BCIS 5379: Chapter 3: Retailing in Electronic Commerce: Products and Services


Welcome to BCIS 5379. Chapter 3: Retailing
in Electronic Commerce: Products and Services. The learning objectives for this chapter include
describing electronic retailing, sometimes referred to as e-tailing and some of its characteristics.
We will also talk about the primary retailing business models and try to classify them in
make it easier for you to be was to distinguish one model from the next will describe how
online travel and tourism services operate in their impact on the industry will discuss
the online employment market, including its participants, benefits and limitations will
describe online real estate services will discuss online stock trading services. Then
we’ll move on to discuss cyber banking and online personal finance will talk about the
on-demand delivery of groceries and similar perishable products and services related to
them talk about the delivery of digital products and online entertainment will discuss various
online consumer aids including comparison-shopping aids and then we’ll finish up by discussing
disintermediation and other be to see strategic issues electronic retailing or retailing is
a term that you might hear periodically and it’s really not anything to be intimidated
by it’s really nothing more than just simply a retailer that selling stuff over the Internet
so that’s where they do their their primary business about their their entire business
detailers of the people were actually doing that of the retailer to sell over the Internet.
This first the seismic growth. The be to see market. It’s really kindhearted to say the
reason is the numbers get reported and collected in a variety of different ways insult really
hard to talk about the growth size and growth of the be to see market at the what is really
pretty well accepted, though, is inserted it’s a pretty sizable more sizable market
and that it continues to grow at a headache fairly steady pace pretty aggressively. This
part was so well on the Internet that really depends that something has changed over time.
Currently there’s a whole variety of different categories. So well but original equipment
Internet really started to get going in and detailing really for starting to get going
first-generation e-commerce if you will simple items were related items sold best things
like books, software, music things that were relatively small high-value to weight ratio,
things of that nature. However, as technologies come through in our faith and in in the ability
of e-commerce to two e-commerce websites to convey information about goods and services
across the Internet have improved to move beyond simple simple transactions and moved
to smoke more complex type products. For example, furniture expensive jewelry designer clothes,
appliances, cars warring big-screen TVs so the types of products of evolved over time.
Traditional retailing and detailing really aren’t all that different, but they sure probably
more similarities than do different. Having said that there obviously are some differences
between 22 approaches. Probably nothing really bigger than the fact that in the online environment.
You really need to have a solid distribution network or logistic strategy to be able to
handle the delivery of goods and services is another issue is the online environment
detailing environment. You need to have an extremely flexible infrastructure be able
to have the ability to ramp up your your technology of the structure to be able to handle significant
increases in demand as far as a some of the other advantages will general concepts about
detailing utility should offer expanded customer services really offered by some of the traditional
retailers in the horse they have have some advantages. For example, they have lower product
cost which allows the allows for increasing competitive advantage to get the name of the
bad thing because that’s an advantage that you have local retailers is a retailer that’s
also an advantage that other retailers have as well so the competition becomes much more
significant will reach more customers than the outside of your normal traditional regions.
The words customers no longer those that are just around you. The whole world as it is
potentially your customer base is easy to change. Prices and catalogs quickly because
of the rings online you will have to mail a new catalog. Hopefully you have lower supply
chain costs is not necessarily the case because it literally everything a shift in your shipping
onesies and Tuesday shipping individual items to customers rather than shipping and bulk
as a wholesaler might do to retailer your will provide customers with a wealth of information.
