0. Chapter 3 Retailing in Electronic Commerce: Products and Services

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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.
Describe online real estate services.
Discuss online stock-trading services.
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LEARNING OBJECTIVES
Discuss cyberbanking and online personal finance.
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.
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3. INTERNET MARKETING AND ELECTRONIC RETAILING
Retailer :is intermediary between manufacturers and customers
Why do companies need retailers ?
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
FYI
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7. INTERNET MARKETING AND ELECTRONIC RETAILING
CHARACTERISTICS AND ADVANTAGES OF SUCCESSFUL E-TAILING
Page 136
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8. E-TAILING BUSINESS MODELS
CLASSIFICATION OF MODELS BY DISTRIBUTION CHANNEL
Direct marketing by mail-order retailers that go online
Direct marketing by manufacturers
Pure-play e-tailers
Click-and-mortar retailers
Internet (online) malls
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9. E-TAILING BUSINESS MODELS
Direct marketing by mail-order
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
Sellers can understand their markets better because of the direct connection to consumers, and consumers gain great information about the products
Virtual (pure-play) e-tailers
Firms that sell directly to consumers over the Internet without maintaining a physical sales channel.
General e-tailer, and specialty e-tailer

10. E-TAILING BUSINESS MODELS
click-and-mortar retailers
Brick-and-mortar retailers that offer a transactional Web site from which to conduct business.
brick-and-mortar retailers
Retailers who do business in the non-Internet, physical world in traditional brick-and-mortar stores.
multichannel business model
A business model where a company sells in multiple marketing channels simultaneously (e.g., both physical and online stores).
Retailing in Online Malls
Referring Directories
Malls with Shared Services
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11. OTHER B2C MODELS AND SPECIAL RETAILING FYI
Online Group Buying
B2C IN SOCIAL NETWORKS
Provide consumers with rich social context and relevancy to the purchases that they are making
Find ,collect, and share/recommend. These three acts comprise the phenomenon of online group shopping (rate ,review )
B2C in virtual worlds is also becoming popular
Virtual Shopping
Many consumers embrace impulse buying because they get interesting products they would never have bought if they hadn’t seen them
One aspect of 3D it is ability to put dimensions and shape into a more physical context

12. TRAVEL AND TOURISM (HOSPITALITY) SERVICES ONLINE
Examples of travel-services online
The revenue model of online travel-services
Three important trends will drive the online travel industry
SERVICES PROVIDED:
Providing general information ,reserving, purchasing tickets, accommodations, entertainment ,travel tips, fare tracking , maps and directions ,expert opinion ,chat rooms ,bulletin boards , and online travel auctions
SPECIAL SERVICES ONLINE
-Wireless services -Direct marketing -Alliances and consortia
-Travel bargaining ,low airfares & discounted accommodation prices (lastminute.com),medical advice & services

13. TRAVEL AND TOURISM (HOSPITALITY) SERVICES ONLINE
Travel-Oriented Social Networks
Since 2005 travelers’ use of social computing technologies for researching travel has skyrocketed
Travelers want more relevance and more correct information
social computing has shifted online travel from passive selling to active customer engagement, which affects how travel companies and agents disrepute and market their products
Wikitravel and world66
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14. TRAVEL AND TOURISM (HOSPITALITY) SERVICES ONLINE
BENEFITS OF ONLINE TRAVEL SERVICES
To travelers :free information ,accessible at any time from any place, substantial discounts
To providers: selling otherwise –empty spaces, direct selling saves commission
LIMITATIONS OF ONLINE TRAVEL SERVICES
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
CORPORATE TRAVEL
Many large corporations receive additional services from large travel agencies
Online optimization tools – travel authorization software

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16. EMPLOYMENT PLACEMENT AND THE JOB MARKET ONLINE
Theses parties use the Internet job market:
Job seekers
Employers seeking employees
Classified ads
Job agencies
Government agencies and institutions
Online Job Markets on Social Networking
Global Online Portals
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19. REAL ESTATE, INSURANCE, AND STOCK TRADING ONLINE
REAL ESTATE ONLINE
Zillow, Craigslist, and Other Web 2.0 Real Estate Services
Make me move ,real estate listing, real estate wiki
INSURANCE ONLINE
Offer standard insurance policies such as ato, home, life, health at a substantial discount
Third –party offer free comparison of available polices
Large insurance companies offer comprehensive insurance contract
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20. REAL ESTATE, INSURANCE, AND STOCK TRADING ONLINE
ONLINE STOCK TRADING
The commission online is lower, the chanse for error is small, there are no busy telephone lines ,order can be placed from anywhere at any time and no biased broker to push a sale
Investors can find free information about companies and mutual funds
Many services are provided to online traders like online statements ,tax-related calculation, real-time news, and tutoring on how to trade
Stock exchange service
The risk of online stock trading is security
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21. 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.
Consumers can use e-banking to check their account, pay bills, secure loan ,…
e-banking saves users time and money ?
An innovation in online banking is peer-to-peer online lending
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HOME BANKING CAPABILITIES
FYI
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23. BANKING AND PERSONAL FINANCE ONLINE
VIRTUAL BANKS: these have no physical location but only conduct online transactions
Like security first network bank, and first internet bank
INTERNATIONAL AND MULTIPLE-CURRENCY BANKING
International banking and the ability to handle trade in multiple currencies are critical
MasterCard developed a multiple-currency system for global transaction
Major banks offer international capital funds, foreign exchange ,risk management investment … for international trader
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24. BANKING AND PERSONAL FINANCE ONLINE
ONLINE FINANCIAL TRANSACTION IMPLEMENTATION ISSUES
Securing Financial Transactions
Imaging Systems
Fees Online Versus Fees for Offline Services
Risks: hackers and liquidity
ONLINE BILLING AND BILL PAYING
Many people prefer to pay monthly bills , such as telephone, utilities, rent, credit cards, and so on online
The recipients of such payment are equally eager to receive money online because online payments are receive much more quickly and have lower processing costs
Taxes : one important area in personal finance is advice about and computation of taxes.

