Making E-commerce Easy

The Nielson Company recently came out with its research report which showed how users use their mobile devices. With there being such a dog fight about attracting customers online, I think its time that the Indian Retailers start using mobile Commerce as another medium to engage the customer.

The landscape of Supply Chain in E-tailing is drastically changing for the better. Here is a look at some of the improvements taking place at the leading online retailers in India.

Large distribution centers: Improves order fulfilment with higher inventory levels that are directly under your control compared to a 3^rd party.

Improved technologies: Deeper integrations with supplier inventory reduces the chances of received orders not getting fulfilled because of stock unavailability.

Better tools and systems: Better scanners, conveyer belts, automated packaging systems, automated labelling systems have decreased the time taken at multiple points of procuring and packaging.

Smarter Analytics: Predictive analysis is being used increasingly to anticipate customer order patterns and stock accordingly.

Production Panning: Increasingly, Ecommerce companies, who are more aggregators than manufacturers, are planning their sales and promotions and going directly to the manufacturers with a set of orders and an delivery schedule based on demand. This backward integration has not only cut out the middlemen, but also given better controls to the Ecommerce companies.

Infrastructure-as-a-Service: The TATAs own a company called Drive India, which basically provides large scale infrastructure to any company that requires it. I believe this IaaS model will grow in the Ecommerce industry.

Better talent: As the Indian Ecommerce market matures and customer orders increase and the investments pour in, better talent is getting attracted to the sector. And with the influx of better talent, the supply chain built around the Ecommerce trade is constantly improving in quality.

Was at Coonoor (a gorgeous-sleepy hill station town in the Nilgiris) over the weekend, and was amazed at how the entire town, and increasingly the entire region, is saying no to plastic.

They have the same retail chains who dole out plastic bags across India, providing cloth / paper bags at the checkout counters. Incredible. Amazing what a little firm initiative from the local government can do.

Makes me wonder when the same focus is going to come into the world of Ecommerce. Today some of the leading online retailers are still dumping the customer with excessive non-sustainable packaging. Its time all of us in the industry looked into this and did something about it.

I’m starting today by trying to find vendors who supply sustainable packaging materials so that I can recommend them to our clients.

I’m convinced that it will make a difference for the customers as well to know that the company that they shop with is green. It should be a differentiator and for those e-retailers complying with it should be making some noise about it.

Never before has so much attention been given to the shopping cart as now. With the customer’s mail box getting flooded with coupons from deal sites, the customer has become a lot more price conscious. Getting a customer to come to your site, and be excited enough by your product to add it to the cart is great. But to get the customer to carry that cart all the way through checkout is a completely different ball game.

The E-commerce game revolves around the cart. With conversion rates at E-commerce stores ranging between 1% – 7%, and each percentage point becomes ever so important. There are many things that can be done to fix the cart. Here’s a look at what some of the leading etailers in India are doing to keep their shopping carts conversion rates high. We looked at flipkart.com, ebay.in, infibeam.com, shopping.rediff.com, and myntra.com. Here are the findings:

1. Infibeam.com

I loved the bit where they point out the availability of Cash-on-Delivery as a payment option for the items in the cart. I like how “Proceed to checkout” is the main highlighted button, whereas everything else is in a lighter colour, such the “continue shopping” button.

2. Flipkart.com

The blue-eyed boys of Indian Ecommerce have a fairly straight-forward shopping cart. Its one of the few that show the cart in a ajax pop-up. (Landmarkonthenet.com also does the same). The ajax part is nice, because it doesn’t wait for a page to load. However, I believe that this can somehow reduce the conversion rate.

3. Rediff.com

Rediff’s cart is probably the simplest no-frills cart amongst the major retailers. Not what I would recommend. The only good part perhaps is that they have no other element in the page.

4. Ebay.in

Fantastic cart. My favourite. Not surprisingly its probably the one of the most successful site in the Indian Ecommerce market, and I’m excluding their auction related sales. Its got a bunch of options that a customer might want to see including help through live chat, product thumbnails, payment options, discount / savings information, next steps, and very importantly, it does a very good job of cross-selling.

