Online Retail Shopping

8/9/2019 Online Retail Shopping

http://slidepdf.com/reader/full/online-retail-shopping 1/79

Table of Contents1 . Introduction........................................................................................................ 4

1.1 Scope............................................................................................................. 4

1.2 Methodology..................................................................................................51.2.1 Type of data obtained:............................................................................. 5

1.2.2 Method of administering the uestionnaire:...............................................5

1.2.! Tabulation and "ata analysis:.....................................................................#

1.! $b%ecti&es of the 'eport................................................................................#

1.4 (imitations.....................................................................................................#

2 (iterature 'e&ie):................................................................................................ #

2.1 Impact of Internet..........................................................................................*

2.2 $nline Shopping.............................................................................................+

2.3 ,urchasing intention:................................................................................... 1-

2.4 actors In/uencing Consumer0s ,urchasing Intention.................................1-

2.4.1 Security.................................................................................................1-

2.4.2 Time Sa&ing........................................................................................... 11

2.4.3 ebsite "esign eatures......................................................................12

2.4.4 Con&enience..........................................................................................1!

2.4.5 $nline Shoppers in terms of "emography.............................................1!

2.5 'eturn ,olicies............................................................................................. 1!

3 Impact of eb in retail sectors of de&eloped countries:.....................................14

!.1 Critical factors for determining ,opularity in online retail shopping:........ ...1#

!.2 Smartphone and tablet de&ices are adding a ne) dimension in retailing:...1*

!.! Shift from store3based retailers to non3store retailers:................................1

!.4 Consumers are being more in/uenced socially............................................1+

!.5 ddressing target consumers indi&idually...................................................1+

!.# 6lobal &ariation in online retail....................................................................2-

!.* hat may be the future scenario7...............................................................22

4 $&er&ie) of $nline Shopping ser&ices and it8s pre&alence in 9angladesh.........24

4.1 9angladesh conomy $&er&ie)...................................................................2#

4.2 Mar;et structure of superstores...................................................................2*

4.! Internet and online shopping in 9angladesh................................................2

1



5 Ser&ice o<ering of the select physical and online stores...................................2+

5.1 ,hysical Stores.............................................................................................2+

5.1.1 arong................................................................................................... 2+

5.1.2 Meena 9a=ar..........................................................................................!-

5.1.! gora..................................................................................................... !-

5.1.4 'ang...................................................................................................... !-

5.1.5 Sh)apno................................................................................................!1

5.2 $nline Stores............................................................................................... !1

5.2.1 'o;omari.com........................................................................................!1

5.2.2 oodpanda............................................................................................. !2

5.2.! hatba=arbd.com.....................................................................................!2

5.2.4 >ungry?a;i.com.................................................................................... !!

5.2.5 Chaldal.com...........................................................................................!!

# nalysis of business players: Conte@t in 9angladesh.........................................!!

#.1 ,ST nalysis...............................................................................................!!

#.1.1 ,olitical.................................................................................................. !4

#.1.2 conomical............................................................................................ !4

#.1.! Social.....................................................................................................!4

#.1.4 Technological........................................................................................ !5

#.2 6 MT'IA................................................................................................... !5#.2.1 6 MT'IA.............................................................................................!5

6.2.2 "esirable feature of 6..........................................................................!#

6.2.3 Criticism of the 6 matri@......................................................................!#

6.2.4 ?(BSIS $ 6 MT'IA........................................................................ !*

#.! 9C6 MT'IA.................................................................................................!+

#.!.1 $&er&ie)............................................................................................... !+

#.!.2 uestion Mar;s:.....................................................................................!+

#.!.! Stars:..................................................................................................... 4-

#.!.4 Cash Co)s:............................................................................................ 4-

#.!.5 "ogs:..................................................................................................... 41

#.!.# (imitations:............................................................................................41

#.!.* ?(BSIS $ 9C6 MT'IA......................................................................41

#.4 "( MT'IA................................................................................................. 44

2



#.4.1 "( MT'IA $D'DI.........................................................................44

#.4.2 The ad&antages and disad&antages of the "( [email protected]*

#.4.! nalysis of "( Matri@...........................................................................4

#.5 ,orter8s i&e orces Model:...........................................................................51

#.# 'esources and Capabilities:.........................................................................52

#.* The !C8s Model of Eenichi $hmae:...............................................................52

#. 9usiness Can&as Model:...............................................................................55

#..1 9ric; $rgani=ation.................................................................................55

#..2 Clic; $rgani=ation:.................................................................................5#

* Ser&ice Mar;eting Mi@ * ,8s nalysis:.................................................................5*

*.1 * p8s nalysis for Clic; $rgani=ation:...........................................................5*

*.2 * p8s nalysis for 9ric; $rgani=ation:...........................................................5

6ap nalysis and ,roposed Strategies to o&ercome 6ap:..................................5+

+ 'ecommendation:.............................................................................................. #2

1- Conclusion:.....................................................................................................#5

11 ,,?"IA........................................................................................................ #*

11.1 FSTI$?I'............................................................................................. #*

11.2 'eferences:..................................................................................................*4

1 . IntroductionRetail trade is one of the traditional businesses of Bangladesh. Its expansion is keeping

pace with population growth and changes in consumption patterns, which are consistent

with the growth of the economy. This expansion has not been structurally organied,

!



because, until recently, retailing had ne!er been percei!ed as an industry, but rather as

an indi!idual or family business entity with a !ery limited scope of organied expansion.

"ittle to no market information is a!ailable on the retail sector, but secondary sources

indicate that the sie of the food retail sector in Bangladesh could be #$%&'(&) billion,

and the number of retail grocery shops could be around & million. Retail is one of the

biggest sources of employment *&' percent+, and it contributed &3 percent *wholesale

and retail trading+ to Bangladeshs -/.

Retail sector, until recently, consisted of only physical stores such as epartment

stores, $upermarkets, $uperstore, 0on!enience stores, iscount stores and off( price

stores, but the ad!ent of internet has changed the situation dramatically. 1!er the past

few years, 2uite a number of online shopping portals or e(trading platforms launched

operations, offering products and ser!ices from !egetables, clothes, computer

accessories to books and tra!el tickets. The brick and mortar retail stores also reacted

2uickly to the changing situation. any stores ha!e introduced online ordering and

payment system and home(deli!ery system to keep pace with the changed demand.

$o, apparently the 4eb has caused 2uite a stir in the retail sector of Bangladesh. In this

report we tried to ha!e an insight into the impact of web in creating ser!ice opportunities

in the retail sector of Bangladesh.

1.1 Scope1ur research endea!ors to find out how introduction of internet is shaping the retail

sector of Bangladesh. 5or this purpose we worked on select few physical and online

retail stores. ost of these stores operate in haka only while one or two operate in

0hittagong and $ylhet also. 6ence the conditions of the sector in other parts of the

country fall outside the scope of this research. $o, naturally our report is not a

comprehensi!e one rather it gi!es a rough idea about the sector.

1.2 Methodology. In this report we worked with 7 physical and 7 online retail shops8

Physical stores Online stores 9aron Rokomari

4



9gora 5oodpandaeena Baar 6ungrynaki

$hwapno 0haldaalRang Bdhaat

1.2.1 Type of data obtained:

Both primary and secondary data has been collected for the research purpose.

• /rimary data has been collected from the respondents through the sur!ey

2uestionnaire• $econdary data has been collected from the different e(commerce websites and

articles ;ournals

1.2.2 Method of administering the questionnaire:

Survey method: The sur!ey has been conducted mainly among ;ob holders, home

makers and students residing in haka, 0hittagong and $ylhet metropolitan city. The

2uestionnaire was de!eloped using -oogle docs and its link was shared by email and

different groups of face book likely to contain appropriate respondents.

Nature of the questionnaire: The 2uestionnaire has been de!eloped to find out more

on the research topic, probing into the ob;ecti!es of research. The 2uestionnaire

includes two parts, multiple choice, and "ikert scale 2uestions. These 2uestions ha!e

been put in the 2uestionnaire in order to attain a more insightful understanding of the

!iews and attitudes of the users regarding online shopping. It contains se!eral

2uestions asking the demographic information about the respondents as well. The

2uestionnaire has been made with simple, direct, and familiar words keeping the

respondents in mind.

1.2.3 Tabulation and Data analysis:$ince the 2uestionnaires were created in -oogle ocs, all the data analysis were done

by the program itself.

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1.3 b!ecti"es of the #eport

The specific ob;ecti!es of this research are as follows:

•

To analyse the o!erall situation of retail sector in Bangladesh• To determine the relati!e position of select few online and physical stores in the retail

industry• To find out influence of internet on retail sector

• To point out the problems faced by the physical and online stores while conducting

their business• To suggest possible solutions to the problems

1.$ %imitationsThis paper has the following limitations:

• The concept of online shopping is still relati!ely new in Bangladesh and hence

there was a lack of rele!ant data.

• Time and resource constraints did not enable the authors to conduct a rigorous

market research.• The sur!ey sample was obtained online and is not the true representati!e of the

retail sector of Bangladesh.

2 %iterature #e"ie&:

In this re!iew we synthesie the current knowledge based on academic literature. The

impact of web in retail sector created an opportunity for !arious organiation initially to

pro!ide marketing information about their products and ser!ices, customer support and

later to conduct business transaction with customers. Retail is the sale of goods and

ser!ices from indi!iduals or businesses to the end(users. <inghe= 4enyuan and

#



>aiming *'?&)+ explained that a retailer purchases goods or products in large 2uantities

from manufacturers directly or through a wholesale, and then sells smaller 2uantities to

the consumer for a profit. It co!ers a wide array enterprises in terms of sie, business

model and goods.@hamb and khan *'?&?+ identified the most appropriate retail formats

for !arious items such as food and grocery(supermarket= 6ealth and beauty care

ser!ices($upermarket= 0lothing and 9pparels( all= Antertainment(all= 4atches(

6ypermarket= /harmaceuticals(6ypermarket= obile, accessories $er!ices(

6ypermarket= 5oot wares(epartmental store.

2.1 Impact of Internet&CC?s, the Internet was !iewed as a disrupti!e transformational technology

*0hristensen, 9nthony, and Roth &CC)+ with respect to the retail industry. 5uturists

en!isioned that consumers would abandon brick and mortar organiations and buy most

products or ser!ice o!er internet. Dwass *&CCE+ predicted that store(based retailers

would be replaced by Internet(sa!!y entrepreneurs who could harness this new

technology to pro!ide superior offerings to consumers. Internet is facilitating traditional

store based retailers to complement their store offering through web.

4igand and Ben;amin *&CC7+ found that the Internet economic model is more efficient at

the transaction cost le!el. Alimination of middlemen in the distribution channel *or

disintermediation+ also can ha!e a big impact on the market efficiency *ichalski, &CC7+.

