ebay.in

TOP international players.

AMAZON
Amazon.com, Inc., doing business as Amazon, is an American electronic
commerce and cloud computing company based in Seattle, Washington, that was founded
by Jeff Bezos on July 5, 1994.The tech giant is the largest Internet retailer in the world as
measured by revenue and market capitalization, and second largest after Alibaba Group in
terms of total sales.The amazon.com website started as an online bookstore and later
diversified to sell video downloads/streaming, software, video games, electronics, apparel,
furniture, food, toys, and jewellery. The company also produces consumer electronics—
Kindle e-readers, Fire tablets, Fire TV, and Echo—and is the world's largest provider
of cloud infrastructure services. Amazon also sells certain low-end products under its in-
house brand AmazonBasics

ALIBABA
Alibaba Group Holding Limited is a Chinese multinational conglomerate specializing in e-
commerce, retail, Internet, AI and technology. Founded in 1999, the company
provides consumer-to-consumer, business-to-consumer and business-to-business sales
services via web portals, as well as electronic payment services, shopping search
engines and cloud computing services. It owns and operates a diverse array of businesses
around the world in numerous sectors, and is named as one of the world's most admired
company by Fortune.

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WALMART
WalmartInc (formerlyWalMartStores,Inc.) is American multinational retail corporation that
operates a chain of hypermarkets, discount department stores, and grocery
stores. Headquartered in Bentonville, Arkansas, the company was founded by Sam Walton in
1962 and incorporated on October 31, 1969. It also owns and operates Sam's Club retail
warehouses. As of January 31, 2018, Walmart has 11,718 stores and clubs in 28 countries,
operating under 59 different names. The company operates under the name Walmart in the
United States and Canada, as Walmart de México y Centroamérica in Mexico and Central
America, as Asda in the United Kingdom, as the Seiyu Group in Japan, and as Best Price in
India. It has wholly owned operations in Argentina, Chile, Brazil, and Canada.
GROUPON
Groupon is an American worldwide e-commerce marketplace connecting subscribers with
local merchants by offering activities, travel, goods and services in 15 countries. Based in
Chicago, Groupon was launched in November 2008, and the first market for Groupon was
Chicago, followed soon thereafter by Boston, New York City and Toronto. By October 2010,
Groupon was available in 150 cities in North America and 100 cities in Europe, Asia and
South America, and had 35 million registered users. By the end of March 2015, Groupon
served more than 500 cities worldwide, nearly 48.1 million active customers and featured
more than 425,000 active deals globally in 48 countries

1.4 GOVERNMENT POLICIES / REGULATION OF

THE SECTOR

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In a major step towards regulation of the online industry, India is mulling a single legislation
to address all aspects of e-commerce regulation, and it is also exploring the idea of setting up
a single regulator to consider all sector-related issues, according to a draft policy document
seen by Reuters. The move comes amid growing demand in the space action against e-
commerce players, including Amazon and Amazon, for alleged violation of foreign direct
investment (FDI) policies.

Apart from FDI violations, online sellers, most notably the AIOVA  (a community of around
2,000 online sellers) had alleged that ecommerce firms are violating existing marketplace
rules of government. Acknowledging the receipt of complaints from the group, the
government had said that it had received complaints to resolve issues related to payment
settlement for online sellers.

According to the Reuters report, some of the measures suggested in the draft include local
data storage, mandating the use of state-run RuPay payments in online transactions and
enhancing the participation of micro, small and medium enterprises in online retail.

The major regulations on cards include amending thresholds so that potentially competition-
distorting M&A deals get mandatorily examined. “The federal government has indicated it
aims to remove the legal fragmentation governing the e-commerce sector, according to the
Draft National Policy Framework on e-commerce,” the Reuters report said.

The proposed regulator will also oversee issues like consumer protection and full disclosure
by e-commerce entities on the purpose and intent of their operations, a source had recently
informed the Financial Express. Recently, the $16-billion Walmart-Amazon deal came under
attack by the Confederation of All India Traders (CAIT) that represents brick-and-mortar
stores. The CAIT has threatened to step up agitations, claiming “the deal is circumventing
(FDI) laws”, besides helping Walmart “to reach out to offline trade through e-commerce
way”.

1.5 INDUSTRY TRENDS

 Internet penetration in India grew from just 4 per cent in 2007 to 34.42 per cent in
2017, registering a CAGR of 24 per cent between 2007 and 2017. In Q1 2018 overall
internet penetration in India was 38.02 per cent.

 It is the India’s fastest evolving market with annual multifaceted growth rate (CAGR)
52% to touch USD 36.7 billion by 2020. The increasing perception of smartphones
and internets are expressively contributing to the growth of e-commerce. Convenient
payment process, speedy delivery of product, high discount, customer friendly
policies and easy returns are driving more customers towards online shopping.

 Rural India, with an estimated population of 906 million as per 2011 census, has
145.83 million internet users as of March 2018. There is therefore a great opportunity
for increasing penetration in the rural areas.

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 Figure 1.5.1 Internet Penetration in India

Figure 1.5.2 Annual Web Sales

 The online retail market in India is estimated to be worth US$ 17.8 billion in terms of
gross merchandise value (GMV) as of 2017.
 Online retail sales in India are expected to grow by 31 per cent to touch US$ 32.70
billion in 2018, led by Amazon, Amazon India and Paytm Mall.
 Electronics is currently the biggest contributor to online retail sales in India with a
share of 48 per cent, followed closely by apparel at 29 per cent. By 2025, non-
electronics categories are expected to take 80 per cent share in online retail in India.
 Currently, there are 1-1.2 million transactions per day in E-commerce retailing.
 With cost of servicing tier-II and other smaller cities going down, most of e-retail’s
growth in the country is going to come from there. Overall, Online shoppers in India
are expected to reach 220 million by 2025.

Figure 1.5.3 E-commerce share

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 Figure 1.5.4 Online Retail Share

1.6 STRATEGIC PRESPECTIVE:

CHALLENGES AND OPPORTUNITIES:

Challenges:

 Poor knowledge and awareness

 Online Transactions
 Online Security
 Tax Structure
 Touch and Feel Factors
 Fear Factor
 Cash On Delivery
 Logistics and Shipment Services

Above are the few challenges facing by E-commerce sector.

Opportunities:

 With increasing emphasis on social media penetration, marketers have realized the
potential consumer base in Tier 2 and Tier 3 cities. Social media engagement leaves a
strong impact on the customer base leading to healthy conversions
 The present Indian urban landscape is characterized by mobile generation.
Availability of affordable smartphones and tablets and attractively priced internet
plans will assist in the rising base of potential online shoppers
 Government initiatives like Digital India are constantly introducing people to online
modes of commerce.
 Increasing FDI inflows, domestic investment, support from key industrial players is
helping in the growth of Ecommerce
 As the awareness of using internet is increasing, more and more people are being
drawn to E-commerce.

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Products:
Below are the list of the products that are offered by the companies in E-Commerce Sector

 Retail Goods
 Consumer Goods
 Digital Content
 Electronic Goods
 Fashion Apparels
 Groceries
 Entertainment

Above are the few products that are offered by the Companies in E-Commerce Sector

CUSTOMER:

Surfers:        
These types of customers may or may not be looking to shop, but browse various websites
just to determine if anything interests them or just to kill time. Some of these customers
browse a few products on online shops that are also available at brick-and-mortar stores, and
they may want to compare prices or brands before actually purchasing them.
These customers are potential buyers and can be converted into loyal customers, through
regular promotions on social networking websites such as Facebook or Twitter. Also, if your
website has a blog, community or forum, they can help Surfers form an opinion about your
website, product/ service and customer care. They may start visiting your store regularly to
see what’s new, and eventually find something they would like to purchase.

Researchers:
These customers are definitely looking for a specific product or service, but will compare
prices, shipping details, features, return policies and other aspects before actually making a
purchase. These are patient shoppers and are not driven by impulses. If they do not find what
they are looking for now, they are willing to wait it out and try again after a few weeks or
even months.

Besides other aspects, researchers also look for a trustworthy seller. If they have not bought
from your website yet, they will try and gather as much information about your store and
products through news and reviews. As a seller, you need to ensure you provide all the
necessary details in a consistent, easy to view format. Based on the time spent on the website,
these potential customers can also be converted through means such as live chat and
personalized emails.

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Focused Customers:

These customers are product-driven and log on to your store knowing exactly what they want
to buy. It may be that they are looking to replace a previously owned product, so they do not
spend too much time in research. These goal oriented customers are looking for a faster
interface, easy to use filters, and easily available products. These customers almost always
end up making a purchase, provided they find what they are looking for.

What you as a seller can do to close the sale is to ensure you have a speedy, yet accurate,
search tool on your website that is able to identify the said product or service in a flash. Once
the product is located, the customer should be able to go through and understand all of its
attributes clearly and identify it as the right product, and then immediately proceed to
checkout.

Sales / Discounts Driven:

Sales or Discount Driven customers love scouting for a good deal, especially if it’s not sale
season. These customers look for bargains and discount codes on their favourite products and
can be enticed into making a purchase.

