E-Tailing

297 Please cite as: Chugh, R & Grandhi, S 2012, ‘E-tailing: A Snapshot of Australia’s Top 25 Retailers’.In Rezaul, KM(ed), Strategic and Pragmatic E-Business: Implications for Future Business Practices, IGI Global, Hershey PA. Chapter 13 E-Tailing: A Snapshot of Australia’s Top 25 Retailers Ritesh Chugh CQUniversity Melbourne, Australia Srimannarayana Grandhi CQUniversity Melbourne, Australia ABSTRACT E-tailing is gaining momentum in Australia as traditional retailers are moving towards the adoption of a clicks and bricks strategy. Electronic retailing or E-tailing can be described as selling goods to customers directly through electronic means. Although this Business-to-Consumer phenomenon is not new, it is helping retailers to conduct business online with virtual storefronts and to reach local and global customers who are disadvantaged by geographical and other distinct barriers. This chapter starts by detailing the current state of e-tailing with supporting statistical igures from recent research with a speciic emphasis on Australia. Overall growth in Internet accessibility rates across Australia clearly demonstrate e-tailing’s importance to online customers. Literature review once again proves the fact that Internet not only creates opportunities for retailers but also poses many challenges. Further discussion provides an understanding of the suitability of the retailing channel for different products and services. This study then analyses the usability of Australia’s top twenty-ive retailers’ websites focussing on website usability factors, such as navigation, searchability, purchasing, layout and clarity, information content, and web browser compatibility. Australia’s e-tailing initiatives might be lagging behind most developed markets, however recent research indicates that there is a signiicant growth in this online activity and it will continue to attract more and more online customers in the coming years as retailers jump on the e-tailing bandwagon. DOI: 10.4018/978-1-4666-1619-6.ch013 E-Tailing INTRODUCTION The shift from buying in brick and mortar stores to online stores is transforming the retailing experience, both for the buyer and the seller. The Internet has provided a forum for connectivity, allowing buyers and sellers to connect with each other on a global platform. E-commerce has been the emerging winner, fuelled by the explosion of Internet usage worldwide. Retailers, worldwide, have been quick to embrace electronic retailing (e-tailing) which has allowed them to capture new markets and gain competitive advantage. E-tailing offers economy of scale for retailers in the form of reduced supply chain costs and an enhanced market share. Customers can potentially benefit from an increased variety of products and services with varied information, convenience, price competition and a different shopping experience for customers who may like this medium owing to its “so-called” anonymity (Turban et al, 2000; Wang, Head & Archer, 2000). Progressively more businesses are recognising the commercial potential of the Internet and a number of researchers have noted that the Internet is becoming important to facilitate business in the networked world (Burt & Sparks, 2003; Sharma & Sheth, 2004). The benefits of setting up an Internet presence are cost reduction, new capability, competitive advantage, communications improvement, improved control and customer service (Bocij et al., 2006). As online retailing continues to grow, it has become important to identify quality factors that impact on it. There are various measures of the dimensions of quality for making online retailing successful. Cho and Park (2002) have identified ten important factors of electronic commerce user-consumer satisfaction: quality of product information, level of consumer services, satisfaction with purchase results and delivery; goodness of site design, satisfaction with purchasing process, quality of product merchandising and portfolio, satisfaction with delivery time and charge, convenience of payment methods, ease of use, and provision of 298 additional information services. The focus on site design is crucial in providing customers a friendly navigational experience and enhance satisfaction. Schneider (2009) suggests that in terms of dollar value and number of transactions, businessto-business (B2B) electronic commerce is much greater than business-to-consumer (B2C) electronic commerce whereas the business processes that support selling and purchasing activities is greater than the number of all B2B and B2C transactions together. This demonstrates the importance of electronic commerce in supporting selling and purchasing processes. E-tailing is considered as one of the rapidly expanding segments of the retail market. Hence businesses need to be able to find a way of providing their products and services online so that they do not miss out on a share of the market that demands and needs online purchasing. So far, in the current literature, there is limited research on the state of e-tailing in Australia specifically with no focus on top retailers’ adoption of e-tailing. Therefore, the purpose of this chapter is to examine the extent of the utilisation of the Internet in providing an electronic retailing medium by the top twenty-five retailers in Australia. Shackel (1984) has defined usability as the ability of a system to be used easily and effectively by humans, allowing them to complete the specified tasks within a range of scenarios. It is important that online stores are