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The Net v/s the Mall

Agassi Georgi Alex

2The Rise of the NET

Amazon.com began with books– July, 1995 with its motto “If it’s in print, It’s in Stock”.

eBay.com began in September 1995 By 2000 everyone in the US made at least one purchase via the web.

Malls2005 – there were 48,695 shopping malls and centres across US.

Agassi Georgi Alex

3The Early Days of Online Retail

It gave the customers more convenience and options to choose from. Led in the rise of intermediary between the manufacturer and the

customer. Many entered the web based retailing sector as it required very less

investments.The Dot Com collapse Along with the toy retailer e-Toys many other e-commerce companies had collapsed as they had made themselves public and due to the fall in the market prices.

Agassi Georgi Alex

4Brick and Mortar to the Internet

Brick and

Mortar Department

stores

General merchandiser

s

Agassi Georgi Alex

5Discount stores

The top three discount stores in the United States were :1. Wal-Mart2. Target3. K-Mart

There were some advantages the traditional stores had over the web stores.

1. Brand equity and trust 2. Consumer confidence in customer when buying from and online retail site that

also has a physical store.3. An existing supply chain infrastructure.

Agassi Georgi Alex

6Reasons for hesitation amongst the Brick and Mortar to enter the online store:

1. Lack of understanding of new medium 2. A fear that online sales would kill the physical store

sales The online webstores also launched seasonal offers like Cyber Monday and Black Friday where customers had themselves set for a massive shopping.Broadband connections also helped many customers to place orders faster and give clarity and better speed than dial-up connections.

Agassi Georgi Alex

7Promoting online stores from their physical stores

Agassi Georgi Alex

8Advantages of NET stores

These stores have more store keeping units than the usual physical stores.

They have more store or warehouse space where they could keep their products ready. Ex; Costco.com online tire store in 2004

The only space they required was the virtual shelf space.

Agassi Georgi Alex

9Comparison- shopping sites

It is a vertical search engine that shoppers use to filter and compare products based on price.

Leading comparison-shopping sites are: Yahoo shopping BizRate.com PriceGrabber

Agassi Georgi Alex

10Impact of comparison shopping sites on prices

The degree of price sensitivity could be correlated to one of three components of search engines : pricing data, quality information, comparison across retailers.

The ease of discovery and transparency of pricing on the internet lowered the cost of commodity goods such as consumer electronics. 

Search results produced an ordered list with more than adequate listings of attractive options.

Options tend to be more similar in overall quality valuation compared to randomly selected items.

Agassi Georgi Alex

11Impact of comparison shopping sites on purchasing transaction

Online had become a substitute for a visit to a retail outlet. Many independent or small chain retail outlets had already

experienced intense competition for the large discount and big-box stores.

Internet users mainly purchased from  pure-play retailers were books, CDs, DVDs, videos, telecom, electronics, household appliances and computers.

Online auctions were popular ways to purchase second hand goods and collectibles, toys and jewelry.

Mail-order companies dominated in clothing, shoes, furniture, perfume and cosmetics and household products.

Agassi Georgi Alex

12Conclusion

Retailers from national chains to high-end speciality stores were developing and testing strategies to steady shift from traditional to online shopping.

Consumers used both brick and mortar and online comparison sites as they spent their dollars in the online and offline multichannel shopping.

This shopping process help consumers with lower shopping cost, ideal product and shopping efficiency.

The expectation on the part of the consumer for readily available, accessible information and inventory would raise the bar in customer satisfaction.

Agassi Georgi Alex

Agassi, Rithwik BSBA13

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