Electronic Retailing Sharif University of Technology Ali A

Electronic Retailing Sharif University of Technology, Ali A. Nazari Shirehjini shirehjini@sharif. edu Fall 1392 1

Learning Objectives 1. 2. 3. 4. 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. 6. Discuss online stock-trading services. 2 5. Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Learning Objectives 7. 8. 9. 10. 11. 3 12. Discuss cyberbanking and online personal finance. Describe on-demand delivery by e-grocers. Describe the delivery of digital products and online entertainment. Discuss various e-tail consumer aids, including comparison-shopping aids. Identify the critical success factors and failure avoidance tactics for direct online marketing and e-tailing. Describe reintermediation, channel conflict, and personalization in e-tailing. Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Electronic Retailing n Definition – Retailing conducted online, over the Internet – Also called E-Tailing E-Tailers – Retailers who sell over the Internet 4 n Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

What sells well on the Internet? n n n Travel Computer Hardware and Software Consumer Electronics Office Supplies Sport and Fitness Goods Books and Music n n n n Toys Health and Beauty Entertainment Apparel and Clothing Jewelry Cars Services Pet Supplies 5 n Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Characteristics of Successful EC n n n High brand recognition A guarantee provided by highly reliable or wellknown vendors Digitized format Relatively inexpensive items n n n Frequently purchased items Commodities with standard specifications Well-known packaged items that cannot be opened even in a traditional store 6 n Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Classification by Distribution Channel n n Mail-order retailers that go online Direct marketing from manufacturers Pure-play e-tailers Click-and-mortar retailers Internet (online) malls 7 n Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

8 E-Tailing as an Enterprise EC System Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

E-Tailing Business Models

E-Tailing Business Models n 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 n Virtual (pure-play) e-tailers 10 Firms that sell directly to consumers over the Internet without maintaining a physical sales channel Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

E-Tailing Business Models n Click-and-mortar retailers Brick-and-mortar retailers that offer a transactional Web site from which to conduct business n Brick-and-mortar retailers 11 Retailers who do business in the non-Internet, physical world in traditional brick-and-mortar stores Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

E-Tailing Business Models n Retailing in online malls ‒ ‒ Multichannel business model ‒ A business model where a company sells in multiple marketing channels simultaneously (e. g. , both physical and online stores) 12 n Malls with shared services Referring directories Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Example Services

Online Travel and Tourism Services n Benefits to travelers ‒ ‒ Benefits to service providers ‒ ‒ Airlines, hotels, and cruise lines sell otherwise-empty spaces Direct selling saves the provider’s commission and its processing 14 n Free information accessible at any time from any place Substantial discounts are available Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Online Travel and Tourism Services n Corporate Travel ‒ Impact of EC on the travel industry ‒ ‒ The Internet may be contributing to a sharp reduction in the number of travel agents It has also driven the rise of intermediaries— third-party online sellers and portals provide price comparisons and a range of other valueadding services for the consumer 15 n To reduce corporate travel costs, companies can make arrangements that enable employees to plan and book their own trips Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Online Travel and Tourism Services Limitations ‒ ‒ ‒ Many people do not use the Internet The amount of time and the difficulty of using virtual travel agencies may be significant, especially for complex trips and for inexperienced Internet surfers Complex trips or those that require stopovers may not be available online because they require specialized knowledge and arrangements 16 n Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Delivery

On-Demand Delivery n On-demand delivery service ‒ E-Grocers ‒ A grocer that takes orders online and provides deliveries on a daily or other regular schedule or within a very short period of time 18 n Express delivery made fairly quickly after an online order is received Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Consumer Aids

Online Purchase-Decision Aids n Shopping portals ‒ n Shopping robots (shopping agents or shopbots) ‒ n Tools that scout the Web on behalf of consumers who specify search criteria “Spy” services Wireless shopping comparisons 20 n Gateways to e-storefronts and e-malls; may be comprehensive or niche oriented Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Online Purchase-Decision Aids n n Business Ratings Sites Trust Verification Sites Other Shopping Tools n ‒ Amazon. com’s A 9 Search Engine Answers. com 21 n Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Critical Success Factors

Reasons for Retailors not to Go Online n n Their product is not appropriate for Web sales Lack of significant opportunity High cost Technological immaturity Online sales conflict with core business 23 n Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Lessons Learned n n n Don’t ignore profitability Manage new risk exposure Watch the cost of branding Do not start with insufficient funds The web site must be effective Keep it interesting 24 n Definitions E-Tailing BMs Exmpl. Services Delivery Consumer Aids Success Factors

Related Literature n Efraim Turban, H. Michael Chung, Jae Kyu Lee, Michael Chung. Electronic Commerce 2010: A Managerial Perspective. 7 th Edition, Pearson , ISBN 0132145383, 2009. Mehdi Khosrow-Pour. Cases on Electronic Commerce Technologies and Applications. Idea Group Publishing, ISBN 1599044021, 2006. . 26 n