25. ON-DEMAND DELIVERY OF PRODUCTS
On-demand delivery service
Express delivery must be done fairly quickly after an online order is received.
Pizza, fresh flowers, blood
The same day delivery model
Faster than overnight but slower than 30 to 60 minutes
Groceries , office supplies, repair parts, and pharmaceutical 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.
E-grocer often deliver using the same day delivery model
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26. Online delivery of digital products , entertainment, and media
Certain goods, such as software, music, or news stories can be distributed in physical form or they can be digitized and delivered over the internet
Advantages
Disadvantages
Physical distribution
Customers perceive value in holding a physical CD.
Customers enjoy the liner notes ,user manuals and all other materials that accompany a CD
Customers might have to wait days for physical products to be delivered
for sellers the costs associated with the manufacture, storage and distribution of physical products can be enormous

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Online entertainment
The major forms of traditional entertainment are television, film ,radio ,music, games, reading, and gambling .All of these are now available over the internet
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28. ONLINE PURCHASE-DECISION AIDS
Shopping portals
Gateways to e-storefronts and e-malls; may be comprehensive or niche oriented.
They Have links to many different sellers and present and evaluate a broad range of products
Some offer shopping opportunities and comparison tools to help identify the best price for particular item
They generate revenues by directing consumers to their affiliates sites
The advantage of niche shopping portals is their ability to specialize in a certain line of products and carefully track consumer tastes within specific and relevant market segment
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30. ONLINE PURCHASE-DECISION AIDS
Shopping robots (shopping agents or shopbots)
Tools that scout the Web on behalf of consumers who specify search criteria.
Search the web to find the best prices and availability of popular items
In addition to price they include product details and features, product reviews ,and information about the store selling the item
The shopbot might have to evaluate different SKU numbers for the same item
''Spy'' Services
Wireless Shopping Comparisons
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31. ONLINE PURCHASE-DECISION AIDS
Business ratings sites
Many websites rate various e-tailers and online products based on multiple criteria
Trust verification sites
A number of companies purport to evaluate and verify the trustworthiness of various e-tailers . Truste.com Verisign.com
recommendations from other shoppers and friends
referral economy
The effect upon sales of consumers receiving a referral or recommendation from other consumers.
It occurs on the internet via blogs, social networking sites, and review sites where users recommend items to other users
The recommendation has a higher perceived value. Why?
Viral campaigns via the internet
Kaboodle is a social shopping community where people find ,recommend, and share products

32. ONLINE PURCHASE-DECISION AIDS
Other shopping tools
Other digital intermediaries assist buyers or sellers or both with the research and purchase process
Escrow services : assist in the exchange of item and money. may also provide payment processing support as well as letters of credit
Communities of consumers who offer advice and opinions on products and e-tailers
Wallet :program that contains the shoppers information

33. ISSUES IN E-TAILING AND LESSONS LEARNED
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.
The intermediary’s role is shifting to one that emphasizes value-added services such as assisting customer in comparison shopping from multiple sources ,providing total a solutions by combining services from several vendors, and providing certifications and trusted third-party control and evaluation systems

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35. ISSUES IN E-TAILING AND LESSONS LEARNED
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
Prices need to be competitive on the internet and should be in line with the corporate policy on profitability
Product and service customization and personalization
The internet gives the ability to create an element of personalization for each individual consumer and allows for easy self-configuration
Fraud and other illegal activities:
The increasing rate of online fraud can cause losses to both buyers and sellers
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36. ISSUES IN E-TAILING AND LESSONS LEARNED
LESSONS LEARNED FROM FAILURES AND LACK OF SUCCESS
Speak with one voice
Leverage the multi-channels
Empower the customer
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MANAGERIAL ISSUES
What are the limitations of
e-tailing?
How should we introduce wireless shopping?
Do we have ethics and privacy guidelines?
How will intermediaries act in cyberspace?
Should we try to capitalize on social networks?
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CH 3 Point
In order to gain CH 3 point , you need to do one of the following :
Answer one of the chapter cases Or
Choose two of the internet exercises (page 170) and answer them
I recommend number 1,2,3,7,8
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