easy to use with minimal distractions so that there is a positive perception of e-tailing in the minds of consumers. Retailers’ websites should facilitate the purchase process and also help in disseminating organisational information easily and effectively. Successful electronic retailing is dependent upon all aspects of the shopping experience, including the usability of the retailers’ website. The remainder of this chapter is organised as follows. The following section provides a literature review that has been segregated into two subsections, outlining the state of electronic retailing and an overview of Internet adoption in Australia and E-Tailing its use for online shopping. The third section delves into the opportunities and challenges of e-tailing. The fourth section provides some examples of products and services specifying their suitability to physical retail stores, electronic retail stores and a combination of both. The fifth section outlines the research methodology that was adopted for data collection. Findings and discussion then follow to provide an analysis of usability of Australia’s top twenty-five retailers’ online stores. Finally, the key premises of the research have been summarised and the chapter’s limitations are explicitly stated with an outlook for possible future research. This research makes no implication that one retailer’s site is better than another. The intention is to highlight the usability of the retailers’ websites and to allow for a better understanding of the adoption of e-tailing in Australia. This chapter is an indispensable source of information for retailers, vendors, suppliers, business partners who would like to gain an insight and avail the opportunities proffered by electronic retailing. LITERATURE REVIEW State of Electronic Retailing (E-Tailing) E-tailing became a reality in 1991 when the Internet was opened for commercial usage. Amazon launched their site in 1995 and can be considered as the one of the pioneers of electronic retailing. A lot of other companies (Dell, eBay) shortly joined the band wagon although the real uptake was after year 2000 when the Y2K issue had been resolved. There has been no looking back ever since as retailers realised the benefits of attracting their customers in cyberspace. Today the world is becoming borderless and is fuelled by customers’ access to information, products, and services “anytime anywhere” concept. Online retail sale of goods and services is called electronic retailing or e-tailing (Wang, Head & Archer, 2002). In this model, retailers sell goods and services directly to the customers bypassing any intermediary also called disintermediation (Porter & Millar, 1985; White & Daniel, 2004). E-tailing can be defined as an Internet-based business that sells its products and services online. It suggests the physical analogy of buying in a brick and mortar (physical) store albeit in this case an online world. Currently several retailers are just emerging in the Internet shopping arena because they need to be seen at the forefront of technological adoption. E-tailing still has a long way to go in Australia and it has the potential to change the structure of the marketplace. Although e-tailing has not been adopted by a lot of major retailers, recently retailers like Big W and Kmart have started selling some items online. However, non-adoption does not mean that it is a passing fad. Research indicates that only 13% of retailers were trading online in Australia (Charlton & Taylor, 2004). This means Australian retailers are not harnessing technology to improve their customers’ experience and nor reducing their operational costs. This also proves that businesses still prefer to operate as brick and mortar as opposed to “pure clicks” (only retailing online). Most companies have adopted a safe haven of clicks and bricks (physical presence along with online retailing). Interestingly this survey also found that 49% of online retailers estimated that electronic retailing accounted for less than 5% of their gross turnover (Charlton & Taylor, 2004). A research by Australian Interactive Media Industry Association (2010) Retail Industry Group has predicted that 83% of Australian retailers are expected to increase their online budgets for 2011 which is a good sign going forward for both customers and retailers. Findings of a study by Gribbins and King (2004) have revealed that the development of a transaction website is often not the initial strategy to generate online sales. Small businesses prefer strategies that are less intrusive to their physical operations. It all boils down to the customer’s perception of the ease of online retailing and 299 E-Tailing whether it offers any benefits or not. Although the adoption of online retailing also depends on the personality traits of the customers accompanied with high levels of confidence in the usage of technology (Dholakia & Uusitalo, 2002), the trends indicate that adoption of online retailing is ascending rapidly. The ensuing years will definitely not bring a decline as we move from Generation X to Generation Y whose adoption and usage of technology is definitely higher. The competitiveness of both Australian and global market e-tailing is rapidly rising. Projections of the potential market for electronic retailing vary widely. Jupiter Research (2006) has forecasted that online sales will grow 12% annually to $144 billion in 2010. Research conducted by Forrester Research (2006) that was published by Shop.org, indicates that online retail revenue is