Transcript e-tailing

Retailing in Electronic Commerce:
Products and Services
Lecture 4
Supakorn Kungpisdan
Roadmap
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Internet Marketing and Electronic Retailing
E-tailing Business Models
Travel and Tourism Services Online
Employment Placement and the Job Market Online
Real Estate Online
Banking and Personal Finance Online
Online Delivery of Digital Products, Entertainment, and Media
Online Purchase-decision Aids
Successful Click-and-mortar Strategies
Problems with E-tailing and Lessons learned
Issues in E-tailing
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Internet Marketing and Electronic Retailing
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Overview of Electronic Retailing
electronic retailing (e-tailing)
Retailing conducted online, over the Internet
e-tailers
Retailers who sell over the Internet
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Internet Marketing and Electronic Retailing
What Sells Well on the Internet?
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Computer hardware
and software
Consumer
electronics
Office supplies
Sporting goods
Books and music
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Toys
Health and beauty
Apparel and clothing
Jewelry
Cars
Services
Others
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Internet Marketing and Electronic Retailing
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Characteristics of Successful E-Tailing
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High brand recognition
A guarantee provided by highly reliable or wellknown vendors
Digitized format
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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Retailing vs E-Tailing
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E-Retailing Business Models
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E-Retailing Business Models
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Classification by Distribution Channel
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Mail-order retailers that go online
Direct marketing from manufacturers
Pure-play e-tailers
Click-and-mortar retailers
Internet (online) malls
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E-Retailing Business Models
direct marketing
Broadly, marketing that takes place without
intermediaries between manufacturers and
buyers; in the context of this book, marketing
done online between any seller and buyer
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Direct Marketing: Land’s End
• Landsend.com
• Increase sales by going online
• Website contains product catalogs and features
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My Virtual Model
Wide range of fabric to choose from
Affiliate program: pay 5% commission
Real-time chat with customer service reps
Less than 2 days delivery 16 distribution outlets and
the US and 3 in the UK
• 88% of their customers are college graduates
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Landsend.com
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E-Retailing Business Models
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Direct Sales by Manufacturers
– Sellers can understand their markets better
because of the direct connection to
consumers
– Consumers gain greater information about
the products through their direct connection
to the manufacturers
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E-Retailing Business Models
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Retailing in Online Malls
– Referring Directories
– Malls with Shared Services
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Representative B2C Services
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Postal Services
Services and Products for Adults
Wedding Channels
Gift Registries
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Travel and Tourism Services Online
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Online travel is probably the most successful
e-commerce implementation
Services provided include:
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General information
Reserving and purchasing tickets,
accommodations, and entertainment
Travel tips
Electronic travel magazines
Fare comparisons
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Travel and Tourism Services Online
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Benefits of Online Travel Services
– Benefits to consumers
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Large amount of free information available 24/7
Substantial discounts can be found
– Benefits to providers
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Airlines, hotels, and cruise lines are selling
otherwise-empty spaces
Direct selling saves the provider’s commission
and its processing
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Travel and Tourism Services Online
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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
– Complex trips or those that require stopovers may not be available online because
they require specialized knowledge and
arrangements
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Travel and Tourism Services Online
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Corporate Travel
– To reduce corporate travel costs, companies
can make arrangements that enable
employees to plan and book their own trips
using online optimization tools provided by
travel companies
– Travel authorization software that checks
availability of funds and compliance with
corporate guidelines is usually provided by
travel companies
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Travel and Tourism Services Online
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Intelligent Agents in Travel Services
– Software agents emulate the work and
behavior of human agents in executing
organizational processes like travel
authorization, planning or decision making
– Each agent is capable of acting
autonomously, cooperatively, or collectively
to achieve the stated goal
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Employment Placement and the Job
Market Online
• The Internet Job Market
– Job seekers
– Employers seeking employees
– Job agencies
– Government agencies and institutions
• The Internet is a global online portal for
job seekers
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Employment Placement and the Job
Market Online
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Intelligent Agents Match Resumes with
Available Jobs
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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
– Many people do not use the Internet. This limitation is
even more serious with non-technology-oriented jobs
– Security and privacy: resumes and other online
communications are usually not encrypted, so one’s
job-seeking activities may not be secure
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Real Estate Online
• Real Estate Applications
– Advice to consumers on buying or selling a home
– Commercial real estate listings
– Listings of residential real estate in multiple
databases
– Maps are available
– Information on current mortgage rates
– Mortgage brokers can pass loan applications over the
Internet and receive bids from lenders who want to
issue mortgages
– Online lenders can tentatively approve loans online
– Automated closing of real estate transactions
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Real Estate Online
• Real Estate Applications
– Property management companies (residential,
commercial, and industrial) are using the Internet for
many applications ranging from security to
communication with tenants
– Sites for persons who want to sell their homes
privately, without using a real estate agent
– Rental properties are listed
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Domain.com.au
What’s its revenue model?
