retailing in e commerce

Prentice Hall, 2002 1

ELC 200

Day 6

Prentice Hall, 20032

Agenda

Questions from last Class?Assignment 2 posted to WebCT

Due Feb 9 (next class)Assignment 3 will be posted on Feb 13 Begin Discussion on

Retailing in E-Commerce: Products and Services Quiz 1 on Feb 13

Computer based WebCT examChap 1-3 20 m/c (60 points) 5 short essays (40 points)70 minsopen book, open notes, open computer


Chapter 3

Retailing in E-Commerce:Products and Services


Learning Objectives

Define and describe the primary business models of electronic retailing (“e-tailing”)Discuss various e-tail markets, such as those for books, music, and carsIdentify the principles of “click-and-mortar” strategies for traditional retailers

Describe how online travel and tourism operate


Learning Objectives (cont.)

Discuss the online employment market, including its drivers and benefitsDescribe online real estate, insurance, and stock tradingDiscuss cyberbanking and online personal financeDescribe on-demand delivery by e-grocers


Learning Objectives (cont.)

Describe the delivery of digital products and online entertainmentDiscuss various e-tail consumer aids, including comparison-shopping aidsIdentify the critical success factors for direct marketing and e-tailingDescribe reintermediation, channel conflicts, and personalization in e-tailing


Amazon.com: King of E-Tailing

The ProblemAmazon.com has recognized that it must continually enhance its electronic store by expanding product selection and improving the customer experience

The SolutionAmazon.com now offers specialty stores

Professional and technical storeExpanded book editorial contentIncreased product selection


Amazon.com (cont.)

Some key features of the Amazon.com are:

Easy browsing and searchingUseful product informationLow pricesOne-Click order technology

Features that make the online shopping experience more enjoyable

Gift ideasE-cards


Amazon.com (cont.)

Various marketplace servicesAmazon AuctionszShops service hosts electronic storefronts for a monthly fee

Customer relationship managementCreates interesting and informative front-endHighly automated and efficient back-end supportPersonalized service

Diversification through business alliances


Amazon.com (cont.)

The ResultsFinancial performance—annual sales

for Amazon.com have trended upward, from $15.7 million in 1996 to $4 billion in 2002Offers several features for international customersDeclared its first profit for the 2001 first quarterYet the company’s financial success is by no means assured


E-Tailing and B2C Market Growth

A retailer is a sales intermediary, a seller that operates between manufacturers and customersElectronic retailing (e-tailing)—retailing conducted online, over the Internet

Catalog sales free a retailer from the need for a physical storeManufacturer sells directly to the customer, cutting out the intermediary


Size and Growth of the B2C Market

Statistics for volume of B2C EC sales come from many sources:

emarketer.comjmm.com

Statistics on e-tailing can be found at:Cyberdialogue.comBusiness2.com

Substantial deviations in the reported data due to how the numbers are derived


US figures

http://www.census.gov/


What Sells Well on the Internet?

Computers and electronicsSporting goods Office supplies Books and music Toys

Health and beautyEntertainmentApparelCarsServicesOthers


Characteristics of Successful E-Tailing

Brand recognition and guarantees

LL Bean Guarantee provided by highly reliable or well-known vendorsDigitized products

itunesInexpensive itemsFrequently purchased

Gevalia Coffee

Commodities with standard specifications

Office DepotWell-known packaged items that cannot be opened even in a traditional store

FredricksAmmo


E-Tailing Business Models

E-tailing business models can be classified in several ways:

By the scope of items handledGeneral-purpose Specialty e-tailing

By scope of the sales region coveredGlobal Regional

Two main models Direct selling model Distribution channel


Classification by Revenue Model

Product sales models Charge customers directly for products or services

Subscription modelsCharge monthly or annual subscription fee for service

Transaction-fee modelsCharge service fee based on the level of transaction offered

Advertising-supported models Charge fee to advertisers instead of customers

Sponsorship modelsCompanies sponsor the business through donations (usually supplemental income)


Classification by Distribution Channel

Direct marketing—manufacturers sell directly from company sites to individual customersPure-play e-tailers—have no physical stores, only an online sales presenceClick-and-mortar retailers—traditional retailers with a supplementary Web site


Direct Marketing by Manufacturers or 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 the seller and the buyer

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


Exhibit 3.1: Disintermediation in the B2C Supply Chain


Direct Marketing by Manufacturers or Mail-Order Companies (cont.)