projected to reach $211 billion in 2006, demonstrating an increase of 20% of last year’s $176 billion. This shows that adoption of electronic retailing is on the rise from both the buyer and seller’s end as there is constant evolution of technologies to improve the offerings. According to an estimate by the United States department of commerce, e-tailing in United States totalled $165.4 billion in 2010 demonstrating an increase of 14.8% over 2009(Enright, 2011). The IMRG Capgemini e-retail sales index revealed that £58.8 billion was spent online in 2010 that shows an increase of 25% year-on-year (IMRG, 2011). Online retailing revenues in Japan have also been on rise every year by approximately 17% since 2005(The Economist, 2010). The widespread adoption of e-tailing is a good indicator that customers are accepting this medium of retailing. This is also a reminder to non-adopting businesses that e-tailing should form an integral part of strategic planning so they are ready to respond to the changing needs of their customers. With 2.6 million websites and 210 million Internet users, online shopping in China topped $8.2billion in 2007. As the number of Internet users increased to 457 million by the end of 2010, 300 it is forecasted that online sales that currently accounts for less than 1% of China’s total retail sales would escalate to 8% by 2012(China Today, 2011). Part of this surge can also be attributed to the growth in online advertising and availability of Internet on mobile phones. With these positive forecasts, ultimately adopting the Internet as a distribution medium positively depends on the communication avenues, accessibility of consumers and cost savings on entering new markets (Doherty, Ellis-Chadwick, & Hart, 1999). At the other end, inhibitors can be security, trust, and technical issues that prohibit customers from buying online. It is also pointed out that understanding the enablers and inhibitors of e-commerce adoption has become increasingly important (Zhu, Kraemer & Xu, 2003). Internet Adoption and Its Use for Online Shopping An electronic commerce analysis by consulting company, Frost and Sullivan (2010) has reported that Australia’s e-commerce market is immature and lagging behind the US and UK markets by approximately three years. The report also pointed out that online retail spending in Australia in 2010 is expected to account for approximately 5% of total retail sales. This is an indication that more physical retailers must make the move to e-tailing to be successful. The report has also predicted that Australia’s e-commerce market will double in size over the next four years growing from $12 billion in 2010 to $18 billion by the end of 2014. The retail industry is one of the biggest revenue generating industries in many countries. Retailing of goods and services accounts to over two-thirds of all economic activity in the USA (Kotzab & Madlberger, 2001). At the end of 2005-06 financial year, there were 156,668 retailers operating in Australia with more than 1.2 million employees and a total income of $292.3 billion (Australian Bureau of Statistics, 2007). According to Australian Bureau of Statistics (2009), in 2008-09 72% E-Tailing of Australian households had home Internet access and from 1998 to 2008-09, household access to the Internet at home has more than quadrupled from 16% to 72%. Socio-economic characteristics of households influence the rate of computer, Internet and broadband connectivity across Australia. The Australian Bureau of Statistics (2008a) also reported that 64% of Australian homes had access to the Internet in 2006-2007 compared to 35% in 2001 which demonstrates a substantial growth in the usage of Internet as a way of accessing information, communicating and purchasing goods and services online. 98% of the 9.9 million users who used the Internet at home used it for personal and private reasons that included sending and receiving emails and purchasing goods and services online. Of the 11.3 million people who used the Internet at any location, 61% used it for buying goods and services online for private use (Australian Bureau of Statistics, 2008b). As this data reveals, while most of the web users are also online shoppers in Australia, online retailing is still far from competitive. Nonetheless the predictions are optimistic. Research Company IBISWorld estimated that Australian online spending will grow by at least 5.5% annually for the next five years, from $15.1 billion in 2007-08 to $21.2 billion in 2013-14 (Tadros, 2009). A more recent report by Forrester Research (2010) predicts similar trends with forecasts that indicated online retail sales in Australia will almost double from $16.9 billion in 2009 to $33.3 billion in 2015. With recent economic downturn and tight budgets, consumers are now turning to online shopping for better bargains. Retailers can capture shoppers’ interest with factors other than price, such as trust, after sales service, a returns policy and quick delivery. Australian retailers, regardless of size, have to make use of this trend of multi-channel shopping as more and more consumers are turning to the Internet, especially for information, before visiting physical retailers. Shoppers go online searching for product information using major search engines and price comparison engines first before hitting a physical store. Often an online presence opens up a sales window for physical stores since the method of product research has changed vividly in recent years with the emergence of online retailing. A