lec3-e-retail
TRANSCRIPT
LECTURE 3
Retailing in Electronic Commerce:
Products and Services
Retailing in Electronic Business:
Products and Services
Objectives:
Describe e-tailing and its characteristics.
B2C
Define and describe (“e-tailing”).
Cases
14- 3
Definitions
• Retailing
– All activities involved in
selling goods or
services directly to final
consumers
for their personal,
nonbusiness use.
14- 4
Definitions
• Retailer
– Can be brick and
mortar,
– 100% virtual,
– or click and mortar
5
Internet Marketing and Electronic
Retailing (E-Tailing)
• Overview of e-tailing
– Electronic retailing (e-tailing): Retailing
conducted online, over the Internet
– E-tailers: Those who conduct retail business
over the Internet
14- 6
How is web
retailing
different? In
your opinion,
what “works
on the web”
that won’t work
in a typical
store?
Discussion Question
E-tailing (etailing) Short for "electronic retailing"
E-tailing is synonymous with business-to-consumer (B2C) transaction.
•The opportunity July 1995, e-tailing pioneer Amazon.com, offered
books via an electronic catalog from its Web site(amazon.com)
The company has continually enhanced its businessmodels and electronic store by:
Expanding product selection
Improving the customer’s experience
Adding services and alliances
Recognizing the importance of order fulfillment andwarehousing
Amazon.com: The King of E-Tailing
Amazon.com: The King of E-Tailing (cont.)
Amazon.com: The King of E-Tailing (cont.)
Amazon.com: The King of E-Tailing
Amazon.com: The King of E-Tailing
Amazon.com: The King of E-Tailing
Amazon.com: The King of E-Tailing
Amazon.com: The King of E-Tailing
Amazon.com: The King of E-Tailing
Technology used
Amazon.com has expanded in a variety of directions:
Offers specialty stores (professional and technical store)
Expands its editorial content through partnerships withexperts in certain fields
Increases product selection with the (used and out-of-printtitles)
Expands its offerings beyond books (June 2002 became anauthorized dealer of Sony Corp. selling Sony productsonline)
Today: a diversified retailer of products and services
Amazon.com: The King of E-Tailing (cont.)
– Key features of the Amazon.com superstore are:
• Easy browsing, searching, and ordering
• Useful product information, reviews,
recommendations, and personalization
• Broad selection
• Low prices
• Secure payment systems
• Efficient order fulfillment
• Personalization
Amazon.com: The King of E-Tailing (cont.)
–Amazon.com is recognized as an online
leader in CRM• Informative marketing front ends
• One-to-one advertisements
• Free posting of restaurant menus from thousands of
restaurants
• “Welcome back,” with recommendations of new books from
the customers preferred genre based on previous purchases
Amazon.com: The King of E-Tailing (cont.)
– In 1997, Amazon.com started an extensive affiliatesprogram
By 2002, the company had more than 500,000partners that refer customers to Amazon.com
Amazon pays a 3 to 5% commission on any resultingsale
alliances with major “trusted partners” provideknowledgeable entry into new markets
Carsdirect.com allows it to sell cars online
Drugstore.com connects to health and beauty aids
AT&T, Nextel and others suggest service plans forwireless phones
Amazon.com: The King of E-Tailing (cont.)
Carsdirect.com
www. CircuitCity.com
E-Tailing Business Models (cont.)
• Brick-and-mortar retailers: Retailers in old-economy who do business inthe non-Internet (off-line), selling physical products by means of physicalagents.
• Click-and-mortar retailers: Brick-and-mortar retailers with a transactionalWeb site from which to conduct business in the physical world
• Multichannel business model: Describes a company that sells in multiplemarketing channels simultaneously (e.g., both physical and online stores)
• virtual (pure-play) organizations: Organizations that conduct theirbusiness activities solely online
Classification by distribution
channel:– Mail-order retailers that go online [Lands’ End]
– Direct marketing from manufacturers [Dell
Computers; Nike.com]
– Pure-play e-tailers [cattoys.com]
– Click-and-mortar retailers [CircuitCity]
– Internet (online) malls
E-Tailing Business Models
E-Tailing Business Models
Classification by distribution
channel:• 1. Direct marketing from manufacturers model
• HP & Dell Computers;
• Toyota.com
TOYOTA.com
TOYOTA.com
TOYOTA.com
TOYOTA.com
TOYOTA.com
Classification by distribution
channel:
2. Mail-order retailers that go
online [Lands’ End]
Classification by distribution
channel:
– 3. Pure-play e-tailers
cattoys.com;
dogtoys.com;
Amazon.com
Classification by distribution
channel:
4. Click-and-mortar retailers
[CircuitCity]
www. CircuitCity.com
Classification by distribution
channel:
– 5. Internet (online) malls
14- 49
Outlet malls
and category
complete are
popular with
consumers
50
51
E-Tailing Business Models (cont.)
