Oline Retail Models

 Business-to-business (B2B)
B2B model comprises all the form of transaction done between businesses, such as whole
seller distributor retailer etc. there is no involvement of end user in this model.
B2B transactions generally takes place in material procurement in manufacturing
industries in which companies purchase raw material from ancillary industries.
B2B transactions can be easily seen in Automobile Manufacturing Sector, as well as
waste management housekeeping, and industrial cleanup companies.

Value Proposition: MailChimp is the prominent email service provider. It maps the
business aspirations and then shows how a collaboration with another business could be
profitable in several aspects. Noticing the business tagline in above image how they
speak in the second person “you” to show the conviction of their effective
communication

 B2C (Business to Consumer)

B2C works on the simple retail model, in which a company trades to customers, but
online rather than in a physical store. In this type of model, the target is generally
consumer, individual or households. A customer visits to a particular website catering the
need and adds items in the cart and after reviewing the cart it pays money online or opt
for Cash on delivery facility. Examples Include: Staples, Wal-Mart etc.

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 Value Proposition

 Excellent advertising needed to attract clients

 Effective hardware / software investments.

 Value addition or good customer care.

 B2G (Business to Government) B2G E-commerce are the businesses involved in

selling their goods and services to the government agencies with the typical process of
online tender, bidding and negotiations. A major difference as compared to B2B and B2C
is that in the B2G model, usually companies approaches to the government agencies with
their capabilities to take contract for a particular requirement.

For example, Government has initiated one E-commerce portal GeM for the online
biding and tender processes. They are now including more functionalities day by day to
ease the process and handling complaints and dispute.

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  Customer-to-Customer (C2C)

As the name suggests, in this model, a third party company provides a marketplace for customers
to sell goods and services to another customer online. These third party companies earn revenues
from the commission fees charged by customers who want to list their goods on the website.
Currently, the tier 2 and 3 cities are doing better than the tier 1 cities as they have most of the
manufacturing hubs, making it easier for resellers to tie-up with suppliers and offer more product
options

Value Proposition: The buyers enjoy low price products and services as the need for middlemen
is eliminated. It’s a straightforward procedure to incorporate posting with subtleties of a product.

Some of the C2C e-commerce platforms are:

 Kraftly – Marketplace for unique and handcrafted products

 Glowroad
 OLX
 Quickr

 Consumer-to-Business (C2B)

C2B model is the reversed version of a usual marketplace, where a customer sells products and
services to businesses. It is a model where consumers create value and businesses consume that
value. Under this model, cosumers demand a price for their offering (product/ service) that fills a
existing gap in a business.

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Value Proposition: Accessibility of internet has given immense power to consumers as they
have now started to realize the power they possess and look forward to leverage that power into
profits. This model also enables businesses to acquire best of the talents available in the market,
and incorporate them into their businesses.

Some of the best C2B business models are:

 Google Adsense – online advertising

 Jobster.com – Job hiring services platform
 Shutterstock – Stock photos, vectors, flash animations
 Survey Monkey – Online surveys
 Amazon Influencer Programme – Affiliation programmes

 Private Label

Also known as OEM (Original Equipment Manufacturer), a private label product is one which
the retailer sells under its own brand name. Under this model, goods are manufactured by a third
party company but sold under the retailer’s own brand. According to the Private Label

Manufacturers Association (PLMA), "Private-label market share has reached nearly 25% of unit
sales in the U.S. and is expanding faster than the national brands."
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Value Proposition: A private brand gives a distinct differentiation to the retailer; giving them
full control over design, pricing, merchandise assortment, stocking, and distribution. Retailers
have been witnessing an upward trend in the business of private label in India, in both online as
well as offline. Private labels give a cost advantage to the retailers, hence giving them an edge
over competitors.

Some of the examples for private label are:

 Amazon Basics, Presto, Solimo by Amazon

 MarQ, Perfect Homes, Billion by Flipkart
 Koryo by Big Bazaar
 Reliance Select, Reliance Honey, Reliance Tea by Reliance Fresh
 Fresho, bb Royal by Big Basket

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  White Label

White Labels and Private labels are often used interchangeably but they are not exactly the same.
Under white label, products are manufactured by one company but sold under the brand name of
some other company, usually the one having a good brand name. This model allows the reseller
to customize the product in terms of their brand, logo and identity. On the other hand, the
manufacturer can save costs on the product’s marketing.