survey conducted by the global information and media company Nielsen on Internet shopping habits revealed that more than 85% of the world’s online population has used the Internet for purchasing (Nielsen Company, 2008). The most popular purchased items through the Internet are books, clothing/accessories/shoes, videos/DVDs/games, airline tickets, and electronic equipment in that order. It was also reported that over the past two years the number of consumers who had shopped online has grown from 627 million to 875 million, demonstrating an increase of around 40%. Recent demographic findings have also outlined that people from all ages are using websites for shopping and the driving force behind this is ‘expediency’ compared to price. Some key reasons for customers shopping online are convenience, low cost, variety of stores and products, no travelling time, ability to avoid impulse buying and anytime shopping (Morganosky & Cude, 2000; Ramus & Nielsen, 2005). Given the recent fall of Borders physical stores it has become important than ever before for retailers to embrace e-tailing. A recent study by market research firm Colmar Brunton (2011) has uncovered that Australian consumers are demanding more online shopping options. The survey also indicated a steep increase in online shopping across Australia with 40 percent people choosing online retailing over their physical retail counterparts. The report also indicated that 85 percent of people shop online due to the convenience, 49 percent shopped online because there were no parking hassles, traffic and waiting queues whilst 66 percent believed that online deals were simply better. Trust seemed to be the cornerstone with 86 percent of Australian consumers stating that they only preferred shopping from trusted websites. 301 E-Tailing There is no doubt that many retailers are turning to the Internet to promote and sell their products. Many have reached a stage where a large section of their operation is done through online retailing for reduced transaction costs, increased accuracy and timeliness of delivery. Research has shown that trust, security, detailed product information, easy navigation, and price are vital for any online business as these factors influence a customer’s decision to buy online (Tilson et al,1998; Lee & Turban, 2001; Turban et al, 2006). OPPORTUNITIES AND CHALLENGES OF E-TAILING Considering the pace at which technology is changing, there is enormous uncertainty about the future contour of e-tailing. Corporate executives now have to make sense of mushrooming e-tailing ideas and analyse business strategies and concepts to reorganize business models that create opportunities in a growing web-based market. Technology may facilitate advantageous revelations of what e-tailing can accomplish, so every business should be considering opportunities across realms of sales and marketing, customer service and operations to tailor support their individual needs. In order to understand and fully explore the opportunities, technological development needs to be categorised into different domains such as business, teamwork, communication, relationship and computation. By identifying and addressing the opportunities, e-tailing can be exploited to offer innovative products, address marketplace issues, join forces with business partners, alter business practices and deliver services. E-tailing also provides an opportunity to access global markets and strengthen the relationship between the customer and retailers (Kaufman-Scarborough & Forsythe, 2009). Further, it can help provide value added services such as product information with specifications, comparison with other brands, and customer reviews and ratings to help price 302 sensitive shoppers with their decisions (Garfinkel et al, 2008). Instantaneous communication, synchronization, and alliance across the Internet are helping firms lower their transactional costs through implicit amalgamation with suppliers and customers. Internet economy thrives on infrastructure and by easing up charges associated with dedicated access; e-businesses can increase their potential by lowering costs and infiltrate a wider market. Variables include Internet users shopping orientation, comprehension of web security, shopping novelties, satisfaction with websites, importance of inspecting products and price sensitivity; all such attitudes have an influence on web retailing(Cheung & Lee, 2005; Kim & Park, 2005). Poorly designed websites that are difficult to navigate or sites that appear amateurish do not mount trust in customers. The Internet and e-commerce are no longer inimitable as both have become conventional mediums in commerce and communication. By embracing Internet and e-commerce, a business can create opportunities to build strategic and operational business models to gain a sustainable advantage over their competitors. While several business models relevant to ecommerce are available, what is suitable to each business is not always clear. For example online retailers can blend several models like advertising, subscription, sponsorships and so forth as part of their overall Internet business strategy to earn profits. Ultimately, a business model that has a customer focus rather than product focus should be an integral component of successful e-tailing. With millions of businesses clamouring for attention, e-retailers need to develop strategies that attract customer loyalty to gain viable advantage over their competitors. One of the advantages of e-retailing over physical