A good way to get the attention of these customers is to highlight on how much they would
be saving, by listing the retail price as well as the discount you are offering. These customers
also offer the opportunity of being converted into loyal customers by being provided with
special discounts on becoming members, free shipping with a minimum amount purchase and
other such incentives. Targeted and personalized email marketing and social media marketing
can attract such users to your website. Conversions can also take place through well-trained
live chat customer service professionals, who can judge the intent of the shopper and offer the
best quote for them.

Impulsive/ One-Time Customers:

These customers can be browsers or even product driven, but will make an impulse purchase
if they find something to their liking on your webstore. They could also be recipients of a gift
card or a special discount coupon that they would like to convert. These shoppers are also
looking for convenience, so they will need to have a clear, concise description of your
products, easy, faster checkouts and no need for registration.

It is hard to determine whether they will be a returning customer, but as a seller, you will
need to woo them through excellent after-sale service, sale updates via newsletters and
special occasion discounts.

Loyal Customers:

These customers are every online seller’s dream come true, as they account for almost 80%
of all sales, although they account for only 20% of your total customer base. These customers
trust your web store, your service, your shipping policies – basically everything you have to
offer. The real challenge is to retain them, as many web stores often tend to ignore existing
customers, in trying to woo new ones

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1.7 SECTORAL GROWTH IN LAST 5 YEARS
Since 2014, the Government of India has announced various initiatives namely, Digital India,
Make in India, Start-up India, Skill India and Innovation Fund. The timely and effective
implementation of such programs will likely support the e-commerce growth in the country.
Some of the major initiatives taken by the government to promote the e-commerce sector in
India are as follows:

 Reserve Bank of India (RBI) has decided to allow "inter-operability" among Prepaid
Payment Instruments (PPIs) such as digital wallets, prepaid cash coupons and prepaid
telephone top-up cards. RBI has also instructed banks and companies to make all
know-your-customer (KYC)-compliant prepaid payment instruments (PPIs), like
mobile wallets, interoperable amongst themselves via Unified Payments Interface
(UPI). The interoperability is expected by June 2018.
 The Government of India has distributed rewards worth around Rs 153.5 crore (US$
23.8 million) to 1 million customers for embracing digital payments, under the Lucky
Grahak Yojana and Digi-Dhan Vyapar Yojana.
 The Government of India launched an e-commerce portal called TRIFED and an m-
commerce portal called ‘Tribes India’ which will enable 55,000 tribal artisans get
access to international markets.
 In order to increase the participation of foreign players in the e-commerce field, the
Indian Government hiked the limit of foreign direct investment (FDI) in the E-
commerce marketplace model for up to 100 per cent (in B2B models).

FUTURE:
The future of e-Commerce market in India is growing really very Fast.Now a days not only
the present generation but also the 90’s people are referring online shopping.

There are so many online store according to google there is at least 2 or more e-commerce
website launched in a day . All the business like B2B as well as B2C are referring to sell the
products online which is easy for them to reach out to client and understand their requirement
and also they can check the area of demands and fulfill their needs across the world which is
really necessary for the business.Buying products online is simple just need to login search
product add to cart checkout or pay on delivery with certain discounts and offers on the
particular product which attracts customers to buy e-commerce market has become
everyone’s favorite platform to buy.

 Brand and Author Identity Will Become More Important

 Marketing Automation
 More social and search ads
 Personalized Experience

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1.8 OTHER RELEVANT INFORMATION
MAJOR STRTEGIES

Expansion

E-commerce companies are gradually expanding to different cities, regions and even
countries. They are also expanding their product range to cater to a larger amount of people.
In May 2017, Uber launched UberEats, an on-demand food delivery app in India
Amazon, after getting acquired by Walmart for US$ 16 billion, is expected to launch more
offline retail stores in India to promote private labels in segments such as fashion and
electronics.
Paytm Mall, E-commerce platform of Paytm, is planning to expand its groceries segment and
is targeting a Gross Merchandise Value (GMV) of US$ 3 billion from this segment by the
end of 2018.
Amazon and Amazon have also entered the second hands good market in India which is
estimated to be around US$ 17 billion.

Ancillary services

One of the biggest advantage of E-commerce is that along with the core product or service it
can also provide numerous ancillary services without having to invest a lot.
Guaranteed one day deliveries, exclusive deals and video streaming for a subscription fee, as
in the case of Amazon Prime. India is currently the fastest growing market for Amazon
Prime. Amazon introduced its own payment gateway Payzippy and also, its own logistics and
supply chain firm Ekart.
E-commerce websites are also introducing e-Wallet services; for example - Amazon’s Pay
Balance.
Paytm has launched its bank - Paytm Payment Bank. Paytm bank is India's first bank with
zero charges on online transactions, no minimum balance requirement and free virtual debit
card

Assisted Commerce

To expand their reach, brands are tying up with assisted E-commerce organisations which
provide local merchants with a platform to place their orders.
Under this, the consumers do not place online orders on their own. Instead, the order is
placed on the merchant shops with their help and the product is either delivered to the shop or
customer’s address.
This model can become an enabler for online retailers to expand their outreach in areas where
internet penetration is low.

Subscription for Ecommerce

E-commerce companies are increasingly adopting subscription model to provide extra

benefits and tailored services to customers to suit their needs.
Amazon introduced Amazon Prime, a subscription based service for Amazon customers, in
2016. members of Amazon Prime could avail early access to selected deals, free one day

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delivery and other benefits. Amazon Prime subscribers in India stood at around 5-6 million as
of December 2016

Personalised Experience

Site visitors demand one-of-a-kind experiences that cater to their needs and interests.
Technology is available, even to smaller players, to capture individual shoppers’ interests and
preferences and generate a product selection and shopping experience led by individualised
promotions tailored to them.
Many E-commerce websites provide personalised experience to customers to cater to their
needs and interests depending upon their location, choices, products they like or buy,
websites they visit etc.
This strategy has helped companies to know customers’ demands better and serve them
accordingly.

1.9 INTRODUCTION TO THE COMPANY

Amazon.com was founded by Jeff Bezos back in 1995.The founders vision was to build a
virtual shopping place for book lovers. Amazon.com brings the world largest book store to
the door step of the people around the world. All people has to do is search and select the
desired book. It took 30 day to deliver books to the customers of 50 states and 45 countries.
Amazon.com was a huge success in nineties.Amazon.com became a platform for the retailer
and individuals in 2000.Amazon.com offers their services towards four types of
customers, consumers, sellers, enterprises and content creators.
Amazon serves customer through the popular web site www.amazon.com. Now a day
customers can access through mobile technology.Amazon.com apps are also available for the
customers.

The Amazon kindle is a series of e-readers designed and marketed by Amazon.com. Amazon
kindle devices enable users to browse, buy, download and  read e-books, newspapers,
magazines and other digital media via wireless networking to the kindle store. The hardware
platform, developed by Amazon subsidiary lab126, began as a single device and now
comprises a range of devices, including e-readers with e ink  electronic paper displays, and
android- based tablets with color lcd screens. All kindle devices integrate with the kindle
store to acquire content and as of february 2016, the store has over 4.3 million e-books
available in the us. The oneplus one launched as an Amazon exclusive in India last year, but
now the device is available for purchase on rival e-commerce store Amazon. Moto g (gen 4)
and moto g plus (gen 4) will be available exclusively on Amazon

1.10 BACKGROUND

The story of the formation of Amazon.com is often repeated and is now an urban legend. The
company was founded by Jeff Bezos, a computer science and electrical engineering graduate
from Princeton University. Bezos had moved to Seattle after resigning as the senior vice-
president at D.E.Shaw, a Wall Street investment bank. He did not know much about the
Internet. But, he came across a statistic that the Internet was growing at 2300%, which
convinced him that this was a large growth opportunity. Not knowing much more, he plunged
into the world of E-Commerce with no prior retailing experience.

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 He chose to locate the company in Seattle because it had a large pool of technical talent and
since it was close to one of the largest book wholesalers located in Roseburg, Oregon.
Clearly, he was thinking of the company as a bookseller at the beginning. Moreover, the sales
tax laws for online retailers state that one has to charge sales tax in the state in which one is
incorporated. This means that for all transactions from that state the price would be increased
by the sales tax rate leading to a competitive disadvantage. Therefore, it was logical to locate
in a small state and be uncompetitive on a smaller number of transactions rather than in a big
state such as California or New York.

The company went on-line in July 1995. The company went public in May 1997. As a
symbol of the company’s frugality, Jeff and the first team built desks out of doors and four-
by-fours. The company was started in a garage. Ironically, initial business meetings were
conducted at a local Barnes and Noble store.

Bezos’ first choice for the company name was Cadabra. He quickly dropped this name when
a lawyer he contacted mistook it for cadaver. He picked Amazon because it started with the
letter A, signified something big and it was easy to spell.