Impact of web in retail market can result in additional sales at !ery low unit cost. 0assar

et al. *'???+ contended that in a long term perspecti!e, online retailers are expected to

achie!e a significant cost ad!antage o!er their competitors that run their businesses in

a traditional way. In addition to the lower cost, the 4eb also enables higher le!el of

customiation to the needs of indi!idual clients *0hoi and 4inston, '???+. In this way

organiation is more flexible in to expand different product lines and markets 2uickly

with low in!estment. It will reduce the communication gap with customer and

organiation will be able to pro!ide better customer ser!ice. Bryn;olfsson and $mith

*'???+ empirically examined prices for books and 0s offered by traditional and online

retailers and found that the latter sell products that are on a!erage C(&E F cheaper.

$imilarly, Gan and /ei *'??C+, using a game theoretical model, pointed out that a firms

*



performance can be significantly impro!ed after opening an online channel competing

with the traditional retail channel. 0on!ersely, >otha et al. *'??)+ asserted that web site

usability is not a source of competiti!e ad!antage, as it can be easily obser!able and

imitated.

0ustomer retention rate will increase with repeated order. Reichheld et al. *'???+ stated

that customer retention rate is highly and significantly related to a firms profits The rich

interacti!e media and database technology of the 4eb allows for unconstrained

awareness, !isibility, and opportunity for an organiation to promote its products and

ser!ices *0hen, otiwala and >han= '??3+. 6owe!er, impact of web also caused some

issues of an ethical nature. 4hysall *'???+ suggested some of them: customers pri!acy

and confidentiality, tracing customers email and !isited websites, and exclusion of some

segments of customers lacking net access.

Impact of web in retail sector introduced brick and mortar organiations to multi channel

retailing. "e!y and 4eit *'??C+ describe multichannel retailing as the set of acti!ities

in!ol!ed in selling merchandise or ser!ices to consumers through more than one

channel. That means introduction of web as another channel for retail sector besides

physical stores. Impact of web is not confined only as another channel for reaching upto

customer. It is becoming the most important tool for customer ser!ice. 6arris and

1gbonna *'??&+ concluded that the ma;or retailers try to differentiate themsel!es from

competitors on customer ser!ices. Retail sector is facing new challenges and

opportunities in the presence of web. The market for store based retailer is limited to the

local trading area of the store. 4ith the addition of web the retailer is enabled to exploit

economies of expanding market without making any physical store.

9ggarwal *'??H+ 6ighlights the emergence of organied retailing in India and !iews the

0atalytic effects of retail on Indian Aconomy. Tusharinani *'??H+ noted the

transformation of traditional and malls taking the lead in attracting consumers in the

metro cities. -oyal and 9ggarwal *'??C+ opine that In India, a consuming class is

emerging as a result of increasing income le!els and dual career families with high



disposable incomes. #rban class of Bangladesh is also experiencing the same socio

economic growth. 4ith retailers eyeing their presence in market, internet has brought a

new dimension in attracting these new consumers. This led us to online shopping.

2.2 nline Shopping-hayel and hingra *'?&'+ affirmed online shopping as the act of purchasing products

or ser!ices o!er the internet ha!ing the product or ser!ice deli!ered directly to the

consumer themsel!es. The consumer can find information about different models of an

item, different colors choice, and different brand choice doing their comparisons before

lea!ing the house. Birkin, 0larke, 0larke, *'??'+ described online shopping as a

single, homogenous acti!ity, the selling of goods and ser!ices !ia the 4orld 4ide 4eb

*www+.

The low adoption of internet to make purchase in retail stores by Bangladeshi

consumers is a big challenge for the industry growth. The use of the web for shopping is

culture bound and, therefore its adoption from one country to another is influenced by

culture. This !iew is corroborated by Rogers *&CC7+ who explained that the degree of

compatibility of the information technology and its !arious uses with the !alues and

norms of a social system influences its diffusion pattern in that social system. $uki,

9hmad, Thyagara;an, *'??'+ ha!e also indicated that one of the obstacles which limit

the de!elopment of online retail locally is related to the culture or the beha!ior of

customers when it comes to buying goods and ser!ices through web. In Bangladesh the

Internet is not compatible with the retailers culture of selling through physical stores and

consumers entrenched beha!ior of physically !isiting the stores, touching, feeling and

comparing products before actual purchase is made. 9l(5adhli, *'?&&+ contended that

inability of consumers to inspect a product prior to purchase hinders online shopping in

alaysia.

2.3 'urchasing intention: 9ccording to business dictionary purchasing intention defined as a plan to purchase a

particular good and ser!ice in the future. 9ccording to 5ishbein and 9;en, purchase

+



intentions are defined as decisions to act *9;en, &CH7+. 9s studied by Aagly and

0haiken *&CC3+, purchase intention is defined as psychological states which represent

the indi!iduals perception to engage in a particular beha!ior. 9ccording to 6oward and

$heth *&CEH+, in its simplest form, predicting purchases rests on the stage preceding

actual purchase, and is referred to as intention to purchaseJ. There are some !arious

theories results with, purchase intention helps predict following purchase. $arigiannidis

and >esidou *'??C+ contend that product in!ol!ement positi!ely affects consumers to

shop online and It is concluded that pri!acy ha!e no effect o!er consumers intentions

towards online shopping.

2.4 (actors In)uencing *onsumer+s 'urchasing Intention

2.4.1 Security

9 further barrier the adoption of the Internet to make transaction in the retail industry is

security concerns by the prospecti!e and actual shoppers. $ecurity is defined as a set

of procedures, techni2ues, and safeguards designed to protect hardware, software,

data, and other system resources from unauthoried access, use, modification, or theft

*a!is, Bagoi, 4arshaw, &CKC+. The impact of web on retail industry is negati!ely

affected by the online shoppers concern regarding fraud and security. Ratnasingham,

*&CCK+ highlighted that fear of online credit card fraud has been one of the ma;or

reasons customers ha!e not done more extensi!e online buying. In addition, "ee

Turban L'??7M lamented that consumers cannot physically check the 2uality of a product

or monitor the safety and security of sending sensiti!e personal and financial

information while shopping on the Internet. 5rom the foregoing, security challenge is a

real one that should be tackled headlong to encourage more Bangladeshi to adopt

online shopping.

9s users get accustomed with new technology, they learn the usefulness and risks

associated with the technology. Torkadeh and hillon *'??&+ defined percei!ed risks

an assessment of uncertainties or lack of knowledge about the distribution of potential

outcomes. /ercei!ed risk is a ma;or challenge for the growth of online shopping in retail

sector. e Ruyter, 4etels, >lei;nen *'??&+ argued that while there are other factors

1-



affecting consumers adoption beha!ior on the Internet, percei!ed risk is a barrier to the

repatronage and purchase on the Internet. $imilarly, $alisbury, /earson, /earson,

iller *'??7+ affirmed that percei!ed risk may influence the attitude and beha!ior of

consumers towards the Internet ser!ices. #ncertainties about how customers financial

information is treated by retailers will increase percei!ed risk associated with online

transactions, and reduce their willingness to adopt online shopping.

Gang and @un *'??K+ found that reliability was the most important dimension for Internet

purchasers e!en when compared to access, ease of use, personaliation, security, and

credibility. Internet non(purchasers, in contrast, consider security as their most critical

concern. 0ustomers actually e!aluate a websites reliability based on whether it

pro!ided them with reliable information and safe transactions. Gen and "u *'??K)

identified some !ariables such as efficiency, system a!ailability, pri!acy and fulfillment

as the dimensions of e(ser!ice 2uality. Then they examined the linkages among

dimensions of e(ser!ice 2uality, customer satisfaction and loyalty. Results re!ealed the

dimensions of e(ser!ice 2uality directly influence customer satisfaction. $ubse2uently,

customer satisfaction positi!ely affected loyalty. Ne!ertheless, 0uneyt and -autam

*'??)+ claimed trust in the internet shopping with ad!anced technology, and fre2uent

online shopping to the internet being secured as a trustworthy shopping channel.

2.4.2 Time Sa"ing

Time sa!ing is one of the most contributing factors for online shopping. 1nline shopping

can reduce peoples effort and sa!e time. Rohm and $waminathan *'??3+ asserted that

online shopping sa!es time during the purchasing of goods and it can eliminate the

tra!eling time re2uired to go to the traditional store. Notwithstanding of that, some argue

that the deli!ery of products or ser!ices o!er online is time consuming. $imilarly

0orbett, *'?&&+ pointed out that time sa!ing is not the moti!ating factor for the

consumers to shop online because it takes time recei!ing goods or deli!ery. But time

sa!ing factor can be seen through different dimensions i.e. person li!ing in 5lorida can

11



shop at 6arrodOs in "ondon *through the web+ in less time than it takes to !isit the local

Burdines department storeJ ha!e concluded that time sa!ing factor was reported to be

primary reason among those consumers who ha!e already experienced the online

grocery buying *9lba et al. &CCH, '???+. $o the importance of the time sa!ing factor

cannot be neglected as moti!ation behind online purchasing. 9dditionally -oldsmith and

Bridges emphasie that there is a discrimination between online shopper and non online

shoppers, online shoppers are more worried about con!enience, time sa!ing and

selection whereas non online shoppers are worried about security, pri!acy and on time

deli!ery *Bridges, -oldsmith and Bridges *'???++. 9 study by >amariah and $alwani

shows higher website 2uality can highly influence customers to shop online *$alwani,

1nline shop, '??7+.

2.4.3 ,ebsite Design- (eatures

4ebsite design and features is one of the most !ital influencing factors of online

shopping. $hergill 0hen *'??7+ point out that 4ebsite design, website

reliabilityfulfillment, website customer ser!ice and website securitypri!acy are the most

attracti!e features which influence the perception of the consumer of online buying.

>amariah and $alwani *'??7) claims the higher website 2uality, the higher consumer intends to shop from internet. 4eb design 2uality has important impacts on consumer

choice of electronic stores, stated by "iang and "ai *'??? ). 4ebsite design one of the

important factor moti!ating consumers for online shopping. 9lmost &??,??? online

shoppers sur!eyed by *Reibstein, '??&+ shows that web site design was rated as

important factor for online shopping. 9nother study conducted by Dhang, ran, $mall,

and Barcellos *Barcellos, &CCC, '???+, and Dhang and ran *'???+ indicated that

website design features of the website are important and influencing factors that leads

consumers satisfaction and dissatisfaction with a specific website. 9 study conducted by

Gasmin and Nik *'?&?+ shows a significant relationship between online shopping acti!ity

and website features. 4ebsite design features can be considered as a moti!ational

factor that can create positi!e or negati!e feelings with a website. 9 study by "i and

Dhang *'??'+, if website is designed with 2uality features it can guide the customers for

12



successful transactions and attract the customers to re!isit the website again. 6owe!er,

worse 2uality website features can also hamper online shopping. 9ccording to "iang

and "ai *'???+, web design 2uality or website features has direct impact on user to shop

online.

2.4.4 *on"enience

0on!enience factor cites that it is rather easy to browse or search the information

through online than the traditional retail shopping. 0onsumers can easily search product

catalog through online but if the consumer look generally for the same product or item in

a traditional store manually it is difficult to !isit physically and time consuming also.