stores is customization of information on the web. Web customers can draw any information from websites the way they want it, whenever they want it and also in the form they want it. By customising information, E-Tailing the probability of a customer to buy what they want can be increased. Although e-tailing provides new opportunities to increase profits and also helps to gain more customers, there are several challenges in selling goods online. Some of these challenges include providing secure payment channels to customers, maintaining the accuracy of content on websites, re-engineering the current processes to make them compatible online, prompt delivery and customer service, additional costs to develop applications for mobile devices and employing skilled people to manage the sites(Dennis, Fenech & Merrilees, 2004). Developing an interactive website and maintaining the accuracy of the content on the website, is a significant challenge for businesses (Hofacker, 2008). Research indicates that online shoppers prefer to have more information about the products, particularly about product specifications, customer ratings, comparison of products and their prices between brands (Burke, 2002). Choosing the right colours, content and making the website user-friendly are very important because it is the often the only way of interaction between the e-tailer and consumer (Bramall, Schoefer & McKechnie, 2004).A key challenge for any etailer is to deliver increasingly complex data to an insatiable and growing user population to make shopping a pleasurable experience by providing a fast, uncluttered and easy to navigate site (Anand, 2007). Research has shown that customers get frustrated while navigating sites and customisation of information by e-tailers helps to alter or taper options for individual customers thus reducing their frustration and improving value for the customer (Thirumalai & Sinha, 2009). The core of e-commerce is information and communication. Providing effective and efficient ways in which buyers can gather information rapidly about products and services are vital for its success. The Internet is a poor service delivery channel as it does not provide the direct personal interaction provided by non-Internet based services (Kolesar & Galbraith, 2000). Customers evaluate services on the basis of tangibles, responsiveness, compassion, assertion, dependability and control. These service qualities or tactile cues depend on the customers’ perception of the overall service experience. One of the inadequacies of Internet based retailing is the lack of tactile cues that can have a negative impact on customers online purchasing. In brick and mortar stores, customers can feel, try, smell and hold the product which gives a satisfactory shopping experience but online stores do not give sensory support to their customers. Trust and privacy play a vital role in helping consumers overcome perception of risk and insecurity (Turban et al, 2006). Shoppers are wary of divulging their personal information on the Internet as it is a public domain and is susceptible to unauthorised interference. Even with security arrangements like passwords and firewalls, cyber criminals have exploited Internet weaknesses to hack retailers’ sites to gain access to credit card and banking information (Hancock, 2001). As the Internet is largely unregulated, privacy invasion is a pressing concern for any online buyer. Today, a customer is asked to provide several layers of information for authentication, yet hackers can still find a way to crack the sites. With phishing websites, email scams and key logging on the rise, security has become a growing peril. Constraints are necessary to minimize fraud and to secure the customer’s data including their financial information (Kotzab & Madlberger, 2001). There are inherent socio-cultural barriers that hinder the adoption of e-tailing. Some socio-cultural barriers are lack of transactional trust, no social interaction, and poor understanding of language and content (Lawrence & Tar, 2010). While some threats are real, some are based on fallacy. Retailers have to move beyond the basics and work hard towards minimising these cracks in Internet security. Consumers are demanding more privacy than ever before and e-retailers need to make a conscious effort to put up proper layers of security and build customer relationships based on trust. 303 E-Tailing Table 1. Suitability of products and services to retailing channel Product/Service Physical Retail stores Electronic Retail Store Combination of both Travel and banking Services Suitable Suitable Suitable Real Estate Suitable Unsuitable Suitable CDs, DVDs and books Suitable Suitable Suitable Toys Suitable Suitable Suitable Sporting goods Suitable Suitable Suitable Jewellery Suitable Unsuitable Suitable Perfumes Suitable Unsuitable Suitable Clothes Suitable Unsuitable Suitable Vegetables/Food items Suitable Unsuitable Suitable Software Suitable Suitable Suitable Electronic equipment Suitable Suitable Suitable Insurance Products Suitable Suitable Suitable Wine Suitable Suitable Suitable Medicines Suitable Unsuitable Suitable Gift and Phone Cards Suitable Suitable Suitable Entertainment Tickets Suitable Suitable Suitable (Adapted from Sorce, Perotti, & Widrick, 2005; Phau & Poon, 2000) SUITABILITY OF THE RETAILING CHANNEL FOR DIFFERENT PRODUCTS AND SERVICES Unlike customers of physical retail stores, Internet shoppers cannot see, touch or smell the products before buying. Instead, they only rely on the description