The setting customer service cost. The words instead of dealing with the customer on a
one-to-one basis you publish all this information into your and your website and customers able
to go and check out that information individually as the as they see fit to having to deal with
those customers individually. They’re coming consuming that information on their own time
and there’s a variety of other advantages as well as well. Book this is the exhibit
from the book and gives you a general overall view of the supply chain of what might look
and the book basically takes the perspective or gives you the impression that you’re in
the center of the supply chain will it if you are the company that’s there in the middle
of the of the exhibit to the right. It’s the traditional be to see transactions that occur
business to consumer your selling to consumers. B2B transactions occur back to the left. In
other words, we have to to be able sell to our customers. We obtain goods and services
from other businesses that are higher up the supply chain. Essentially this is, generic
business model if you will business models. A description of how the organization intends
to generate revenue through its business operations more specifically, it includes an analysis
of the organizations customers and from that discussion is created to help how that organization
will achieve profitability sustainability by delivering goods and services are some
some type of value to those customers the next several slides talk about very specific
detailing business models and in general you can, classify some of those different models
by the distribution channels used for example, direct marketing by mail order is go online
direct marketing my manufacturer’s pure play detailers click and mortar retailers and Internet
or online malls. If you direct marketers, direct marketing can either be companies that
have just recently gotten detailing business or they can come from traditional mail order
retailers that their business to the online environment. Some examples include QVC Sharper
Image lands them. For example, basically the idea is that marketing takes place without
intermediaries between manufacturers and buyers. This gives firms with an establishment your
mail order business a little bit of an advantage in the sense that they were to get an existing
payment structure inventory management order fulfillment operations in place, direct sales
by manufacturers are an attempt to remove his many intermediaries as possible between
the manufacturer and the consumer good drive behind this is the business model is to be
will save the markups of those recent years might might take world would take in most
transactions occur: the best example of this is Dell in the book. Also within the section,
introduces a new another concept that the really kind of important concept in comes
to subfield the logistics if the idea of the pool distribution channel in as opposed to
the push distribution channel in which products are manufactured, sold and sold downstream
and it simply hoped that demand will be there to purchase those goods or services walls
goods the poll-based model is really more long lines with elbows doesn’t manufacture
a lot of their computers upfront. They wait until we get order and then they produce so
they pull based, so the they wait until the demand is there before they actually produce
a product in it that gives them a few advantages gives them improve customer satisfaction,
better pricing allows large cost savings and finished vehicle and a carrying cost was they’ll
have to sit there and store finished goods until her soul virtually real-time market
feedback a barrier to entry gives foreign-made goods and better cash flow to the manufacturers
now virtual or pure play detailers or firms that sold directly to consumers of the Internet
without maintaining a physical sales. So again, Dell was his is a great example that Amazon
is a great example that virtual retailers have an advantage of low overhead costs, streamline
processes, but never certain drawbacks as well. For example, they oftentimes they don’t
have an established infrastructure for to be oblivious or services or goods like traditional
retailers. My click and mortar retailer is really kind of hybrid combination of brick-and-mortar
stores as well as on an online presence since combination of both traditional retailer and
an online transactional website as opposed to brick-and-mortar retailers. Which is really
what we typically think of think of retail stores. So, Sears, Walmart, target, Macy’s
were all examples of brick-and-mortar stores of brick-and-mortar retailers. They have since
the last several years, evolved into becoming more and more retailers get another detailing
business model is retailing in online malls. There’s a couple of different approaches to
to this particular business model there’s referring directories and there’s malls with
shared resources referring directories are really just after directories of director
will usually round product type may have catalog listings are banner as and once you select
the the particular product that you’re interested in your take into the retailers from the e-tailer’s
website where the transaction is actually conducted a mall with shared services. However,
it is a little bit different from all shared services is actually actually advertises the
various goods and services provided by all the various participants in that mall in the
mall itself provides the services of arranging prepayment and taking the order arranging
for shipment so it reduces some of the burden on the e-tailer’s there variety of other be
to see models that the special categories of retailing retailing project versus concept
that these transactions separately taken on the social nature of you will there’s the
idea of online group buying where in a traditional retail environment. You might have multiple
people that come together in order to buy in bulk in order to receive a large discount.
Certainly the online environment allows groups to come together much easier and in larger
groups, thereby the idea is to receive an even larger discount and so those are some
things that are are popping up. It’s relatively easy to find enough people to enjoy the discount
large-volume buying and/or sure the freight cost in some cases we rely on others as well.
The social aspect of shopping we rely on the reviews of others to come rate service to
rate the products for the that were receiving from from the three to so word-of-mouth becomes
very important. Is also personalized event shopping. People like to be invited special
sales. As you can get a thrill from say that I’m one of those individuals. My stepdaughter
probably would fit right in the that the description essentially the ideas that you receive an
invitation to view your your favorite the method, twitter, Facebook, or email, or however
you choose and I once you get that invitation you are able to go enjoy some of the savings,
but the specialized event others. Also, private shopping clubs works, Sam’s if you will Costco
sleaze. These discount places free of purchase a membership in order to be able shop of establishment.
