Download e-tailing

Chapter 3
Retailing in Electronic Commerce:
Products and Services
Learning Objectives
1.
2.
3.
4.
5.
6.
Describe electronic retailing (e-tailing) and its
characteristics.
Define and describe the primary e-tailing business
models.
Describe how online travel and tourism services
operate and their impact on the industry.
Discuss the online employment market, including its
participants, benefits, and limitations.
Describe online real estate services.
Discuss online stock-trading services.
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Learning Objectives
7. Discuss cyberbanking and online personal finance.
8. Describe on-demand delivery by e-grocers.
9. Describe the delivery of digital products and online
entertainment.
10. Discuss various e-tail consumer aids, including
comparison-shopping aids.
11. Identify the critical success factors and failure
avoidance tactics for direct online marketing and
e-tailing.
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Internet Marketing
and Electronic Retailing
 electronic retailing (e-tailing)
 Retailer is a sales intermediaries, a seller that operates
between manufactures and consumers.
 E-catalogs sales free a retailer from the need for physical
store to distribute products.
 E-retailing (e-tailing)
 Retailing conducted online, over the Internet.
 E-tailing makes it possible for a manufacture to sell
directly to consumers, cutting out the intermediaries.
 e-tailers
 Retailers who sell over the Internet
 Amazon.com is the most recognize e-tailer worldwide
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Internet Marketing
and Electronic Retailing
What Sells Well on the Internet?
 Travel (e.g., priceline.com)
 Computer Hardware
and Software (e.g., Dell)
 Consumer Electronics
 Office Supplies (e.g.,
Staples.com)
 Sport and Fitness
Goods (e.g., fogdog.com)
 Books and Music (e.g.,
 Toys (e.g., Kbkids.com)
 Health and Beauty
 Entertainment (e.g.,
espn.go.com)
 Clothing
 Jewelry
 Cars
Amazom.com)
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Internet Marketing
and Electronic Retailing
 Characteristics of Successful E-Tailing
• Retailer and e-tailer success comes from offering quality
goods at good prices, coupled with excellent services.
• Goods with the following characteristics are expected to
facilitate higher sales volumes:
 High brand recognition (e.g., Sony)
 A guarantee provided by highly reliable or well-known
vendors
 Digitized format (e.g., software, music, or videos)
 Relatively inexpensive items
 Frequently purchased items
 Commodities with standard specifications
 Well-known packaged items that cannot be opened even in a
traditional store
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E-Tailing Business Models
Classification by Distribution Channel
Direct marketing from manufacturers
Pure-play e-tailers
Click-and-mortar retailers
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E-Tailing Business Models
 direct marketing
 Broadly, marketing that takes place without
intermediaries between manufacturers and
buyers; marketing done online between any
seller and buyer.
 By direct marketing, product delivery time is
decreased, manufactures can build closer
relationship with customers, order accuracy is
increased, and order can be placed quickly.
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E-Tailing Business Models
virtual (pure-play) e-tailers
Firms that sell directly to consumers over
the Internet without maintaining a
physical sales channel.
Virtual e-tailers have the advantages of
low overhead cost and streamlined
processes.
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E-Tailing Business Models
click-and-mortar retailers
Brick-and-mortar retailers that offer a
transactional Web site from which to
conduct business
brick-and-mortar retailers
Retailers who do business in the
physical world in traditional brick-andmortar stores.
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E-Tailing Business Models
multichannel business model
A business model where a company
sells in multiple marketing channels
simultaneously (e.g., both physical and
online stores)
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Travel and Tourism Services Online
 Travel-related Web sites are ideal places to plan,
explore, and arrange almost any trip.
 Some major travel-related Web sites are expedia.com,
orbitz.com, travelocity.com, and priceline.com
 Services provided
 Online travel agencies offer almost all the services provided by
the conventional agencies such as reserving and purchasing
tickets, accommodations, and entertainment.
 They often provided services that conventional agencies do not
offer such as e-travel magazines, fare comparison, currency
conversion calculator, fare tracking, and so many.
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Expedia.com
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Travel and Tourism Services Online
Special Services
 Many online travel sites such as Lastminute.com offer very low
airfares and discount accommodations prices to fill otherwiseempty seats and hotel rooms. Last-minute trips can also be
booked on americanexpress.com, sometimes at a steep discount.
 Special vacation destinations can be founded at priceline.com.
 Many sites such as tripprep.com and medicalert.com offer
medical advice and services for travelers.
Wireless services
Direct marketing
Alliances and consortia
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Travel and Tourism Services Online
Benefits of Online Travel Services
To travelers
Free information accessible at any time from any
place
Substantial discounts are available
To travel services providers
Airlines, hotels, and cruise lines sell otherwiseempty spaces
Direct selling saves the provider’s commission
and its processing
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Travel and Tourism Services Online
Limitations of Online Travel Services
Many people do not use the Internet
The amount of time and the difficulty of
using virtual travel agencies may be
significant, especially for complex trips and
for inexperienced Internet surfers
Complex trips or those that require
stopovers require specialized knowledge
and arrangements, which maybe better
done by knowledgeable, human travel agent
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Travel and Tourism Services Online
 Impact of EC on the Travel Industry
 The Internet may be contributing to a sharp
reduction in the number of travel agents
 It has also driven the rise of intermediaries—thirdparty online sellers and portals provide price
comparisons and a range of other value-adding
services for the consumer
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Employment, Placement,
and the Job Market Online
 Traditionally, job matching has been done in
several ways:
 Ads in classified sections of newspapers
 Corporate recruiters
 Commercial employment agencies
The job market has now moved online.
