Chapter 4 Retailing in Electronic Commerce ISM 41113 M. Fathima Rashida

Learning Objectives Describe electronic retailing (e-tailing) and its characteristics. Define and describe the primary e-tailing business models. Describe how online travel and tourism services operate and their impact on the industry. Discuss the online employment market, including its participants, benefits, and limitations. Discuss cyber banking and online personal finance. ISM 41113

Learning Objectives … Describe on-demand delivery of groceries and similar products/services. Describe the delivery of digital products and online entertainment. Discuss various online consumer aids, including comparison- shopping aids. Describe disintermediation and other B2C strategic issues.

Internet Marketing and Electronic Retailing Overview Of Electronic Retailing A 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 ISM 41113

Internet Marketing and Electronic Retailing cont… What Sells Well On The Internet 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 Travel  expedia, Travelocity Sport  fogdog.com Services  travel service, stock trading service, electronic banking service, … ISM 41113

Internet Marketing and Electronic Retailing cont… 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 ISM 41113

E-Tailing Business Models E-tailing as an Enterprise EC system: B2B, B2C ISM 41113

E-Tailing Business Models cont… Classification By Distribution Channel Direct marketing by mail-order retailers that go online Broadly, marketing that takes place without intermediaries between manufacturers and buyers Direct marketing by manufacturers Pure-play e-tailers Firms that sell directly to consumers over the Internet without maintaining a physical sales channel General purpose  amazon Specialized e-tailers  Cattoys.com 2. Advantages to sellers and customers  dell 3. amazon: adv  no overhead cost and streamlined processes: drawback  lack of established infrastructure to support 4. ISM 41113

E-Tailing Business Models cont… Click-and-mortar retailers Internet (online) malls Online shopping center where many online stores are located 4. Physical + online: started traditional business then click and mortar

E-Tailing Business Models cont… 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 SOCIAL COMMERCE  in the era of web 2.0, setting up an e- tailer and waiting for customers to log on is no longer enough.  Instead, companies are being more proactive, finding ways to engage customers, build relationships and create communities ISM 41113

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 Wireless  updated information, booking, cancelling air tickets  Cathay pacific, delta Direct marketing  airlines sell e-tickets. Customer print when arrival at airport pay by credit card  electronic kiosk Alliances and consortia  airlines and other travel companies are creating alliances to increase sales or reduce purchasing costs. zuji.com  dedicated to Asia- pacific travelers  Travelocity  some hotel chains, car rental: providers providing specializes in tour packages in region ISM 41113

Travel and Tourism (Hospitality) Services Online cont… 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 ISM 41113

Travel and Tourism (Hospitality) Services Online cont… 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 Eg: amaricanexpress.com, expedia.com, Travelocity.com, orbitz.com ISM 41113

Travel and Tourism (Hospitality) Services Online cont… 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 ISM 41113

Employment Placement and the Job Market Online Traditional Vs. Online job market ISM 41113

Employment Placement and the Job Market Online cont… 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 Consortium  IBM: the National Association of Colleges and Employers  nacelink.com Online job  MySpace, LinkedIn ISM 41113

The Referral Power of Social Networks in Job Matching ISM 41113

Employment Placement and the Job Market Online cont… 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 ISM 41113

Advantages of the Electronic Job Market for Job Seekers and Employers ISM 41113

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 Virtual banks  Security First Network Bank (SFNB)  now part of RBC Centura (rbccentura.com): First Internet Bank US (firstib.com) International  tradecard, mastercardm bank of america ISM 41113

Banking and Personal Finance Online cont… 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 Images of checks, invoices, and other related online correspondence  bank of America, citybank ISM 41113

On-Demand Delivery of Products, Digital Items, Entertainment, and Gaming 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 service Express delivery made fairly quickly after an online order is received: Albertsons.com, woolworths.com.au E – tailers using postal system to deliver product  FedEx, DHL ISM 41113

On-Demand Delivery of Products, Digital Items, Entertainment, and Gaming cont… Distribution of Digital Vs. Physical Products ISM 41113

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 Shoping portals  several collections, price comparison Rating sites  bizrate.com, consumberreports.org, forrester.com… Trust  truste.com,  TRESTe seal Other  digital intermediaries: decision making  pricescan.com for price comparison,  onlineshoes.com for shoes comparison ISM 41113

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 ISM 41113

ISM 41113

Issues in E-Tailing cont… 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 Happy Cybbermediation  special web sites that use intelligent agents to facilitate intermediation: can conduct price comparison, insurance policies, … ISM 41113

End of the Chapter ISM 41113