Lesson 03

Retailing in Electronic Commerce

ISM 41113, Electronic CommerceBy:

M. Fathima Rashida

Lecturer in MIT

Department of MIT

Faculty of Management and Commerce, SEUSL

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Learning Objectives

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. Discuss cyber banking and online personal finance.6. Describe on-demand delivery of groceries and similar

products/services.

7. Describe the delivery of digital products and online entertainment.

8. Discuss various online consumer aids, including comparison-shopping aids.

9. Describe disintermediation and other B2C strategic issues.

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Internet Marketing and Electronic Retailing

• Overview Of Electronic RetailingA retailer is a sales intermediary, a seller that operates

between manufacturers and customers

• Electronic Retailing (E-tailing)

Retailing conducted online, over the Internet called as e-tailing

• E- tailers

Retailers who sell over the Internet B2C: B2B

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Internet Marketing and Electronic Retailing

• 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

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What Sells Well On The Internet

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Internet Marketing and Electronic Retailing

• Characteristics Of Successful E-tailing

Following characteristics are expected to facilitate higher sales volume:

• High brand recognition Dell, Sony

• A guarantee provided by highly reliable or well-known vendors Dell

• Digitized format software, music or videos

• Relatively inexpensive items office suppliers, vitamins

• Frequently purchased items groceries, prescriptions drugs

• Commodities with standard specifications books, CDs, airline tickets

• Well-known packaged items that cannot ne opened even in a traditional store food, chocolates vitamins

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E-Tailing Business Models• B2B, B2C

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E-Tailing Business Models

• Classification By Distribution Channel1. Direct marketing by mail-order retailers that go online

Broadly, marketing that takes place without intermediaries between manufacturers and buyers

2. Direct marketing by manufacturers

3. Pure-play e-tailers

Firms that sell directly to consumers over the Internet without maintaining a physical sales channel

I. General purpose amazon

II. Specialized e-tailers Cattoys.com

4. Click-and-mortar retailers

5. Internet (online) malls

Online shopping center where many online stores are located

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E-Tailing Business Models

• 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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Travel and Tourism (Hospitality) Services Online

• Online travel bookings and associated travel services are one of the most successful e-commerce implementations

• Special Services Online

• Conventional services +

• Wireless services

• Direct marketing

• Alliances and consortia

• Travel-Oriented Social Networks

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Travel and Tourism (Hospitality) Services Online

• 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 online

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Travel and Tourism (Hospitality) Services Online

• 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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Travel and Tourism (Hospitality) Services Online

• 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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Employment Placement and the Job Market Online

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Employment Placement and the Job Market Online

• The Internet Job Market• The following parties use the Internet job market:

• Job seekers hotjobs

• Employers seeking employees

• Classified ads

• Job agencies hotjobs, AOL

• Government agencies and institutions jobsearch.gov.au

• A Consortium of Large Employers and College Career Advisors

• Online Job Markets on Social Networking

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Employment Placement and the Job Market Online

• 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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Banking and Personal Finance Online

• Electronic (online) banking or 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

• 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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Banking and Personal Finance Online

• Online Financial Transaction Implementation Issues• Securing Financial Transactions

• Access to Banks’ Intranets by Outsiders Bank of America

• Imaging Systems

• Fees Online Versus Fees for Offline Services

• Risks

• Personal Finance Online• Online Billing and Bill Paying

• Taxes

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On-Demand Delivery of Products, Digital Items, Entertainment, and Gaming

• 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: Albertsons.com, woolworths.com.au

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On-Demand Delivery of Products, Digital Items, Entertainment, and Gaming

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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

• Business Ratings Sites

• Trust Verification Sites

• Other Shopping Tools

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Issues in E-Tailing

• 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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Issues in E-Tailing

• Cybermediation (Electronic Intermediation)

The use of software (intelligent) agents to facilitate intermediation

• 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

• Product And Service Customization And Personalization

• Fraud And Other Illegal Activities

• How To Make Customers HappyISM 41113