• Retailing in online malls
– Referring directories• directory organized by product type
• catalog listings or banner ads at the mall site advertise the products or stores
– Malls with shared services• consumer can find the product, order and pay
for it, and arrange for shipment
• hosting mall provides these services, but they are executed by each store independently
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E-Tailing Business Models
• Other B2C business models
– Transaction brokers
– Information portals
– Community portals
– Content creators or disseminators
– Viral marketing
– Market makers
– Build-to-order
– Service providers
Travel and Tourism
information systems on line
54
Travel and Tourism
Services Online
• Major travel-related Web sites are:– expedia.com
– priceline.com
– orbitz.com
– travelocity.com
– asiatravel.com
– hotwire.com
– travelweb.com
– eurovacations.com
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Customize your trip
Auction-Style Booking-Related Sites:
www.priceline.com — bid and press your luck; best combined with
information from biddingfortravel.com and betterbidding.com
www.hotwire.com — not always as great a deal as Priceline but takes the
price guess work away a bit; best combined with info from betterbidding.com
www.biddingfortravel.com — information on Priceline bookings
www.betterbidding.com — information on Priceline and Hotwire bookings
www.skyauction.com/home.do — Travel auctions and buy it now deals
Comparison sites for travel products:
www.hotelscomparison.com — one of the best for hotels.
www.travelsupermarket.com — flights, hire cars and (from May) hotels.
www.traveljungle.co.uk — strong on flights, hotels and cars. Sponsors
appear at the top of the results page, so scroll down to find the
cheapest.
http://www.flyertalk.com/
58
Travel and Tourism
Services Online (cont.)
• Revenue models of online travel services include:
– Direct revenues (commissions)
– Revenue from advertising
– Consultancy fees
– Subscription or membership fees
– Revenue-sharing fees
– Others
59
Travel and Tourism
Services Online (cont.)
• Unique services
– travel tips (a visa problem)
– electronic travel magazines
– fare comparisons
– currency conversion
calculators
– worldwide business and
place locators
– outlet for travel accessories
and books
– experts’ opinions
– major international and
travel news
– detailed driving maps and
directions
– chat rooms and bulletin
boards
– frequent-flier deals
– online travel auctions
60
Travel and Tourism
Services Online (cont.)
• Wireless services
check flight status, update frequent flyer miles,
and book flights through cell phones
• Direct marketing—sell electronic tickets over
the Internet
airlines are able to build customer profiles and
target specific customers with tailored offers
• Alliances and consortia
aggregate participants’ Internet-only fares
61
Travel and Tourism
Services Online (cont.)
• Benefits
– Huge amount of free information
– Accessible at any time from any place
– Substantial discounts
• Limitations
– Amount of time and the difficulty of using virtual travel agencies significant for inexperienced Internet surfers
– Complex trips require specialized knowledge
62
Travel and Tourism
Services Online
• Intelligent agents in travel services
– Agent is capable of acting autonomously,
cooperatively, and collectively to achieve the stated
goal
– Involved in buyer-seller negotiations
– Agents may activate other agents to make special
arrangements, cooperate with each other, activate
multimedia presentations, or make special inquiries
Employment Placement and
the Job Market
64
Employment Placement and
the Job Market
• The Internet offers a rich environment for job seekers and for companies searching for hard-to-find employees
• Who uses the Internet job market?
– Job seekers
– Employers seeking employees
– Job agencies
– Government agencies and institutions
65
66
Employment Placement and
the Job Market (cont.)
67 http://www.jobsinegypt.com/
68
Employment Placement and
the Job Market (cont.)
69
Employment Placement and
the Job Market (cont.)
• Limitations of the electronic job market:
– many people do not use the Internet
– security and privacy
– create high turnover costs for employers by
accelerating employees’ movement to better jobs
– finding candidates online is complicated due to the
large number of resumes available online
70
Employment Placement and
the Job Market (cont.)
• Intelligent agents in the electronic job market—job seekers– free service that uses intelligent agents to search
the Internet’s top job sites and databases for job postings based on users’ profiles is offered at careershop.com
– users create as many as 5 different profiles based on more than 100 different job categories, geographic regions, and key words.
– users receive a daily e-mail containing job opportunities from over a dozen top job sites around the Internet
Real Estate Online
72
Real Estate Online
• Potential homebuyers can:
– view many properties online, at any time and
from anywhere, saving time for the buyer and
the broker
– sort and organize properties according to
specific criteria and preview the exterior and
interior design of the properties, shortening
the search process
Real Estate
Sector Comparison
Steps to Buy a Property
List of possible specification
Through a map
Sliders to Edit Search
80
Insurance Online
83
Insurance Online
• Standard insurance policies are available online
at a substantial discount :
– Auto
– Home
– Life
– Health
• Third-party aggregators offer free comparisons
of available policies
84
Online Stock Trading
86
Online Stock Trading
Live feeding
Market research
Direct access
87
Online Stock Trading (cont.)