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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, and home banking
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Banking and Personal Finance Online
• E-banking:
– Various banking activities conducted from
home or the road using an Internet
connection; aka. cyberbanking, virtual
banking, online banking, and home banking
• 54M americans use online banking in 2005,
47% increase in only 2 years
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Bankdirect.co.nz
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Banking and Personal Finance Online
• Implementation Issues in Online Financial Transactions
– Securing financial transactions
– Access to banks’ intranets by outsiders
– Using imaging systems
• Incoming checks, invoices, letters from banks and customers
– Pricing online versus off-line services
– Risks
• Hackers
• People are afraid of not having sufficient funds  resulted in
panic withdrawals
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Banking and Personal Finance Online
• Online Billing and Bill Paying
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Automatic transfer of mortgage payments
Automatic transfer of funds to pay monthly utility bills
Paying bills from online banking accounts
Merchant-to-customer direct billing
Using an intermediary for bill consolidation
• collect commission from payer and payee
– Person-to-person direct payment
– Pay bills at bank kiosks
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Commonwealth Bank
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Online Delivery of Digital Products,
Entertainment, and Media
• Interactive Entertainment
– Web browsing
– Internet gaming
• Online arcade, lotteries, casino gaming
– Fantasy sport games
• Sportline.com, espn.com
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Single and multiplayer games
Adult entertainment
Card games
Participatory Web sites:
• clubs, user groups, infotainment sites
– Reading
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Online Delivery of Digital Products,
Entertainment, and Media
• Non-interactive Entertainment: entertainment
that users are not being entertained
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Event ticketing
Restaurants
Information retrieval
Retrieval of audio and video entertainment
Live events
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Online Purchase-Decision Aids
• Business Ratings Sites
– Bizrate.com, gomez.com
• Trust Verification Sites
– TRUSTe (truste.org), Verisign.com
• Other Shopper Tools
– Escrow services
– Communities of consumers who offer advice and
opinions
– E-wallet (or e-purse)
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Successful Click-and-Mortar Strategies
• A traditional brick-and-mortar store with a
mature Web site uses a click-and-mortar
strategy to:
– Speak with one voice
• Communicate the same thing to customers in every channel
– Leverage the multi-channels
• Purchase online, return at store
– Empower the customer
• A powerful 24/7 channel for service and information
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Circuitcity.com
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A successful click-and-mortar company
The second-largest US retailer of consumer electronics
Manage 650 stores around the country
Features
– Educate customers about features and capabilities of products
– Power search on a product database
– Extensive amount of product information
• Over 50% of purchase processes completed compared
to 17% of ones at others
• Customers have 3 choices: 3-day delivery, overnight
delivery, or self-pickup in a store
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Amazon.com & Toys“R”Us
• Alliance between amazon.com and Toys“R”Us
• Amazon.com expertises in e-tailing business, but could
not get best deal from toy manufacturers
• Toys“R”Us is the best in toy industry but failed in e-tailing
• Seemed to be a promising agreement
• However, they sued each other after 4 years out of 10year agreement.
– Toy“R”Us wanted amazon to sell only its products
– Amazon interpreted the agreement to allow it to sell other
companies’ products
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Problems with E-tailing and Lessons
Learned
• Don’t ignore profitability
– If it doesn’t make cents, it doesn’t make sense
• Manage new risk exposure
– Concern about scope of target customers
– Wallmartsucks.com
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Watch the cost of branding
Do not start with insufficient funds
The Web site must be effective
Keep it interesting: dynamic content
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Issues in E-Tailing
disintermediation
The removal of organizations or business process layers
responsible for certain intermediary steps in a given
supply chain
reintermediation
The process whereby intermediaries (either new ones or
those that had been disintermediated) take on new
intermediary roles
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Disintermediation and Reintermediation in the
B2C Supply Chain
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Issues in E-Tailing (cont.)
• channel conflict
Situation in which an online marketing channel upsets the traditional
channels due to real or perceived damage from competition
• Determining the right price
• Personalization
– Mass customization
• Fraud and illegal activities
• How to make customers happy
– Need market research
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Questions?