0on!enience has always been a prime factor for consumers to shop online. arian

*&CKH+ mention that online shoppers carry multiple benefits in terms of con!enience,

such as less time consuming, flexibility, !ery less physical effort etc. Bhatnagar and

-hose *'??)+ claims for con!enience as one of the most important ad!antage for online

shopping. 4ilson, *'??H+ affirmed that the ma;or moti!ation for online purchasing is

con!ince in terms of shop at any time and ha!ing bundles of items deli!ered at door

step.

2.4.5 nline Shoppers in terms of Demography

9nother aspect of online shopping in retail sector is shoppers in terms of demography.

4e would like to study demography in terms of age, gender, income and education to

identify the purchase beha!ior related to these terms. $tudies ha!e shown that online

shoppers mainly consist of people with 6igher education and income and working in

middle to senior management or professionals *<inghe= 4enyuan and >aiming '?&?+.

iller *&CCE+ claims cyberspace is the domain of young people. $im and >oi *'??'+

states as main discriminating factors appeared to be gender and income. 0ustomer

segmentation is important for electronic commerce success. iller *'?&?+ has focusedon demographics to show the profile of Internet users.

1!



2.5 #eturn 'olicies/roduct return is an important component of organiations customer relationship

management strategies. 0lick organiations can differentiate their ser!ice by

implementing product return policy. $imilarly, /etersen and >umar *'??C+ point out that

current return beha!ior has an in!erted(# relationship with the likelihood of future

purchases and customer lifetime !alue. It is also shown that increase in leniency of

return policy enhances trust and con!enience and hence leads to a higher likelihood of

repeat purchases. 6owe!er, it also leads to a higher likelihood of repeat returns *4ood

'??&+. $imilarly, 9nderson, 6ansen, and $imester *'??C+ show that as the option !alue

of returns is increased, customers are more likely to make repeat purchases. >ushwaha

and $hankar *'??Hb+ assert that ignoring customer return beha!ior in marketing

resource allocation decisions may lead to suboptimal outcomes.

3 Impact of ,eb in retail sectors of de"eloped countries:

1nline shopping has become an integral part of most consumers day to day beha!ior.

5orrester Research, Inc. conducted a sur!ey which shows that more than )?F percent

of the population in 4estern Aurope purchase goods online. oreo!er, 7?F of

consumers of -ermany, $witerland and 5rance are doing so. This trend is set to

14



continue with the Auropean a!erage set to rise almost &? percentage points to )CF by

'?&7. In the #> and the Netherlands this figures are pro;ected to approach H?F by

'?&7. In the #$, EHF of consumers shop online and online sales are pro;ected to

achie!e a &?F compound annual growth rate, generating %'HC billion by '?&7.

In de!eloped countries consumers use a number of different channels to make a single

purchase. 9n example of this kind of transaction is researching a product online and

then buying it in store. $ue and "isa *'?&'+ found that more than K?F of all

respondents conduct online research before they buy electronics, computers, books,

music, and mo!ies. Aighty(eight percent of #$ respondents said that they research a

product online !ia their /0 before buying *!s. K?F globally+ P and H3F of #$

respondents report that they research online when buying clothing, footwear, toys, and

health and beauty products *!s. E?F globally+. In other words, online research doesnQt

;ust lead to online purchases, itQs also critical in leading to purchases through other

channels and in dri!ing traffic to physical brick and mortar outlets.

1ne of the ma;or findings from $ue and "isa *'?&'+ was the self(described

sophistication of the online shoppers they sur!eyed. any of their respondents

considered themsel!es to be highly capable in terms of researching and purchasing

online. In fact, H'F of #$ respondents consider themsel!es to be either confident or

experts in this regard *fig + slightly besting the ECF of their global respondents that

consider themsel!es to be at this same le!el. 4hy is this so rele!ant for retailersS 9s

weQll see, this online sa!!y comes with increased demands for faster ser!ice, more

selection, and more transparent information in the shipping and tracking of goods. 4hile

retailersO online operations are e!ol!ing, consumers are being forced to find ways to

make the system work for them. Regardless, online sales are growing at the expense of

traditional retail outlet sales. 9ccording to 5orrester Research, Inc., H?F of the o!erall

growth in online sales in '?&? came from existing shoppers simply buying more online.

15



5ig. : H'F of the #$ sample consider themsel!es accomplished online

shoppers.

9ccording to $ue and "isa *'?&'+ not only do global online shoppers consider

themsel!es experts, but they are also buying across all product categories.

$taggeringly, more than C?F of global online shoppers buy books, music and films,

clothing and footwear online. A!en the categories at the bottom end of the online

purchase scale, such as ;ewelry, watches, sports e2uipment and outdoor goods, attract

o!er E?F of online shoppers.

3.1 *ritical factors for determining 'opularity in online retail

shopping:$ue and "isa *'?&'+ claimed a great deal of global consistency in the top fi!e factors

which determine attracti!eness about online shopping, regardless of nationality or

geography. The con!entional wisdom is that the issue of price is the dri!ing force for thegrowth of online shopping, and indeed, it does feature among the top three reasons

cited by their sur!ey respondents *5ig.G+. Interestingly, howe!er, the top factor gi!en is

')H access to shopping, or the con!enience factor cited by 'KF of the online shoppers

we sur!eyed. 1nline shopping is all about freedom and being able to shop where!er

and whene!er you want. 9s for selecting a specific online outletP after embracing the

1#



con!enience factor of the online shopping modelPthe key factors include reasonable

pricing, free and fast deli!ery, and a wide range of products from which to choose.

Retailers really need to integrate these key consideration factors into their business

models. 9ccording to /w0Os Axperience Radar '?&&: Insights for the #$ Retail Industry,

retailers can gain an additional margin opportunity of KF to &'F by offering free

shipping, yet 7CF of retailers charge for shipping products. /erhaps e!en more

impactful is the fact that ' out of 3 #$ consumers say they are likely to cancel a

purchase without free shipping.

5ig. G: 4hen it comes to online shopping, the con!enience factor rules

3.2 Smartphone and tablet de"ices are adding a ne&

dimension in retailing:

9ccording to Richard "e!is *'?&3+ the mo!ement of online retail acti!ity from desktop

/0s to $martphones and tablet de!ices represents a new phase in the e!olution of

retail. The pace of change has been dramatic. $ince the first fully internet(enabled

mobile phones hit mass market in around '??H, the number of smartphone users in the

#> alone has exploded to o!er 'E million people and continues to rise, according to

1*



data pro!ider, com$core. 9round half of smartphone users are using them for some

kind of shopping acti!ity, which principally means browsing retail sites, researching and

comparing prices, but also ordering goods for deli!ery or collection. In the #nited $tates

meanwhile, the proportion of ecommerce being carried out using mobile or tablet

de!ices has grown from almost ero to around &? per cent in ;ust a few years *5ig D+.

5ig D: /ercentage of total #$ ecommerce dollars spent !ia mobile or tablet de!ice

$ource: com$core obile easurements, 9ugust '?&'

3.3 Shift from storebased retailers to nonstore retailers:1n the spectrum of online integration, retailers range from store(based, Qbricks and

mortar at one end, to online only, Qpure(play at the other. Between the two extremes lie

retailers who combine physical and !irtual retail elements to !arying extents, most often

labelled Qmulti(channel. These broad categories ha!e existed for years, but 9ccording to

Richard "e!is *'?&3+ the balance is increasingly shifting away from traditional Qbricks

and mortar. $tore(based retailers are leading the change by integrating the internet into

their business models as a part of multi(channel strategies. In the #> and #$, for

example, online retailing is dominated by store(based legacy retailers that ha!e mo!ed

to multi(channel, according to retail consultants, @a!elin -roup *5ig 9+.

1



5ig. 9: Acommerce sales for the #>s leading multi(channel retailers, '?&&('?&'

$ource: @a!elin -roup, No!ember '?&'

3.$ *onsumers are being more in)uenced socially 9ccording to ebbie 1ates *'?&&+ the purchasing decision used to be a relati!ely

pri!ate affair potentially informed by manufacturer or retailer dri!en information and

can!assing close friends or relati!es opinion. Nowadays consumers now acti!ely seek

recommendationsre!iews about brands or particular product pre(purchase. ebbie

1ates *'?&&+ suggested that this is particularly rele!ant for commodity type purchase

groups where '?F of purchases are influenced by re!iews. /eople are also influenced

by what friends within their social networks are saying about particular products they

ha!e purchased, this !aries between 7(&?F in category purchasers with Books, usic

and -ames and 0lothing most influenced. Taking this one step further, 7F ha!e acti!ely

sought feedback on a potential product purchase from Twitter or 5acebook followers on

their mobile again demonstrating how online beha!iors will begin to infiltrate the 6igh$treet.

3./ 0ddressing target consumers indi"idually 9ccording to Richard @enkings *'?&&+ todays consumer is better informed, more

discerning and more focused than was the case in the past. Retailers are taking these

1+



changes into account as they try to optimie store and online range selection.

5ulfillment is also a ma;or issue. $ome things are being sold or deli!ered in a different

way, but other goods are not being able to benefit from the same degree of flexibility.

0learly, consumers ha!ing the ability to research the products in which they are

interested, e!en if they dont go on to buy them in the store, is a !ery important factor.

Axperian has analyed consumer beha!ior in this area, looking at how it differs by

market sector. Axperian 6it wise can measure who goes where, what they do, whether

or not they buy and predict how different groups of consumers are likely to react to

marketing campaigns. The most exciting thing what technology made a!ailable today is

the ability it gi!es marketers to tailor marketing materials, to ensure that targeted

consumers recei!e material that is as rele!ant as possible to their needs, desires and

preferences. The traditional practice was to send most people in the country a brochure

in the post. Now retailers can target consumers who ha!e responded to similar

approaches in the past, or those whose profiles re!eal the right sorts of lifestyles and

the ability to pay for the goods or ser!ices on offer. 4ith more people using more

intelligent mobile de!ices, marketers now ha!e the ability to create e!er more

sophisticated tailored communications, targeting particular groups of people and the

type of communication methods they prefer= and bringing geography into the structuring

and planning of marketing campaigns.

3. lobal "ariation in online retail 4e see that the extent of online retail penetration !aries significantly from country to

country. Richard "e!is *'?&3+ claimed that the #> appears to ha!e one of the most

ad!anced online retail sectors, with sales rising as a proportion of o!erall retail spending

from 3 per cent in '??H to o!er C per cent in '?&'. Internet sales growth is clearly

outpacing retail sales in general *5ig. B+. In the #$9, official data show internet sales

approaching 7 per cent of total sales in '?&?, up from around & per cent ;ust ten years

pre!iously. #nofficial sur!eys place the figure closer to C per cent for non(food retail in

'?&'. 9gain, online sales are growing significantly faster than all retail sales *5ig 0+.