• Well-known companies that offer online trading:
– E*TRADE
– Ameritrade
– TD
– Waterhouse
– Suretrade
– Discover
– Lombard
Banking and Personal
Finance Online
89
Banking and Personal Finance
Online• electronic banking (e-banking): Various
banking activities conducted from home or
the road using an Internet connection; also
known as
• cyberbanking,
• virtual banking,
• online banking,
• home banking
96
Banking and Personal Finance
– Bank of America and most other major banks
offer:
• international capital raising
• cash management
• trades and services
• foreign exchange
• risk management investments
• merchant services
• special services for international traders
98
Online Security
Bank of America
E-Grocers
100
On-Demand Delivery Services
and E-Grocers• E-grocer: A grocer that will take orders
online and provide deliveries on a daily or
other regular schedule or will deliver items
within a very short period of time
• On-demand delivery service: Express
delivery made fairly quickly after an online
order is received
101
On-Demand Delivery Services
and E-Grocers (cont.)
• Who are e-grocery
shoppers?
– Shopping avoiders
– Necessity users
– New technologists
– Time-starved
consumers
102
Example: Safeway
• Grocery shopping in the palm of your hand
– Safeway implemented its Easi-Order services using a Palm handheld device (PDA) to allow customers to point and click their grocery lists and send them to Safeway via phone
– Part of the company’s ―Collect & Go‖ service
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Safeway (cont.)
– Valued customers are given handheld devices that are loaded with an application that contains a list of thousands of grocery items, including descriptions and prices
– Customers review the items and make their grocery lists off-line when time permits
– Estimated time savings is 60 to 90 minutes each week
105
Online Delivery of Digital Products,
Entertainment, and Media (cont.)
• Noninteractive entertainment
– Event ticketing
– Restaurants
– Information retrieval
– Retrieval of audio and video entertainment
106
Even for grocery?
Yes
107
Order your grocery from PeaPod Web site
And get your order delivered soon
108
All these types of products … and more
From one Web site
109
You can use one click to order your frequent
requirement using Personal Lists
110
If you do not like shopping …
Shopbots do
111
Just write a list of your requirements in the
shopping robot notepad
112
Just write a list of your requirements in the
shopping robot notepad
113
The Shopping robot will do the job and find all
alternatives for each item
114
Oh my God ! All these types of shampoo
Which one can I use ?
115
Even this question has an answer …
But this is not everything
116
Even this question has an answer …
But this is not everything
Online Purchase
Decision Aids
118
Online Purchase
Decision Aids (cont.)
• Trust verifications
sites:
evaluate and verify
the trustworthiness
of various e-tailers
– TrustE
– Versign
– BBB online
– Webtrust
119
Characteristics of goods leading to higher online sales
1. High brand recognition
2. A guarantee is provided by highly reliable or well known vendors
3. Digitized goods, such as books, music, software and videos
4. Relatively inexpensive items
5. Frequently purchased items
6. Commodities that have standard specifications making physical inspection unimportant
7. Well-known packaged items that cannot be opened even in a traditional store
120
A Model of EC Consumer Behavior
Purchasing decision begins with customer’s reaction to stimuli
Decision
Making
Process
Stimuli
Marketing
Price
Promotion
Product
Quality
Others
Economical
Technology
Political
Cultural
Buyers’ Decisions
Buy or not
What to buy
Where (vendor)
When
How much to spend
Repeat purchases
Vendors’ controlled System
Logistic
Support
Payments,
Delivery
Technical
Support
Web design,
Intelligent-
agents
Customer
serviceFAQ,
e-mail,
Call centers,
One-to-one
Individual
Characteristics
Age, gender, ethnicity,
education, lift style,
psychological, knowledge,
values, personality
Environment
Characteristics
Social, family,
communities
121
After purchase service
and evaluation
Purchase and delivery
Alternative evaluation,
negotiation and selection
Information search
(What? From whom?)
• The Purchasing Decision-Making Model
Need identification
(Recognition)
122
Model of Internet Consumer Satisfaction
Customer
Satisfaction
Logistics Support
Customer Service
Pricing Attractiveness
Web-site Store Front
3rd Party
Seal of Approval
Trust in
Web-shopping
Vendor
Reputation
Repeat Web Purchase
(Brand Loyalty)
Authentication
Privacy Transaction
Safety
Non-repudiationIntegrity
SecuritySystem
Reliability
Speed of
Operation
Ease of
Use
Content,
Quality
Format
Reliability
Completeness
Timeliness