The online versions are referred to as private shopping clubs members only shopping club
members can buy goods a large discount. Still other bowl niches retailing business models
area include regifting online basically sites that allow different individuals to come together
as a group in order to make make a purchase for for an individual for the preventer for
particular occasion. Think of this is, like where you got a group of people that normally
would, during a birthday or something of that nature Pool their money together in order
to buy a bigger gift for for an individual group gifting online, helps to facilitate
that process is also location-based e-commerce. Imagine walking down the street passing a
Starbucks and also get a coupon for dollar off your Venti coffee it. Something is based
on your location and trees information from your your phone to determine where you are
the greatest retailers around you and you to target ads to to customers in the sense
that way. There’s also the concept of shopping and virtual worlds. For example, Dell has
has a place in Second Life referred to as Dell Island elastic to login the Second Life
and travel around and enter various e-tailer sites retailers stores in this virtual environment
and examine their various products and talk to individuals in this virtual environment
and this is a test drive. Some of these products and that that online environment that leads
to the next point. There virtual visual shopping in a society have been will present these
goods in a three almost a 3-D environment. The in order to give us all the more realistic
experience very early on in in e-commerce very hard and very challenging for sites to
to kind of even really approach the experience he might have. If you actually go to a retailer.
Unfortunately for retailers and an awful lot of their role for e-tailer’s I should say
an awful lot of profit that retailers get is from impulse buys approximately 85% of
all purchases were made at the shelf so was impulse buys are very important. Well, at
least conceptually. If we had the ability to market goods in a 3-D environment. We would
get much closer to that ability to to improve impulse buy purchases the travel and tourism
services online is is made up predominantly by some very well-known companies. Obviously
there’s a lot of out there. The company such as Expedia, Travelocity, Priceline just to
name a few. And I’ll provide a lot of different services to larger types of things, rentals,
hotels, airlines, trains, dispersal of specific services that they offer for general information
to help preserve and purchase tickets and accommodations as well as entertainment offenses
provide travel tips and tracking detailed driving maps and directions. In some cases,
chat rooms and bulletin boards allow consumers to to talk about their experiences, both good
and bad some special services that are provided by by some of these groups in the the problem
tourism, hospitality services if you will include wireless services. So the ability
to login and check reasons and in conducted drastic facilities, direct marketing. In other
words, an airline oftentimes can send you what you purchase the ticket they can start
direct marketing to you and offer you special deals on flights directly market to you. Also
facilitates alliances and consortia. The words you may have an airline the teams up together
with that particular car rental company. They also dissipate with a particular hotel in
order to kind of push you or steer you towards those those specific companies and all benefit
from that that the alliance together. The concept of social travel networks are the
that to many of these people get together online and share their experiences. Again,
both good and bad they go to Facebook and talk about the vacation that things went well.
In this particular location of that particular location whether they traveled on this airliner
that are experienced or bad experience and it helps encourage business or discourage
business how things worked out their benefits and limitations to to online travel services.
Some of benefits include free information is just everywhere you can find all kinds
of information about your trips in terms of cost in terms of experiences and things of
that nature of advances that information is available all the time online is 24 seven
is a 24 seven operation and also get a lot of substantial discounts online if you got
the system. If you have time and patient to patient store look for some of those deals.
The benefits are just for consumers benefits are also four for some of the travel service
providers, airlines, hotels and cruise lines. For example are oftentimes it will sell what
otherwise of the empty spaces and direct selling saves the providers commission and processing
fees as well. But there are some limitations on the amount of time. The difficulty using
virtual travel agencies can be significant, especially if the complex. You might have
layovers and things of that nature complex trips for those that require stopovers might
not be available online because they require specialized knowledge and arrangements so
some of the the limitations of the sites of travel services. This first corporate travel
are using online optimization tools provided by travel companies want times companies can
to try to reduce their travel costs. E-commerce is also used for employment placed in the
job market and not in the online environment for some of the participants who use the Internet
job market. Obviously, there is through the jobseekers also employer seeking employees
classified ads of agencies, government agencies and institutions when it comes to jobseekers.