of the products provided by the retailer. This increases the level of perceived risk and makes it difficult for customers to decide. This perceived risk can be seen as a deterrent of electronic retailing adoption by customers (Ruyter, Wetzels & Kleijnen, 2001). There are various products and processes that are not suitable for etailing, such as clothes, vegetables, perfumes, and so forth because customers cannot experience the physical characteristics of these products. Product suitability for e-tailing could also be assessed on the basis of value-to-weight ratio, smell, taste or touch characteristics and trial fittings. Travel tickets, CDs and software are most suitable for electronic retailing as customers do not need to 304 experience the physical characteristics (Phau & Poon, 2000). Table 1 below outlines examples of products and services specifying suitability to physical retail stores, electronic retail stores and a combination of both. Many firms with traditional physical stores view electronic retailing as an opportunity to attract more customers and increase the market share, which can lead to an increase in profits, because of access to global markets (Nikolaeva, 2006). Considering the various types of products that cannot be sold online, physical stores will never go out of business and electronic retailing will be used to complement existing channels. However retailers can attract online shoppers by offering better deals compared to physical stores. Online stores can save on operational costs such as rent, electricity, qualified staff, payroll and contribute such savings towards cutting the cost of products in the form of deals of the day, free shipping costs and online saving codes. E-Tailing RESEARCH METHODOLOGY The top 25 retailers that were identified as the sample population for this research were sourced from the Inside Retailing Magazine’s 2010 Top 25 Retailers Rankings (Inside Retailing, 2010). These rankings have been based on the financial performance of the retailers. The sales data, according to the specific retail category, has been presented in Table 2. Figure 1 indicates the breakdown of the top 25 retailers according to their retail categories. This study analysed website usability through heuristic evaluation (Kantner & Rosenbaum, 1997). This evaluation method is based on evaluation carried out by experts who scrutinize and use a website to discover usability problems that they believe would affect end users (Nielsen, 1994). The retailers’ websites were analysed using a quantitative retailer website evaluation survey that had 18 close-ended questions. The process of developing the questionnaire balanced the needs of validity, reliability and practicality. Evaluation and re-evaluation was carried out to establish the reliability of the survey. There was zero difference between the evaluation and re-evaluation scores indicating 100 percent reliability of the instrument. The questions in the survey helped in determining factors relating to navigation, searchability, purchasing, layout and visual clarity, information content and others pertaining to online web browsers support and the usage of cookies. The collated results of the survey have been presented in Table 3. Initial web presence of the retailers was determined using the Google search engine. Website evaluation was conducted in March 2011. In order to ensure consistency of results, specifically for the load times of the websites, all evaluations were carried out at the researchers’ workplace with Internet that uses fibre optic backbone @ 100mbits with dedicated virtual private network tunnelling. Many online website load testing tools were evaluated but most tools only offer page loading estimates by downloading a limited amount of data but Ping- dom (2011) downloads the entire page providing an accurate picture of the download time. Thus, Pingdom was selected to test the load time of the retailers’ homepage. FINDINGS AND DISCUSSION It is remarkable to note that out of the top twentyfive retailers that were investigated, 56% offer online purchasing options, although there is a 100% web presence rate. Since this study only surveyed Australia’s top 25 retailers, it is possible that the size of the retailers was an important factor in the adoption rate, nevertheless, it can be argued that 56% adoption rate is not very promising. Amongst the five supermarkets surveyed only two offered online purchasing. All the five department stores surveyed offered online purchasing. This demonstrates that product category proves to be a determinant in the e-tailing adoption with some categories showing a high level of adoption over others. Big W has recently embraced e-tailing and now offers a wide variety of products online whereas Myer and David Jones offer a limited range of products for online purchasing. Target and Kmart only sell catalogue items online with the exception of some other items. Harvey Norman does not offer online purchasing although allows customers to create a wish list of items for future viewing. Spotlight and Target offer online purchasing using traditional order forms that can be very cumbersome to complete in comparison to the use of shopping carts. Fifty six percent of the surveyed retailers sell gift cards on their websites. Twelve percent of this cohort uses external providers for retailing gift cards. It is interesting to note that out of the 44% that do not offer online purchasing 8% sell gift cards through their website which is also online retailing but for the purposes