5. FutureBazaar.com

Probably the most expensive platform in the history of Indian Ecommerce yet. Their cart doesn’t disappoint. Its got almost all the elements laid out well. I think their design could be much better, but they seem to get most check marks as far as the cart essentials go. I like them showing the progressive steps of the cart along with the live chat help icon.

Also like the fact that they provide a very prominent place to add any coupon details. Many site leave this to the final page before they provide this option. I think the earlier you allow your customers to see the benefit the better it is.

Also they do a good job of cross-selling, which is so crucial. If you can even get 10% of your customers to add something from the suggested list, thats a huge revenue.

Murali Balan is a Director at Tenovia, and shares Tenovia’s mission of helping businesses do business online. He has around 10 years of experience in Ecommerce technologies and business practices.

Its time that Indian Ecommerce companies started getting up and about on cloud computing. And when I say its time, I mean yes there are a few companies that dabble in it, but I’m talking about something like 25 – 40% of the Ecommerce companies in India using cloud computing in some capacity.

Who is it ideal for?

1. Smaller companies, hungry for growth.  And which is serious about spiking their traffic.

2. Large Ecommerce companies who have built up comprehensive platforms need to start pushing some of their applications on the cloud. Predominantly to get comfortable with it.

Why aren’t more people using it?

A couple of reasons mainly

1. Inexperience amongst the developer community with implementing cloud solutions. They’re still comfortable hosting applications on shared / dedicated servers and are afraid to experiment.

2. Online businesses are confused about the total cost of ownership of a complete cloud based solution. (CPU cycles / data download and upload pricing / pricing with and without CDNs, etc)

Way Forward

Okay, despite last week’s outage of services at Amazon’s Cloud, I believe that Cloud computing is where all of Ecommerce is headed. I believe that there is a huge Mobile commerce play that will consume the Indian market. And all those mobiles would need to interact with a lot of data sitting in servers. And that traffic’s unpredictability will be huge.

Cloud computing for Ecommerce makes too much sense and saves too much money to be ignored. And with Ecommerce at infliction point in India, its more important now than ever that our developer community / Online business heads wake up to this reality.

Picking a courier company / logistics partner is probably one of the most critical decisions for an Ecommerce company. They are the last mile of your interaction with the customer, and as a result you need to be really careful about that experience. So please consider the following points as you select one or more logistics partners for your ecommerce business.

1. Pin Codes covered - The more the merrier.  You would be surprised the remote corners your customers can come from.

2. Delivery times for Tier 1, Tier 2, Tier 3 and Tier 4 cities / regions - Most of your customers are going to be from Tier 1 and Tier 2 cities. So ensure that your logistics provider commits to delivering your products in these cities in super quick time. Ideally next day. Worst case within 48 hours.

3. Own Network vs 3rd Party Network - Ask your logistics provider about details of the network they cover. How much of the pincodes that they cover is by their own fleet, and how much is outsourced to a local 3rd party provider. The difference in quality would be stark between the two, as will be the accountability.

4. Dedicated Relationship Manager – Demand for one. You need someone senior to service your account. Depends on the size of your business, but still demand it and get it.

5. Rates - The all important one. Shop around and consider all the factors on this list, and not just this one. Yes it needs to make sense for your business. But you don’t want to pinch pennies here at the cost of your customer’s experience.

6. Technology support – Check out how much information they can provide you and your customers with their technologies. Courier tracking and on demand status are the minimal service they should provide. They should also provide your customer support team to find the status of a bunch of Airway Bill Numbers.

7. Reconcilliation – This one is crucial to your accountant. Make sure they offer you on-demand reports of how many packages were picked up, how many delivered, send you the proof of delivery receipts, as well as all cash collections for Cash-on-Delivery orders. Also settle with your logistics company once every fortnight. In my experience, the longer the period of settlements the more the number of issues that crop up.

8. Damage and Return policy - Read this part of any contract you sign very carefully. Who is liable in case of damages to the products? What is the maximum amount of liability taken by the logistics partner? What is the insurance coverage provided? Please factor in these points when you publish your return and refunds policy.

9. Weight vs Rate – When you are considering a logistic partner, please check how their rates goes up with respect to the weights of the shipment. Does the increase seem justified? Or do they plan to make a killing when the shipment weight goes up? When you formulate your own shipping policies please factor in these costs.