We typically think of a few sites which, one usually pretty quickly career builder.com
for example, hot jobs monster.com, an element may want to check out, especially if you’re
going to school full-time and looking for a job after graduation. They may want to check
out college recruiter.com as far as employer seeking employees a lot of organizations or
employers will advertiser openings on their own websites cases by Kaiser opening popular
public portals. Some of those those sites and just got through talking about online
newspapers, bulletin boards, etc. firms consider the idea is that from the employer’s perspective
they’re trying to automate as much of the hiring process is the and so we can reach
an awful lot of potential employees that way will submit a relatively new trend that is
starting CR the use of new tools such as videos and meet ups that to they can use to interview
candidates from remote locations. I would recommend that you check the employment office
called the specific name of the top my head right now, but the other Tarleton State they
actually offer the ability to to create video resumes and it’s something that you can certainly
look into classified ads. Her mother thing to look into. Examples include Craigslist
or eBay classifieds web classifieds that US but don’t forget about some of the social
side social space, but we might find some job openings posted job agencies are also
have online environments or or touch points if you of hundreds job agencies direct from
the web, the user on webpages to to post available job descriptions and advertiser services,
government agencies also most government agencies advertiser openings for positions on the website
and it in on other sites. In some cases. In some cases required by law to do so. So check
check those out online job markets on social networks. Obviously, this the social network
is it is start talking about jobs. Other smoking without the will look at had to as well. Jobs
are for example, blue-chip expert, blue-chip expert, I should say Mattia is is that they
work to solve the problem finding the right people for the job in a very short time. They
provide jobseekers opportunities to promote their area of expertise as well as to help
them get found by their employers. Essentially it operates is kind of a brokerage for headhunters
to to go to try to find candidates that have exactly the right skill set that they want
LinkedIn is probably another great example of this type of of the site Global online
portals for job placement is an interesting global site replacing or finding jobs in different
countries: seeing the comments X ING.com is basically electron job market little again
last do something very similar to to match up your skills with potential jobs that are
around the world something to coupon businesses, two-way street. Only does it help you to find
jobs and get jobs and help employers to fill positions, but also creates open positions
do well basically the idea is if it’s so easy to find jobs all what happens when there’s
a better job. It comes open and you have the skills that match the job you’re much more
likely to leave your current current position and go to that new position so it does potentially
create a higher turnover for employees by facilitating employees movement jobs that
sectionals talk about the video online tools to to interview candidates from remote locations
in the last on on the slightest virtual job fairs. Basically a recruiting via social networks
for quickly finding qualified candidates to reduce cost in the virtual environment that
allows is a different potential employers examine what the benefits are there pay is
that the job expectations things that nature analyzer to visit a lot more more potential
businesses or or hiring companies at a reduced cost. Some of the advantages of the electronic
job market for job seekers and employers include things like that allows jobseekers to find
information. A large number of jobs worldwide. It allows the increase the ability for jobseekers
to communicate quickly with potential employers bushings fire off an email or potentially
chat with the that an employer online you listen we have to write a letter will drive
down to their organization to discuss the position was to market yourself directly to
kitchen employers. It allows you to write and post resumes for the large volume of distribution
words can apply to a lot of people post resume online a career builder. For example, in headhunters
or potential employees can all review that very quickly I can search for jobs quickly
from any location can obtain several support services at no cost. For example, monster.com
provides career planning services for free can assess the market value was good idea
of how much you your work, your skills, your experience, etc. check out wage web in Riley
guy that worked for us. Our service can learn how to use the voice effectively in an interview
great waste of, for example, and can access newsgroups that are dedicated to finding jobs
and hopefully keep this first employers advantages they can advertise to a large number of jobseekers,
not just this early advertising to the group that it receives a particular newspaper rather
there really advertising worldwide can save on advertising costs they can reduce the application
processing cost by using electronic application forms was in the process paper print paper
and then read the each form is a comes in they can provide greater equal opportunity
for jobseekers. They can increase the chance of finding highly skilled employees they can
describe positions and in great detail knowers is not limited to just a few lines in a newspaper
they can as much details they want online environment way, subject only to to the size
of progress that can conduct interviews online using video teleconference they can arrange
for testing online was a famous screen potential employers upfront, they can have them take
some type of assessment online. They also use our service recruiting strategies in the
words, what is the market paying one of the competitors live a better idea of what it
cost to get to recruits detailing is also been significantly impacted by several service
industries. Joe really becoming very popular on the Internet. Some of these real estate
insurances. All stock trading online. For example, as well as real estate the Burrell
Associates forecast that the this year 2013 33.1% are projected $35.3 billion in real
estate related advertising be spent online. That’s a lot of money it’s just advertising
rental lot online. It’s advertising real estate sale online things that nature. Some of the
sites we might see some of stuff Craigslist is a low some of is also in the ones that
are out there so services that they offer it in some cases are free of it. They allow
buyers find information. The comparisons on their own is socially going through a disintermediation
process of of removing some amendments of traditional advertising mechanisms that have
that have used been used by the real estate industry in the past. Insurance online is
also service it’s becoming more popular the sale of auto home life and health insurance
can oftentimes be done at a substantial savings to customers. Another one is online stock
trading companies such as E*TRADE Schwab Scott trade all allow consumers to to relatively
inexpensively buy and sell stocks and bonds are in an online environment quickly, easily,
and usually at a pretty good rate will cost to the relatively, relatively speaking to
someone bigger traditional brokerage houses. Having said that, obviously, there’s risk
interviewed conducting financial transactions online. There is at risk of of usernames and
passwords of things of that nature that something to be wary of. Nevertheless, it’s it’s something
that most consumers seem to embrace to and be relatively comfortable using related to
that is banking and personal finance online electronic for online banking or E banking
really is versus some of the various banking activities conducted from home or or on the
road using an Internet connection, sometimes referred to cyber cyber ranking virtual banking
online banking and homemaking. Some of the capabilities of home banking really provide
the incentive to to use those services, rather than the traditional banks for example there’s
a lot of information get online you can can get general bank information history, financial
education, employment information interest rate quotes, etc. you can also perform administrative
the options as well. You can open an account close accounts order replacement checks, etc.