It seems that mainland Aurope is lagging behind, with only around 3 per cent of sales

occurring online o!erall. But there is huge !ariation across Auropean countries, with a

2-



broad di!ision between the Qnorthern core and southern states *see 5ig. +. 9ccording

to Richard "e!is *'?&3+ online retailing is growing at an explosi!e rate. In 0hina, for

example, by '?&' the ecommerce market is expected to ha!e grown from !irtually ero

to o!er & trillion Guan *approx %&E? billion #$+ in under a decade.& the extent to which

online and multi(channel retailing penetrates traditional store(based retailing is related

to a range of pre(existing conditions. The countries most exposed are likely to be

relati!ely affluent and ha!e fast, high(2uality digital and transport infrastructure. 9 global

comparison of e(readiness and logistics performance pro!ides a top(le!el indicator of

those countries most pre(disposed to online retail penetration *5ig. A+.

5ig. B: #> internet sales !s. all retail sale

$ource: Thomson Reuters ata$tream

21



5ig. 0: #$ 2uarterly retail sales growth total and ecommerce

$ource: #$ 0ensus Bureau, <3 '?&'

3. ,hat may be the future scenario44e ha!e seen that online(only sales are growing rapidly in many countries. It is difficult

to predict how far online(only retail channels will grow, but the #> pro!ides us with a

useful indicator of how it may progress in other countries. 9ccording to Richard "e!is

*'?&3+ by '?'? around '?('7 per cent of retail sales will occur online *up from around

&? per cent today+S This estimate includes sales as part of multi(channel retailing. 9side

from the physical and economic barriers described abo!e, limits to the growth of online(

only retail channels mainly relate to distribution costs and practicalities. Richard "e!is

*'?&3+ suggested a huge potential efficiency gains through, for example, the

standardiation of packaging, subscription(based deli!ery models, night(time deli!ery

options and purpose(built collectionreturn facilities, such as lockers. /otentially, these

could significantly increase the penetration of internet(only retailing abo!e currentassumptions= with more serious implications for traditional retail property. Richard "e!is

*'?&3+ proposed a large change further ahead by emergence of 3 printing. This

technology has the potential to turn current models of the manufacturing and distribution

upside(down by pro!iding the ability for consumers to find, buy and produce goods at

22



the place they are consumed. This would ha!e significant conse2uences for retail and

distribution property as we know it today.

5ig. : A# percentage of indi!iduals making online purchases in the last three months

$ource: Aurostat, ecember '?&'

2!



5ig. A: A(readiness !s. logistics performance by country, '?&'

$ource: 4orld Bank, 4orld Aconomic 5orum, 9!i!a In!estors, @anuary '?&3

$ "er"ie& of nline Shopping ser"ices and it5s

pre"alence in 6angladesh

Bangladesh 1nline shopping along with the online shopping is the process through

which consumers directly buy goods or ser!ices from a seller in real(time, without an

intermediary ser!ice, o!er the Internet. It is a part of electronic commerce. 9s

technology is becoming an e!eryday accessory and rate of Internet penetration is

increasing like wild fire people tendency to on(line shopping is on rise. The total number

of Internet $ubscribers has reached )).?K&C)' million at the end of 1ctober, '?&).

*$ource: BTR0+The most important reason behind a rise in on(line shopping trend is

time scarcity of modern life style. 4e are now li!ing in an age of scarce time. $hopping

regularly for daily products is a luxury to this time scarce society. 9s the trends show in

near future the rate and extend of on(line shopping will be increased in manifold. 1n(

line shopping is going to be a boom and one of the most growing business sectors of

country. Taking indicators like increasing Internet penetration, life style change, time

scarcity into consideration it can be a safe prediction that online shopping will be a

24



phenomenon in near future. Realiing the demand a number of on(line shopping sites

ha!e been started their ;ourney to make life easier and laier. 9n online shop, e(shop, e(

store, internet shop, web shop, web store, online store, or !irtual store are used as the

physical analogy of buying products or ser!ices instead of bricks(and(mortar retailer or in a shopping centre. The process is called Business(to(0onsumer *B'0+ online

shopping. In Business(to(Business *B'B+ online shopping, a business buys from

another business. The largest online retailing corporations are eBay and amaon.com

both based in the #$9. 1ne of the first known 4eb purchases took place in &CC). It

was a pepperoni pia with mushrooms and extra cheese from /ia 6ut, a somewhat

appropriate purchase for the early days of the Internet. 4hen 9maon came on the

scene not long after, selling books online was a curious idea. The timeline below

highlights the emergence and e!olution of online shopping year by year:

Time Amergence A!olution

&CC? Tim Berners("ee created the first 4

4eb ser!er and browser.

&CC& Internet 0ommercialied National 5oundation releases its grip on the In

&CC) 1ne of the first products to be sold ona pepperoni and mushroom with extrby /ia 6ut.

&CC7 ABay, ell and 9maon.com, the -iants of online shopping were 5ound

&CCC onwards an explosion is created with gosocial networking sites nowadays noff(limits for selling online

Table &: Amergence of 1nline $hopping

$.1 6angladesh 7conomy "er"ie&

25



The economy of Bangladesh is a rapidly de!eloping market(based economy. Its per

0apita income in '?&3 was estimated to be #$%'K&?*ad;usted by purchasing power

parity= $ource: 4orld Bank+. 9ccording to the International onetary 5und, Bangladesh

ranked as the E3rd largest economy in the world. The economy has grown 7(EF per

year since &CCE despite political instability, poor infrastructure, corruption, insufficient

power supplies, and slow implementation of economic reforms. Bangladesh remains a

poor, o!erpopulated, and inefficiently(go!erned nation. $er!ice sectors growth rate had

been increased from the birth of our country and it reached maximum around E?F in

'???. Now it is 7'F. Though it has declined but again we are !ery much optimistic

about the intensification. It is a good sign for our country because in de!eloped

countries ser!ice sector contributes more share in total -/ than other sectors.

Bangladeshs growth was resilient during the '??K(?C global financial crisis and

recession.

Retail trade is one of the traditional businesses of Bangladesh. Its expansion is keeping

pace with population growth and changes in consumption patterns, which are consistent

with the growth of the economy. 1f the retail trade, the newest type is the superstores

2#



which ha!e only began appearing around the year '???. $ince then, their expansion

has been rapid. This expansion has not been structurally organied, because, until

recently, retailing had ne!er been percei!ed as an industry, but rather as an indi!idual or

family business entity with a !ery limited scope of organied expansion. "ittle to no

market information is a!ailable on the retail sector, but secondary sources indicate that

the sie of the food retail sector in Bangladesh could be #$%&'(&) billion, and the

number of retail grocery shops could be around & million. Retail is one of the biggest

sources of employment *&' percent+, and it contributed &3 percent *wholesale and retail

trading+ to Bangladeshs -/ in '??&?'.The annual turno!er of the superstores now

stands at around Tk &7.? billion *&7?? crore+, according to Bangladesh $upermarket

1wners 9ssociation *B$19+. *$ource: Internet+

$.2 Mar8et structure of superstores

In Bangladesh, organied retail outlets are relati!ely few and remain concentrated in the

ma;or cities. The off(take by consumers is limited *less than 7 percent of total food

consumption comes from these outlets+.They usually procure their products fromimporters or distributors for imported items, and from distributors or suppliers for the

local products. 1rganied sector retailers normally maintain established supply lines

*drawing from establishments with storage capacity+ for imported products, and

access both established and casual supply lines *once(in(a(whileJ suppliers with no

storage+ for local products. epending on the sie of the outlets, they engage '?? to

)?? distributors or sub(distributors *dealers+ for consistent a!ailability of their

commodities. ost importers source their goods in mixed containers from the country of

origins or from consolidators in ubai or $ingapore, except those that arri!e in high

!olumes, like fresh fruits.

2*



5igure & The arket $tructure of the retailing industry of Bangladesh. *$ource:#$9 5oreign 9gricultural $er!ice, '?&3+

Included in the category of supermarkets, around 3? medium(sied super stores, and'??('7? other con!enience stores are located in the posh areas of haka and other bigcities. The share of imported food products currently handled by these outlets is !ery

small, and items include fruit ;uice *both powdered or li2uid+= canned fruits,!egetables, and fishmeat= ;am;elly= sauceketchup= edible oil= dry milk powder= saladdressings= spaghetti!ermicelli= oli!e oil= coffee= fresh fruits= and chocolates, biscuits,and cookies. The biggest constraint facing this sector is the extreme scarcity of space inthe appropriate areas: land is almost una!ailable and is !ery costly.

$.3 Internet and online shopping in 6angladesh

In &CCE, the first U$9T base data circuit was introduced through ' Internet $er!ice/ro!iders *I$/s+ connecting Bangladesh to the world wide web for the first time. By

'??7 there were about &K? registered I$/s operating in Bangladesh. The 5irst e(

commerce site clickbd.com started operations in '??E which was the same year that

Bangladesh got connected with the latest technology of a submarine optic fiber cable. In

'??H, 0ellbaar, an IT "ab pro;ect inaugurated operations bringing the baaar to the

hands of '? million -rameen/hone $ubscribers. In '??K, Broadband and 4imax

internet ser!ices were first introduced in Bangladesh which impro!ed speed, penetrationand user experience

V9n influx of e(business sites opened up

• Rokomari.com

2



• 5oodpanda.com

• 6ungry naki.com

• 0haldal.com

• bdhaat.com

• 6utbaar.com

• 9arong.com

• meena baar.com

• shwapno

• Rang

•

Bd-ift.0om• -iftinbangladesh.com

• eshigreetings.com

• 6utbaar.com

• Agiftbd.com

• 9rfigift.com

• -ifthaat.com

• Bangladeshgiftcorner.com

• Akhoni.com

/ Ser"ice o9ering of the select physical and online stores

/.1 'hysical Stores

/.1.1 0arong

The word 9arong means Q!illage fair and the 9arong brand is meant to in!oke a deeper

connection to its rural roots. Born out of a humble resol!e to empower the marginalied

rural women and enable them to realie their full potential, 9arong is one of the &K

social enterprises of BR90 ( the worlds largest de!elopment organiation. It has been

working towards BR90s mission of po!erty alle!iation through economic de!elopment

and human capacity building, with a specific focus on the empowerment of women.

9arong was initiated in &CHK as a pro;ect to ensure poor silk farmers, block printers and

2+



embroiders in anikgan; in central Bangladesh were paid upon deli!ery of their

products. The purpose was to pro!ide a platform for rural artisans where they could sell

their products and get a fair market price. $tarting its ;ourney with pro!iding employment

for a limited number of rural women, 9arong rapidly extended its support by working

with many other artisan and crafts.

/.1.2 Meena 6aar

eena Baar is a well reputed retail supermarket chain in Bangladesh with International

standards. It started its operation in '??' and runs outlets in haka, 0hittagong and

>hulna di!ision. A!ery eena Baar outlet carries almost E,???(K,??? products to sell.

It pro!ides con!enient shopping experience, friendly customer ser!ice along with easy

parking pro!isions for its customers. eena Baar is a subsidiary of -emcon -roup. It

also produces organic products, dairy items, prepared food herbal products.

eena Baar is the first retail superstore in Bangladesh that has a website to shop

online. They launched their website in 9pril, '?&', and now they deli!er in haka,

>hulna and 0hittagong. They took this initiati!e to make customer life easier. 1nline

shopping with eena Baar sa!es time and it is also !ery con!enient for our customer

as we face more more traffic these days.

