E-CommerceRetailing in E-Commerce (E-Tailing)

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E-Business Level 2

2013-2014

Try to be the Best

Electronic Retailing (E-Tailing) and B2C Market Growth.

Consumer Purchase Process and the Marketing Plan

Online Purchase Decision Aids

E-Tailing Business Models

Digital Delivery: Music, Software, News, and More

Successful Click-and- Mortar Strategies

Problems with E-Tailing and Lessons Learned

Lecture Elements

Electronic Retailing (E-Tailing) and B2C Market Growth

Electronic Retailing: A Retailing Process that is

conducted online, over the Internet.

E-Tailers: They are retailers who sell over the internet.

We will focus on B2C marketing, primarily on those

companies that sell so-called hard goods that shipped to

a customer, as opposed to soft goods or digital goods

such as information and news, which can be downloaded

via internet easily.

Electronic Retailing (E-Tailing) and B2C Market Growth

Direct Relationship with consumers without intermediaries is

one of the most important characteristics of B2C commerce.

Manufacturers with established brands such as Dell, are able

to execute a successful direct marketing strategy if they pay

attention to the basic rules of successful direct marketing and

efficiently deliver quality merchandise to the consumer.

In early days, traditional retailers' web sites were typically

used as brochure-ware and lacked interactivity

Electronic Retailing (E-Tailing) and B2C Market Growth

Successful strategies are now implemented by

traditional e-tailers, for combining an online presence

with their physical retail stores ("brick-and-mortar"

stores). The strategy of having both off-line and online

presence is called a "click-and-mortar" model or "brick-

and-click".

Electronic Retailing (E-Tailing) and B2C Market Growth

A. High brand recognition

B. A guarantee provided by highly reliable or well-known

vendors

C. Digitized format

D. Relatively inexpensive items

E. Frequently purchased items

F. Commodities with standard specifications

Characteristics of Successful Retailing

Consumer Purchase Process & the Market Plan

Here we are to talk about the role of Marketing, and

the consumer purchasing process.

To understand the managerial process of successfully

selling merchandise directly to consumer, we must first

look at the process that consumers follow when they

shop and purchase items.

Consumer Purchase Process & the Market Plan

Consumers usually give far more thought to the

decision of purchasing a car than to buying a carton of

milk. But the purchasing process is the same for both.

The process starts with pre-purchase steps, followed

by actual purchase and finally ends with post-purchase

steps.

Consumer Purchase Process & the Market Plan

Consumers begins with an awareness that they need

to make a purchase and identify the basic need or

want. They then establish a decision criteria and refine

it may be by having recommendations form others or

collecting information from different resources.

Finally, consumers use the stage of "information

search and evaluation alternatives" in which they

make a decision toward a specific product or service

after making comparisons.

Consumer Purchase Process & the Market Plan

Once consumer purchase an item, he or she is often

presented with options regarding item configuration or

personalization, this can often be made directly on the

web site.

For example, consumer may need to assistance for

product installation, say dishwasher. With physical

stores this was done using the telephone, but now

online helpdesks are used to help customers for

maintaining their products without costing them to

visit the store or use the telephone calls.

Consumer Purchase Process & the Market Plan

A. Time-starved consumers: found in two income

homes, will be willing to pay higher prices or extra

fees to save time on shopping.

B. Shopping avoiders: dislike shopping and may use

the internet just to avoid people, lines or traffic.

C. New Technologists: often young and comfortable

with technology in general, may just shop online

"because it's cool".

Types of Online Shoppers

Consumer Purchase Process & the Market Plan

D. Time-sensitive materialists: only use the internet

to look for products, they prefer to make their

purchases from traditional stores because of security

concerns or other reasons.

E. Traditional: just prefer stores, and may never adopt

online shopping behaviors.

F. Hunter-gatherers: about 20% of all online

shoppers, enjoy the process of price comparison and

the search for good services.

Types of Online Shoppers

Consumer Purchase Process & the Market Plan

G. Brand loyalists: consumers who shop online for a

particular brand, probably account for the greatest

per-person profit levels.

H. Single shoppers: about 16% of online shoppers,

prefer the internet not only for shopping, but also for

banking, communications, game playing, news, and

other activities.

Types of Online Shoppers

Consumer Purchase Process & the Market Plan

Value Proposition: what a retailer offers may be

unique and valuable to the consumer-customer

service, better prices, or higher quality. Price is often

most important criteria.

Personal Service: Firms that treat each customer as

a unique individual will outsell firms that do not do it.