you can also do conduct transactions you can pay bills, make deposits, fund transfers,
and so on. You can also utilize portal functions. For example, links to to financial information
links to community information, local businesses, etc. and then sometimes there’s some other
services that are offered up as well online banking such as wireless capabilities and
search search functions is also a special class of of these banks referred to as virtual
banks. These are banks that really don’t have any physical locations. Good thing or bad
thing about this. Obviously you are saving money by not having physical locations and
pay for real estate to the safeguards of money involved in things that nature per se, but
I would the book gives suggest that a word of caution if you will comes to virtual banks.
A very large portion of virtual banks failed back in 2003 Google due to a lack of financial
viability and the number of other banks failed over the 2007 2010. As the economy hit pretty
Russ spell him solutions like the more successful banks really to be more that the click and
mortar typos as well as physical presence as well as an online presence is also the
international and multicurrency banking side of things. While some international retail
purchasing can be done using a credit card. In some instances you’re gonna have to use
some other way to conduct transactions when when making purchases in an international
environment a couple of options are some options tray card, MasterCard, for example, develop
a multi-currency system for global transactions. Bank of America and most other major banks
offer international capital funds, cash management trade server trades and services for exchange
risk management investments, merchant services, etc. so realize that you’re operating in an
international environment and having to deal with multiple currencies, but there are some
special situations that sometimes I require looking into into more detail implementation
issues of online financial transactions include securing financial transactions, imaging systems
fees online versus fees for off-line set services and risks securing financial transactions
release, no-brainer. We talk a little bit more in chapter 9, chapter 10, but it’s pretty
obvious that we need to make sure that that’s a major issue when it comes to conducting
transactions because were dealing with money were dealing with account numbers and personal
information to secure a secure e-commerce payment systems. It is a must imaging systems
is also another implementation issue users oftentimes expect images of incoming checks,
invoices, and other related materials that they get in and received from their banks
fees online versus fees for for off-line services. Respecting services are often briefed by some
banks were Celebrex charge some type of of a fee. Also, some banks charge for individual
transactions. Financial institutions need to really think think this through. In terms
of their online cost versus their off-line services costs and fees need to take into
account the cost provided cost of providing different types of services organizations
desire to attract customers and the prices offered by competitors other words, if they’re
charging twice as much as all the competitors. It can be awfully hard for financial institution
to retain or attract customers. Many banks charge more for off-line services in order
to encourage customers to go online for some of the risks assembly that the virtual banks
have ample quiddity risk. The that is that they simply don’t have sufficient funds to
pay obligations as they come due and when you look at the failure rate of central banks
in the past that that may be a valid concern. So it’s something to be wary of when you start
talking about banks that operate in a purely virtual environment hackers is obviously another
concern we can think about the concern that individuals may hack into a bank system and
move funds out of our accounts so that’s another risk that we have to to be wary of the stores
online billing and bill paying the popular popularity of the payment systems is growing
substantially number of checks of the US Federal Reserve system processes has been decreasing
all the same time commercial automated clearinghouse transactions has been increasing so we tend
to prefer those online payment of monthly bills such as our our house payments are or
when a car loans, telephones, utilities, all the types of we prefer to automate that rather
than writing checks all the time, within the same categories. The the issue of taxes and
there’s the issue of computation of taxes think about sales tax. For example, it depends
on where you are in the country as to if you’re going to pay sales tax when you make a purchase
online and if so, where you pay that sales tax is it where the product was purchased
from it where the product is actually delivered to slip becomes the issue that has to be has
to be considered in 2008 grocery sales amounted to $7.3 billion online is expected to reach
about $13.7 billion or 2% October sales from 2000 in 2012. So what last year. Unfortunately
it’s a very competitive market in the margins are really very thin, mostly gross. It grosses
you click and mortar retailers such as Albertson’s or Amazon fresh.com has a services well the
grocers a it grosses online provides delivers a daily or the regular schedule or within
a very short period of time. This can lead to center on-demand delivery service. Express
delivery made very quickly after online orders received. Obviously especially important when
talking about perishable goods like my seat from gross. This is a very tough market for
four retailers to operate in traditionally over the last 10 years or so, if they’ve typically
been much more successful and metropolitan areas where the population is very large and
there typically very close together so you you see these being fairly popular on the
coasts of in the Northeast around New York for example, Manhattan, as well as on the
West Coast and Los Angeles and Cisco things manage certain goods such as software, music,
or new stories can be distributed physical environment. They can also be this digitized
and delivered over the Internet. For example, iTunes allows you to download movies, songs
and movies. Netflix clicks allows you to stream movies. The online entertainment industry
is is a company different forms. For example, the traditional entertainment industry includes
things like television, film, radio, music, games, reading gambling all these are now
available online across Internet. In some cases there the certain segments have actually
grown in popularity because were able to enhance the experience in the online environment.
