Identifying sustainable business model for e-tailing industry

Abstract

In the era of knowledge economy, traditional brick and mortar retail shops are witnessing severe competition from the off-store counterparts. Accessible and large repository of structured digital information is one of the driver to organizational transformation or value creation process. Owing to the network effects in the online channels, it is easy for an item or concept to become a rage or to be declined by all. Various industry features have shifted their categorization from point of differentiation to point of parity like seasonal discounts and buy 2 get 1 offers. The need to make a mark in consumer’s mind is through innovative ways of putting the value proposition across. Today, consumers are more value conscious than ever. Many players in the retail industry, on-store and off-store, are struggling in acquiring a market share and sustain it for longer time. In fast moving internet world, it has become imperative for companies to rework on their traditional business practices. Organizations need to reengineer their structure, processes revenue model and business strategy to capitalize on the benefits of e-commerce. In order to implement customer-centered e-commerce model; integration of suppliers, back-office functions, and front-office functions to achieve the organizational flexibility necessary to move at Internet speed and to satisfy customer demand is a must. Also, reinventing services by building cost-effective complete experience and loyal relationships with the profitable customers is required for growth. Digital assets in form of comprehensive customer database are helping players like Amazon.com and eBay to redefine economies of scope to maximize value.