turban ec2010 ch03
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Retailing in Electronic Commerce: Products and Services
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
1. Describe electronic retailing (e-tailing) and its characteristics.
2. Define and describe the primary e-tailing business models.
3. Describe how online travel and tourism services operate and their impact on the industry.
4. Discuss the online employment market, including its participants, benefits, and limitations.
5. Describe online real estate services.6. Discuss online stock-trading services.
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
7. Discuss cyberbanking and online personal finance.
8. Describe on-demand delivery of groceries and similar products/services.
9. Describe the delivery of digital products and online entertainment.
10.Discuss various online consumer aids, including comparison-shopping aids.
11.Describe disintermediation and other B2C strategic issues.
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• OVERVIEW OF ELECTRONIC RETAILING– electronic retailing (e-tailing)
Retailing conducted online, over the Internet– e-tailers
Retailers who sell over the Internet• SIZE AND GROWTH OF THE B2C MARKET• WHAT SELLS WELL ON THE INTERNET• CHARACTERISTICS AND ADVANTAGES OF
SUCCESSFUL E-TAILING
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Travel• Computer hardware
and software• Consumer electronics• Office supplies• Sport and fitness goods• Books and music• Toys and hobbies
• Health and beauty• Entertainment• Apparel and clothing• Jewelry• Cars• Services• Food and drugs• Pet supplies• Others
WHAT SELLS WELL ON THE INTERNET
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• CLASSIFICATION BY DISTRIBUTION CHANNEL1. Direct marketing by mail-order retailers that go
online2. Direct marketing by manufacturers3. Pure-play e-tailers4. Click-and-mortar retailers5. Internet (online) malls
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-7
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Direct Marketing by Mail-Order Companies– 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
• Direct Sales by Manufacturers
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Pure-Play E-Tailers– virtual (pure-play) e-tailers
Firms that sell directly to consumers over the Internet without maintaining a physical sales channel
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• click-and-mortar retailersBrick-and-mortar retailers that offer a transactional Web site from which to conduct business
• brick-and-mortar retailersRetailers who do business in the non-Internet, physical world in traditional brick-and-mortar stores
• multichannel business modelA business model where a company sells in multiple marketing channels simultaneously (e.g., both physical and online stores)
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• OTHER B2C MODELS AND SPECIAL RETAILING– Transaction brokers– Information portals– Community portal and social networks– Content creators or disseminators– Viral marketing– Market makers– Make (build)-to-order– B2B2C– Service providers
• B2C IN SOCIAL NETWORKS
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• Online travel bookings and associated travel services are one of the most successful e-commerce implementations
• SPECIAL SERVICES ONLINE– Wireless services– Direct marketing– Alliances and consortia– Travel-Oriented Social Networks
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• BENEFITS AND LIMITATIONS OF ONLINE TRAVEL SERVICES– Benefits
• The amount of free information is tremendous• Information is accessible at any time from any place• Substantial discounts
– Limitations• Many people do not use the Internet• The amount of time and the difficulty of using virtual travel agencies
can be significant• Complex trips or those that require stopovers might not be available
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• IMPACT OF EC ON THE TRAVEL INDUSTRY– Direct impacts because customers increasingly
using the Internet to make bookings– Indirect impacts because airlines and hotel chains
encouraging customers to book direct or through online wholesalers, bypassing travel agents
– Investing in content (information, travel advice, and the like) is a requirement for success in this competitive market
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• CORPORATE TRAVEL– Many large corporations receive additional
services from large travel agencies– To reduce corporate travel costs, companies can
make arrangements that enable employees to plan and book their own trips
– Travel authorization software that checks availability of funds and compliance with corporate guidelines is usually provided by travel companies
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 16
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• THE INTERNET JOB MARKET– The following parties use the Internet job market:
• Job seekers• Employers seeking employees• Classified ads• Job agencies• Government agencies and institutions
– A Consortium of Large Employers and College Career Advisors
– Online Job Markets on Social Networking– Global Online Portals
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-18
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• BENEFITS AND LIMITATIONS OF THE ELECTRONIC JOB MARKET
• Probably the biggest limitation of the online job market is the fact that some people do not use and do not have access to the Internet, although this problem has declined substantially
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 20
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• REAL ESTATE ONLINE– Zillow, Craigslist, and Other Web 2.0 Real Estate
Services
• INSURANCE ONLINE– Companies use Internet to offer standard
insurance policies, such as auto, home, etc. often at a substantial discount to individuals
• ONLINE STOCK TRADING– The Risk of Trading in an Online Stock Account
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-22
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• electronic (online) banking or e-bankingVarious 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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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• HOME BANKING CAPABILITIES– Informational, administrative, transactional,
portal, and others
• VIRTUAL BANKS– Have no physical location; only conduct online
transactions
• INTERNATIONAL AND MULTIPLE-CURRENCY BANKING– Support global transactions
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• ONLINE FINANCIAL TRANSACTION IMPLEMENTATION ISSUES– Securing Financial Transactions– Access to Banks’ Intranets by Outsiders– Imaging Systems– Fees Online Versus Fees for Offline Services– Risks
• PERSONAL FINANCE ONLINE– Online Billing and Bill Paying– Taxes
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• ON-DEMAND DELIVERY OF PRODUCTS– 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 serviceExpress delivery made fairly quickly after an online order is received
– The Case of E-Grocers• FRESHDIRECT
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
ONLINE DELIVERY OF DIGITAL PRODUCTS, ENTERTAINMENT, AND MEDIA
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• ONLINE ENTERTAINMENT– Adult Entertainment– Internet Gambling– Online Dating Services
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• shopping portalsGateways 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
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• “SPY” SERVICES– Wireless Shopping Comparisons
• BUSINESS RATINGS SITES• TRUST VERIFICATION SITES• OTHER SHOPPING TOOLS
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• A traditional brick-and-mortar store with a mature Web site that uses a click-and mortar strategy is able to do the following:– Speak with one voice– Leverage the multichannels– Empower the customer
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• disintermediationThe removal of organizations or business process layers responsible for certain intermediary steps in a given supply chain
• reintermediationThe process whereby intermediaries (either new ones or those that had been disintermediated) take on new intermediary roles
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-33
Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• cybermediation (electronic intermediation)The use of software (intelligent) agents to facilitate intermediation
• channel conflictSituation in which an online marketing channel upsets the traditional channels due to real or perceived damage from competition
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
• DETERMINING THE RIGHT PRICE• PRODUCT AND SERVICE CUSTOMIZATION
AND PERSONALIZATION• FRAUD AND OTHER ILLEGAL ACTIVITIES• HOW TO MAKE CUSTOMERS HAPPY
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Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall
1. What should our strategic position be?2. What are the limitations of e-tailing?3. How should we introduce wireless shopping?4. Do we have ethics and privacy guidelines?5. How will intermediaries act in cyberspace?
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