For example, online games offer multimedia experiences all kinds of animation and sound
really allows you to become more engaged in adult entertainment is is the really been
successful in even though it tends to be a, a segment that the lot of classes. People
don’t really like to talk about that much. It’s really been able to be successful really,
because 300 basic things. One, it allows for degree of anonymity allows for instant gratification.
You have to wait and go anywhere to to view online adult sites and variety of choice help
adult entertainment successful is also Internet gambling I should say in the gaming which
includes Internet gambling also includes arcade gaming lotteries, promotional incentives,
so the ease of access and use of broadband services throughout the world in recent years
is really been vital to the expansion of online gaming and it is something that he is continuing
to grow relatively rapidly. Even though the economy is really been in a pretty tight spot
of the last few years relative to off-line gaming online gaming has been growing at a
rate greater than 10% online dating services are another thing that can be delivered online
and online dating is a dating system allows people to make contact and communicate with
each other over the Internet. We have all seen these commercials online for match.com
all those the other sites that are out there. Basically they provide unmoderated matchmaking
all over the Internet. This too is a very lucrative area over the last several years
according to Juniper research in 2007, online dating sites were projected to increase revenue
from $900 million, 2007 to $1.9 billion in 2012 that’s about a 16% increase over those
five years on different sites and tools that are available on the web to help consumers
with their online purchasing decisions sites that allow you to do price comparisons satellite
to evaluate services evaluate individual’s trust of a particular site on the quality
of of a good or service from various sites. Since a lot of tools that are out there are
some of them include shopping portals, shopping portals, a gateway to web store in the mall.
One example that a shopping.com. Another example is actually eBay’s supposed familiar with
it. It’s could be described as a shopping portal. The loss also offers shopping at fixed
prices. In addition to those auction the auctions that they offer are also helping communities
helping communities are social communities that help members define goods and services
evaluate the quality of the center. Another example is been several examples throughout
the book of another example is yup.com which is an online mall. We can meet people from
around the world. You can to discuss products and trends and things that nature and you
can shop at a variety of different online retailers are you embrace discounts as a member
of your.com and you can earn an additional discount by helping others to to make purchases
from your.com. Still other online purchasing decision aids include things like shopping,
robots, these are things that.I personally enjoy this one called Price grabber.com that
I think is a great site and basically allows you type in what you’re looking for. Oftentimes,
if you have a brand and model number you can find exactly where it is you’re looking for.
And it retrieves a list of that particular brand and model from a variety of different
retailer shop detailing shops and give you a comparison of the different prices but also
details some of the features details product reviews sometimes reviews from the merchants
as well. Consumers and a host of other information are available in a particular good is also
Google commerce search which is kind of the next iteration of Google’s search feature
shopping feature it’s a power search service for online stores helps online retailers maximizer
sales satisfaction usability by allowing customers to find exactly what is it looking for basically
without having to go to these other of these other sites Price grabber. For example of
retail retailers. Retailers it’s an innovative merchandising dashboard provides an innovative
merchandising dashboard is basically simple. A simple way to manage and target customers
with promotions and things of that nature is also spy services which are our basically
robots that are working for you as an individual without you being tethered to your computer.