For his contribution, Jeff Bezos was picked as the 1999 Time person of the year at the age of
35 making him the fourth-youngest person of the year. Describing why it choose Bezos, Time
magazine said, “Bezos’ vision of the online retailing universe was so complete, his
Amazon.com site so elegant and appealing that it became from Day One the point of
reference for anyone who had anything to sell online”

1.11 Vision and Value

Jeff Bezos was one of the few people to understand the special nature of Internet Retailing
and E-Commerce. This is how he compares E-Tailing to traditional retailing4- Look at e-
retailing.

The key trade that we make is that we trade real estate for technology. Real estate is the key
cost of physical retailers. That's why there's the old saw: location, location, location. Real
estate gets more expensive every year, and technology gets cheaper every year. And it gets
cheaper fast.

There were really two elements to his vision

1. He wanted to build the world’s most customer-centric company
2. He wanted to establish a place where customers could buy anything.

This is how he characterizes his vision of customer-centrism-

Our goal is to be Earth's most customer-centric company. I will leave it to others to say if
we've achieved that. But why? The answer is three things: The first is that customer-centric
means figuring out what your customers want by asking them, then figuring out how to give
it to them, and then giving it to them. That's the traditional meaning of customer-centric, and
we're focused on it. The second is innovating on behalf of customers, figuring out what they
don't know they want and giving it to them. The third meaning, unique to the Internet, is the
idea of personalization: Redecorating the store for each and every individual customer. If we

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have 10.7 million customers, as we did at the end of the last quarter, then we should have
10.7 million stores.

He strived to understand what was unique about the Internet in developing a customer-centric
company-

“In the online world, businesses have the opportunity to develop very deep relationships with
customers, both through accepting preferences of customers and then observing their
purchase behavior over time, so that you can get that individualized knowledge of the
customer and use that individualized knowledge of the customer to accelerate their discovery
process. If we can do that, then the customers are going to feel a deep loyalty to us, because
we know them so well”.

The value elements Amazon.com sought to deliver are illustrated in this Bezos quote7-

"Bill Gates laid it out in a magazine interview. He said, "I buy all my books at Amazon.com
because I'm busy and it's convenient. They have a big selection, and they've been reliable."
Those are three of our four core value propositions: convenience, selection, service. The only
one he left out is price: we are the broadest discounters in the world in any product category.
But maybe price isn't so important to Bill Gates".

Some of Bezos’ critics have said that the extent of customer-centricism of the company is
about the same as any other company. In other words, Bezos has been seen as generating
hype and nothing much.

Bezos’ vision has been translated into a large customer base and loyalty rate. Amazon.com‘s
customer base has grown rapidly over the past several years. Customer accounts grew from
1.5 million in December 1997 to 24.7 million in December 20018. The percentage of repeat
customers increased from 64% in 1998 to 78% in 2000. In the fourth quarter of 2001,
Amazon spent $7 to acquire a new customer and the average customer spending was $123.

In addition to customer-centricism, Jeff Bezos wanted Amazon.com to be the place where

you could buy anything and everything online. While the company started out as the world’s
biggest bookstore, it wanted to become the world’s biggest store in the long run. The
company has made some progress along these lines by expanding into new product categories
such as cookware and tools and also providing new services such as Auctions. However, he
has conceded that this is a “multi-decade proposition”.

Books- The Entry Point

Amazon.com started out as an online bookseller. Indeed, to some, Amazon.com will always
be a bookseller. Selling books on the Internet made sense at many levels.

To Jeff Bezos, the main advantage was selection

"Books are incredibly unusual in one respect, and that is that there are more items in the book
category than there are items in any other category by far. There are more than 3 million
different titles available and active in print worldwide. When you have this huge number of
titles, a couple of things start to happen.
First of all, you can use computers to sort, search and organize. Second, you can create a
super-valuable customer proposition that can only be done online, and that is selection. There

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are lots of categories where selection is proven to be important: books, in particular, with the
book superstores, but also in home construction materials, with Home Depot, and toys with
Toys ‘R Us. Online, you can have this vast catalog of millions of titles, whereas in the
physical world, the largest physical superstores are only about 175,000 titles, and there are
only three that big".

In addition, as a product, books were-

 Easy to ship since they were not bulky.
 Low value item and hence, low risk.
 Informational products making them amenable to selling them via online storefronts
using features such as-
 Sample chapters
 Table of contents
 Editorial reviews
 Customer reviews

Moreover, Amazon.com felt that it could add maximal value given the archaic and inefficient
structure of the $23 billion American publishing industry

Brand

Amazon established a relationship with its first customers on the basis of being a bookseller.
Redefining this relationship in terms of other product categories is a non-trivial task. A
typical customer reaction can be stated as- “Many of us old customers have a hard time
thinking of Amazon as a place to buy a set of Polk home theater speakers or a set of
Calphalon cookware. For me, the Earth's Biggest Bookstore moniker has occupied a spot in
my mind since it began appearing in those tiny bottom-of-page-one advertisements in the
New York Times”.

New Products Lead To New Challenges

As mentioned earlier, books provided certain unique advantages to Amazon. Moving into
new product areas provided new challenges-
 Bulky products- Consider cookware items such as pans, blenders and grills. These
items are hard to stock, expensive to ship and return.
 Non-informational products- Books are informational products that lend themselves
to features such as reviews and sample chapters. Except Music and Video, all other
products Amazon sells are non-informational products that do not have these
advantages. As a result, the advantage of selling them online may be limited.

In the consumer electronics business, for example, Amazon.com has not been able to buy
directly from leading manufacturers such as Sony, Panasonic and Pioneer. As a result,
Amazon is forced to buy products from distributors leaving it with a hefty competitive
disadvantage that may be hard to overcome. In addition, selling at prices lower than what the
manufacturer wanted strained relationships with such giants as JVC

There are many reasons for this. In the electronics business, manufacturers have a stringent
set of requirements on how a retailer will display and sell their products. Only retailers who

20
pass this are pronounced authorized dealers. Authorized dealers get lower prices, money for
cooperative advertising and the right to sell warranties. Large manufacturers did not want to
jeopardize existing relationships with retailers by selling through Amazon- whom they feared
will sell at lower prices. At the same time, some manufacturers wanted to set up their own
online stores. For example, Sony sells electronics through sonystyle.com and deals with the
online counterparts of established players such as Best Buy and Circuit City.

Moreover, some manufacturers felt that Amazon did not have a long-enough history in the
business and were turned off by its string of losses. Amazon may have appeared as too
unconventional for them to feel comfortable- e.g. Amazon’s reliance on e-mail as the primary
customer service tool did not please some manufacturers.

The vital part of this is that electronics represent the fastest growing part of Amazon’s
business while the book, music and video portions have leveled off. As one analyst from
Prudential put it- “It has been our contention that if the most profitable part of Amazon's
business is not growing, and the most unprofitable part of its business is growing rapidly, the
company will begin to experience economic deterioration”.

In the final analysis, the company has showed an inability to grasp the intricacies of some of
the businesses it entered into. Interestingly, BN.com did not diversify beyond books, music
and videos.

Competition

Amazon.com was the de facto first-mover in the book market. But, this was not the case in
most other product categories. For example, E-Tailers such as CDNow were already in place
before Amazon.com appeared in the music category. As a result, Amazon exposed itself to
new levels of competition creating new vulnerabilities. In many cases, established players in
the brick and mortar space had also established a presence in the online arena. Moreover, as
brick-and-mortar stores such as JC Penney and Circuit City expanded to the online arena,
Amazon was faced with escalating levels of competition.

Cost of Complexity

Amazon.com’s business is not driven by technology costs alone. Rather, its costs are
significantly dependent on handling of physical goods and inventory. As the magnitude and
variety of good increase, the cost of real estate, labor and inventory also increase. This
increased cost dragged the company down to some degree.

The Associates Program

Amazon pioneered the concept of the associates program- what is now also referred to as
affiliate programs. The basic idea here was-
 Small sites would act as traffic generators for the company.
 These sites would post content on their site with a link to Amazon.
 Each site would receive a commission of 15% for any referred purchase and 5% for
any other purchase made by that consumer.
 The company would benefit not only by traffic generation, but also by branding.
Since the small sites would carry an Amazon logo, it would enhance the online
presence of the company.

21
  The company paid for the customer traffic after the fact as opposed to traditional
advertising where companies pay ahead of time without knowing the level of traffic
that will take place.

The company also obtained a patent for its affiliate program, which was somewhat
controversial. The program itself has been quite successful with the company reporting
signing up at least 800,000 associates by September 2002. At this point, the vast majority of
E-tailers have an associate program. But, once again since Amazon was the first to do this
they were able to sign up a lot of small sites.

Partnerships

The basic idea with the partnering approach was to let another firm bear the risk of selling
products that had unique problems and yet share in the potential upside from such a venture.
Specifically, Amazon acquired ownership stakes in many companies including:
Drugstore.com, HomeGrocer.com, Pets.com, Ashford.com, Gear.com, Audible.com,
Greenlight.com, Living.com and Della.com. According to various estimates, Amazon spent at
least $160 million in those investments. In some cases, the investment was sizeable- Amazon
owned a 46% stake in Drugstore.com and 50% in Pets.com.