of this chapter selling gift cards does not constitute retailing of their primary products and services. In the case of Spotlight Group, customers cannot buy cards 305 E-Tailing Table 2. Top 25 Australian Retailers for 2010 (Source: Inside Retailing, 2010) # 306 Retailer Name(ranked according to sales) 2010 Sales(in AUD) 1 Woolworths food and liquor + www.woolworths.com.au $34.2b 2 Coles food and liquor + www.coles.com.au $23.34b 3 Harvey Norman www.harveynorman.com.au $7.70b 4 Bunnings Warehouse www.bunnings.com.au $6.24b 5 Woolworth Big W www.bigw.com.au $4.32b 6 Kmart www.kmart.com.au $3.98b 7 Target www.target.com.au $3.88b 8 Myer www.myer.com.au $3.30b 9 JB HiFi www.jbhifi.com.au $2.67b 10 Aldi * www.aldi.com.au $2.43b 11 David Jones www.davidjones.com.au $2.01b 12 The Good Guys * www.thegoodguys.com.au $1.70b 13 Dick Smith www.dicksmith.com.au $1.59b 14 Reece Plumbing www.reece.com.au $1.51b 15 Officeworks www.officeworks.com.au $1.37b 16 Chemist Warehouse Group # www.chemistwarehouse.com.au $1.30b 17 Retail Adventures www.retailadventures.com.au $1.00b 18 Terry White Chemists* www.terrywhitechemists.com.au $1.00b 19 Spotlight Group www.spotlight.com.au $979m 20 Repco (Exego Group) www.repco.com.au $969m 21 Supercheap Auto www.supercheapauto.com.au $889m 22 Franklins www.franklins.com.au $870m 23 Just Group www.justgroup.com.au $849m 24 Ritchies IGA www.iga.net.au $820m 25 Peregrine Corporation www.perecorp.com.au $820m E-Tailing Figure 1. Top 25 retailers of 2010 according to their retail categories Table 3. Collated Results of the Survey 307 E-Tailing online however can register cards bought from physical stores and check their balances online. Just Group, Peregrine Corporation and Retail Adventures have different brands under their umbrella with each brand having its own dedicated site. Analysis of the Just Group, Peregrine Corporation and Retail Adventures sites did not reveal any useful outcomes for the purposes of this study as the sites were primarily a portal for their brands. To eliminate any redundancy and confusion, only one brand (Peter Alexander - a clothing and fashion accessories retailer of the Just Group, On The Run - convenience stores of Peregrine Corporation and Sam’s Warehouse - discount variety retailer of Retail Adventures) was evaluated. It is possible that other brands of Just Group, Peregrine Corporation and Retail Adventures may have usability characteristics and functions that are not reflected in either Peter Alexander, On The Run and Sam’s Warehouse. Data analysis also revealed that the provision of information content was the prime focus of all the surveyed retailers. All the retailers had information about the company, 100% provided a store locator function making it easier to search for store location and 92% had online catalogues that were an extension of their advertising campaigns. Seventy-two percent of the retailers had the returns policy displayed on their website, irrespective of the fact of whether they offered online retailing or not. These policies were applicable for customers regardless of where they shopped. Ninety-two percent retailers displayed the company’s privacy policy which generally outlined the type of personal information the site collected, how the information is used, how the information collected can be accessed and the security measures the company takes to protect personal information. It was evident from the privacy policies exhibited on the retailers’ sites that the Australian National Privacy Principles for the Fair Handling of personal information were being followed. 308 All the retailers had information about careers and recruitment displayed on their sites. This included but was not limited to: employment opportunities, ability to apply online for positions and also the ability to create profiles allowing the company to alert potential candidates. Under the search category, 68% of the retailers had an in-site search tool. The non-availability of an in-site search tool in the remaining 32% often made it difficult to search for the information within the site. Fifty-six percent of the retailers had a site map that listed the pages in the website in a hierarchical manner. Apart from helping users locate the site’s content, site maps can also improve search engine optimisation by ensuring that all the web pages in the site can be found. Ninety-six percent of the sites were clearly laid out and visually appealing. All of them avoided unnecessary animation, especially at the site entry point, since it is often frustrating for consumers to look at an entry splash page. JB Hi-Fi has used a bright yellow colour that is irritating to look at after an extended period of time although understandably the colour has more to do with the company’s use of yellow colour in its branding and identification. The load time of the retailers’ website home page was also determined. Three tests were performed on different dates and times of the day to ascertain the average load for each site. In the case of 4 retailers, the processing to ascertain the load times of the webpages was automatically stopped by Pingdom because timeout exceeded 30 seconds. The average load time for the remaining 21 retailers was 11.91 seconds. The fastest site to load was Target at 1.3 seconds whilst the slowest site to load was Supercheap Auto at 24.93 seconds. Figure 2 details the load time for retailers’ website home page. 24 percent of the retailers’ home pages took 10-15 seconds to load while 8% of the retailers’s home page took 20-25 