Turban Ec2010 Ch03

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Retailing in Electronic Commerce: Products and Services

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. Describe online real estate services. 6. Discuss online stock-trading services.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-2

7. Discuss cyberbanking and online personal finance. 8. Describe on-demand delivery of groceries and similar products/services. 9. Describe the delivery of digital products and online entertainment. 10.Discuss various online consumer aids, including comparison-shopping aids. 11.Describe disintermediation and other B2C strategic issues.Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-3

OVERVIEW OF ELECTRONIC RETAILING electronic retailing (e-tailing) e-tailers

Retailing conducted online, over the Internet

Retailers who sell over the Internet SIZE AND GROWTH OF THE B2C MARKET WHAT SELLS WELL ON THE INTERNET CHARACTERISTICS AND ADVANTAGES OF SUCCESSFUL E-TAILING

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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 Copyright 2010 Pearson Others Education, Inc. Publishing as 5Prentice Hall

CLASSIFICATION BY DISTRIBUTION CHANNEL1. Direct marketing by mail-order retailers that go online 2. Direct marketing by manufacturers 3. Pure-play e-tailers 4. Click-and-mortar retailers 5. Internet (online) mallsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Direct Marketing by Mail-Order Companies direct marketing

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

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Pure-Play E-Tailers virtual (pure-play) e-tailers

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

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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)Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-10

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 providersCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

B2C IN SOCIAL NETWORKS3-11

Online travel bookings and associated travel services are one of the most successful e-commerce implementations SPECIAL SERVICES ONLINE Wireless services Direct marketing Alliances and consortia Travel-Oriented Social NetworksCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-12

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 onlineCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-13

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

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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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

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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THE INTERNET JOB MARKET The following parties use the Internet job market: Job seekers Employers seeking employees Classified ads Job agencies Government agencies and institutions

A Consortium of Large Employers and College Career Advisors Online Job Markets on Social Networking Global Online PortalsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-17

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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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 substantiallyCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-19

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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REAL ESTATE ONLINE Zillow, Craigslist, and Other Web 2.0 Real Estate Services

INSURANCE ONLINE Companies use Internet to offer standard insurance policies, such as auto, home, etc. often at a substantial discount to individuals

ONLINE STOCK TRADING The Risk of Trading in an Online Stock Account

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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electronic (online) banking or ebanking Various banking activities conducted from home or the road using an Internet connection; also known as cyberbanking, virtual banking, online banking, and home banking

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HOME BANKING CAPABILITIES Informational, administrative, transactional, portal, and others

VIRTUAL BANKS Have no physical location; only conduct online transactions

INTERNATIONAL AND MULTIPLECURRENCY BANKING Support global transactionsCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-24

ONLINE FINANCIAL TRANSACTION IMPLEMENTATION ISSUES Securing Financial Transactions Access to Banks Intranets by Outsiders Imaging Systems Fees Online Versus Fees for Offline Services Risks

PERSONAL FINANCE ONLINE Online Billing and Bill Paying TaxesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-25

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 service Express delivery made fairly quickly after an online order is received The Case of E-Grocers

FRESHDIRECT

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ONLINE DELIVERY OF DIGITAL PRODUCTS, ENTERTAINMENT, AND MEDIA

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ONLINE ENTERTAINMENT Adult Entertainment Internet Gambling Online Dating Services

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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 criteriaCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-29

SPY SERVICES Wireless Shopping Comparisons

BUSINESS RATINGS SITES TRUST VERIFICATION SITES OTHER SHOPPING TOOLS

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A traditional brick-and-mortar store with a mature Web site that uses a click-and mortar strategy is able to do the following: Speak with one voice Leverage the multichannels Empower the customer

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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 rolesCopyright 2010 Pearson Education, Inc. Publishing as Prentice Hall 3-32

Copyright 2010 Pearson Education, Inc. Publishing as Prentice Hall

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cybermediation (electronic intermediation) The use of software (intelligent) agents to facilitate intermediation channel conflict Situation in which an online marketing chan