Retailing in Electronic Commerce:

Products and Services

• OVERVIEW OF ELECTRONIC RETAILING
– 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
• WHAT SELLS WELL ON THE INTERNET
• CHARACTERISTICS AND ADVANTAGES OF
SUCCESSFUL E-TAILING
Copyright © 2010 Pearson Education, Inc.
3-1
Publishing as Prentice Hall
WHAT SELLS WELL ON THE INTERNET
• Travel • Health and beauty
• Computer hardware • Entertainment
and software • Apparel and clothing
• Consumer electronics • Jewelry
• Office supplies • Cars
• Sport and fitness goods • Services
• Books and music • Food and drugs
• Toys and hobbies • Pet supplies
• Others
Copyright © 2010 Pearson Education, Inc.
2
Publishing as Prentice Hall
• CLASSIFICATION BY DISTRIBUTION CHANNEL
1. 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) malls

Copyright © 2010 Pearson Education, Inc.

3-3
Publishing as Prentice Hall
• 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

Copyright © 2010 Pearson Education, Inc.

3-4
Publishing as Prentice Hall
• Pure-Play E-Tailers
– virtual (pure-play) e-tailers
Firms that sell directly to consumers over the
Internet without maintaining a physical sales
channel

Copyright © 2010 Pearson Education, Inc.

3-5
Publishing as Prentice Hall
• 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.

3-6
Publishing as Prentice Hall
• 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 providers
• B2C IN SOCIAL NETWORKS

Copyright © 2010 Pearson Education, Inc.

3-7
Publishing as Prentice Hall
• 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 Networks

Copyright © 2010 Pearson Education, Inc.

3-8
Publishing as Prentice Hall
• 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 online Copyright © 2010 Pearson Education, Inc.
3-9
Publishing as Prentice Hall
• 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.

3-10
Publishing as Prentice Hall
• 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.
3-11
Publishing as Prentice Hall
Copyright © 2010 Pearson Education, Inc.
12
Publishing as Prentice Hall
• 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 Portals
Copyright © 2010 Pearson Education, Inc.
3-13
Publishing as Prentice Hall
Copyright © 2010 Pearson Education, Inc.
3-14
Publishing as Prentice Hall
• 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
substantially

Copyright © 2010 Pearson Education, Inc.

3-15
Publishing as Prentice Hall
Copyright © 2010 Pearson Education, Inc.
16
Publishing as Prentice Hall
• 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.
3-17
Publishing as Prentice Hall
Copyright © 2010 Pearson Education, Inc.
3-18
Publishing as Prentice Hall
• 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

Copyright © 2010 Pearson Education, Inc.

3-19
Publishing as Prentice Hall
• HOME BANKING CAPABILITIES
– Informational, administrative, transactional,
portal, and others
• VIRTUAL BANKS
– Have no physical location; only conduct online
transactions
• INTERNATIONAL AND MULTIPLE-CURRENCY
BANKING
– Support global transactions
Copyright © 2010 Pearson Education, Inc.
3-20
Publishing as Prentice Hall
• 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
– Taxes
Copyright © 2010 Pearson Education, Inc.
3-21
Publishing as Prentice Hall
• 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

Copyright © 2010 Pearson Education, Inc.

3-22
Publishing as Prentice Hall
ONLINE DELIVERY OF DIGITAL PRODUCTS,
ENTERTAINMENT, AND MEDIA

Copyright © 2010 Pearson Education, Inc.

23
Publishing as Prentice Hall
• ONLINE ENTERTAINMENT
– Adult Entertainment
– Internet Gambling
– Online Dating Services

Copyright © 2010 Pearson Education, Inc.

3-24
Publishing as Prentice Hall
• 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 criteria

Copyright © 2010 Pearson Education, Inc.

3-25
Publishing as Prentice Hall
• 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

Copyright © 2010 Pearson Education, Inc.

3-26
Publishing as Prentice Hall
• 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
Copyright © 2010 Pearson Education, Inc.
3-27
Publishing as Prentice Hall
• cybermediation (electronic intermediation)
The use of software (intelligent) agents to
facilitate intermediation
• channel conflict
Situation in which an online marketing
channel upsets the traditional channels due to
real or perceived damage from competition

Copyright © 2010 Pearson Education, Inc.

3-28
Publishing as Prentice Hall
• DETERMINING THE RIGHT PRICE
• PRODUCT AND SERVICE CUSTOMIZATION
AND PERSONALIZATION
• FRAUD AND OTHER ILLEGAL ACTIVITIES
• HOW TO MAKE CUSTOMERS HAPPY

Copyright © 2010 Pearson Education, Inc.

3-29
Publishing as Prentice Hall