Electronic Commerce and Retailing

CHAPTER 6:
ELECTRONIC
COMMERCE AND
RETAILING
Electronic commerce or E-tailing defined
-a concept of selling of retail goods using

electronic median, in particular, the internet.
6.1 INTRODUCTION
E-commerce or ‘e-tail’, the sale and distribution of goods
and services via electronic means, has developed rapidly
over the last couple of decades. There is a variety of e-
commerce sectors, including business-to-business (B2B),
business-to-consumer (B2C), business-to-government
(B2G), consumer-to-consumer (C2C), and government-to-
business (G2B).
Note: This chapter is concerned primarily with B2C and

C2C e-commerce.
WHAT IS B2C E-COMMERCE?
 Business-to-consumer e-commerce, or commerce between
companies and consumers, involves customer gathering
information, purchasing physical goods or receiving products
over an electronic network.
What is C2C e-commerce?

• Consumer-to-consumer e-commerce is simply
commerce between private individuals or consumers.
6.2 THE GROWTH AND DEVELOPMENT OF
THE E-COMMERCE MARKET
6.2.1 WEB 2.0
• Web 2.0 is a term encapsulating a number of software

developments that allowed the web to be used for
information sharing and collaboration, and for fostering
creativity, use-centred design and interoperability.
• Web 2.0 encourage collaboration among professionals and

academics and underpinned the development of wikis,
blogging and social-networking sites.
6.2.2 EXPLOITING THE ‘LONG TAIL’
 The ‘long tail’ was a term coined in the early 2000s to
describe an emerging feature of the online
marketplace in which niche demands could be
profitably exploited.
 In some e-commerce market sectors, supply is not
limited by shelf space and how much it costs to
manufacture, store and distribute a product. The
product becomes virtually abundant at such low costs
that it can be provided at low levels of demand,
whereas the costs of providing it through traditional
channels outweigh potential revenues.
62.3 ONLINE SHOPPING FORMATS
 The e- commerce market allowed for a great deal of
creativity in the design of e-tail stores . As the B2C
market developed, a number of distinct online retail
formats could be distinguished.
1. Price formats – Sells overstocks or products from
previous seasons, and auction sites. Where buyers and
sellers mutually agree the selling price.
-Customers are attracted to e-tail portal sites that offer
points or cashback in their websites.
For Ex: Shopee, eBay
2. Experiental formats – apply the potential technology in
creating an interesting and enjoyable online shopping experience,
leading the way in exploiting social networking and discussion
forums.
3. Community Based formats – began to emerge , which placed a
social community at the heart of the shopping experience.
 Customer’s reviews and customer’s purchase trends positively
affect the image of the product.
4. mass customization formats - emerged which exploited the
interactivity of the online environment to provide merchandise
precisely tailored to the individual desires of customers.
 5. Merchandise -oriented formats
- focus on achieving a product mix that attracts customers.
Types of merchandise oriented e-tailer include:
-Online department store -
www.robinsonsdepartmentstore.com.ph
www.smsupermalls.com
-Online market places – Shopee, Lazada, Amazon
-Online Category killers- Toys R Us (toys), Pixmania
(electronics)
6.2.4 MULTICHANNEL RETAILING AND
GROWTH OF BRAND IMPORTANCE
 Brand Equity – is a term used to denote the non
financial, market- based intangible assets that build long
term marketing success and create future profits.
6.2.5 INTERNATIONAL E-TAILING
 The growth of the internet audience already distributed
to more than 100 countries
 - American, German , French websites and in 2011, in
Spanish, Italian and Australian sites.
“Consumer satisfaction depends not only on a successful
shopping experience but also on efficient delivery and
returns”.
Profitability is related to cost effective logistics.
-IMRG (2011)
6.3 THE E-COMMERCE CONSUMER
 As the market matured, the profile of the consumer
began more representative of the population it served.
 Segmentation of online consumers in UK
 Group 1. Virtual virgins
 Group 2. Chatters and gamers
 Group 3, Dot.com dabbers
 Group 4, Surfing Suits
 Group 5, Wired Living

 Broadly, Online store attributes fall into the
following categories:
 Navigation and Convenience

 Merchandise mix
 Pricing
 Customer service
 Security
 Navigation and convenience – relate to a consumer’s
ability to reduce transaction cost through visiting a
website rather than a retail outlet.
 Merchandise mix – relates to the merchandise on offer
with regard to the overall assortment, variety and
product information.
 Pricing – should be a key online shopping attribute in
that consumers should have a reduction in search costs,
more product information and a greater opportunities to
compare prices.
 Customer’s service – Or the overall service quality
experience embraces some of the other attributes
discussed in this section.
 Security – was a major negative factor in deterring
consumers from buying online in the early years of E-
commerce development.

 Electronic commerce and retailing – Creating

awareness of a new online store required spending an
enormous amount on advertising through traditional
media.
 Online Store Attributes – As online usage increased,
more research was conducted into the shopping service
attributes of e – tailing compared with conventional store
attributes.
 E – tail store development
 The role of the web in retailing - Online retailing offers

retailers sales via potentially limitless shelf space,
unconfined by store size, shape and location and large
online retailers.
 ONLINE GORCERY MARKET:
 An online grocery is either a brick and mortar supermarket
or grocery store that allows online ordering, or a
standalone e-commerce service that includes grocery
items. There is usually a delivery charge for this service.
Online grocery delivery services are available throughout
Europe, Asia and North America, mostly in urban centers.
 *limited online potential

 *High cost of delivery
 *selection variety trade-offers
 *existing entranced competition

 E-Fulfillment
 E-fulfilment is the arrangements that are necessary for
businesses to sell their products or services on the
internet
 Summary
 *Convenience
 *Product range
 *Customer service
 *Price

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CHAPTER 6:

-a concept of selling of retail goods using

Note: This chapter is concerned primarily with B2C and

What is C2C e-commerce?

• Web 2.0 is a term encapsulating a number of software

• Web 2.0 encourage collaboration among professionals and

 Group 1. Virtual virgins

 Group 2. Chatters and gamers

 Group 3, Dot.com dabbers

 Group 4, Surfing Suits

 Group 5, Wired Living

 Navigation and Convenience

 Electronic commerce and retailing – Creating

 The role of the web in retailing - Online retailing offers

 *limited online potential

 *selection variety trade-offers

 *existing entranced competition

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