Value Proposition: White label model enables respective companies to focus on their core
competencies; Reseller gets to indulge more in the marketing and creativity aspects and
manufacturer gets to optimize its operations. Apart from products, services can also be white
labeled.

Some
examples of white label companies are:

 Vendasta, Socialbakers – Social Media Management Platforms

 LevelUp – Mobile applications for restaurants
 HubShout’s – SEO and SEM Management Software
 Hubspot – Email marketing software

 Dropshipping

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Dropshipping is a retail fulfillment model where a retailer doesn’t need to maintain a stock for
the products he/she wants to sell. When an order is placed by a customer, the retailer purchases it
from a third party vendor and in this model, the vendor even ships it directly to the customer on
retailer’s behalf.

Value Proposition: Dropshipping model eliminates the setup and overheads cost which
otherwise had to be incurred by retailers in traditional businesses. It also provides flexibility of
location and huge variety of products
to the retailer. Risk level is also
reduced as no inventory is to be
maintained by the retailer.

Some of the drop shipping companies are:

 Baapstore
 Trade India – B2B Business model
 Oberlo

 Subscription
Subscription is the most common and convenient model used by Ecommerce companies
creating a Win-Win Situation Scenario. They are providing premium services at a very
low cost and taking the fees in advance to maintain the customer retention ratio.
According to a survey by McKinsey & Company, 46% of customers already pay for an

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 online streaming service and 15% have subscribed to an e-commerce service within one
year of the survey.
For Example
OTT websites like Netflix and Spotify have created their business successful by
initiating the subscription model with just minimal charges. Now they are including the
infotainment content to increase the customer base.
Value Proposition: The value of subscription business is providing products or services
to customers at a reasonable recurring price.

 Freemium

Under a freemium model, a business provides you the services at a very low cost or no price
to maintain the relationship with the customer and gain customer loyalty for future business
processes. The freemium model generally works with Internet Bases Services with less
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 customer acquisition costs, but high lifetime value. After a certain time period it allow the
basic access to every user but some special features are provided to premium users.
An example of a company that
uses the freemium business model is Cisco Webex the firm that allows you to make video or
voice calls over the Internet. Up to a certain limit. After that user have to pay a certain
amount to continue services.

Value Proposition: Thoughtfully design the value of the free product in relation to the premium
product and make both your free and your premium services desirable. Attract new customers
with your free product but keep in mind what ratio between free and premium users is necessary
in order to finance your business model.

Future of Online Retail in India

The introduction of Online Retail or E-commerce has changed the way of business done in India.
The implementation of new and enhanced technology also drives the rise in the sales of online
retailing. A significant part of the development is due to increase in India’s total internet base
and the smartphones.The continuous advanced change in the nation is required to build India's
complete Internet client base to 829 million by 2021 from 636.73 million in FY19.

Propelled by rising smartphone penetration, launch of 4G network and increasing consumer

wealth, the Indian E-commerce market is expected to grow to US$ 200 billion by 2026 from
US$ 38.5 billion in 2017. Online retail sales in India is expected to grow 31 per cent to touch
US$ 32.70 billion in 2018, led by Flipkart, Amazon India and Paytm Mall.

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 Source: https://www.ibef.org/industry/ecommerce/infographic

This shift in the buying pattern of consumers moving from offline to online retail stores open up
the numerous opportunities in the new market. Also, the advancement in technology helps in
changing the shopping pattern of consumers. It is predicted that in the next 5-7 years the
shopping style of consumers will be totally different from what it is now. So, lets get into the
new future of the online retailing market.

Future of Online Retailing

1. Use of AR/VR Technology enhances user experience:

The introduction of Augmented Reality (AR) and the Virtual Reality (VR) tools will proved
to be a game changer when it comes to online retailing. It enables the customers to visualize
the items that they are keen on, irrespective of whether it is related to clothing product or
furniture.Customers would now be able to perceive how they would look while wearing a
specific thing or how pleasant their home would look with a specific paint shading, all before
hitting the "Purchase Now" button. This enables online customers to conquer the obstacle of
not having the option to see the item firsthand, bringing examination shopping to an unheard
of level.