10. Cash on Delivery – Extremely important in India. COD is still the preferred method of payment for many online customers. So please pick a logistics partner that provides you this service. Also do the homework in checking out the reputation of your partner when it comes to settlement of the COD amounts. This is really crucial as they become your collection agents and any delays on the logistic partners’ part in settling payments would then impact your cash flows. But still this is extremely important. And cannot be ignored.

In an Ecommerce business you have a lot of variables that can steal the focus away from your core activities. For example Business Heads at various E-tailing / Ecommerce companies have to constantly dabble with issues like evolving technologies, optimizing search results for a new category, site design and re-design, a new A/B testing campaign, competition’s discounts, Social media campaigns, bugs on the site that refuse to go away, etc.

Its easy to get distracted and lose sight of the bigger picture sometimes. And thats why its so important that we stick to the basics and adopt the KISS (Keep it simple, stupid) principle. An Etail Business Head should obsessively focus on the following:

1. Drive Traffic to the site

2. Ensure the site is fast and easy to use

3. Provide fantastic value to your customers

4. Ensure GREAT customer service

5. Deliver your products on or before time

6. Ensure post sale engagement with your customers / Get customers to come back

If you do the above right, everything else will fall into place. So ensure that you’re spending your team’s energy equally, in the above areas. And remember, the bigger the dream, the more important the team.

So depending on the size of your operations / revenues, start creating teams that revolve around each of these areas. There are a lot of other areas that can be listed above such as managing vendors, accounts, legal, etc but thats where the KISS principle works so well. Take care of the basics and everything else will fall into place. Focus on building solid foundations.

Whats different between DLF Mall and Rediff.com? Obvious answer: One’s brick-n-mortar, the other is purely online. And thats where the differences end. Both house a huge number of brands, provide lots of choice to their visitors and are major retail destinations today, involving huge amounts of high value daily transactions.

Like with the case of malls across the country, there have been a surge of virtual malls in the country. Some of the better ones are rediff.com, indiatimes.com, ebay.in, naaptol.com, indiaplaza.in, infibeam.com, indiavarta.com, and homeshop18.com.

So why should a retailer care about competing in these shopping portals? For the same reason he decides to rent a store in a mall. Attract customers. Brand awareness. High sales. Here are a few advantages.

1. Brand Awareness - Put your brand out there online. Gain brand recognition and be known by the online customer as a choice.

2. Attract Traffic to your brand – With the Shopping portals, you have a lot of traffic coming to the sites. Get noticed by putting out great offers, discounts to the visitors. Entice them with offers. Wow them with the experience. Dazzle them with the service. And rule a portion of their wallets for a lifetime.

3.  Acquire visitors in Shopping Portals and then get them to your own site – Shopping portals are great places for customer acquisition. It lets people from all over the country to know your brand (not just in the cities you are present in) and test you out. If they like your products and service, they will look you up directly, come to your store and increase your direct traffic to your own dot com.

4.  Learn online strategies at the marketplace - As a vendor at these shopping portals, life isn’t easy. You need to compete with aggressive pricing on the popular items. You need to provide great service, quick response times to customer issues, ensure good post sale service to have good vendor ratings on these shopping portals. So in effect you can constantly view what your competition is upto on the same platform. And thats great learning for you. You get battle ready to take on your competition directly with your dot com.

5. Focus on the business, leave the rest to the Shopping Portals - One huge advantage for smaller retailers is that they  often don’t have the resources to worry about technical stuff and thats where the portals come in so useful for their online strategies. Coz they can forget about technology, logistic, driving traffic, payment gateways but instead focus on the core of what they do.

Next Blog post: How to setup an E-store at a Shopping Portal

One of the first things most businesses do when they start an online business is to sign up with a payment gateway. Here are some of the key things you should look for in a Payment Gateway provider / partner.

1.  Commission and fees – The most important part of decision making. There is choice today. So shop around. All the payment gateways quote high percentages. Don’t give in easily to their demands. Remember, this decision has long ranging impact so negotiate hard.

2. List of participating banks – This is important, because this will open up the choice of paying through the bank of their choice. So ideally you want a PG that accepts all banks.