It is something allows you to monitor for example, stock prices and send you an email
with a price. It’s a certain level the same thing on eBay bid. Maybe your bidding on something
you will make sure the bed that you when that particular item spy services allow you to
be notified when a bid that exceeds yours comes in so you can log back in and up your
bed to to the winning bid there’s a wireless shopping talks about don’t be confused. It
seems kind of vague in the book about this really all are talking about is the availability
smart phones to be able have access to the virtually everywhere we go allows us to do
comparison-shopping all the time where the login when were at the store we can log into
various competitors websites check prices online mall were standing in front of a product
to make a determination. Is this a goodbye or is it not get still there online purchasing
decision aids include things like business rating sites allow websites rate breezy tailors
and their online products based on a variety different criteria. Some examples of these
is businesses that do this are sites like this right.com Consumer Reports online as
well as Forrester Research. In many cases that we really like to get recommendations
from other shoppers, friends, things of that nature can lead to what you sometimes referred
to as willful economy is effective. Consumers receiving a referral recommendation other
consumers on their buying actions caboodle offers places for consumers to exchange these
types of things also see it on on a lot of retailers websites go to Amazon for example
of how she will see recommendations from other purchasing the same good in some cases we
don’t really know who to turn to. We don’t know what site to really trust in one another.
There are trustworthy in terms of making a recommendation not so in some cases we can
turn to water sometimes referred to as trust verification sites are several different ones
of these as trustee. There’s a person is your business bureau online and these are basically
sites that fully the vast majority consumers trust and have faith in it can turn to for
reliable information is also other online shopping tools and other digital intermediaries
if you will that help buyers and sellers of some cases both with research and in and purchase
processes. For example, there’s escrow services which exist very similar to what you see in
the to the real estate world reassigning the loss to purchase a home. You don’t necessarily
know the seller of the home rather than simply give the money up front as you going through
the process of making the purchase. You put money in escrow. That’s essentially giving
the money to a third-party, then the hold on to as the process goes forward before you
actually finalize the rest of the deal works the same when the online environment. It’s
a trusted third-party that takes acceptance of the of the money takes acceptance of the
good verifies that the human the proper amount of money is there. The good is what was advertised
and then does the exchange and so I just to assist both sides both parties. Another online
shopping tool yelp example to surgeon his mission released to help people find local
goods and services, restaurants, mechanic services, automobile services and things that
nature moving to and enough in the environment has not been as easy as it is somewhat have
liked, and is easy as one might think the reality is, is there been some growing pains
to move to the online environment. The initial promise was this concept of disintermediation
to talk about before the removal of organizations or business processes. Process layers responsible
for certain intermediary steps given supply chain so it’s that wholesaler in the middle
that we get rid of for the retailer or both. So you stray from the manufacture to the consumer.
The advantage of disintermediation is there no longer taking their their markups so presumably
will have a reduced price reduced cost. The reality is is that sometimes intermediaries
though are providing actual value in providing some service that’s worth more than what their
markup is and that leads to a process referred to as re-intermediation the process whereby
intermediaries either new ones or those that had been distant intermediate take on new
intermediary roles say re-enter into the process. This exhibit tries to illustrate that the
basic simple traditional supply chain mycelia of a supplier of cells to produce or the cells
to distributor the social retailer that ultimately sells to the end consumer, and with the process
of disintermediation. Perhaps you eliminate the the the retailer altogether perhaps the
distributor even in some supplier cells of the producer who may sell directly to the
end consumer supplier cells the producer who sells to the distributor who then sells the
end consumer’s again. The idea is that they the market that the retailer is taking or
that the distributors taking is more than the value that they’re providing supply chain.
If, however, one of those intermediaries is actually providing more value than the market
that they were taking then what’ll happen is they may be reintroduced into that supply
chain. That’s what the the last Parker see down there is trying to illustrate known say
they’re producing more value than than the market that they’re taking what types of value
might they be providing what may be information that the providing about the good of the services
being provided. It may be about support after the sale or support before the sale so the
sorority different ways for intermediaries to provide services to justify their markup.
It just really depends on how much they’re taking. If they take too much too much markup
for relative to the value that they provide their prime targets for disintermediation.
Another lesson learned was the idea of channel conflict. The situation in which an online
marketing channel upsets the traditional channels due to real or perceived damage from competition
is an example of this several years ago with a in the apparel industry. I believe it was
Levi’s who began to markets market genes online directly to consumers and that channel essentially
upset the traditional channel of selling to retailers because they were able to undercut
the price Levi then had to make a choice about how they were going to go forward in terms
of utilizing the benefits of of the online environment all at the same time not upsetting
their traditional channels that they had been ultimately moving to the point of providing
lots of information services online in pushing customers to their traditional retailer retail
outlets at the expense of selling directly, but it is an issue that retailers have to
be very cognizant of that when they sell in multiple channels that be very careful about
how they go about doing that the types of services that they offer both click and mortar
stores. There’s also the possibility of a price conflict is very difficult for click
and mortar stores to find it is. It’s a tricky situation for them to find a good pricing
strategy because they have to prices that are competitive both in the online environment
as well as the store environment. The physical store environment and becomes difficult for
those prices to be very close to each other so is it sometimes because of her Lepanto
overcome is also the issue of product and service customization personalization and
this is probably a good problem to have the online environment really facilitates the
customization services that are available to users Corsican can build and design build
their own computer get exactly what they want to order furniture is exactly the the material
that they want and things of that nature. So allows you to provide services that are
very customizable to to consumers in ways that they really were able to do in the truest
traditional environment easily. Online customer online competition. Everybody has a website.