Jeff Bezos’ comments on the deal with Drugstore.com are particularly relevant

“Take Drugstore.com as an example. That is a very complicated business, because you have
to be regulated in all 50 states in a very careful way. You have two payers because you pay
the $5 copay, and the insurance company takes care of the rest. That leads to a different set of
technology systems to make that work. So, it becomes clear very quickly that because they're
up and running and they have that customer experience nailed, it would be much better for
our customers to offer them that experience than to put our energy and time into trying to
replicate it”.

However, these investments have proved to be disastrous. In most cases, the fees paid to
Amazon by these partners were in their stock, which lost most of its value

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1.12 AMAZON SWOT ANALYSIS

STRENGTH WEAKNESSES
1.Customer base and 1. Seasonality of the
Loyalty Business

2.Global Presence 2. Low Profit Margins

3.Large Range of 3.Product Failures

Products

4.Strong Financials

OPPORTUNITIES THREATS
1.Diversification 1.Loss of profitability
due to low profit
2.Increasing focus on margin
own brand products
2.Threats to online
3.Opening Physical security
Stores
3.Competition from
local online
companies

Figure 1.12.1 Swot Analysis

1.13 BCG MATRIX

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 Figure 1.13.1 BCG Matrix
1.14 PESTEL

1. PESTEL - Synthesis

The PESTEL Analysis allows to analyze and anticipate the opportunities and threats of a
company’s macro-environment (all external variables with an impact on the business). It
distinguishes six categories of macro-environmental influences.

 Brainstorming & information searches in the media

 Grouping factors to define trends
 Define whether these factors groups are opportunities or threats

Figure 1.14.1 PESTEL Synthesis

PESTEL - Analysis
Political

Amazon's activities and development could be impacted by more or less aggressive

protectionist policies. The United States is not a symbol of trade openness, other economic
states follow suit and show their determination and claim their rank of great economic
countries. The meetings of Donald Trump (President of the USA) with Xi Jinping (General
Secretary of the Chinese Communist Party) and Vladimir Poutine (President of the Russian
Federation) as well as the concerns of NATO indicate that the game of global alliances could
change the balance through economic pressures and influence the rights and duties of large
international groups like Amazon. It is specially true as substitutions to Amazon remain
easily conceivable with finally few constraints (as long as the hypermarkets and malls still
exist). Sometimes politic community can indirectly push towards e-commerce. For example,

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France has a specific government plan named “plan très haut débit” in which the French
government wants to accelerate the 4G and optical fiber network deployment. This kind of
political decision facilitates the access to the Internet, so to all services based on the Internet
(e-business included).

Economical

Since the economic crisis of the beginning of the 1980-90s (stock market crash of October
1987), the world population consumes less and is back to an almost systematic search for the
best deal. People want more comfort, always for the lowest price. The competition game
pulls prices down (appearance of the "low cost" concept), and unsurprisingly, after the
decrease of computers and Internet accesses prices emerged systems of optimized supply
chain sales such as Amazon (overpressure of intermediaries, removal of physical stores in the
city). This movement is still ongoing (e.g., the recent democratization of smartphones and 4G
packages) and is maintained by the disappearance of the middle class. Jeff Bezos is in some
ways an "Edward Leclerc" (founder of the first French cooperative society and hypermarket
chain) at worldwide network level. So we can think that Amazon has in front of it a very
favorable economy to continue to grow up.

Social

As previously pointed out, the Internet brings in more and more users because:

• Subscriptions are becoming more affordable

• People (assisted by governments and competition between Internet Service Providers) have
a better network coverage

• The development of the goods and people movements at a global level means that we need
global networks to monitor them all the time and everywhere. All the countries around the
world are opening up to the world, making large, formerly emerging countries new economic
powers whose population is eager for new technologies, information and new services (e.g.,
China, India).

Our modern societies (and our governments) tend to restore gender equality. With an
everincreasing life cost, couples see that both people have to work. Therefore, both man and
woman are less and less at home. This society evolution means that household chores such as
errands become a waste of time that one would rather spend on leisure if possible. The e-
commerce and the "drive-in solutions" are a response to this time optimization need. Beyond
the search for "low cost", e-business has changed our societies and is now becoming
unavoidable and inseparable from our modern consumption patterns. The consumer changes
his habits according to the constraints he experiences in his environment, meaning that the
consumer interest in e-commerce is not foolproof. The consumer behavior will evolve further
in the coming years depending on the opportunities (e.g., technological developments, new
services) that will minimize the impact of his daily constraints. One can also imagine that if

25
the concept of a universal salary were to come into being (tests are ongoing in Finland) and
became global to the world, the constraints currently applied to the consumer would be
turned upside-down and that he could then get some time again to hang out in physical stores
and would turn away from e-commerce.

Technology

“All modern societies are characterized by a shortage of time: the more modern a society is,
the less time it has. It is not the oil that we will miss one day, but rather the time” says the
German sociologist and philosopher Hartmut Rosa. The more we innovate to do the things
quicker (the more we save time), the less we have time per task (so the less we enjoy life, so
the less we live). According to Harmut ROSA, “acceleration is not the fault of the technique.
One can imagine a world where, thanks to technical progress, it would be possible to release
a surplus of time if the rate of growth were not so strong. Technical progress broadens our
horizon and our possibilities. It changes the perception of opportunities and obstacles and
also changes social expectations, both what we expect from others than what they expect
from us. Technology allows the acceleration of the life beat, but does not impose it. It gives
us the means to dispose of it freely”. But it has yet to be implemented. Hundreds of
innovations grew in the recent decades and even more will in the upcoming years.
Innovations fuel innovation and today the devices to browse the Internet are diverse:
computers, tablets, hybrid computers, mobile phones, watches, etc. Channels are also more
plentiful: ADSL, CPL, optical fiber, 3G, 4G, etc. Overall, all these tools are more efficient
and more effective. As a result, more data can be processed and potentially more users can be
attracted. In addition, artificial intelligence (e.g., Alexa) and “AWS machine learning
services” (making predictions more reliable) make it easier and more commonplace to buy.

“The dream of modernity is that technology allows us to acquire temporal wealth. The idea
behind it is that technical acceleration allows us to do more things per unit of time” wrote
Hartmut Rosa. Around 1900, an average house had 400 different objects. Today, it has about
10,000. This quantitative increase leads to have less time to take care of each object. We go
faster with our computers, but we spend less time on it because we go from a mean to another
all the time (due to the diversity of solutions): computers, tablets, connected watches,
connected home, etc. Transportation is the same: switching from the “2CV” to the “DS7”
allowed us to double our speed. But at the same time, we quadrupled distances when it comes
to work, leisure and getting objects always further from home. This technological
springboard has still bright years in front of him because multiple leaps are already
announced (cf. https://buzzly.fr) as for example:

• Unlimited data storage for all

• The development of all kinds of sensors and connected clothes

• The connected reading glasses

• The generalization of the digital identity

• Phones that will be more powerful than a microcomputer

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• Mobile phones implanted in the body

• The trivialization of 3D printing for basic objects but also cars fully produced in 3D printing

• The generalization of the means of sharing for transport.

And we can’t imagine or anticipate the impact of nanotechnologies on innovations, business

and the society. It’s easy to see how these advances will continue to support Amazon's
frenetic growth, unless our environmental concerns and the absolute need to preserve our
planet (for our children’s future) disrupt our consumption habits.

Environmental

This technical innovation acceleration, accompanied by an ever more targeted marketing

favoring social competition, boosts the purchases. There is a real frenzy pushing to renew
faster and faster our favorite products. Product lifetimes are shorter (sometimes voluntarily;
see recent (in 2017) legal proceedings against Apple and Epson) and the products are often
no longer "economically repairable" (the repair cost is often higher than the OEM production
cost). This unbridled consumption draws on the resources of our planet and weakens its
balance. It generates, despite the efforts of the politicians, a lot of pollution during the
manufacture, the distribution and the waste treatment. This pollution is at the origin of global
warming that we know today and causes more and more natural disasters. CSR initiatives are
becoming more and more frequent because, fortunately, more and more people and
companies feel concerned and responsible for the future of our children. Even if all countries
(e.g., the USA during the G7) do not deploy the same energy, globally, governments vote
laws encouraging companies to reduce their ecological impact. These measures have a high
cost and non-compliance with these laws potentially has a high power of nuisance on the
corporate image of the offending company. American and international groups like Amazon
have every interest in accelerating and anticipating their ecological expectations because their
image is global and then we can only be convinced that US laws are bound to strengthen on
the subject someday. The consumer also wants to participate in this mission. For example,
brands of plastic garments such as Patagonia are growing, despite higher prices than the
competition. Emails also sport more and more the "Please consider the environment before
printing" mention at their bottom. It is perhaps also for this reason that the consumer is
moving more and more towards digital solutions such as e-commerce, considering that it is
probably more environmentally friendly to use a carrier that will deliver several products to
several people rather than having everyone to take his own vehicle to buy his object at the
nearest mall.