2.  Netbanking – Ensure that this is enabled for your account.

3. Integration – Ask details of time taken and complexity to integr ate your site with the Payment Gateway provider.

4.  Enrollment Process – How long does it take for the paperwork to come through. What documents do you need to submit?

5. Security Measures - Do you have to buy a SSL certificate? Most gateways would request you to buy one. If not, then how would you ensure the safety of your customers transactions and details.

6. Sandbox – What kind of a testing / stage environment does the Payment Gateway provider make available so that you can test out the entire system? Insist on a sandbox in which your developers can test the integration.

7.  Time to transfer the money to your account – Please get written commitments from the PG provider about this period. What documents, if any need to be provided to ensure the transfer of funds into your bank account.

8. Time to transfer the money to a customer in case of refunds – Please clarify this very clearly with the PG provider, as you would need to answer pointed questions from the customer in case of delays in refunding the money.

9.  Ease of reconciliation of accounts – How easy is it to reconcile accounts with the Payment Gateway transactions. Do they provide you easy access to download reports? This is important otherwise, as the transactions grow on your site, your accountant would find it difficult to tally things. What kind of online interface do they provide? Is it easy to look up transactions from previous months?

10.  Responsiveness towards Conflict Resolution – Every once in a while, a customer will argue that money has been debited from his account, despite your systems saying that the transaction was declined by the bank. In such cases, you need to be able to quickly check in your online panel. It is possible that the panel might back your data, but the customer could still be right. In which case you should be able to call a contact manager at the Payment Gateway provider and check with her / him about it.

11. Customer Service – Most importantly, you want a payment gateway provider that really provides excellent customer service, right from registration to integration to operational issues. Ideally, always ask and get to know a few people in the company well, so that you can reach them easily.

12. Backup – Sign up with more than one payment gateway. Highly recommended. Good to have backup of such an essential service.

13. Cash on Delivery / Cheque Payments - Lastly, and very importantly, Ecommerce still works very heavily on non-payment-gateway transactions in India. Ensure that your business has as many payment options that your customers can desire.

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Okay…so we started with Diwali, Children’s day, but here is a summary of the most important dates in the Indian Ecommerce calendar that a retailer should not ignore. So make sure you plan your promotions in advance. Monitor the performance of your promotions, analyze your earnings and learnings and get ready to better it with the next event in the calendar.

1. Dussera – Kick start the holiday season with this 10 day long period. Lots of money gets spent around this time.

2. Diwali – The ‘big-daddy’ of Indian festivals. Make a lot of noise around this one with your offers and promos.

3. Christmas – Lots of money gets spent on the lead up to this day. Make sure you get part of that dough.

4. New Years – Excellent time for renewed energy. Start the new year with the right deals with the goal to engage the customer throughout the year.

5. Pongal (Tamil) – You don’t want to miss out on the 2nd largest festival in the country’s most prosperous state. Get regional, get local and gain the goodwill.

6. Valentine’s day – Shiv Sena might oppose it, but the online community absolutely goes nuts over it. Spending surges for the 3 – 4 days before it. Good time to attract young customers.

7. Republic Day – Spruce up your site with saffron, green, white and blue. Give your discount coupons a patriotic angle.

8.  Holi – Holi is big for gifting. Across India and from the NRI community. Make sure you’re part of it.

9.  Mid – April (New years day in Southern India and parts of North India) – Gifting is part of the tradition especially within the family. So apparel and accessory related sites would be well advised to offer discounts and partner with discount stores.

10.  Independence Day – Time for you to ‘bleed blue’ in your discounts. Believe me, its a good thing. Target the patriotic sentiments. Ensure you have products / discounts to go for the occasion. If you’re an international brand, its a good time to score local brownie points.

11. Gandhi Jayanthi – Promote all things ‘desi’.

12. Cricket Fever – You cannot be part of the Indian Ecommerce scene and not be affected by cricket fever. Rather than worry about low traffic on big match days, embrace the cricket fever and become a part of it. Your customers will love you. Create memorabilia that can be bought from your site, or given free on certain conditions with every purchase, or some other interesting cricket related promotions.