Parties in direct marketing have a greater opportunity to influence each otherMake-to-order online—direct sales by manufacturers are gaining popularity due to the ability to customize products or services


Lands’ End: How a Mail-Order Company Moved Online

http://www.landsend.com/ Successful B2C e-tailers are mail-order companies once based solely on paper catalogsLogistics system were already in placeLands’ End served over 6.2 million customers in 2000Internet sales:

1999 were 5% of company’s total sales2000 were 10%2003 are 20% (projected)


Lands’ End (cont.)

Landsend.com offers all its catalog products onlineWeb site offers:

Allows women customers to build and store a 3D model of their bodyMale customers use a feature called “Oxford ExpressPersonal shopping accounts Order status tracking


Lands’ End (cont.)

The company has:Affiliates network that pays 5% commission for every sale that comes from a referralB2B “store” (landsend.com/corpsales) Allows online customers to shop with the assistance of a “real” personal shopperGlobal presence with localized sites


Virtual (Pure-Play) E-Tailers

Virtual e-tailers sell over the Internet without a physical sales channel

General purpose e-tailers (Amazon.com)Broad range of productsLarge number of consumers

Specialty or niche e-tailers (CatToys.com)One specific product areaHigh demand items in the areaEffective practices for customer appeal


Buying Cars Online:Build to Order

Traditional system—”build-to-stock”:Manufacturers conduct market research to estimate which features and options will sell wellMake the cars they wish to sellCars are sold from stock at a loss when there is insufficient demand for a particular vehicle

Auto giants intend to transform themselves from build-to-stock to build-to-order companies

Cutting inventory requirements in half Giving customers exactly what they want


Buying Cars Online:Build to Order (cont.)

Using a virtual car at jaguar.comConsumers custom configure their car’s features and components, see it online, price it, have it delivered to a nearby dealer

Web site helps with the research processThe configuration is transmitted to the production floor:

Reducing delivery timeContributing to increased customer satisfaction


Cattoys.com: A Specialty E-Tailer

Cattoys.com is designed to appeal to cat enthusiasts

No banner adsEasy to navigateUpdated weeklyDisplays products in clear categoriesRetail prices comparable to pet storesPrices kept low through aggressive cost control


Cattoys.com: A Specialty E-Tailer (cont.)

CatToys.com hosts its site on Yahoo!Allows it to use sophisticated technology

Cookies for the shopping-cart processPayment securityAccess to a large audience.

Concentrate on its core competencies:Selecting the right cat toysMarketing them effectively

Example of a low-volume specialized store that attracts people with specific shopping needs


Click-and-Mortar Retailers

Brick-and-mortar retailers—retailers who do business in the non-Internet, physical world in traditional brick-and-mortar storesClick-and-mortar retailers—brick-and-mortar retailers with a transactional Web site from which to conduct businessTraditional retailing frequently involves a single distribution channel, the physical store—may also operate a mail-order businessMultichannel store—firm that operates both physical stores and an online e-tail site


Other Business Models

Electronic mall Transaction brokersInformation portalsCommunities portalContent creator or disseminators

Viral marketingMarket makersMake-to-orderService providers


Travel and Tourism Services Online

The Internet is an ideal place to plan, explore, and arrange almost any trip and save moneyTravel-related information available at many sites including:

Expedia.com Orbitz.comTravelocity.com Asiatravel.comTravelweb.com Trip.comEurovacations.com Priceline.comLonelyplanet.com


Travel and Tourism Services (cont.)

Information and bookings Travel tipsElectronic Travel magazineFare comparisonsCurrency conversion calculatorsFare tracker Worldwide business and places locator

Outlet for travel accessories and booksExperts’ opinionsMajor international and travel newsDriving maps and directionsChat roomsFrequent flier dealsOnline travel auctions

Services provided:



Special servicesVery low airfares and discount accommodationsLast-minute trips can also be booked Special vacation destinations

Sites that offer medical advice and services for travelers:

World Health Organization (who.int)Governments (cdc.gov/travel)Private organizations (Healthcenter.com)



Wireless servicesCustomers with WAP cell phones can check their flight status, update frequent flyer miles, and book flights

Direct marketingBuild customer profiles and target specific customers with tailored offers

Alliances and consortiaIncrease sales or reduce purchasing costs



BenefitsFree information is tremendousFree information is accessible anytimeSubstantial discounts

LimitationsNot all people use the InternetIt may take a long time to find what you wantPeople are still reluctant to provide credit card numbers


Impacts of EC on the Travel Industry

Impacts of EC on the travel industry into 10 categories including:

Product promotion, new products, new business models

Only the value-added activities of travel agencies will not be automated

Performed by a new type of organizationWill serve certain targeted markets and customers

Entering the market will be:Travel superstores that will provideInnovative individuals operating from their homes


Many large corporations receive additional services from large travel agencies

Online optimization tools provided by travel companies (rosenbluth.com)

Travel authorization software that checks availability of funds and compliance with corporate guidelines

This is a huge and rapidly growing marketOracle’s e-Travel provides software to automate and manage online booking

Corporate Travel


Corporate Travel (cont.)