Legal

Laws evolve to try to preserve our planet in the long term but they are also evolve to deal
with globalization. Since the 19th century with the corporate tax ceiling put in place by the
state of New Jersey (USA), the major international groups are looking for the best
organization of their "holding" allowing the best possible tax optimization (this is called
aggressive optimization). Noting the millions (and sometimes the billions) of taxes that elude
governments, they adapt regularly through lawsuits and new laws of tax laws more binding
for companies. At a minimum, international groups must provision in the event that they are
the subject of legal proceedings. They cannot ignore that social protection (even if it is not
perfect) has made much progress (as for example in the USA) this last century. Even without

27
mentioning universal arrangements (in terms of wages and social protection) as early as 2019,
we can assume that states will have to be very imaginative to finance its social strategy in the
upcoming decades. The companies’ tax rates could then be revised upwards with a decrease
of the net income after tax.

1.15 OBJECTIVES OF THE STUDY

1)To understand and estimate the consumer perception and factors affecting their behaviour
for choosing e-commerce sites.
2)To study the different information systems used by Amazon in their activities
3)To study the different business strategies used by Amazon in their Online Activities.

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 Chapter-2
LITERATURE REVIEW

IAMAI (Internet and Mobile Association of India) a non profitable company to enhance and
expand the online and mobile services in India and IMRB (Internet Market Research Bureau)
International a leading market research and survey Company. They carry survey in
conjunction pertaining to Mobile, Internet and E-Commerce. Their surveys “Consumer E-
commerce Market in India 2006/07”, “Online Activities & Ecommerce from Cybercafés
2005”, “ICUBE 2007” and “ICUBE 2008” discusses various Triggers and Barriers for
Ecommerce market in India, these survey also suggest that maximum 10% of users actually
carried out transaction and that too for non-tangible products while in case of tangible
products it falls to merely 6%, while biggest contributor being online travel industry.

IOAI (Internet and Online Association of India) survey “Ecommerce Security 2005” is an
executive summary providing an insight about Internet Access & Usage details, Security of
Online Transactions, Areas of Concern while shopping online and also factors that would
increase the faith in Online Transaction.

KPMG Forensic, India surveys “India Fraud Survey Report 2006” and “India Fraud Survey
Report 2008” gives an insight that e-fraud even though are rare but dents the Trust and
Confidence of consumer and drives him away from internet.

PEW Internet & American Life Project survey “Online Shopping” in 2008 carried out this
survey in America and found that 65% internet users have purchased online and also find
various problems faced by others that prevented them from carrying online transaction. To
our surprise biggest reason being lack of Trust.

Daniel (1999) described e-banking as the most recent delivery channel offered by the retail
banks in many developing countries. The purpose of the study was to analyze the present
provision of electronic services of major retail banking institutions in the UK. The researcher
through a structured questionnaire found that 25 percentage of the banks in the UK were
those previously providing e-banking services, 50 percentage of the banks were testing or
developing such services while 25 percentage of them were not providing any e-banking
services. Electronic channels, Personal Computers, digital televisions and all these provide
superior accessibility and services at low price. To make services more flexible, customers
should be provided utmost choice and expediency. Constraint and restrictions within
organization to activate the services and its market share or potency were viewed as
important to make a decision and manage the e-banking services.

Sathye (1999) studied the factors affecting the acceptance of internet banking by Australian
customers. The researcher stated that internet and other virtual based banking had
significantly reduced the cost when compared to traditional ways of banking. So, the banks
should encourage customers to use internet banking. The 44 author was of the stern opinion

29
that for adoption of internet banking, it was necessary that consumers should be made aware
of the services offered and also about the availability of such a merchandise and explain how
it adds value to the other produce. The investigation of the study showed that protection
concerns and lack of awareness were the main reasons for not adopting internet banking by
Australian bank customers. On the other hand, internet should be measured as a part of
overall customers’ service and delivery strategy. These measures could help in quick
migration of customers to internet based banking resulting in substantial saving of operating
costs of banks.

Talwar (1999) investigated the information technology revolution in banking sector which
had not only afforded improved service to the customer, but also abridged the operational
expenses. The researcher brought out that computerization of banks, introduction of RTGS
System, Electronic Clearing Service had ensured better resource management, regular
efficiency and considerably reduced inter-branch settlement entries. However fright of
hacking, tampering of data, secrecy protection were some issues which create threats on
usage of e-banking. The challenges in banking sector were various but still the formation of
National Payment Council by RBI and development of the integrated payment and settlement
system was a footstep in this direction to remove the difficulties coming in the way of using
e-banking.

Wenninger (2000) studied the role of e-commerce in banks which had created new structure
of competition and forced banks to make choices about the services that are offered by them,
the size of their branch network and degree of their support to interbank payments network.
The main purpose of the research is understand the changes that happened with the
introduction of electronic commerce. Development of electronic banking services such as
electronic billing, internet portals, electronic cheques, ATM, etc. had afforded additional
services to banking customers. The researcher also highlighted upon the strategic and
operational risks which take place in banking sector. These problems could be reduced with a
cost efficient electronic process

Kamesam (2001) investigated the changes that happened in the Indian banking industry
which insisted on technological improvements and profitability in banks. Technology has
helped in centralized information storage with decentralized 45 dispensation which has
helped in reduction of expenses and Non-Performing Assets. Further, materialization of
services such as Electronic Data Interchange, smart cards, RTGS, e-commerce; all resulted in
increasing the point of profitability and productivity of banking services. The researcher
concluded that for the purpose of reducing crimes, security audit should be conducted which
could be helpful in improving customer service, increase efficiency and thus increased
efficiency and profitability.

Unninthan (2001) studied the impact of e-commerce based banking adaptation on Indian and
Australian banking sectors with the help of qualitative and quantitative analysis. The
researcher found that Australia had a strong platform for electronic banking growth where
many people are willing to use e-banking services mostly in urban areas. May be this could
be due to young working population with discretionary income. However, in India due to
comparatively weak infrastructure, low computer penetration and consumer disinclination in
rural sector. But the professionals are compelling the government and administration in the
country to sustain and develop new initiatives at an earlier speed of internet banking.

30
However, in together, ebanking was a successful strategic tool for banks to stay on profitable
in a unpredictable and competitive market place

Yakhlef (2001) studied the services delivered through internet. The researcher investigated
the internet based services of banks at Sweden. The purpose of the study was to find out
whether internet based banking services were compliment or competitive to non-internet
based bank branches. The results of the survey indicated that although internet based banking
provided more secured, handy and professional services to the customers, yet as far as
individual contact and direct information was concerned, manual banking system was more
preferable than internet. Internet has reduced number of bank branches, added value to the
customers, fascinated new customers and developed more personalized services but at the
same time it also requires vast investment, infrastructure and tech-trained employees of bank.
So, internet was not a replacement rather compliment of manual banking system.

Alu et al. (2002) in their study were of the opinion that there was a rapid change in the
banking industry due to IT which was conducted in Nigeria. 260 respondents were chosen for
the study and it was found at 86% of the respondents were of the opinion that adoption of IT
helped banks. 83.1% agreed that IT had a positive impact on the services offered by the banks
and only 66.5% disagreed with the above. The study also revealed that IT had a great impact
on the productivity of the banks, banking transactions, cashiers work, banks aid and
sponsorship, service delivery of the banks and on customer services. The use of IT highly
affected the growth of banking industry because customers because customers could
withdraw money from any of the bank branches. Most banks were using customer system
with LAN networks while some used WANs and wireless telephones. The major drawback of
internet banking in Nigeria was that sufficient power supply was not available for e-banking.

Gurau (2002) studied the e-banking system in USA and Europe and found that there were
more than 1500 websites of the banks all over the world. While most banks in the USA had
their own websites, in Europe the banking websites were from countries like Spain, UK,
Italy, France and Germany. The author was of the opinion that by 2005 the various
distribution channels adopted by banks would include 10% ebanking, 65% multi-channel,
10% mobile banking and only 15% through traditional bank branches as compared to only
15% direct banking and 85% branch banking. The study concluded that harmonization of
several interacting elements of both economic and financial system would result in successful
e-banking services which were considered to be a complex process

Durkin and Howcroft (2003) found in their study that banker-customer relationship could be
improved through phone, mobile and internet banking. The adoption of latest technology by
banks had made them profitable and competitive and internet had a vital role in it. In the
study perceptions of bankers and customers towards internet banking was examined. The
study revealed that with an increase in remote bank delivery channels, relationship

31
management was of great importance. The adoption of a combination of traditional and new
delivery channels would improve the productivity and profitability of banks.

Joseph and Stone (2003), stated that technologies like ATM, e-banking, telephone banking
which were customer friendly were used by banks to reduce the cost of services provided and
build a strong market share and increase customer loyalty. The study also revealed that
technology was vital for any banking service. The most important element for adoption of e-
banking by banking customers was the location, easy accessibility and security of ATM
machines. An emphasis on speedy and efficient customer services was required by the banks.
In order to deliver the latest and adequate services to the customers the bank managers have
to conduct regular marketing studies to know the extent to which technological services have
advanced.