/.1.3 0gora

4ith outlets in ma;or locations throughout haka, and many more being planned in

haka and other ma;or cities, 9gora is endea!ouring to fulfil the e!eryday needs of its

customers by pro!iding the right 2uality, assortment and price through stores of !arious

forms and sies.4hile 9gora mainly focuses on food items ( ranging from a wide !ariety

of fish, meat, !egetables, fruits, bakery, dairy, and grocery ( it also carries a !ast array of

other grocery, personal care, and !arious other consumer goods and household

utensils.

/.1.$ #ang$ince &CC), Rang has been contributing to the growth of handloom and handicraft

industry. 4ith the motto of painting time Rang has introduced a new dimension of

no!elty in the trend of clothing. Rangs concept of fashion has e!ol!ed round the 2uest

for and celebration of national heritage. The predominant ingredient of our products

being indigenous colours and fabrics, the ideology of Rang is to spread an aesthetic

!-



experience among our people. -oing beyond the typical point of commerce and being

urged by the !alues of our heritage and a clear sense of commitment Rang arranges

special programmes to obser!e festi!als and rituals. 9head of all such occasions our

customers now wait with keen interest to see our response to e!ery socio(religious

festi!als. 9t the centre of Rangs concept of fashion is the spirit of !ariety and !ariation

in our application of colours. The same urge has been essentially reflected in most of

our products. Through the simultaneous moti!ation of flourishing our handloom and

handicraft industry and introducing e!er new products Rang has come to be esteemed

as one of the leading fashion entrepreneurs of the country.

/.1./ Sh&apno

Best /rice with <uality and Ualue( this was the premise with which 90I launched its

mega retail operations $hwapno. 1n ?ctober '??K, $hwapno embarked on its ;ourney

with a network of )? outlets across haka, 0hittagong and $ylhet and till date it holds

the position of the largest neighborhood supermarket chain in the

Bangladesh. $hwapno outlets across Bangladesh are strategically located to ensure a

wide range of customers ha!e easy access to them. $hwapnos di!erse range of

products, both local and international, means it has the capacity to cater to the needs of

clients from all walks of life. eticulous product and ser!ice placement is done to

guarantee the outlets meet the needs of the locality and these demands are meteffecti!ely.

/.2 nline Stores

/.2.1 #o8omari.com

Rokomar.com is a Bangladeshi 1nline $hopping /ortal. Rokomari.com launched in

@anuary &C, '?&' as an online bookstore and it will soon start selling eBook, obile

/hones, computers and accessories, cameras, consumer electronics, 0sUs,

paintings, tickets, handicrafts, home appliances, apparels, gift items, food, toys and

directly imported goods. Rokomari.com is an ecommerce !enture of 1nnorokom 4eb

$er!ices "td, a sister concern of 1nnorokom -roup.

They ha!e introduced some path(breaking ser!ices like 0ash on eli!ery all around

Bangladesh, 1rder by /hone, inimal shipping charge *1nly 7? Taka shipping cost on

!1



any amount of purchases+, iscount. They want to deli!er 414 through our 0ustomer

$er!ice. Their team makes your online shopping easy fun with a user(friendly

shopping interface. They maintain highly customer(centric practices, including great

products and multiple payment options to make shopping with Rokomari.com as an

easy, smarter and hassle free experience.

Rokomari.com is on a mission to dri!e Bangladeshs most comprehensi!e !irtual

business that helps customers make informed choices and extract the best !alue for

their money.

/.2.2 (oodpanda

They are a small team of problem sol!ers, designers, thinkers and tinkers, working

around the clock to make 5oodpanda the most powerful online tool for ordering food in

the uni!erse. They belie!e that ordering food should be easy, fast and definitely funW

They wanted something simpler, so they made it.

5oodpanda has online menus from the staggering selection of deli!ery restaurants

around us. 9nybody can a!ail good food simply entering hisher area and search for

cuisine type, restaurants or e!en price range. The restaurant index also includes

address and deli!ery hours. No online food deli!ery is too difficult for 5oodpandaW

1rdering food filtered to your needs has ne!er been made easier. 5oodpanda

Bangladesh is part of Rocket Internet group.

/.2.3 hatbaarbd.com

hatbaarbd.com is an online marketplace featuring discount deals with popular

businesses like Internet ser!ices, "uxurious restaurants, 6otels, Transports, Beauty

parlors, 5ashion houses, Theme parks, -ymnasiums, 5urniture shops, $ports

Recreation centers, etc. They pro!ide consumers with 2uality and demand able

products in cheap, and the businesses with a ton of customers. Businesses need

customers profit also, 0ustomers need products but at low cost, and hatbaarbd.comsol!es this riddle. Their mission is to increase sales of our merchants and create

wonderful buying experience for their consumers. They create happiness for both their

merchants and consumers.

!2



/.2.$ ;ungry<a8i.com

They are a team of dedicated, food enthusiasts who welcomes us to order food online

and ha!e it deli!ered to our doorsteps. They truly aim to ser!e other food enthusiast

long term and in international standards. 0ustomers no longer ha!e to wait in 2ueues

for takeaways or sit in traffic ;am while the food gets cold or e!en carry hot packed food.

They will do all that for us. Their goal is to facilitate customers to get food without ha!ing

to spend a sweat. They help customers find the right restaurant, cafX, and any other

eatery in customers neighborhood, to order food online. They ha!e peoples fa!orite

nearby restaurants listed down to order food online.

/.2./ *haldal.com

0haldal.com is an online shop based in haka, Bangladesh. It is a ser!ice rooted on the

idea that shopping for necessities should not be a burden. 9t 0haldal, we belie!e time is

!aluable to our fellow haka residents, and that they should not ha!e to waste hours in

traffic, bra!e bad weather and wait in line ;ust to buy basic necessities like eggs. This is

why 0haldal deli!ers e!erything customer needs right at hisher door(step and at no

additional cost. 0haldal is a work in progress, and they hope to get better o!er time.

They are firm belie!ers in using technology to impro!e Bangladesh, and they will

continue to in!est all our effort in pushing the boundaries of technology in this country.

0nalysis of business players: *onte=t in 6angladesh

.1 '7ST 0nalysis

/A$T analysis gi!es a larger picture of the macro(en!ironment of the industry. The

analysis is done so that the industry can prepare itself for the future changes

withchanging factors in the business en!ironment. The /A$T model will help by

categoriing the macro(en!ironment in to political, economic, social and

technological.4e did /A$T analysis of the retail sector of Bangladesh and tried to figure

out which factor has the highest effect on the industry en!ironment.

!!



.1.1 'olitical

Government stability:In Bangladesh the go!ernment and political situation is !ery

unstable which has some direct effects to some extent in the industry.

Political Disruptions: This ser!ice is affected negati!ely during political unrest like 6artal,

$trike, and Blockades etc.

Taxation policy: 5or both B'B and B'0 the !alue added tax *U9T+ is &7F. U9T is

applicable for all items *except some of the unprocessed agricultural products+ thirty

fi!e listed ser!ices. U9T is le!iable at the time of supply of goods and ser!ices. Turno!er

tax Y ' per cent is le!iable where turno!er amount is less than &.7 million taka. Tax

returns are to be submitted on monthly or 2uarterly basis.

.1.2 7conomical

Inflation: Inflation rate is E.E?F in No!ember '?&). The reason for the rise was mainly

for the rise of the food prices. The consumer price index is '?E.K&. *$ource: BB$('?&)+.

GDP total: %&'C.KE billion, -/ per capita: %E'7.3), Total exports: '?K.&? BT billion,

Total imports: 'K&.') BT billion, Total 5I: %&3?? million, and 5orex reser!es: &ECK.C?

BT billion. *$ource: BB$('?&)+. This high rate of inflation poses problems for an

online store because this means that prices will tend to fluctuate and may cause loss of sales or disgruntled customers.

.1.3 Social

Projected Population July 2!" July 2!#

$otal &7K.CE &EH.3C

%aleK&.E3 K7.KE

&emale HH.33 K&.7&

!4



'ender (atio &?E &?7.3)

9s we ha!e a constant growth on population and our country has growing economy

there is a huge potential of online superstore. There are some acti!ities going on social

networking sites which are pro!iding online product to some extent. 4e ha!e a total of

)).?K&C)' million people who ha!e internet access. They are potential buyer of online

superstore which indicates a huge market of this business. Bangladeshi people are

getting busier day by day. The time to go to shop for shopping is getting difficult for

people like corporate executi!es. In the metropolitan cities, which are considered in this

business model, the corporate executi!es and other ;ob holder people are more inclined

to shop online rather than going there physically, which pro!ides the potential of a huge

market.

.1.$ Technological

Internet: Bangladesh is one of the emerging countries in Internet usage in the world.

The number of I/ addresses is proportionate to the number of people. The usage of the

Internet has spread through the country and the number of Internet attacks and !iruses,

is 2uite low. 9ccess to smart phone and internet has brought a re!olutionary change in

the ser!ice sector. Introduction of 3- and a!ailability of cheaper data package has also

expedited the growth.

.2 7 M0T#I>

.2.1 7 M0T#I>

In the early &CH?s, the management consultant c>insey 0o in con;unction with-eneral Alectric in the #$9 de!eloped a comprehensi!e portfolio planning tool *a* +

%ajluf, !##- /a0er, !##" Jo--er, 21) . The -eneral Alectric *-A+ model was

inspired by the need to de!elop a method of e!aluating the plans of -A different

business units in order to fund the plans with the greatest potential for success and

also by the need to o!ercome the limitations of the B0- model yers et al, !##4).

!5



"ike the B0- matrix, it is plotted on a two(dimensional grid. But unlike the B0-, which

classifies a business unit on only two criteria *relati!e market share and market growth

rate+= the -A model employs composite measures in classification of business units.

$B#s are plotted against two dimensions: arket attracti!eness on the !ertical axisand business strength on the horiontal axis.

6.2.2 Desirable feature of 7

• It allows for immediate ranking between high and low, and between strong and

weak

• It incorporates explicit consideration of a much wider !ariety of strategically

rele!ant !ariables

• It stresses the optimal allocation of corporate resources with a !iew to achie!ing

competiti!e ad!antage and superior performance.

6.2.3 *riticism of the 7 matri=

• The -A matrix looks at the current position of $B# but does not take into

account how their future positions might change due to changes in the industry.

It does not also consider how their positions might change due to change intheir lifecycle ill + Jones, !#5#).

• The selection and weighting of factors and the subse2uent de!elopment of both

firms position and market attracti!eness are sub;ecti!e process. Indi!idual bias

and historical perspecti!e cannot be ruled out in the process /a0er, !##").

• any factors are in!ol!ed in determining both indicators on which the matrix is

based. 9ggregation of the indicators is difficult.

•

There is no standard list of critical external and critical success factor to beused by all business units. This creates inconsistencies and ambiguity in the

classification of business unit.

• The result of the analysis is sensiti!e to the definition of the business market.