 The online job market connects individuals
who are looking for a job with employers who
are looking for employees with specific skills.
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Employment, Placement,
and the Job Market Online
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Employment, Placement,
and the Job Market Online
 THE INTERNET JOB MARKET
 The following are parties use the internet job
market:
Job seekers
Employers seeking employees
Job agencies
Government agencies and institutions
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Employment, Placement,
and the Job Market Online
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Employment, Placement,
and the Job Market Online
 Limitations of the Electronic Job Market
 The biggest limitation of the online job market is the
that many people do not use the Internet.
 Finding candidates online is complicated due to the
large number of resumes available online
 Security and privacy
 High turnover costs for employers by accelerating
employees’ movement to better jobs
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Employment, Placement,
and the Job Market Online
Intelligent Agents in the Electronic
Job Market
Intelligent agents for job seekers
Intelligent agents for employers
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Employment, Placement,
and the Job Market Online
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Real Estate, Insurance,
and Stock Trading Online
 Real Estate
 E-commerce and the Internet are surely having an ever
increasing impact on the real estate industry for many
reasons:
1. Potential home buyers can view many properties online,
saving time for the buyer and the broker
2. Potential home buyers can sort properties according to
specific criteria and preview the design of the properties,
shortening the search process
3. Potential home buyers can find detailed information
about the properties
4. Builders can use virtual reality technology on their Web
sites to demonstrate three-dimensional floor plans to
home buyers
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Real Estate, Insurance,
and Stock Trading Online
 Real Estate Applications and Services
 Advice for consumers on buying or selling,
assist2sell.com
 Commercial real estate listings,
realcommercial.com.au
 Maps, mapquest.com
 Information on current mortgage rates,
bankrate.com
 Mortgage comparisons and calculations, eloan.com
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Real Estate, Insurance,
and Stock Trading Online
Insurance Online
Standard insurance policies, such as auto,
home, life, or health are offered at a
substantial discount
Third-party aggregators offer free
comparisons of available policies
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Banking and
Personal Finance Online
 electronic (online) banking (e-banking)
 Various banking activities conducted from
home or the road using an Internet connection.
 E-banking also known as cyberbanking, virtual
banking, online banking, and home banking
 For users, e-banking saves time and money.
For banks, it offers inexpensive alternative to a
branch banking and a chance to enlist remote
customers.
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Banking and
Personal Finance Online
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Banking and
Personal Finance Online
Online billing and Bill-paying
Major payment systems
Automatic transfer of loan payments
Paying bills from online banking accounts.
Merchant-to-customer direct billing
Using an intermediary for bill consolidation, First
Data Merchant Solutions
Person-to-person direct payment, Paypal
(paybal.com)
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On-Demand Delivery Systems
and E-Grocers
 E-tailers may use the postal system within their
country or they may use private shippers such as
FedEx, DHL, or UPS.
 Delivery can be made within days or overnight if the
customer is willing to pay for expedited shipment.
 Some e-tailers provide delivery functions by using
either company-owned delivery vehicles or outsourced
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On-Demand Delivery Systems
and E-Grocers
e-grocer
A grocer that takes orders online and
provides deliveries on a daily or other
regular schedule or within a very short
period of time
on-demand delivery service
Express delivery made fairly quickly after
an online order is received
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Online Delivery of Digital Products,
Entertainment, and Media
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Online Delivery of Digital Products,
Entertainment, and Media
 Online Entertainment
 Examples of online entertainment
 Web browsing
 Internet gaming
 Fantasy sports games
 Single and multiplayer games
 Card games
 Social networking sites
 Reading
 Live events
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Online Delivery of Digital Products,
Entertainment, and Media
Developments in the Delivery of
Digital Products
CD customization sites
The disintermediation of traditional print
media
Time will tell if digital delivery may replace
or enhance traditional delivery methods for
various types of digital content
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Online Purchase-Decision Aids
 Many sites and tools are available to help online consumers
with purchasing decisions
 shopping portals
Gateways to e-storefronts and e-malls
 They have links to many different sellers that evaluate a
broad range of products
 They also may provide comparison aids
 Several portals have purchased shopbots and
incorporate them
 shopping robots (shopping agents or shopbots)
 Tools that scout the Web on behalf of consumers who specify search
criteria, for example mysimon.com
 Some of agents are specialized in a certain product category. For
example, the agent in office.com helps consumers find the best price
for office supplies
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Online Purchase-Decision Aids
Business Ratings Sites
Rate e-tailers and online products based on
multiple criteria
Trust Verification Sites
Evaluate and verify the trustworthiness of
various e-tailers
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Successful Click-and-Mortar
Strategies
 Speak with one voice
 Regardless how the customers interface with a
company, the information received and services
provided should be consistent
 Leverage the multichannels
 The retailer will offer the advantages of each
marketing channels to customers of all channels
 Empower the customer
 The seller needs to create a powerful 24/7 channel
for services and information
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Problems with E-Tailing
and Lessons Learned
Lessons Learned
Don’t ignore profitability
If it doesn’t make cents, it doesn’t make sense.
Manage new risk exposure
The Internet has the potential to expose a
retailer to more sources of risk.
Watch the cost of branding
The drive to establish brand recognition quickly
often leads excessive spending.
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Problems with E-Tailing
and Lessons Learned
Do not start with insufficient funds
It may seems obvious that a venture will not
succeed if it lacks funds at the start,
The web site must be effective
Internet shoppers expect Web sites to offer
superior technical performance- fast page loads,
quick database searches, …
Keep it interesting
Web sites without dynamic content will bore
returning visitors
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