Sharma and mittal (2009) in their study “prospects of e-commerce in India”, mentions thatIndia
is showing tremendous growth in the e-commerce. Undoubtedly, with the middle class of288
million people, online shopping shows unlimited potential in India. The real estate costs
aretouching the sky. Today e-commerce has become an integral part of our daily life. There
arewebsites providing any number of goods and services. The e-commerce portals provide
goodsand services in a variety of categories. To name a few: apparel and accessories for men
andwomen, health and beauty products, books and magazines, computers and peripherals,
vehicles,software, consumer electronics, household appliances, jewelry, audio, video,
entertainment,goods, gift articles, real estate and services. Ashish gupta, senior managing
director of helionventure partners and one of the first backers of Amazon
as an angel investor: “Amazon has beenabsorbing companies that have some potential
(letsbuy, myntra). In that process, some of the betswill go wrong, for sure. But that is par for
the course. The company (Amazon) is consciouslytaking bets that allow it to either grow or
eliminate competition that reduces marketing spend and
improves economics.”
 
Miyazaki and fernandez (2001)substantiated that the prior experience was found to affect
theintention and behavior significantly and in a variety of ways. The results of this study
imply thatthe technology acceptance model should be applied to electronic commerce
research withcaution. In order to develop a successful and profitable web shop, understanding
customers'needs is essential. It has to be ensured that products are as cheap in a web shop as
purchasedfrom traditional channels. According to sharma and mittal (2009) in their study
“prospects of e-commerce in India”, mentions that India is showing tremendous growth in the
e-commerce.

Undoubtedly, with the middle class of 288 million people, online shopping shows unlimited
potential in India. The real estate costs are touching the sky. Today e-commerce has become
anintegral part of our daily life. There are websites providing any number of goods and
services.

The e-commerce portals provide goods and services in a variety of categories. To name a
few:apparel and accessories for men and women, health and beauty products, books and
magazines,computers and peripherals, vehicles, software, consumer electronics, household
appliances, jewelry, audio, video, entertainment, goods, gift articles, real estate and services.
Samadi and ali(2010) compared the perceived risk level between internet and store shopping,
and revisit therelationships among past positive experience, perceived risk level, and future
purchase intentionwithin the internet shopping environment.

32
Abhijit mitra. (2013), “e-commerce in India-a review”,international journal of
marketing,financial services & management research. Concluded that the e-commerce has
broken thegeographical limitations and it is a revolution-commerce will improve
tremendously in next fiveyears in India.

D.k.gangeshwar. (2013),” e-commerce or internet marketing: a business review from

Indian context”, international journal of u- and e- service, science and technology. Concluded
that the e-commerce has a very bright future in India although security, privacy and
dependency on technology are some of the drawbacks of e-commerce but still there is a
bright future to e-commerce.

Martin dodge. (1999),”finding the source of Amazon.com: examining the hype of the
earth’s biggest book store”, center for advanced spatial analysis. Concluded that
Amazon.com has beenone of the most promising e-commerce companies and has grown
rapidly by providing qualityservice.

Vijay govindarajan is one of the world’s leading experts on strategy and

innovation.Govindarajan, coxe distinguished professor at dartmouth college’s tuck school of
business and marvin bower fellow at harvard business school, is also a best-selling author.
The biggestopportunity in India is e-commerce. Why? Three important factors will drive this:
1) mobile phone penetration; 2) a young demographic that is used to ordering things using the
mobile platform; 3) growth of consumerism with more Indians with higher disposable
income. We willsee many new innovative business models in the e-commerce space in the
next five years. Nodoubt we will see new innovative high-growth companie — Indian
equivalents of alibaba.

Technological changes are working to advantage of consumers and retailers both.

Technology enables consumers to make more informed decisions, receive better beneficial
offers, and get fast efficient service. It helps retailers in reaching right target consumers.
Inman and Nikolova (2017) draw attention to how technologies can benefit both consumers
and businesses, which ultimately enhance the sales and profitability. They highlight mobile
apps, scan-and-go technologies, self-check-outs, QueVision, and smart shelf technology. For
example, self-check-out technology helps shoppers scan, bag, and pay for products without
waiting at billing counters.

Customers thus gain control; retailers enjoy reduced labour costs from the fewer number of
cashiers required. QueVision gives retailers insights into how many billing counters are
needed and the expected waiting times, using data from infrared sensors over store doors and
billing counters, predictive analytics, and real-time data feeds from point-of-sale systems.
Using this technology, grocery retailers have been able to reduced wait times from more than
4 min to less than 30 s. Thus, QueVision improves the customer experience, through shorter
wait times, and leads to customer delight.

The introduction of smart phones is a revolution for shoppers. From mobile apps, to geo-
fenced targeted offers, to constant access to the online shops, this has led to new customer

33
expectations and in turn new challenges for retailers. Scan-and-go technologies allow
customers to use their smart-phones to scan items as they shop, then use the retailer’s app to
pay. Amazon Go from online retailer Amazon is an example of how things will shape up in
future, seamless buying experience without any hassle courtesy the new technology.
Technology is changing the consumer shopping experience for better. It will set new
expectations of what shopping can be in the times ahead.

Mobile technology also allows retailers to offer relevant offers that reflect locational
information (e.g., time of day, weather, location), using location-based applications (e.g.,
Google maps) (Grewal et al. 2016). For example, feel-good products can be promoted
effectively when the weather is bad (Rosman 2013). Similarly, mobile promotions can take
advantage of indoor positioning information gathered using iBeacons in order to offer
location relevant offers.

Personalizing technologies to make them user specific clearly has benefits for both
consumers and retailers. However, a personalization–privacy paradox warrants consideration.
Personalizing information for customers can both enhance and diminish consumer
engagement with the retailer, because consumers may recognize how much data and
information retailers have about them and begin worry about their privacy. Retailers therefore
need to be careful to use their knowledge about customers in a way that balances out this
personalization–privacy paradox (Aguirre et al. 2015).

New technology will affect the retailers as well as shoppers. Retailers through their
applications will target deal seeking customers. Shoppers will be able to seek more
information whenever they wish to. Role of retail stores will evolve in coming days, Stores
will act as showrooms and also click and collect centres in the new retail scenario.

Retail Store stock displays and consumer offers communication Shoppers are loaded with
offers from retail chains. The task for retailers is to design offers that induce purchase. Along
with these offers the display of merchandise in store becomes very important. Getting it
correct can help good sales.

Kahn (2017) highlights the need for manufacturers and retailers to account for a “visual
salience bias” and make assortments easier for consumers to process. She recommends
several key strategies for doing so, such as reducing the size of the assortment presented,
reducing information intensity, making sure, each item relates to the assortment context, and
carefully thinking through the spatial positioning of merchandise. Stocking products such that
they are in line of sight as well as accessible for picking up for shopping basket are very
important in a retail store.

Further evidence on the role of spatial orientation of merchandise presentation is provided by

Nordfält et al. (2014). They examine the importance of the vertical, horizontal, and diagonal
orientation of merchandise. Their results demonstrate the superiority of a vertical
organization of merchandise (e.g., vertical arrays of multiple beverages in a cold case result
in more purchases than the same beverages in a horizontal display). Vertical displays, versus
a diagonal display, resulted in a more than 90% increase in product pick-ups by customers.
These little insights can be very useful for stocking products.

In addition to their organization on the shelf, on the display, or on the website, product
packages are an important aspect of the visual scenery. Kahn (2017) highlights the

34
importance of various visual components, such as where an image appears on a product
package and the shape of that package. Investigations of packaging typically take a shape or
design perspective, but Krishna, Cian, and Aydinoglu (2017) propose extending this view to
determine how the different layers of a package might affect consumer shopping engagement.
Package types can have significant influences on how consumers consciously and
subconsciously engage with products. Inducing a purchase when a product is picked up to
seek information and then further make a decision whether to buy or not. Packaging also
might affect consumers’ perceptions and consumption decisions. Visual and spatial
components of the packaging, in conjunction with other sensory dimensions (Spence et al.
2014), thus establish customers’ expectations and their consumption experience.

As part of their visual merchandising efforts, retailers must consider locational effects for
their merchandise and their sales promotions, both online and in stores. Recent research
demonstrates that the location of the sale price in displays and communications online can
have considerable impacts. For example, Biswas et al. (2013) reveal that the sale price is
more effective when it is to the right of a higher advertised reference price rather than placed
to the left. Suri et al. (2017) similarly find that when the price is portrayed to the right of the
package, it is more effective for increasing purchase intentions and purchases of lower
involvement products (e.g. cold drinks, packed juices etc.) than when it is on the left.

Further in store displays, stocking products at right places, assisting the buyers when he
wishes to try or get more information are key elements in this area. 3. Retail Customer
Engagement To get more footfalls to sell more is the purpose of all retail stores. Customers
keep coming back if they are given value for their money. Creating a superior customer
experience can differentiate companies (Grewal, Levy, and Kumar 2009; Verhoef et al.
2009). This experience is created by experience at a retail point as well as by outside factors
that are influence of others, purpose of shopping etc.

Retail firms do acknowledge the need of understanding and managing customer experience
and engagement levels (Accenture 2015; Marketing Science Institute 2016), as do academics
literature (e.g., Grewal, Levy, and Kumar 2009; Lemon and Vehoef 2016; Puccinelli et al.
2009; Verhoef et al. 2009 ok

In todays connected world greater social media engagement can help retailers enhance
customer experience. Roggeveen and Grewal (2016) suggest that five effects drive consumers
to engage with social media: connected, network, information, dynamic, and timeliness
effects. The connected effect is based on the need that people have to connect with others;
social media has changed the format of these relationships.

The network effect refers to an ability to relate to and broadcast information to others. The
Retailers use all possible channels today to do it, online as well as the online ones.

Another driver of social media engagement is convenience or timeliness. Consumers can get
information whenever they wish to, due to the ever connected mobile devices and specific
mobile applications. These applications engage customer by giving information, offers and
helping in engage with a brand at his convenience. These information and dynamic effect
factors also enhance consumers’ desire to engage with their extended social network.
Understanding how these various spokes turn the wheel of social media engagement is
another way that retailers can enhance their engagement with consumers. The all-pervasive

35
social media is a good tool to keep customers informed about the brand and also the way
customers can reach the brand at their convenience.

Today social media has become so important for brands to stay connected with customers.
Similarly, retailers must consider how to best engage customers online or in stores using
visual cues contained within digital displays (Roggeveen, Nordfält, and Grewal 2016) or
dynamic messages (Roggeveen et al. 2015). Dynamic messages (e.g., videos), as opposed to
static ones (e.g., pictures), help mentally transport customers into the experience, which
creates a stronger emotional connection, which in turn reduces customers’ price sensitivity
and enhances their consumption of more hedonic options (Roggeveen et al. 2015). The
visibility element becomes very important as merchandise that is visible and catchy gets
picked up in the shopping basket, this helps get top of mind awareness of the prospect
customer and will drive consumption.
A few years ago, omni channel shopping behaviour was something no one knew about.
Recently, the popularity of the concept ‘omni channel shopping’ has increased, but little
research is conducted (yet) on omni channel shopping behaviour. However, research is
conducted about multi channel and cross channel shopping behaviour (Konuş et al., 2008;
Neslin et al., 2006; Verhoef, Neslin, Vroomen, 2007). Multi channel shopping is shopping on
different channels, for instance in the brick and mortar shop and online on a website. Within
multi channel shopping every channel has its own strategy. In cross channel shopping there is
one strategy for all channels and consumers use different channels. Omni channel shopping is
seen as an advanced form of cross channel shopping. Consumers use several channels during
the buying process, both online and offline: channels such as websites, webshops, social
media, brick and mortar shops, applications on mobile devices, catalogues, and many more.
In addition, consumers switch easily and continuously between these channels and they
experience all channels together as one complete channel. For instance, when consumers are
going to shop for groceries at Albert Heijn they can use the ‘Appie’ application on their
smartphone; this application can show consumers’ shopping list and a personalized shopping
route. Consumers experience this application and the shop as one complete channel. This
seamless shopping experience is called omni channel shopping.
Consumers consider the pros and cons of each channel before using them. The choice
behaviour of consumers regarding channels depends on characteristics of consumers,
products, shopping channels and the retailer (Zijlmans, 2010). Based on their wants and
needs at a moment, the consumer decides which channel to use to search for information or
buy products. For consumers, online shopping has, among others, the advantage that it saves
both time and effort. In addition, information can be easy found and compared online
(Kollmann, Kuckertz & Kayser, 2012).

Recent, new media have emerged, resulting in a closer connection between retailer and
consumer. In the Netherlands, social media have integrated in daily life; almost eighty
percent of the Dutch uses social media (Newcom research, 2013). Retailers’ use of social
media has also increased. Research of EtailTrends has shown that social media use by retail
formulas increased extremely last year, the number of fans and followers increased sevenfold
in one year. Social media can be defined as media for social interaction, using highly
accessible and scalable communication techniques (Markova and Petkovska-Mirčevska
(2013)). Social media is, among others, accessible by personal computer, tablet and
smartphone. In the Netherlands, the most used social media channel is Facebook.Tablets and
smartphones are very popular. In June 2012, twenty-three percent of the Dutch population
had a tablet and forty-eight percent had a smartphone. Smartphones are most popular among
18-34 years old consumers (71% has a smartphone) and 13-17 years old consumers (61% has

36
a smartphone). Tablet owners are generally a bit older, which is presumably due to the price
of tablets. Tablets are most used in the age groups between 35 and 49 years old (27% has a
tablet), between 50 and 64 years old (24%) and between 18 and 34 years old (22%) (GfK,
2013).

THE CUSTOMER JOURNEY

In recent years, there has been an increasing amount of literature on online shopping
behaviour (Javadi, Dolatabadi, Nourbakhsh, Poursaeedi & Asadollahi, 2012; Verhoef et al.,
2007; Kim & Eastin, 2011; Jepsen, 2007). The popularity of online shopping is still
increasing because of the convenience of the internet, the possibilities to compare price and
quality, and the increased amount of information. Online shopping behaviour has changed
consumers’ decision making process. Consumers’ decision making process in this research is
called ‘the customer journey’. This is the journey a customer follows to purchase products
and services, starting from need recognition to the end of the purchase and even after sales
service (Engel, Blackwell & Miniard, 1995). Consumers can experience the customer journey
both psychologically and physically. Consumers use of online channels during their customer
journey is increased, but online channels are not the only Holy Grail. Not all goods or
services are suitable for online sales. Goods which need to be experienced personally are
more suited for brick and mortar shops. Consumers’ online purchasing is different from brick
and mortar shopping (Hogg & Penz, 2008). Consumers like brick and mortar shops because
of the importance of touch, feel, and service in their shopping experience. On the other hand,
online shopping gives consumers an anywhere anytime convenience.

For retailers it is important to offer customers the right mix of information sources during the
different phases in the customer journey. With insight in the customer journey and omni-
channel shopping behaviour of consumers, retailers can better serve their customers.
Consequently, they can beat their competition and gain extra market share.

THE CHALLENGE OF RETAIL

At the moment, most Dutch retailers experience tough times. They suffer from the economic
uncertainty in the Netherlands. Consumers have less confidence in the economy; as a result
they are more conscious about their purchases. In February 2013, consumer confidence
dropped to a historic low, at -44 points (Figure 1) (CBS, 2013). In addition to the dropped
consumer confidence, the retail market is saturated because of the continuous expansion in
the last decades. This increased the competition between retailers (NRW, 2011). Besides,
turnovers of offline retailers decreased because consumers buy products more often online.
For retailers, a way to survive is by combining the best of both worlds. The Dutch Shopping
Center Council (NRW) calls this ‘The new way of shopping’; retailers want to assemble the
best of internet shops and brick and mortar shops (Hoofdbedrijfschap Detailhandel, 2011).
According to the new way of shopping, internet shopping is not a threat but a chance for

37
retailers. Therefore, retailers should offer consumers quality, service and experience offline
as well as online. This new way of shopping can be conducted, among others, in shopping
centers. The inner-city of Veenendaal has already implemented this concept; consumers can
shop with their smartphone and pay online for parking (Jansen, 2012). Several shopping
centers in the Netherlands have a Facebook page, and some have created an interactive
shopping center app to guide customers to and through the shopping centers, which is another
example of ‘the new way of shopping’ (Houwelingen, 2013). In July 2013, IKEA launched a
new app, which allows users to try 90 products at home. This app makes it possible to create
an augmented reality image of the furnishings in your own home (IKEA, 2013).

SEGMENTATION ON CHANNELS

Previously consumers came automatically to the shops, but those days are over. Nowadays,
consumers need to be attracted to shops. Hence, information about consumers is needed to
attract new consumers, and to increase involvement and loyalty. Eventually, this should result
in more profit for the retailer. A method to study consumers and their buying behaviour is
consumer segmentation (Gilboa, 2009). Consumer segmentation is the process of dividing a
heterogeneous market into groups of customers which have nearly the same characteristics,
wishes, needs, buying habits or reactions on marketing activities. Consumer segmentation
assumes that consumers exhibit heterogeneity in product preferences and buying habits
(Dibb, 1998).

Through segmentation, retailers can determine the most interesting customer groups to focus
on. Current studies on consumer segmentation, do not consider omni channel shopping
behaviour and the customer journey. While insight in omni channel shopping behaviour
during the customer journey can help retailers and investors in retail real estate by developing
a strategy to beat the competition.

Multichannel retailing was broadly defined by Stone et al. (2002) as a distribution strategy to
serve customers using more than one selling channel or medium such as the Internet,
television, and retail outlets and refined by Neslin, Grewal, Leghorn, Shankar, Teerling,
Thomas, and Verhoef (2016) as multichannel customer management as the design,
deployment, coordination, and evaluation of channels to enhance customer value through
effective customer acquisition, retention, and development.