!#



9FI(" S(CTID(B S(CTIDITBM?6

$' '?I?6S

'o;omari G!.!5H !.-5

ood ,anda G2.+!H !.-5

(IMIT" A,?SI$?

$' >'DST

,'$TCT ?" '$CFS M?6 $' '?I?6S "IDST

Both of the organiations are in medium position in terms of market attracti!eness and

business strength. The strategic concern for this particula position is as follows:

• /rotect existing programs

• 0oncentrate in!estment in segments where profitability is good and risks

relati!ely low

.3 6* M0T#I>

.3.1 "er"ie&

The B0- matrix, in!ented by the Boston 0onsulting -roup, is a tool that allows to

classify and e!aluate business organiations in a particular industry. It is a decision

making tool in order to balance the acti!ities of a company among those which make

profits, those who ensure growth, those which constitute the future of the firm or those

who are its heritage. 4ith this tool one is able to define the de!elopment policy of the

company. The matrix will position the organiations in two ways:

• The arket -rowth Rate

• Relati!e arket $hare

The B0- growthshare matrix is di!ided into four cells or 2uadrants, each of which

represent a particular type of business.

!+

2.!

Medium

1.-

ea;

5.- !.# 2.! 1.-



.3.2 Cuestion Mar8s:

These are products or businesses, that compete in high growth markets but where the

market share is relati!ely low. 9 new product launched into a high growth market and

with an existing market leader would normally be considered as a 2uestion mark.

Because of the high growth en!ironment, they can be a cash sinkJ.

$trategic options for 2uestion marks include..

• arket penetration

• arket de!elopment

• /roduct de!elopment

• 4hich are all intensi!e strategies or di!estment.

.3.3 Stars:

$uccessful 2uestion marks become stars. i.e. market leaders in high growth industries.

6owe!er, in!estment is normally still re2uired to maintain growth and to defend the

leadership position. $tars are fre2uently only marginally profitable but as they reach a

more mature status in their life cycle and growth slows, returns become more attracti!e.

The stars pro!ide the basis for long term growth and profitability.

$trategic options for stars include..

• Integration forward, backward and horiontal

• arket penetration

• arket de!elopment


• @oint !entures

.3.$ *ash *o&s:These are characteried by high relati!e market share in low growth industries. 9s the

market matures the need for in!estment reduces. 0ash 0ows are the most profitable

products in the portfolio. The situation is fre2uently boosted by economies of scale that

may be present with market leaders. 0ash 0ows may be used to fund the businesses in

the other three 2uadrants.

4-



It is desirable to maintain the strong position as long as possible and strategic options

include:


• 0oncentric di!ersification

If the position weakens as a result of loss of market share or market contraction then

options would include.

• Retrenchment *or e!en di!estment+

.3./ Dogs:

These describe businesses that ha!e low market shares in slow growth markets. They

may well ha!e been 0ash 0ows. 1ften they en;oy misguided loyalty from management

although some ogs can be re!italied. /rofitability is, at best, marginal.

$trategic options would include.

• Retrenchment *if it is belie!ed that it could be re!italied+

• "i2uidation

• i!estment *if you can find someone to buyW+

$uccessful products may well mo!e from 2uestion mark though star to 0ash 0ow and

finally to og. "ess successful products that ne!er gain market position will mo!e

straight from 2uestion mark to og.

.3. %imitations:

• efinition *2ualitati!e and 2uantitati!e+ of the market is sometimes difficult.

• It assumes that market share and profitability are directly related.

• The use of high and low to form four categories is too simplistic.

41



• -rowth rate is only one aspect of industry attracti!eness and high growth

markets are not always the most profitable.

• It considers the product or business in relation to the largest player only. It

ignores the impact of small competitors whose market share is rising fast.

• arket share is only one aspect of o!erall competiti!e position.

• It ignores interdependence and synergy

.3. 0<0%?SIS ( 6* M0T#I>

In the B0- matrix we analyed four organiations in two business segment. 4e

considered 5ood /anda and 6ungry Naki in the sector of online ser!ice of food. In other

segment we considered Rokomari and B haat.

1rganiatio

n

arket

$hare

arket $hare of

"argest 0ompetitors

Relati!e

arket $hare

arket

-rowth

6ungry Naki HF &CF ?.3H &?F

5ood /anda &CF &CF &.?? &HF

Rokomari )3F )3F &.?? )?F

B 6aat KF )3F ?.&C &7F

42



The market growth rate is shown on the !ertical *y+ axis and is expressed as a F. The

range is set somewhat arbitrarily. The o!erhead shows a range of ? to )?F with di!ision

between low and high growth at '?F. arket -rowth Rate indicated indi!idual growthrate of each organiation. Rokomari has the highest market growth rate among all the

organiation.

The horiontal *x+ axis shows relati!e market share. The share is calculated by

reference to the largest competitor in the market. 9gain the range and di!ision between

high and low shares is arbitrary. The original work used a scale of ?.&, i.e. market

"eadership occurs when the relati!e market share e2uals &.?. In the online ser!ice for

food sector we considered 5ood /anda as the largest competitor and in the later

segment we considered Rokomari.

5rom the 9nalysis we deducted that Rokomari is in the star position in the B0- matrix.

4ith a high market growth rate and high market share Rokomari is the market leader.

Ne!ertheless in!estment is still re2uired to defend the leadership position. Rokomari will

pro!ide long term growth and profitability. Rokomaris strategic option would be market

4!



integration forward, backward and horiontally. arket penetration will be another

strategically important decision for Rokomari. 9part from that Rokomari can introduce

new product or ser!ice with collaboration or ;oint !enture.

The analysis shows that 5ood /anda is cash cow in this industry. 5ood /anda is doing

business with a relati!ely low market share in a high growth market. The necessity of

in!estment reduces as the market gets mature. 5ood /anda is the most profitable

business in the sector. It is desirable that 5ood /anda will maintain its position. 5ood

pandas strategic option would be product ser!ice de!elopment and di!ersification. To

di!ersify 5ood /andas ser!ice it can add more restaurants into its list co!ering more

geographical areas.

In the B0- matrix 6ungry Naki and B 6aat are in the position of dog with a relati!ely

low market share in low growth market. /rofitability is at best marginal in this scenario.

$ometimes dogs can be re!italied. $o the strategic concern would be retrenchment. If

not then di!estment means if there is someone to buy.

.$ 0D% M0T#I>

.$.1 0D% M0T#I> B7#BI7,

The 9" matrix from 9rthur . "ittle is a portfolio management method that is based on

product life cycle thinking. It uses the dimensions of en!ironmental assessment and

business strength assessment. The en!ironment assessment is an identification of the

industryOs life cycle and the business strength assessment is a categoriation of the

corporationOs $B#Os into one of fi!e competiti!e positions, these fi!e competiti!e

positions by four life cycle stages.To assess the competiti!e position held by a company that operates in a gi!en market,

5lorescu, 0onstantin

alcomete *cited in Tudor Ualeriu, '?&&+ ga!e the following list:

V $upply factor: long(term contracts, labor costs and payment terms=

44



V /roduction factors: production flexibility and capacity, experience, technical skills,

en!ironmental protection, 2uality of management, skill of expertise, labor producti!ity

and production cost=

V 0ommercialiation factors: the power and 2uality of distribution network, credit

conditions, the image of the product, product range, market share, sales force and

price=

V 5inancial factors: profitability, financial stability, cash flow and technological protection

Tudor Ualeriu *'?&&+ pointed out that these performance indicators represented by

market competiti!e position are !alued by reference to competition, using 2ualitati!e

and 2uantitati!e !ariables, which make up a set of determinant factors of success

*p.H77+J. 1n the industry life(stage, each specific stage within the product life(cycle is

identified, assessed, 2uantified and characteried by a system of indicators, added,

Tudor Ualeriu *'?&&+. /opa *cited in Tudor Ualeriu, '?&&+ explained that the

competiti!e position are weighted and scored and this results in se!eral competiti!e

positions according to company forces in relation to competitors on a gi!en market.

4hat /opa is saying, explained Tudor Ualeriu *'?&&+ is that these factors change o!er

time, the business gain or loss ground

in terms of competiti!e ad!antage, and e!entually they will identify with one of fi!e

competiti!e positions. 4ilson and -illigan *&CC'+ ga!e these categories of competiti!e

positions as:

!. ominant: This is a comparati!ely rare position and in many cases is attributable

either to a monopoly or a strong and protected technological leadership. The

implications are that the firm is able to exert considerable influence o!er the beha!ior of

others in the industry and has a wide !ariety of competiti!e position.

2. Stron7: By !irtue of this position, the firm has a considerable degree of freedom o!er

its choice of strategy and is often been able to act without its market position been

unduly threatened by competitors.

3. &avora-le: This position, which generally comes about when the industry sis

fragmented and no one competitor stands out clearly, results in the market leaders

45



ha!ing a reasonable degree of freedom. 0ompanies with a fa!orable market position

often ha!e that can be exploited by particular strategies and hence a greater than

a!erage opportunity to increase market share

;. $ena-le: 9lthough a firm within this category are able to perform satisfactory and can

;ustify staying in the industry, they are generally !ulnerable in the face of increased

competition from stronger and more proacti!e companies in the market. The

opportunities for an organiation to strengthen its position tend to lower than a!erage.

The profitability of tenable firm is best achie!ed and sustained through a degree of

specialiation.

". 6ea0: The performance of firms in this category is generally unsatisfactory although

opportunities for impro!ement do exist. . 1ften, howe!er, the firm is either too big and

inefficient to compete with any real degree of effecti!eness, or it is too small to cope

with competiti!e pressure. #nless he firm changes, it is ultimately likely to be forced out

of the market or exit of its own accord.

$he <ife =ycle Sta7es

Ambryonic: introduction stage, e!erything is new.

-rowth:sales increase, many customers start to know the product.

ature: market is stable, ha!e many customers and a lot of competition.

9ging: emand decreases, the companies need to use strategy to add something new

to attract the customers or abandoning the market.

4#



.$.2 The ad"antages and disad"antages of the 0D% matri=

#nlike other models of product portfolio analysis the 9" matrix is based on an

enhanced applicability because it fits to all situations of competition encountered in a

marketplace. 9lso the 9" matrix can be applied to the fragmented industries, holding a

small competiti!e ad!antage but with a large number of ways of obtaining it *pro!ides

multiple ways of differentiation+. 9s such we can say that the 9" matrix has a high

degree of adaptability to situations of a 2ualitati!e nature.

9 first disad!antage is that the matrix does not take into account a number of

phenomena that can generate long(term in!olution in the products life cycle of a

company. 9nother weakness is related to the high le!el of difficulty in terms of ob;ecti!ee!aluation of the 9" model !ariables. This is often the case for the competiti!e position

indicator. In other words, the difficulty lies in the fact that some factors are 2ualitati!e in

nature and there is a high risk of bias in their use.

In conclusion, we can say that the 9" matrix pro!ides clearer results as a company is

more di!ersified and enable synchroniation on decisions relating to competition.