Everybody is online so you’re competing. Are you able to compete easily with the big boys
yes you are. It’s very free to throw website and try to compete with very large retailers,
but you’re not the only one with an opportunity so are the other 7 billion people on the planet.
And then there’s also the issue of fraud and other illegal activities fraud, especially
the be to see market is increasing rapidly and causes losses not just the buyers but
also the sellers and lastly retailers really need to learn to speak with one voice. In
other words, tither systems together in such a way so they’re providing a consistent user
experience throughout the the process with other talk about and mortar aspects of their
the brick-and-mortar aspects of the organization of the online aspects of the organization
make sure that things look the same terminologies the same user experiences the sense of speak
with that one voice by tying all your systems and together leverage the multichannel channel
richness. In other words, the idea is that just because we operate in an online environment
and we operate in a face-to-face environment doesn’t mean that they’re operated as two
separate entities. In other words, we may purchase something online that we want to
return it to the physical store we need to facilitate and make that easy for customers
to be able do we want to empower the customer will make it to the customer to be able to
to do things themselves. In other words, place orders themselves online without having to
necessarily contact customer service representative fish meal. Check the inventory online to make
sure that whatever it is that they’re looking for is available. This real fine local store
information in terms of location and hours product information things like that. So what
are some of the the managerial issues are the concerns that managers need to have one
they’re thinking about going into detail and business or their taking over and detailing
businesses party exists. What are some of those managerial issues will have to understand
there are limitations to tailing after. Also, keep in my work detailing is going life as
a dynamic environment where it is right now it’s not going to be that way five years 10
Years Ctr. How should we introduce wireless shopping elsewhere. That’s where he should
detailing is going right now so we need to take think about how her to move our organizations
into that environment. Do we ethical privacy guidelines in place collecting all this data.
How are you safeguard that what we can do with the things that nature. How intermediaries
act in cyberspace is another concern if were afraid in our particular supply chain intermediaries
have too much power. They might start to gather some pricing. We need to be aware of that
to think of ways to perhaps disintermediation should try to capitalize on social networks.
Certainly a lot of businesses. Businesses are moving into that environment. They try
to take take advantage of Facebook and twitter and things of that nature to be able to capture
market share to get the attention of potential customers. People like that. How should we
manage multichannel marketing to avoid channel and or price complex is a complicated a complicated
problem that did the large click and mortar stores have especially brick-and-mortar stores
are trying to move into the online what are the major potential limitations of the gross
growth of be to see was her other managerial issues that we have to consider semester after
we talked about the scope and characteristics of retailing. We talked about the different
classifications of retailing business models talk about how the online travel and tourism
service operates talk about the online job market and in some of the benefits that it
has two nudges us as jobseekers but also to to employers. We talked about the electronic
real estate marketplace and how e-commerce is really change things up a bit. There we
talk about online trading in stocks online trading stocks and bonds talk about cyber
ranking in personal finance and the need to really become wary of some of those purely
online banks, but the idea is the is we like we like doing automated payments and things
like that rather than running traditional chats. We talked about on-demand delivery
service. Things like groceries things like that that they work really well in population
areas where the population is very dense your city for example we talk about the delivery
of digital products works very well with certain types of things, e-books, for example, music,
movies think Netflix and things like that about aiding consumer purchase decisions with
a variety of tools that are available to shopping agents. For example, shopping robots that
allow sticky easily compare the prices of goods from various retailers and we finished
up document disintermediation and other be to see strategic issues at the end of this
chapter. Take care

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6 thoughts on “BCIS 5379: Chapter 3: Retailing in Electronic Commerce: Products and Services

  1. This class is more about the business concepts of e-business and e-business strategy. Though we do touch on things like web design, it is conceptual in nature. My department does offer some web development classes but currently, I do not teach those. If this is an interest of yours, I would suggest starting simple with something like Google sites at sites.google.com. Hope this helps.

  2. Thank you very much, I watched and enjoyed the u-tube lectures of e-commerce course; content are so valuable; your teaching approach is outstanding; and I really liked your valuable comments during the lecture.

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