seconds to load. Cross browser compatibility checks were carried out in four different browsers (Internet Explorer, Firefox, Chrome and Safari) that custom- E-Tailing Figure 2. Load time for retailers’ website home page ers are more likely to use. All the sites had a consistent look and the homepage loaded uniformly across the browsers. This proves that web designers develop sites that are supported by multiple browsers. Eighty-eight percent of websites surveyed use cookies that are useful for identifying the customer, their preferences, shopping cart contents and other data to help in enhancing the purchasing process. Despite the controversy surrounding cookies, they are important for differentiating customers and to maintain customer browsing data, often across multiple visits. In order to dispel competitors and increase sales, businesses have to adopt the Internet and related technologies for retailing, advertise on the web, consider strategies to identify global customers, take a proactive approach and expand their scope, gain a strong understanding of how to satisfy customers, use distribution systems to handle large volume of e-orders and incorporate a strong brand presence. However it is important that the e-tailing business strategy is designed by keeping into account the characteristics of products and services and their suitability for being sold through the Internet. CONCLUSION This chapter makes a contribution to the limited existing body of knowledge about electronic retailing. The justification for this chapter arose from the recognition that there is limited theoretical and empirical research into the state of e-tailing adoption in Australia and there still remains significant scope to further our understanding. This study has provided an overview of the state of e-tailing in Australia. E-tailing will allow businesses to work smarter and provide customers a ubiquitous channel to facilitate transactions. E-tailing undoubtedly has the capacity to transform the market place. A significant number of the existing top retailers have well developed websites but do not have any provision for selling online. It is imperative that the online retailing medium is exploited to enable businesses operate more efficiently without changing the fundamental way of doing business. As with any research, this chapter has limitations. Looking at the top twenty-five retailers does not constitute a large sample thus further studies could look at a larger sample. Also, it was not practical to collect and analyse a large number of usability factors, so the questionnaire was limited to 18 questions that were deemed to have significant influence on usability. This study has also neglected an analysis of customer needs, wishes, and behaviours towards electronic shopping. This calls for further study to better understand consumer behaviour and adoption patterns in Australia. This chapter has not looked at the number of hits that these retailers’ websites get to prove their popularity but that could be the focus of another study. Also, whilst this chapter focuses largely through personal interest in the retailing sector, a similar study can also be initiated for analysing the adoption of the Internet by government. In spite of these limitations, the results obtained from the current study are promising and advances our knowledge of the state of electronic retailing in Australia. Even if online retailing accounts for a 309 E-Tailing small percentage of aggregate sales, it can be predicted that electronic retailing will only continue to grow significantly in the future. It would come as no surprise to see retailers derive benefit from e-retailing and expand into previously untapped markets. Thus, all retailers should adopt a multichannel strategy to increase sales by leveraging their online presence, as consumers increasingly use the Internet to search for product information and compare prices. To conclude e-tailing has many opportunities to offer for businesses however it requires more initiatives from businesses to attract customers. 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European Journal of Information Systems, 12(4), 251–268. doi:10.1057/palgrave.ejis.3000475 KEY TERMS AND DEFINITIONS Brick and Mortar Retail Strategy: A traditional retailing strategy where a firm retails its products and services through physical stores. Business-to-Business (B2B): Electronic commerce between two business firms. Business-to-Commerce (B2C): Electronic commerce between a firm and its customers. Clicks and Bricks Retail Strategy: A retailing strategy where a firm maintains both physical stores and web presence to sell products & services. Cookies: A small text file that is stored in customers’ computer which helps to uniquely identify web customers and their preferences when they visit an online retail store. Cross Browser Compatibility: Refers to the accessibility of company’s website through different Internet browsers. E-Commerce: Refers to electronic commerce that implies buying and selling of goods & services online using web technologies. E-Tailing: Refers to online retailing that implies selling of retail goods and services online using web technologies. Firewall: A protective mechanism to stop intruders from entering an organisation’s network. Internet Shopping: Browsing and purchasing of products & services through a firm’s website. Pure Clicks or Clicks Only Retail Strategy: A retailing strategy where a firm trades products & services online only using web technologies. 313