CH03Retailing in Electronic Commerce Products and

Chapter3RetailinginElectronicCommerce:ProductsandServices©PrenticeHall20042LearningObjectives1.Describee-tailinganditscharacteristics.2.Defineanddescribetheprimarybusinessmodelsofelectronicretailing(“e-tailing”).3.Describehowonlinetravelandtourismservicesoperateandtheirindustryimpact.4.Discusstheonlineemploymentmarket,includingitsparticipants,benefits,andlimitations.©PrenticeHall20043LearningObjectives(cont.)5.Describeonlinerealestatetransactions.6.Discussonlinestocktradingservices.7.Discusscyberbankingandonlinepersonalfinance.8.Describeon-demanddeliverybye-grocers.5.Describethedeliveryofdigitalproductsandonlineentertainment.©PrenticeHall20044LearningObjectives(cont.)10.Discussvariouse-tailconsumeraids,includingcomparison-shoppingaids.11.Identifythecriticalsuccessfactorsandfailureavoidancetacticsfordirectonlinemarketingande-tailing.12.Describereintermediation,channelconflict,andpersonalizationine-tailing.©PrenticeHall20045Amazon.com:TheKingofE-TailingTheopportunityJuly1995,e-tailingpioneerAmazon.com,offeredbooksviaanelectroniccatalogfromitsWebsite(amazon.com)Thecompanyhascontinuallyenhanceditsbusinessmodelsandelectronicstoreby:expandingproductselectionimprovingthecustomer’sexperienceaddingservicesandalliancesrecognizingtheimportanceoforderfulfillmentandwarehousing©PrenticeHall20046Amazon.com:TheKingofE-Tailing(cont.)TechnologyusedAmazon.comhasexpandedinavarietyofdirections:offersspecialtystores(professionalandtechnicalstore)expandsitseditorialcontentthroughpartnershipswithexpertsincertainfieldsincreasesproductselectionwiththe(usedandout-of-printtitles)expandsitsofferingsbeyondbooks(June2002becameanauthorizeddealerofSonyCorp.sellingSonyproductsonline)today:adiversifiedretailerofproductsandservices©PrenticeHall20047Amazon.com:TheKingofE-Tailing(cont.)KeyfeaturesoftheAmazon.comsuperstoreare:easybrowsing,searching,andorderingusefulproductinformation,reviews,recommendations,andpersonalizationbroadselectionlowpricessecurepaymentsystemsefficientorderfulfillmentpersonalization©PrenticeHall20048Amazon.com:TheKingofE-Tailing(cont.)Enjoyablefeatures:“GiftIdeas”sectionfeaturesseasonallyappropriategiftideasandservices“Community”sectionprovidesproductinformationandrecommendationssharedbycustomers“E-Cards”section,freeanimatedelectronicgreeting©PrenticeHall20049Amazon.com:TheKingofE-Tailing(cont.)Marketplaceservices:hostsandoperatesauctionszShopsservicehostselectronicstorefrontsforamonthlyfeeallowingsmallbusinessestheopportunitytohavecustomizedstorefrontssupportedbytherichnessofAmazon.com’sorder-fulfillmentprocessing©PrenticeHall200410Amazon.com:TheKingofE-Tailing(cont.)Amazon.comisrecognizedasanonlineleaderinCRMinformativemarketingfrontendsone-to-oneadvertisementsfreepostingofrestaurantmenusfromthousandsofrestaurants“Welcomeback,SarahShopper”withrecommendationsofnewbooksfromthecustomerspreferredgenrebasedonpreviouspurchases©PrenticeHall200411Amazon.com:TheKingofE-Tailing(cont.)Sendspurchaserecommendationsviae-mailtocultivaterepeatbuyersEfficientsearchengineandothershoppingaidsCustomerscanpersonalizetheiraccountsandmanageordersonlinewiththepatented“One-Click”orderfeatureincludinganelectronicwallet©PrenticeHall200412Amazon.com:TheKingofE-Tailing(cont.)In1997,Amazon.comstartedanextensiveaffiliatesprogramby2002,thecompanyhadmorethan500,000partnersthatrefercustomerstoAmazon.comAmazonpaysa3to5%commissiononanyresultingsaleallianceswithmajor“trustedpartners”provideknowledgeableentryintonewmarketsCarsdirect.comallowsittosellcarsonlineDrugstore.comconnectstohealthandbeautyaidsAT&T,Nextelandotherssuggestserviceplansforwirelessphones©PrenticeHall200413Amazon.com:TheKingofE-Tailing(cont.)September2001AmazonsignedanagreementwithBordersGroupIncallowsAmazon.com’suserstopickupbooks,CDs,andothermerchandiseatBorders’physicalbookstoresItisbecomingaWebfulfillmentcontractorfornationalchainssuchas:TargetCircuitCity©PrenticeHall200414Amazon.com:TheKingofE-Tailing(cont.)TheResultsIsthenumberonee-tailersince2001generated$3.12billionIsbecomingverysuccessfulinreducingitscostsandincreasingitsprofitabilityAnnualsalesforAmazon.comhavetrendedupward(over$5billionin2003)©PrenticeHall200415Amazon.com:TheKingofE-Tailing(cont.)$15.7millionin1996to$600millionin1998toabout$4billionby2002In2003thesiteoffersover17millionbook,music,andDVD/videotitlestosome20millioncustomersOffersseveralfeaturesforinternationalcustomersInJanuary2002,Amazon.comdeclareditsfirsteverprofit—forthe2001fourthquarter©PrenticeHall200416Amazon.com:TheKingofE-Tailing(cont.)Whatcanwelearn…demonstratestheevolutionofe-tailingsomeoftheproblemsencounteredbye-tailerssolutionsemployedbyAmazon.comtoexpanditsbusinesstheopportunitiesfore-tailing©PrenticeHall200417InternetMarketingandElectronicRetailing(E-Tailing)Overviewofe-tailingElectronicretailing(e-tailing):Retailingconductedonline,overtheInternetE-tailers:ThosewhoconductretailbusinessovertheInternet©PrenticeHall200418InternetMarketingandE-Tailing(cont.)SizeandgrowthoftheB2CmarketnumberofU.S.onlinebuyersfrom53.2%ofallInternetusersin2001to6%by2004(