Neslin and Shankar (2009) conducted a research on the emerging issues and challenges faced
by a firm in multi-channel customer management. This paper described a model customer-
management based framework for guiding a firm's multi-channel decisions and used this
framework to identify and review the key issues. This framework identified the steps
managers must take in developing and implementing a multichannel strategy. Carroll and
Guzmán (2015) used Accenture's Nonstop-Customer Experience Model to help the service
providers' understanding of customer behavior. Panigrahi (2013) reviewed the available
literature on multi-channel retailing and channel choice behavior of consumers and developed
a research agenda on multi-channel retailing. The purchase transaction (ordering, payment,
and fulfillment) stages and differences in cross-channel ordering and payment policies were
analyzed by Chatterjee (2006) to determine the consequences for purchase outcomes. This
paper discussed the managerial implications for pricing consistency, customer segmentation,
and retail market structure. The paper depicted that retailer satisfaction, unplanned

38
purchasing, and sizes of purchase orders were higher for cross-channel retailers, and the
impact of simultaneous (pre - payment) and separable (no pre- payment) cross-channel
ordering and payment policies showed that separable policies lead to greater satisfaction,
unplanned purchases, and purchase order sizes. The author assumed that the cross-channel
retailers maintain consistency in prices online and in their physical stores.

Wikstrom (2005), in his paper, proposed that the precondition of new channel is vital not
only for the sake of knowledge per se, but also to enhance the ability of organizations and
consumers to exploit the efficiency gains from the e-channel in the service production. Using
two sets of different theories namely, theory of innovation adoption and theories of shopping,
he analyzed the consumer adoption of the e-channel. The paper also described that when
consumers are offered both the channels, they chose the optimal alternative solution based
upon the situation.

Chapter-3
RESEARCH METHODOLOGY

3.1 Purpose of the Study

Research is basically a term used for a systematic search for getting relevant answers on a
taken topic. Methodology may be understood as all those methods and techniques that are
used for conducting a particular research. It includes the methods of data collection, statistical
tool for analysing the data etc. In my research both primary and secondary data has been used
in order to reach to the conclusion. Primary data will be collected from100 customers by
using a personal survey method. Secondary data equally is collected from various articles and
research papers.

3.2 Type of investigation

The study will be done by using descriptive research design. The comparative study will be
done on the Consumer Perception on Amazon by using a structured questionnaire to measure
the effectiveness of Amazon. It will help in understanding the perception of consumers. A
few open-ended questions are also put in the questionnaire to get the overall view of
customers perception towards the E-commerce Sector

3.3 Sample Size

For my study I have taken a sample size of 100 customers who used ether Amazon site or
other E-commerce sites

3.4 Tools and Techniques

In research are statistical method of collection, analysis, interpretation, presentation and
organization of data. Statistical provides numerous tools and techniques to analyse the data
and interpret the results of the analysis

39
 CHAPTER 4
DATA ANALYSIS AND INTERPRETATION

 From the 110 responses which I have received I have received 54.5% of males and
45.5% of females

40
 The age group of the responses which I have received are 76% of the people are from
20-30 years of age group and followed by 10% of 30-40 years of age group.
 From this I can observe is most of the people who use online shopping portal are
between 20-30 years of age group

 For this question I have received 94% of the people shop online which means it can
be observed that people are using online services and shop online as the ubiquity of
Internet is everywhere.
 It also shows that people are changing the way of shopping from traditional to digital
shopping

41
 The reason behind asking this question is as we are seeing many frauds are happening
in online space so I would like to know is people are comfortable shopping online are
not and the results are moderate as follows
 43% are Extremely comfortable
 40% are Quite comfortable
 It shows people are really comfortable in shopping online

 As we all know major players in online shopping space in India are Flipkart and
Amazon as my project is on Amazon, I have asked the people how often they shop on
Amazon.com
 Result shows people are not completely using amazon for shopping out of 100% only
34% people shop regularly in amazon.com other are not regular shoppers but they do
shop online occasionally

42
 The average spending in Amazon.com is 56% of people spend between ₹1000 to
₹5000 as the age group of the people varies between 20-30 most of the people under
this age group are students, teenagers so the spending power varies.
 Results shows people are ready to spend large amount in online space as I have
received 10% of people are ready to spend more than ₹10000 in amazon.
 These results also show that people have trust in this online space

 If someone is using buying something from amazon their should be some like about
the brand
 As this question states “what do you like most about Amazon.com?”
 Majority of the people are liking amazon because of convenience and cheaper price
 In the present busy life most of the people are looking for easy way of things as these
online shopping platforms makes life easier as we can shop online by sitting at home
or while travelling so this makes people to buy the products from Amazon.com

43
 As we all know that amazon has started the business by selling books online
 But I want to know what people are usually purchasing from amazon
 Results shows that most of the people are purchasing “Electronics”, “Clothing &
Fashion” from amazon
 It shows that people buy these products as they have wide range of products and
because of its price range and convenience

 User interface for any online platform is important because an easy UI helps the
people to shop online.
 As coming to amazon user interface most of the people are satisfied with Amazon’s
UI because of its simple and self-explanatory website and mobile application
 For any online business UI is one of the important keys because it helps user to shop
online conveniently

44
 As these online portals collect the personal information like “E-mail, Mobile number,
Address etc”
 It may happen some people are not comfortable in providing this information.
 But when the survey was conducted the results are shocking like most of the people
are comfortable and they believe that the information collected is confidential.
 It shows how people are trusting Amazon

 While purchasing anything from amazon it gives different options for the mode of
payment.
 User can pay online or can opt for cash on delivery
 As amazon collects the payment information and most of the people are quite
comfortable and confident about the payment information which is collected is
secured properly

45
  Here I have asked people to rate different parameters like “Price, Brands, Style,
Uniqueness, Quality, Advertising”
 This helps to know the people like about amazon and the usp of amazon

CHAPTER 5
CONCLUSION AND RECOMMENDATIONS

FINDINGS

 There is not much difference in gender for using online shopping.

 Students and salaried persons are most frequent users of Amazon.
 Frequency of purchase for electronics, books and music, apparels and accessories are
more in Amazon.
 Word of mouth was more influential in promotion as many people were made
aware by their friends and family when customers recommend this website to them.
 Highly discounted products got out of stock quickly, since customers purchased it as
on as they could when they see high discount on good featured product.
 The services provided by Amazon are good and even more scope of development is
there for increasing the customer strength.
 Digital marketing techniques like search engine marketing, links providing other
website and advertisement also functioned well for promotion of this website.

46
 Fast delivery is one of best service Amazon is providing.
 Different payment options available in Amazon made customers more satisfied and
comfort for paying while purchasing product.
 Customers feeling more secured when purchasing through Amazon because of
different policies and services they have.
 In comparison with competitors, Amazon is charging free shipping for the purchase
of300 plus rupees, while others free ship the service without any barrier.
 Out of stock is the main issue faced by Amazon.
 Most of customers have good experience with Amazon while purchasing products.
 Most of them are satisfied with the services of Amazon and so that they succeed in
retaining the customers.
 Advertising is an important way to have the brand and products familiar to consumers
Convenience and time saving are two important factors that customer looking for
while purchasing through online.

RECOMMENDATIONS:
 Amazon has successfully placed itself into the prospects mind making it the India‘s
largest online store with huge range of products. But it still needs to work on their
core competence that is books and stationery items.
 Delivery services can be improved mainly in rural areas by selecting appropriate
courier service which has services in customer area for dispatching an item.
 Can make free delivery to all priced products.
 Can include more coupon codes and gift vouchers for increasing the traffic of the
customers.
 Out of stock items can made available as soon as possible and intimate the needed
customers.
 Should look for International/ Overseas markets or Neighbouring Countries.

47
  Critical mass of Internet users–Internet users in India is increasing at increasing rate,
so Amazon can target more & more cities i.e not only tier 1 & 2 but also tier 3 &
4cities, which will help generate stronger customer base & more revenues.
 Should clearing focus on the Growing Online Apparel business & it can diversify into
apparel category either organically or inorganically by acquiring other portals.
 User Experience: Portal should continuously aim to work to improve the user
experience by adding more & more innovative features in the website like virtually
shopping basket, virtual trial rooms. In this competitive world to differentiate via user
experience, the ultimate winner will be the Indian online consumer.
 Should comprehensively invest into E-CRM & online reputation management.
 Logistics & Supply Chain: can continuously aim to reduce the delivery time cycle.
 Price will still be a factor as amazon being a huge company will use its economies of
scale to remove their competitors from the market; therefore, they need to be more
competitive on that aspect

CONCLUSION:
The thorough study is based on the consumer behaviour analysis which serves a great idea
regarding consumer perception when they go for online shopping. In order to satisfy
themselves consumer perceive many things before buying products and they will be satisfied
if the company meet their expectation. The Overall Brand Value of Amazon is good, but it is
facing some tough competition from its global competitors like Ebay and Amazon. Talking
about domestic market i.e India, it is the most superior E-business portal which is
aggressively expanding & planting its roots deep into the Indian market & at the same time
shifting the mind-set of the people from going &shopping from physical store to online
stores, which is magnificent!.Be very focused on consumers and build amazing experiences
for the customers.

48
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7.E-Commerce or Internet Marketing: A Business Review from Indian

Context”,International Journal of u- and e- Service, Science and Technology by
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10. “Prospects of e-commerce in India” by Sharma and Mittal (2009)

THANK YOU

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