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 Source: https://www.simform.com/future-ecommerce-trends-you-need-to-know/

The advantage of using this technology will be:

 Accomplish more than pictures and videos to advance beyond competitors
 It allows the customers to try the product before they purchase
 Convey a more vivid customer experience
 Increase in the value of the product
 Helps in increasing the brand popularity

The integration of this advance technology is not far. Even some of the brands or
organization has started using AR and VR in their retailing. Some examples are:

(i) Fashion Mirror

Source: https://www.youtube.com/watch?v=PzMMyz3VWC0

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(ii) IKEA

Source: https://www.simform.com/future-ecommerce-trends-you-need-to-know/

2. Use of Artificial Intelligence (AI) to boost up the sales:

Artificial will be a key element in the future of online retailing. Artificial Intelligence has
entered into every field and online retailing is not the exception of it. AI helps in enhancing
new tools such as voice search, use of chatbots, and the social media which ultimately helps
the retailer to boost up the sales.

Source: https://www.simform.com/future-ecommerce-trends-you-need-to-know/

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According to a research by BusinessWire in year 2018, they have estimated that the Global
retail spending over the AI technology will be $7.3 billion per annum by the end of year 2022
from $2 billion in 2018.

These AI instruments extend from computerized showcasing stages that are prepared to
create convenient offers, to chatbots that react to client inquiries in a flash. Different zones
where AI will be useful for retailers incorporate AI-advanced estimating and limiting, just as
request anticipating.
The use of AI in coming future will be stronger as retailers put resources into improving their
areas, for example, client assistance where AI can be valuable to comprehend the responses
of customers to the item or administration bought. This will assume a major job in explaining
how retailers can improve client experience.
Advantages of using AI:

 It will help in reducing the cost and improving the efficiency

 Helps in predicting the sales and creating smarter strategies for the same
 It suits to all sizes of business
 Personalization for the customers will be improved

3. Rise in Voice Commerce

Voice shopping is a non-visual experience, which infers that clients need to pick their
things by giving a verbal portrayal of what they are scanning for. This limits the degree

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 of examining for a thing before truly picking it

Source: https://www.oberlo.com/blog/ecommerce-trends

Buying items by using a voice command are generally less costly items, and incorporate
classes such as food items, or electronics accessories. The enthusiasm for using up the
voice as shopping implies that business should observe and give the consumers the
comfort that they are looking for while purchasing the items

4. Use of Chatbots to improve Shopping Experiences

The customers want to have more smart communication with the shopping platforms. At
the core of personalization and AI abilities is the sprightly chatbot who can serve the job
of the physical brick and mortar store and salesman. Chatbots allows the stores to speak
with numerous customers while giving them the sentiment of individual consideration
and insightful proposals dependent on their reactions. A developing number of customers
really like to speak with bots and other advanced self-service devices.

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 Source: https://www.simform.com/future-ecommerce-trends-you-need-to-know/#section4

5. More Payment Methods

Source: https://www.simform.com/future-ecommerce-trends-you-need-to-know/#section4

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 The payment system will be completely different in the upcoming future. Today the
customer mainly using 3 types of payment system:
 Cash
 Credit/Debit Card
 UPI

In the near future, the payment system will get more advanced and new payment methods
will going to be a new element. The introduction of NFC, cryptocurrencies and Wave
payments will become a new tool for easy and fast transactions.

The new payments systems will be beneficial in following ways:

 It will reduce cart abandonment

 More payments methodologies will improve the overall customer experiences.

6. Personalization is the key in Future

Personalization in the online retail experience will play a major role in keeping up the
customers satisfied. Online retails will start to move on with this trend and invest in
personalization to make the customer experience better.This could incorporate the
personalization of messages that go out by means of email, or by giving the correct data
to the intrigued customer gathering. By offering customized client interchanges, giving
significant limits, and connecting with customers through, for example, video content,
will help convey a superior shopping encounter and reinforce the bond with
thecustomers.

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 Source: https://www.oberlo.com/blog/ecommerce-trends

7. Way of Product Delivery will be totally different

Today, the delivery of product through online retail is manual. The delivery boy will be
assigned from the online platform to deliver the package to the address. Also, it will take
on an average 3-4 working days for delivery.
But with increase of internet penetration and the IoT devices, the deliveries in the near
future will be totally different. The online retail in future will use Drones and Robotsto
deliver the package.

