Analyze how Consumers value E-commerce websites

The stories of Kirana shops are now becoming folklore as Digital Retail has reared its head in the Indian sub-continent. For an industry which was valued at INR 19,249 crore in 2009 and now projected to close at INR 62, 967 crore by end of 2013, it is fast becoming a force to reckon with. To capitalize on this growth  we have seen a deluge of portals which cater to the 11% population who use the internet. However, the demographic scenario of Indian population is changing rapidly and internet is bound to penetrate deeper within the population. This will also provide the online retail sites an opportunity to tap into hitherto unknown territories. A wider reach, varied product catalogue since less fight over “digital” shelf space and a constant endeavour to provide more value at “low” costs have been some of the features why more and more people are now favouring the click image of retail to its brick-and-mortar counterpart. The online retail market in India will triple in size by 2014-15, from Rs 32 billion at present.

Our study is an attempt to understand the quality that consumers look into any of these e-commerce outlets or the one quality that helps in binding the consumers with the retail website. For this attempt we have selected the top 5 e-retail web-sites based on the Yahoo India Finance ranking as well as based on their Google page ranks and Alexa Traffic Rank.

SERQUAL parameters have long been a scale for measuring the quality provisions of service or retail organizations. Based on this premise, we have tried to gauge the perception of people towards the above selected e-retailers against the five SERVQUAL parameters, Tangibles, Reliability, Responsiveness, Assurance and Empathy.

Parasuraman et al. (1990) had suggested adapting the SERVQUAL instrument to measure service quality in relation to competition. SERVQUAL is a well-established “gap-assessment” methodology that can be used to develop service-improvement initiatives by examining the “gap” between expectations and perceptions. The adapted SERVQUAL instrument (Parasuraman et al., 1991) uses a non-comparative evaluation model – that is, customers visiting e-retailer A are asked to evaluate the firm against a particular parameter based on what they perceive is the value provided by the firm for the specific parameter. This perception gives an indication as to the customers’ perception alongside their expectations of the service. The SERVQUAL scores thus calculated provide the foundation for highlighting the gaps which the consumers presume about any firm.

Individual SERVQUAL parameters have been ranked using the AHP methodology combined with the pair-wise comparison approach. Analytic Hierarchy Process (AHP) is a multi-criteria decision-making approach developed and introduced by Saaty (1977 and 1994). The process has appropriate measures which will help in prioritising amongst the evaluating parameters (Saaty, 1980; Aguarón, Escobar and Moreno-Jiménez, 2003; Aguarón, and Moreno-Jiménez, 2003; Escobar, Aguarón and Moreno-Jiménez, 2004; Moreno-Jiménez, Aguarón and Escobar, 2008). The pair-wise comparison methodology provides a more meaningful analysis for developing a competitive set of service attributes that will satisfy customers and assist the e-retailers in outperforming its competitors.

We conclude this report by providing our conclusion based on the study and also put forth a few suggestions from our side which may in the long term support the e-retailers to build a more stronger and loyal relationship with its targeted consumers.

The published report can be downloaded at the following link: