Transcript E-Commerce - Safaa

Instructor: Safaa S.Y. Dalloul
E-Business
Level 2
Try to be
the Best
2013-2014
E-Commerce
Retailing in E-Commerce (E-Tailing)
Lecture Elements
 Electronic Retailing (E-Tailing) and B2C Market Growth.
 Consumer Purchase Process and the Marketing Plan
 Online Purchase Decision Aids
 E-Tailing Business Models
 Digital Delivery: Music, Software, News, and More
 Successful Click-and- Mortar Strategies
 Problems with E-Tailing and Lessons Learned
Electronic Retailing (E-Tailing) and B2C Market Growth
 Electronic Retailing: A Retailing Process that is conducted
online, over the Internet.
 E-Tailers: They are retailers who sell over the internet.
 We will focus on B2C marketing, primarily on those companies
that sell so-called hard goods that shipped to a customer, as
opposed to soft goods or digital goods such as information and
news, which can be downloaded via internet easily.
Electronic Retailing (E-Tailing) and B2C Market Growth
 Direct Relationship with consumers without intermediaries is
one of the most important characteristics of B2C commerce.
 Manufacturers with established brands such as Dell, are able
to execute a successful direct marketing strategy if they pay
attention to the basic rules of successful direct marketing
and efficiently deliver quality merchandise to the consumer.
 In early days, traditional retailers' web sites were typically
used as brochure-ware and lacked interactivity
Electronic Retailing (E-Tailing) and B2C Market Growth
 Successful strategies are now implemented by traditional
e-tailers, for combining an online presence with their
physical retail stores ("brick-and-mortar" stores). The
strategy of having both off-line and online presence is
called a "click-and-mortar" model or "brick-and-click".
Electronic Retailing (E-Tailing) and B2C Market Growth
 Characteristics of Successful Retailing
A. High brand recognition
B. A guarantee provided by highly reliable or well-known
vendors
C. Digitized format
D. Relatively inexpensive items
E. Frequently purchased items
F. Commodities with standard specifications
Consumer Purchase Process & the Market Plan
 Here we are to talk about the role of Marketing, and the
consumer purchasing process.
 To understand the managerial process of successfully
selling merchandise directly to consumer, we must first
look at the process that consumers follow when they shop
and purchase items.
Consumer Purchase Process & the Market Plan
 Consumers usually give far more thought to the decision of
purchasing a car than to buying a carton of milk. But the
purchasing process is the same for both.
 The process starts with pre-purchase steps, followed by
actual purchase and finally ends with post-purchase steps.
Consumer Purchase Process & the Market Plan
 Consumers begins with an awareness that they need to
make a purchase and identify the basic need or want. They
then establish a decision criteria and refine it may be by
having
recommendations
form
others
or
collecting
information from different resources.
 Finally, consumers use the stage of "information search and
evaluation alternatives" in which they make a decision
toward a specific product or service after making
comparisons.
Consumer Purchase Process & the Market Plan
 Once consumer purchase an item, he or she is often
presented with options regarding item configuration or
personalization, this can often be made directly on the web
site.
 For example, consumer may need to assistance for product
installation, say dishwasher. With physical stores this was
done using the telephone, but now online helpdesks are
used to help customers for maintaining their products
without costing them to visit the store or use the
telephone calls.
Consumer Purchase Process & the Market Plan
 Types of Online Shoppers
A. Time-starved consumers: found in two income homes,
will be willing to pay higher prices or extra fees to save
time on shopping.
B. Shopping avoiders: dislike shopping and may use the
internet just to avoid people, lines or traffic.
C. New Technologists: often young and comfortable with
technology in general, may just shop online "because it's
cool".
Consumer Purchase Process & the Market Plan
 Types of Online Shoppers
D. Time-sensitive materialists: only use the internet to
look for products, they prefer to make their purchases
from traditional stores because of security concerns or
other reasons.
E. Traditional: just prefer stores, and may never adopt
online shopping behaviors.
F. Hunter-gatherers: about 20% of all online shoppers,
enjoy the process of price comparison and the search for
good services.
Consumer Purchase Process & the Market Plan
 Types of Online Shoppers
G. Brand loyalists: consumers who shop online for a
particular brand, probably account for the greatest perperson profit levels.
H. Single shoppers: about 16% of online shoppers, prefer
the internet not only for shopping, but also for banking,
communications, game playing, news, and other activities.
Consumer Purchase Process & the Market Plan
 Decision Criteria
 Value Proposition: what a retailer offers may be unique
and valuable to the consumer-customer service, better
prices, or higher quality. Price is often most important
criteria.
 Personal Service: Firms that treat each customer as a
unique individual will outsell firms that do not do it.
Consumer Purchase Process & the Market Plan
 Decision Criteria
 Convenience: time is a valuable commodity. Busy consumers
look for ways to save time and add convenience. The web
offers many ways to make shopping more convenient.
Creating effective, easy user interfaces for web sites can
enhance the convenience of shopping
Consumer Purchase Process & the Market Plan
 Decision Criteria
 Other criteria: service after sale may be more important
for certain purchases, such as cars, computers, or
software. If the consumer believes that there may be
difficulties in installation. Consumers prefer an e-tailer
with 24/7 telephone support or web site with help
features.
Consumer Purchase Process & the Market Plan
 Marketing Management is the process of making it
attractive and easy for consumers to buy a firm's ideas,
goods, or services.
 This is done by influencing the portfolio of items available
for sale, the price of them and the promotion of the
products through advertising, and the packaging or
distribution of products, in other words these are the
marketing 4P's.
Online Purchase Decision Aids
 Shopping portals: Gateways to e-storefronts and e-malls;
may be comprehensive or niche oriented.
 Shopping robots (shopping agents or shopbots) : Tools
that scout the Web on behalf of consumers who specify
search criteria. For example, Mysimon.com searches the
web to find the best price for thousands of popular items.
Online Purchase Decision Aids
 Wireless
Shopping
Comparisons,
Enable
shoppers
to
compare prices any time from anywhere, including from any
physical store
 Business Rating Sites: Bizrate.com and Gomez.com are two
of many sites that purport to rate various e-tailers and
online products, based on multiple criteria. At Gomez.com,
the consumer can actually specify the relative importance
of different criteria when comparing online banks, toy
sellers or e-grocers.
Online Purchase Decision Aids
 Other shopper tools: Amazon.com’s A9 Search Engine do
the followings
 Remembers information
 A user can make notes about any Web page and search them
 Offers a new way to store and organize bookmarks
 Recommends new sites and favorite old sites specifically for
the user to visit
E-Tailing Business Models
 Subscription Model: charge a
subscription fee for the service.
monthly
or
annual
 Transaction fee models: Charge a service fee based on
the level of transactions offered.
 Advertising-supported models: instead of charging to
users, charge to the advertising companies. But the
revenue by advertising service can be applied with the
subscription and transaction fee models.
 Sponsorship Models: the companies who can benefit or
who are willing to donate beyond financial reasons may
sponsor the business.
E-Tailing 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
 Sites from manufacturers such as Dell, Nike or Sony site.
 Disintermediation: The removal of organizations or
business process layers responsible for certain
intermediary steps in a given supply chain
 Reinter-mediation: The process whereby intermediaries
(either new ones or those that had been disinter-mediated)
take on new intermediary roles.
E-Tailing Business Models
 Pure-Play e-tailers: They are the firms that sell directly
to consumers over the internet without maintaining a
physical sales channel. such as Amazon.com
 Traditional retailers with Web Sites: which are called
click-and-mortar retailers, such as Wal-Mart or Home
Depot.
Digital Delivery : Music, Software, News and More
 Certain goods, (software, music, or news stories) may
be distributed in a physical form or they may be
digitized and delivered over the Internet.
 For sellers, the costs associated with the manufacture,
storage, and distribution of physical products can be
enormous.
 Inventory management also becomes a critical cost
issue, and so does delivery and distribution.
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: First, a firm can link all
of its back-end systems to create an integrated
customer experience. Whether the customer
accesses information or services through faceto-face encounters with store personnel, web
pages, or sales staff.
Successful Click-and-Mortar Strategies
A traditional brick-and-mortar store with a
mature Web site uses a click-and-mortar
strategy to:
 Leverage the multi-channels: The innovative
retailer will offer the advantages of each
marketing channel to customers from all
channels. Whether the purchase is made online
or at the store, the customer should benefit
from the presence of both.
Successful Click-and-Mortar Strategies
A traditional brick-and-mortar store with a
mature Web site uses a click-and-mortar
strategy to:
 Empower the customer: By utilizing various
technologies to ensure that customers are
empowered with information and by giving the
customers the opportunities to use online
technologies to perform various functions
interactively, the seller creates a powerful 24/7
channels for service and information.
Problems with E-Tailing and Lessons Learned
Don’t ignore profitability: One fundamental
lesson is that each marginal sale should lead to
marginal profits. It has been said that if it
doesn’t make cents, it doesn't make sense.
Watch the cost of branding: Branding has
always been considered to be a key to the
success of e-tailers, but the drive to establish
brand often leads to excessive spending.
Problems with E-Tailing and Lessons Learned
The Web site must be effective: today
internet shoppers expect web sites to offer
superior technical performance, fast page
loads, quick database searches, streamlined
graphics, etc. web sites should be designed in
a way that doesn't frustrate customers.
Problems with E-Tailing and Lessons Learned
Static Design: web sites without dynamic
content will bore returning visitors. Today,
most e-tailers offer valuable tips and
information of consumers, who often come
back just for that content and may purchase
something in the process.
Any Question