4*



.$.3 0nalysis of 0D% Matri=

/lotting the 9" matrix against the two principal dimensions, the position of the $B# is

represented by the circle sies proportionate to the sie of the industry where they

belong,

4

=ompetitive

Position

>m-ryonic 'ro?th %ature /7in7

ominant

Stron7 99R1N-

&avora-le$649/N1

R9N-

$ena-le 9-1R9

AAN9 B9D9R

6ea0

0

1

/

A

TITI

U

A

/

1

$I

TI

1

N

IN#$TRG "I5A 0G0"A $T9-A



The analysis consists of two segments, one for online retail ser!ice pro!iders and

another for physical retail stores. In /hysical retail store we considered 99rong,

$wapno, eenabaar, 9gora and Rang. 9ll the physical retailers are in their mature

stage in their industry life cycle. The analysis found out that 99R1N- is in strongJ

position in terms of competiti!e position. In this particular position aarong strategic

concern would be to

• 0ost optimiation,

• i!ersification

• 6old /osition.

9arong has to cut cost= it should bring di!ersification in its product and ser!ice. This

di!ersification can be attained with the use of internet. 4ith the increased use of web

99R1N- can di!ersified its ser!ice more efficiently. The growth of the 99R1N- will be

simultaneous along with the industry.

4+

T9(: "( MT'IA $' ,>BSIC( 'TI(

0

1

/

A

TI

TI

UA

/

1

$I

TI

1

N

=ompetitive

Position

>m-ryonic 'ro?th %ature /7in7

ominant R1>19RI

Stron7

&avora-le511 /9N9

B699T

$ena-le 069" 9"

6ea06#N-RG

N9>I

0

1

/

A

TI

TI

U

A

/

1$I

TI

1

N

IN#$TRG "I5A 0G0"A $T9-A



$49/N1 and Rang both are in fa!orableJ position in terms of competiti!e position.

$trategic options for both of them will be as follows

• 5ocus

• ifferentiation

• 9ttack small competitors

• 5ind Niche and protect it.

9gora and eena Baar are in tenable position in terms of competiti!e positioning. The

strategic concern for them would be as follows:

• aintain or Retreat

• 5ind a niche

9gora and eena Baar both are targeting niche markets. They are operating in the

higher middle class or higher class areas of the haka city and their target customer is

mainly from the upper class of the society.

9ll the online retailers are in the growth stage in the industry life cycle. Rokomari is in

dominant position in terms of competiti!e positioning. The strategic concern for the

Rokomari is as follows:

• efend position.

• 9ct offensi!e.

• 0ost leadership.

Rokomari will face rapid de!elopment as the industry is still at growth stage and itself

holding a strong position in the market. Rokomari is already at cost leadership by

offering 7? taka per deli!ery across the whole country.

5ood /anda and B 6aat are in fa!orable position in terms of competiti!e positioning.

The strategic concern for both of them would be

• ifferentiation

• 9ttack small competitors

• 0ut 0ost.

5-



0hal al is in a tenable positon in terms of competiti!e positioning. The strategic option

for 0haldal is as follows:

• aintain or Retreat

•

Identify a niche• 9im -rowth

B 6aat is in a weak position in terms of competiti!e positioning. The strategic option

for 0halk al is as follows:

• 5ind a niche

• Retreat.

./ 'orter5s (i"e (orces Model:

=ompetitive

&orce

@mpact of @nternet

Threat of new

entrants

Internet reduces barriers to entry such as the need for a sales force,access to channels, and physical assets= it pro!ides a technology for dri!ing business processes that makes the other things easier to do.

Ri!alry among

existing

competitors

4idens the geographic market, increasing the number of competitors, and reducing differences among competitors= makes it

more difficult to sustain operational ad!antages= puts pressure tocompete on price.

Bargaining power

of buyers

9!ailability of global price and product information shifts bargainingpower to customers.

51



Bargaining power

of suppliers

/rocurement o!er the internet tends to raise bargaining power suppliers= suppliers can also benefit from reduced barriers to entryand from the elimination of the distributors and other intermediariesstanding between them their users.

Threat of substitute

products or ser!ices

Anables new substitutes to emerge with new approaches to meeting

needs and performing functions.

. #esources and *apabilities:

Or7aniAation 9alua-leB (areB@nimita-ilit

y

>*ploited -y

Or7aniAation

=ompetitive

@mplications

>conomic

Performance

99R1N- Ges Ges No ( Temporary

0ompetiti!e

9d!antage

9bo!e Normal

R1>19RI Ges Ges No ( Temporary

0ompetiti!e

9d!antage

9bo!e Normal

Ualuable resource of 9arong is the introduction of online shopping. 1ther apparel

distributers pro!ide online ser!ices but they neither ha!e the !ariety nor the co!erage

52



that aarong has. 9arong en;oys a huge supplier base especially for handicraft products

which at present none of its competitors ha!e. $o this is a rarity for 9arong.

Ualuable resource for Rokomari is the ser!ice deli!ery charge *7? BT+ for whole

Bangladesh. The huge and di!ersified collection of books made rokomari uni2ue in their line of business.

. The 3*5s Model of Aenichi hmae:5oodpanda

30Os model of >enichi 1hmae

=orporate8-ased strate7ies

$electi!ity and se2uencing: android and i1$ on tablets and mobile de!ices

ake or Buy: % '? billion since hello food press

0ost(effecti!eness: base ordering amount8food items worth Tk 3??

=ustomer8-ased strate7ies

$egmenting by ob;ecti!es: can set different rates for party and indi!idual use

$egmenting by customer co!erage: operates in haka, 0hittagong and $ylhet.

Resegmenting the market: can expand their business by bringing other cities outside

these three under their co!erage

=ompetitor8-ased strate7ies

/urchasing: they partner with ')? restaurants significantly more than any of their competitors

esign: their website is better designed than its competitors and ease of use is more

$er!ice: can take steps to lessen the present ser!ice time of & hour &? min.

5!



54



. 6usiness *an"as Model:

..1 6ric8 rganiation

5igure: Business 0an!as odel for Brick 1rganiation.

55



..2 *lic8 rganiation:

5igure: Business 0an!as odel for 0lick 1rganiation.

5#



Ser"ice Mar8eting Mi= '5s 0nalysis:

.1 p5s 0nalysis for *lic8 rganiation:

arketing ix Rokomari 0haldal

/roduct Books, 0(Us, $ou!enir,

T(shirts

-rocery, sweets, electric

appliances, health care,

personal care, pet care, baby

care/rice same price like a retailer

shop, #p to '?F commission

on the stated price, shipping

charge 7?tkdeli!ery

(o)er price than that of

ma%or superstores in the

"ha;a cityH ree deli&eries

all o&er "ha;a city.

/lace eli!ery anywhere in

Bangladesh

Ser&ing all of "ha;a cityH

e@cept certain parts of $ld

to)n./romotion 9d!ertising on 5acebook

*acti!e page with more than

K????? fans+, use of banners

all o!er haka city,

0ampaigning in different

festi!als like Boimela, Aid,

Birthdays of writers.

Through 4ebsite, direct mail,

word of mouth,

/eople eli!ery stuff, Tech sa!!y

book readers, internet users

comfortable with e(commerce

0all centre operators,

deli!ery personnel,

con!enient A(commerce

users/rocess 1nline order *through cart+

deli!ery payment or

b>ash prepayment.

1nline order deli!ery

payment on re2uest send

credit card machine )ith

deli&ery representati&e./hysical A!idence

$er!icescape

4ell decorated webpage,

ease of use, high page

speed, customers re!iew,

clearly displaying productre!iews, similar product

recommendation.

etail information of goods in

web page , lucrati!e web site.

5*



.2 p5s 0nalysis for 6ric8 rganiation:

arketing ix 9arong eenabaar

/roduct ens wear, womens wear,

childrens wear, home dXcor

products, ;ewellery, wedding

product

-rocery, health care, persona

care, pet care, baby care

products

/rice Ualue based pricing 0ompetiti!e pricing,

/lace ser!es through &3 retail

stores across the country

ser!es through &K retail

stores across the country

/romotion Billboard, print media, social

media, electronic media,

$hel!es, /1$ displays, Uisual

product presentation, word of

mouth.

Banner, poster, displays at

point of sale, leaflet, !isual

product presentation, product

placement by creating 61T

D1NA$ 01" D1NA$./eople 0ultural minded people, sales

people, cash people

#pper middle and middle

class people, sales people,

cash people

/rocess /roduct selection physicallyor !ia internet+ deli!ery

payment through Uisa

ebit0redit-ift 0araster

ebit0redit-ift 0ardb>ash

01 *0ash on deli!ery+

/roduct selection physically payment through Uisa

0ardaster card or physical

money

/hysical A!idence

$er!icescape

$pacious and colourful

decorated outlets, printed

brochures, in!oice, fast(paced

music when o!ercrowded like

before AI, /#@9 etc. slow

music when less crowded,

well designed website.

"ucrati!e physical locations

with increasing !isibility, red

and orange colour in meat

section, green colour in

!egetables and fruits section,

troylleyology, white colour in

stationery section and the rest

section with fluorescent

colour.

5



#nderstanding the

customersO re2uirements$atisfactory etermined

9ssurance

aking customers feel

safe in their transactions

Not

$atisfactoryAnsured

>nowledgeable staff to 9nswer customer

2uestion.

$atisfactory Ansured

Tangibles 1rdered 5ood oderate etermined%ar0et (esearch 'ap:

anagement has defined minimum order for taka 3??. But customers think it should be

lower than it. $er!ice charge per deli!ery taka H? in haka 0ity is also high to customer.

But management thinks ser!ice charge is low. anagement can minimie this gap by

conducting a in depth market research

esi7n 'ap:

anagement understood the customer expectation regarding the 2uality control of the

food that 5ood /anda supplies to consumers. Notwithstanding of realiing this particular

expectation, 5ood /anda is not able to pro!ide the guarantee of the food they supply.

anagement can minimie this gap by setting goal regarding customer expectation and

standardiing the ser!ice 2uality.

=onformance 'ap

0ustomers often find it time consuming to order a food by phone as they ha!e to try

se!eral times to get the customer representati!e. 9part from that wait time is ballooned

from fi!e minutes to eight minutes. This gap can be curtailed by designing appropriate

order of ser!ice and customer ser!ice stuff training.

=ommunication 'ap:

5ood /anda offers that customers can a!ail different cuisines from different restaurants

described in the website. But in dept inter!iew with the consumers re!eal that

sometimes some of those cuisines are not a!ailable !ai order. This gap is due to

#1



exaggerated promises in ad!ertising. This gap can be lessened by pro!iding information

to contact personal to gi!e customers.

=ustomer >*pectations and Perceptions 'ap

istorted information pro!ided by contact personal and management are responsible all

the gaps mentioned abo!e. They can ensure better ser!ice through the use of sur!ey.

E #ecommendation:&or C-ric08and8mortarD or7aniAations:

$er!ice is the most crucial part for the success of brick(and(mortar retailers and

technology is the great enabler of ser!ice. #tiliing wireless network and access to

online presence on the cloud system, retailers can gi!e customers access to all the

information they need streaming !ideo demonstrations, up(to(the(minute in!entory

information, personalied coupons or offers and more8right at the point of sale.