Decision Criteria

Consumer Purchase Process & the Market Plan

Convenience: time is a valuable commodity. Busy

consumers look for ways to save time and add

convenience. The web offers many ways to make

shopping more convenient. Creating effective, easy

user interfaces for web sites can enhance the

convenience of shopping

Decision Criteria

Consumer Purchase Process & the Market Plan

Other criteria: service after sale may be more

important for certain purchases, such as cars,

computers, or software. If the consumer believes that

there may be difficulties in installation. Consumers

prefer an e-tailer with 24/7 telephone support or web

site with help features.

Decision Criteria

Consumer Purchase Process & the Market Plan

Marketing Management is the process of making it

attractive and easy for consumers to buy a firm's

ideas, goods, or services.

This is done by influencing the portfolio of items

available for sale, the price of them and the promotion

of the products through advertising, and the packaging

or distribution of products, in other words these are the

marketing 4P's.

Online Purchase Decision Aids

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. For example, Mysimon.com

searches the web to find the best price for thousands

of popular items.

Online Purchase Decision Aids

Wireless Shopping Comparisons, Enable shoppers to

compare prices any time from anywhere, including

from any physical store

Business Rating Sites: Bizrate.com and Gomez.com

are two of many sites that purport to rate various e-

tailers and online products, based on multiple criteria.

At Gomez.com, the consumer can actually specify the

relative importance of different criteria when

comparing online banks, toy sellers or e-grocers.

Online Purchase Decision Aids

Other shopper tools: Amazon.com’s A9 Search

Engine do the followings

Remembers information

A user can make notes about any Web page and search

them

Offers a new way to store and organize bookmarks

Recommends new sites and favorite old sites specifically

for the user to visit

E-Tailing Business Models

Subscription Model: charge a monthly or annual subscription fee for the service.

Transaction fee models: Charge a service fee based on the level of transactions offered.

Advertising-supported models: instead of charging to users, charge to the advertising companies. But the revenue by advertising service can be applied with the subscription and transaction fee models.

Sponsorship Models: the companies who can benefit or who are willing to donate beyond financial reasons may sponsor the business.

E-Tailing Business Models

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

Sites from manufacturers such as Dell, Nike or Sony site.

Disintermediation: The removal of organizations or business process layers responsible for certain intermediary steps in a given supply chain

Reinter-mediation: The process whereby intermediaries (either new ones or those that had been disinter-mediated) take on new intermediary roles.

Direct Marketing

E-Tailing Business Models

Pure-Play e-tailers: They are the firms that sell directly to consumers over the internet without maintaining a physical sales channel. such as Amazon.com

Traditional retailers with Web Sites: which are called click-and-mortar retailers, such as Wal-Mart or Home Depot.

Digital Delivery : Music, Software, News and More

Certain goods, (software, music, or news stories) may be distributed in a physical form or they may be digitized and delivered over the Internet.

For sellers, the costs associated with the manufacture, storage, and distribution of physical products can be enormous.

Inventory management also becomes a critical cost issue, and so does delivery and distribution.

Successful Click-and-Mortar Strategies

A traditional brick-and-mortar store with a mature Web site uses a click-and-mortar strategy to:

Speak with one voice: First, a firm can link all of its back-end systems to create an integrated customer experience. Whether the customer accesses information or services through face-to-face encounters with store personnel, web pages, or sales staff.

Successful Click-and-Mortar Strategies

A traditional brick-and-mortar store with a mature Web site uses a click-and-mortar strategy to:

Leverage the multi-channels: The innovative retailer will offer the advantages of each marketing channel to customers from all channels. Whether the purchase is made online or at the store, the customer should benefit from the presence of both.

Successful Click-and-Mortar Strategies

A traditional brick-and-mortar store with a mature Web site uses a click-and-mortar strategy to:

Empower the customer: By utilizing various technologies to ensure that customers are empowered with information and by giving the customers the opportunities to use online technologies to perform various functions interactively, the seller creates a powerful 24/7 channels for service and information.

Problems with E-Tailing and Lessons Learned

Don’t ignore profitability: One fundamental lesson is that each marginal sale should lead to marginal profits. It has been said that if it doesn’t make cents, it doesn't make sense.

Watch the cost of branding: Branding has always been considered to be a key to the success of e-tailers, but the drive to establish brand often leads to excessive spending.

Problems with E-Tailing and Lessons Learned

The Web site must be effective: today internet shoppers expect web sites to offer superior technical performance, fast page loads, quick database searches, streamlined graphics, etc. web sites should be designed in a way that doesn't frustrate customers.

Problems with E-Tailing and Lessons Learned

Static Design: web sites without dynamic content will bore returning visitors. Today, most e-tailers offer valuable tips and information of consumers, who often come back just for that content and may purchase something in the process.

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