1. Introduction and tendencies
E-commerce course 1
Introduction and tendencies
C Jacques Nantel HEC montréal

2. C Jacques Nantel HEC montréal
Basic numbers
C Jacques Nantel HEC montréal

3. C Jacques Nantel HEC montréal
Source: Nua May 1999
C Jacques Nantel HEC montréal

4. C Jacques Nantel HEC montréal
Source: Forrester May 1999
C Jacques Nantel HEC montréal

5. C Jacques Nantel HEC montréal
4 different approaches
B2B
Dell
Ford
B2C
Amazon
C2B
Priceline
C2C
e-Bay
C Jacques Nantel HEC montréal

6. B2B About 80% of e-commerce
C Jacques Nantel HEC montréal

7. C Jacques Nantel HEC montréal
B2C, C2B and C2C account for less than 20% but is where most marketing strategies are tested E-tail is about 1% of retail business. In 2004 it should account for 10%
C Jacques Nantel HEC montréal

8. C Jacques Nantel HEC montréal
The Number And Spending Of Online Shoppers Will Plateau In 2004 (Forrester 2000)
Total US online retail revenues
(Billions)
$200
180
160
140
120
100 80 60 40 20
1999
2000
2001
2002
2003
2004
C Jacques Nantel HEC montréal

9. C Jacques Nantel HEC montréal
The Number And Spending Of Online Shoppers Will Plateau In 2004 (Forrester 2000)
Average spending online and new
shopping households
(Thousands of dollars
(Millions of
per household)
households)
$4.0 12 11
3.5 10
3.0 9 8
2.5
New online shopping 7
2.0
households 6 5
1.5 4
1.0
Average online spending 3
per online shopping household 2
0.5 1
0.0
1999
2000
2001
2002
2003
2004
C Jacques Nantel HEC montréal

10. C Jacques Nantel HEC montréal
The Number And Spending Of Online Shoppers Will Plateau In 2004 (Forrester 2000)
1999
2000
2001
2002
2003
2004
Total US online retail revenues
$20.3
$38.8
$64.2
$101.1
$143.8
$184.5
(billions)
US households shopping online
17.4
28.4
36.4
42.1
46.8
49.4
(millions)
New online shopping
7.3
11.0
8.1
5.7
4.7
2.6
households (millions)
Average online spending per
$1,167
$1,366
$1,761
$2,403
$3,074
$3,738
online shopping household
C Jacques Nantel HEC montréal

11. Definitions, concepts and models
C Jacques Nantel HEC montréal

12. C Jacques Nantel HEC montréal

13. Some of the things that can be done over the net
Promotion
Customer services
Transaction
Transaction and distribution
intermediating
C Jacques Nantel HEC montréal

14. E-commerce is much more than to have a site
Back Office
Promotion and advertising
Data base marketing
Other electronic supports
C Jacques Nantel HEC montréal

15. Impacts on the organisation
Closer integration of manufacturing and marketing
Different pricing strategies
Huge impact on distribution
Who «owns» the customer?
Bundling, price vs worth of a consumer
Is it about volume or margins?
Should you go vertical or horizontal
C Jacques Nantel HEC montréal

16. C Jacques Nantel HEC montréal
Internet should be the major concern of upper management It is much more than only playing with computers
C Jacques Nantel HEC montréal

17. C Jacques Nantel HEC montréal
E-commerce course 2
B2B
C Jacques Nantel HEC montréal

18. C Jacques Nantel HEC montréal

19. C Jacques Nantel HEC montréal

20. C Jacques Nantel HEC montréal
Supply side
Fewer suppliers
No activity that does not bring added value
All information is electronic
PDM (Product Data Management)
Spec are provided to resellers (clothing industry)
Co-opetition
C Jacques Nantel HEC montréal

21. C Jacques Nantel HEC montréal
We tell our suppliers exactly what our daily production requirements are. Buyers are often so busy trying to protect themselves that the seller can ’t really add a lot of value (Michael Dell)
C Jacques Nantel HEC montréal

22. C Jacques Nantel HEC montréal
Velocity, a key concept « we use inventory information to work both on thefront and the back end at the same time»
Key advantages
Accounts payables and receivable
Quality management
Selection of suppliers
«Scalable» business
All of the above have an impat on cost and profit margins
C Jacques Nantel HEC montréal

23. C Jacques Nantel HEC montréal

24. C Jacques Nantel HEC montréal

25. C Jacques Nantel HEC montréal
Fulfillment
Key aspect in e-commerce
Dell sells 90% of its production to institutions among which 70% buy for more than 1 MM$ a year. What if 70% of their business was done with consumers?
C Jacques Nantel HEC montréal

26. Currently (Forrester 1999)
400 orders per day
Less than 10% of total orders
Most catalogue account for less than 10% of SKU.
Logistics is managed at a central level (budling) or is decentralized
C Jacques Nantel HEC montréal

27. C Jacques Nantel HEC montréal
Source: The Economist , 26 juin 1999
C Jacques Nantel HEC montréal

28. Today’s Online Logistics Realities Forrester 1999

29. Today’s Online Logistics Realities Forrester 1999
C Jacques Nantel HEC montréal

30. New Suppliers Evolve To Fill End-To-End Gaps Forrester 1999
C Jacques Nantel HEC montréal

31. C Jacques Nantel HEC montréal
Various B2B strategies
Vertical Portals
Plasticnet.com
Horizontal Portals (order givers)
C Jacques Nantel HEC montréal