0ustomers can be ser!ed with a team of sales associates enabled and empowered

by mobile technology. 1ne key is making certain that sales associates ha!e as

much, if not more, information about products as the customer has. 9nother is

making sure associates ha!e the same customer data8from demographics to

purchasing history to shared likes and dislikes8to help them deli!er more

thoughtful, more personalied ser!ice. 0ollecting and le!eraging customers personal information ha!e long been staples of

online retailers to pro!ide personalied recommendations. Brick(and(mortar stores

can catch up this method effecti!ely 2uickly. By more closely integrating their

online and in(store operations, they can enhance their knowledge and understanding

of customers through integrated data collection and analytics. 5or example, when a

woman logs onto to a garden centers 4i5i network, the system can see that she

has recently purchased !egetable seeds and send coupon for '7F off fertilier to

her smartphone. 9 home impro!ement store associate can see that a customer is an

a!id birder so he shows him the stores new shipment of birdhouses. 9 pharmacy

can inform a loyal customer that her prescription medication has become an o!er(

the(counter drug and offer her a personalied introductory discount. The system can

#2



gather information ranging from demographic and psychographic data to purchasing

histories and personal shopping beha!iors and make this information a!ailable to

sales associates on the floor. In the era of information technology the key to success

is to make sure that e!ery store and e!ery associate has access to the crucial

customer information network has accumulated. The more the system and

employees know about customers, the more it will be possible to pro!ide more

personal, more consistent, more satisfying and more differentiating customer

experiences.

1ne of the key elements to increase customer satisfaction can be mobile

application. 9fter entering the shop customers can be accessed through the guest

4i5i network. obile applications can enable a !ariety of customer interactions

ranging from greeting a loyal customer to enabling her to check prices with a

barcode scanner to pushing coupons based on her past purchase history. obile

applications can include check out capabilities that allow associates to accept

payment using smart handheld de!ices, eliminating the frustration of waiting in long,

inefficient cash register lines. obile applications can e!en pro!ide customers with

!alue when theyre not in store. $ome of the other mobile app features can be

shopping list aggregation, !iewing a store map, getting product information byscanning shelf or kiosk barcodes, accessing selected social networking tools such

as likes and peer re!iews, finding online help, seeing limited price matching from

respected retailers, re2uesting associate assistance and streamlining electronic

payment.

obile application is not the only option for retailers looking to personalie their

marketing tactics. Interacti!e displays and digital signs can also be used to collect

information about customers and make indi!idualied recommendations based on

that knowledge. 5or example, a cosmetics retailers and brands can start using

interacti!e displays that allow shoppers to try onJ makeup !irtually, using facial

recognition software to determine how a particular product and shade will look on a

#!



shopper based on her skin tone, eye and hair color, and other factors. These

displays can deli!er then targeted ad!ertisements and special offers based on a

userOs customied results. $uch platforms can be expanded in the future to link to

other databases detailing Internet browsing history, social media presence and other

elements of Big ata8e!en pinpoint indi!idual identities8to tailor marketing

messages e!en further. oreo!er interacti!e !ideo displays and apps may allow

customers to more easily na!igate store.

1n the other hand, employees are one of the most important parts of ser!ice.

Theyre the ones that will keep customers coming back to store. Brick and mortar

retailers ha!e to make staff the best part of the experience. They ha!e to ensure that

they ha!e a solid team of experts that are engaged with customers at the right le!el

from the minute they walk in the shops door

&or Cclic0D or7aniAations:

emand of ebooks is increasing day by day. Abooks can be deli!ered almost

instantaneously. It is !ery simple and easy to purchase and download ebooks

through the Internet. $o besides physical books online retailers should initiate

ebook selling. $earch Angine 1ptimiation *$A1+ is a !ery !iable marketing outlet that can, in

concert with effecti!e landing pages and content, bring a business 2ualified leads

and customers. oreo!er, studies ha!e shown that $A1 can ha!e a better R1I

than traditional forms of marketing like TU and print ads. $A1 can pro!ide a

business !isibility, branding, traffic, a high R1I, credibility, and insight into

customer beha!ior. $o online retail stores should in!est hea!ily on $A1. 1nline retailers ha!e to foster relationship with consumers by helping them make

decisions through recommendations of items based on past purchases, user

re!iews and ratings and suggested complementary purchases. 0onsumers

should ha!e many options for forging a personal bond with the brand, including

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user profiles, re!iews and ratings, wish lists and "istmania lists for

recommending fa!orite products.

Running a blog associated with product bring about limitless potential of content

marketing. By producing free, !aluable content, online retailers can create trust in

their brand and keep people informed. Blogging also gi!es something to share on

social media and helps rank in search engines. 9 simple yet highly effecti!e way

to get started with content marketing for business is to think of all the starting(

point 2ueries people ha!e about products and industry. #sing blog, online retailer

can answer these 2ueries as indi!idual articles. 9dditionally, retailers can use

blog to offer tips, tutorials, and resources related to their products and the

lifestyle around their products. If retailers can create epic content on a fairly

regular basis, they will begin to see the power of content marketing !ia social

media shares, search engines, and so forth.

Retailers should pro!ide an easy interface for customers to register their

complaints. They should make sure that all 2ueries and complaints are

addressed immediately. If some problems cannot be addressed due to any

limitation then at least customers should be apprised about the una!oidable

circumstance. 6a!ing customer complaints in their own interface will allowretailers to use customer feedback on products and packaging. Retailers may

adopt the policy to offer their customer a return option for gift orders.

1F*onclusion:Traditional physical retail stores are facing their biggest challenge since the dawn of the

4orld 4ide 4eb some '7 years ago. The face of retail has changed= today, retailing

means going into shopping centers, going online and going mobile. igital technologies

in the form of smart phones touch screens and information infrastructure has

re!olutionied retail outlets. 4ith a burgeoning tech sa!!y population and rising income

in urban areas, the web will continue to shape the business model of online as well as

physical retail stores of Bangladesh. This research looked into the impact of web on the

retail industry of Bangladesh, the sur!ey report showed something really interesting=

#5

https://blog.kissmetrics.com/guide-to-content-marketing/






e!en through people do ha!e reser!ation about shopping online a large population is

willing to adapt. 4ith a proper business model and right strategy online shopping can

become a trend for both physical and online store alike. 5or that to happen many ma;or

issues are to be addressed= like security and customers trust. 4ith constant upgrading

of technologies and proper management= it is not that far, that most people would be

doing business online, redefine con!entional way of shopping altogether.

##



110''7<DI>

11.1 C@7STI<0I#7&O( $> =ES$O%>(S

!. 6hat is your a7eB

*a+ &7 ( '7yrs old

*b+ 'E ( 37yrs old

*c+ 3E ( )7yrs old

*d+ )7yrs [

2. 'ender

*a+ ale

*b+ 5emale

3. %arital status

*a+ arried

*b+ $ingle

;. 6hat is your avera7e monthly @ncomeB

*a+ No income

*b+ \ 3????

*c+ 3????(E????

*d+ E???&( C????

#*



*e+]C????

". /re you self8supportedB

*a+ Ges

*b+ No

4. o? many credit cards) do you useB

*a+ None

*b+ & ( '

*c+ 3 ( )

*d+ ) ( 7

*e+ ore than 7

1. o? many years) have you used a computerB

*a+ Ne!er used computer

*b+ "ess than & year

*c+ & 3 years

*d+ ) E years

*e+ H yrs [

5. @ndicate your a-ility to use the @nternet

*a+ Not skilful

*b+ $omewhat skilful

*c+ $kilful

#



*d+ Uery skilful

*e+ ont use

#. 6hat is your primary access to the @nternetB

*a+ In your home orm room 9partment 4ork office

*b+ 9t uni!ersity computer labs

*c+ /ublic facility *library, apt computer lab, etc.+

*d+ 1ther

*e+ No access

$trongly

disagree

isagree Neutral 9gree $trongly agree

& ' 3 ) 7

!. @ am ?illin7 to 7ive my personal information ?hen shoppin7 on the @nternet.

& ' 3 ) 7

!!. @ can save time -y shoppin7 on the @nternet.

& ' 3 ) 7

!2. @ trust the security of online payment methods such as credit card.

& ' 3 ) 7

#+



!3. @ can save money -y shoppin7 on the @nternet.

& ' 3 ) 7

!;. @nternet shoppin7 is easy to do.

& ' 3 ) 7

!". @ am concerned a-out possi-le interception of financial information -y an

unidentified third party.

& ' 3 ) 7

!4. @ found myself chec0in7 prices ?hen shoppin7 even for small items.

& ' 3 ) 7

!1. @nternet shoppin7 is convenient.

& ' 3 ) 7

!5. @ ?ould -e more li0ely to shop on the @nternet if credit card security ?as

insured.

& ' 3 ) 7

*-



!#. @nternet promotions such as -anner advertisement, sales, or free 7ifts are

attractive to me.

& ' 3 ) 7

2. Online shoppin7 is safe for credit card use.

& ' 3 ) 7

2!. @ ?ould -e more li0ely to shop on the @nternet if the 6e- site ?as easy to use.

& ' 3 ) 7

22. @ shop online ?here @ can reduce my efforts in travelin7, ?al0in7, par0in7,

?aitin7, and carryin7 as much as possi-le.

& ' 3 ) 7

23. @ enjoy shoppin7 on the @nternet.

& ' 3 ) 7

2;. @ ?ant to see and touch products -efore @ -uy them.

& ' 3 ) 7

2". Online shoppin7 is a ?ay @ li0e to spend my leisure time.

& ' 3 ) 7

*1



24. 6hen the @nternet retailers are not fully identified, @ ?orry a-out ?hether they

are relia-le.

& ' 3 ) 7

21. @nternet shoppin7 provides a -etter quality product.

& ' 3 ) 7

25. @ li0e to shop on the @nternet ?here it is easy to compare many products and

screen them in order to choose the one @ li0e.

& ' 3 ) 7

2#. 6hen shoppin7 on the @nternet pictures and colours are clear andrepresentative of the products.

& ' 3 ) 7

3. @nternet shoppin7 provides more variety of products.

& ' 3 ) 7

3!. @ ?ould -e more li0ely to shop online if product returns ?ere easier.

& ' 3 ) 7

*2



32. $raditional retail stores offer me -etter services than online stores.

& ' 3 ) 7

33. 6hen shoppin7 on the @nternet, @ am satisfied ?ith the delivery system.

& ' 3 ) 7

3;. @ am satisfied ?ith the return policyof @nternet shoppin7.

& ' 3 ) 7

3". @ ?ould -e more li0ely to shop online if the pictures of the items ?ere clearer.

& ' 3 ) 7

34. @ ?ould -e more li0ely to shop online if faster delivery ?as insured.

& ' 3 ) 7

31. 6hen shoppin7 on the @nternet, the storeFs reputation concerns me.

& ' 3 ) 7

35. @ donFt li0e to pay returnin7 posta7e ?hen returnin7 online purchases.

& ' 3 ) 7

*!



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*#



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