Source: https://www.martechadvisor.com/articles/ecommerce/three-future-delivery-trends-we-are-likely-to-
see-in-ecommerce/

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 The use of robots and drones in delivering the services helps the online retail in following
ways:

 Faster Delivery: Same day delivery is possible

 Reduction in delivering of wrong parcels
 Easy and exact tracking of product is possible
 Helps in increasing the overall sales for the business

8. Social Media shopping

More and more people have started purchasing through social media platforms, the reason for
this increase in purchase from social media platforms is its increased capability to show and
sell products. People now are able to conveniently shop from their preferred social media
platform.

Instagram, Facebook, YouTube and Twitter are some well known social media platform that
have come up with buy button and have enhanced their selling features. For instance,
Instagram has come up with what is called ‘Shoppable post’ which allows for product tags in
post and stories.

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 Source:https://marketingweek.imgix.net/content/uploads/2018/03/19164326/instagram-
shopping.png?auto=compress,format,&crop=faces,entropy,edges&fit=crop&q=60&w=750&h=450

It is believed that this shopping from social media is in a nascent stage and in near future can
completely change how shopping is done.

9. Interactive product visualization

One of the questions that always comes in mind while shopping online is – Is the product
would be same as what I want?

And in this lies future trend in online shopping where retailers and business are working on
interaction of customer with the product. This means that customer would be able to choose
and customize product according to their need before purchasing them online and this can be
a great opportunity for online retailing in future.

Converse shoe company has come up with this kind of feature where customer can choose
and customize their shoes prior to purchase and customize according to their need like

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choosing color, pattern, logo, design etc. Customer would be able to design exact product
what they want prior to their purchase.

Source:https://www.converse.com/

10.Progressive Web Apps (PWAs)

Mobile shopping has been in the top trend in the past few years and progressive Web Apps
(PWAs) is next evolution of the Mobile shopping. PWAs is the amalgamation of both app
and website and provide a faster and fluid way of shopping.

It can increase the loading time 10x faster than website and can help in reduction in the
marketing of the App. It can help in access the website in offline mode with the help of
feature like local device caching. As speed, functionality and navigability are becoming
important to customer businesses are moving to adapt this PWAs to meet customer
requirement.

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 Even SMEs can use this technology for going online as it does not requires large scale
infrastructure and as a result it can help in getting onboard various small business.

Following benefits of PWAs are observed:

Lighter and more accessible website

Increased Engagement

Reaching emerging markets

Source:https://appstronauts.co/blog/3-examples-of-successful-pwas-that-will-inspire-you/

11.Omni Channel Retail commerce

Omni Channel retailing is going to increase in a drastic way in this era of online retailing one of
the most important benefit that Omni channel retailing provide to customer is the seamless
experience while purchasing whether purchasing from Mobile, Desktop or Brick and mortar
store. Omni Channel has complete integration in the backend as against multi-channel retailing.

There is various benefit which Omni Channel retailing can provide not only to retailers but also
to customer and this can help to create win-win situation for both.

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 Source:https://holisollogistics.com/wp-content/uploads/2019/04/Omni-channel_blog_2.jpg

Future of Online Retail is clear

Ecommerce is the future of retailing; with continuously increasing internet users this way of
commerce is going to increase with great pace and will change the world how shopping is done.

So faster the adoption of Ecommerce more beneficial to the business.

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References

 https://www.simform.com/future-ecommerce-trends-you-need-to-know/#section4
 https://www.oberlo.com/blog/ecommerce-trends
 https://www.bigcommerce.com/blog/ecommerce-trends/#14-ecommerce-trends-leading-the-way
 https://www.martechadvisor.com/articles/ecommerce/three-future-delivery-trends-we-are-likely-
to-see-in-ecommerce/
 https://beeketing.com/blog/future-ecommerce-2019/
 https://ecommerce-platforms.com/articles/5-future-ecommerce-trends-of-2019
 https://www.ecommerce-nation.com/omni-channel-retail-future-ecommerce/
 https://holisollogistics.com/omni-channel-retail/

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