American Express,Microsoft and MCI have developed AXI system that displays:

Airline seat charts Maps showing hotelsInformation on nearby health clubs Weather informationCreates profiles for travelers and their preferencesAttempts to satisfy both travelers and corporate travel managers


Intelligent Agents in Travel Services

Step 1: visit an online travel site and enter

Desired destinationDatesAvailable budgetSpecial requirementsDesired entertainment

Step 2: computer dispatches an intelligent agent that “shops around”


Intelligent Agents in Travel Services (cont.)

Step 3: agent attempts to match your requirements with what is available, negotiates with vendorsStep 4: agent returns within minutes with suitable alternatives, modifies as per your wishes, books the vacationVoice communication with agent may be possible by 2005?? (not yet)


The Employment Placementand the Job Market

Job marketsEmployers are looking for employees with specific skills, and individuals are looking for jobsVery volatile marketMoved to the InternetMillions of job seekers, hundreds of thousands of jobs


The Internet Job Market

The Internet offers a perfect environment; it is especially effective for technology-oriented jobs

Job seekersJob offerersRecruiting firmsGovernment agencies and institutions


Matching Workers with Jobs in the Philippines

Philippine Department of Labor created a Web site that matches people with jobs as a free service

For those who do not have computers or Internet access, the government makes computer terminals (kiosks) availableGovernment employees help those applicants who do not know how to use the systemJob seekers can find a job that best suits their qualifications


Matching Workers with Jobs in the Philippines (cont.)

At the heart of the system is its matchmaking capabilitiesThis job-matching feature differentiates this site from other online job sitesEverything is done electronically, so job seekers can see the match results in seconds


Benefits of the Electronic Job Market

For job seekersFind very detailed and timely information on a large number of jobs world-wideQuickly communicate with potential employersPost resumes for large-volume distributionSearch for jobs quickly from any place at any timeObtain several support services at no costAssess their market valueFind out how to use their voice in an interviewCan access newsgroups that are dedicated to finding jobs


Benefits of the Electronic Job Market (cont.s)

For employersAdvertise to a large number of job seekersSave on advertisement costsLower the cost of processing (using electronic application forms)Provide greater (‘equal opportunity’) for job seekersFind highly skilled employees


Exhibit 3.5Virtual Job Employment Agent


Limitations of the Electronic Job Market

Many people do not use the InternetCompanies may use both traditional advertising approaches and the InternetClear trend: more and more of the job market are going to the Internet

Security and PrivacyResumes and other online communications are usually not encryptedPossibility that someone at your current place of employment may find out that you are job hunting


Limitations of the Electronic Job Market (cont.)

Electronic job market may also create high turnover costs for employers by accelerating employees’ movement to better jobsFinding candidates online is more complicated:

There is a large number of resumes available onlineSome sites offer prescreening of candidates to help alleviate this problem (jobtrak.com)


Intelligent Agents in the Electronic Job Market

For Job SeekersJobsleuth.com offers a free service that uses intelligent agents

To search the Internet’s top job sites and databases for job postings based on users’ profilesUsers can create as many as five different profiles based on

Careermosaic.com Users receive a daily e-mail containing job opportunities from over a dozen top job sites around the Internet interests. Saves the users a tremendous amount of time


Intelligent Agents in the Electronic Job Market (cont.)

For employersResumix.com (now part of Yahoo!) has a special intelligent-agent powered search engine helps employers find resumes that match specific job descriptions

Its Knowledge Base interprets a candidate’s resume, determining skills based on context and matching those skills to the position criteria

The Knowledge Base would select only the candidates with relevant skills


ELC 200

Day 7


Agenda

Questions from last Class?Assignment 2 Due Assignment 3 will be posted on Feb 13 Finish Discussion on

Retailing in E-Commerce: Products and Services Quiz 1 on Feb 13

Computer based WebCT examChap 1-3 20 m/c (60 points) 5 short essays (40 points)70 minsopen book, open notes, open computer


Real Estate

You can view many properties on the screenYou can sort and organize propertiesYou can find detailed information about the propertiesYou can search, compare and apply for loanshttp://www.eradawson.com/listings.html


In some locations, real estate databases are only available to realtors over private networks in their offices Builders use virtual reality technology on their Web sites to demonstrate three-dimensional floor plans to home buyers“Virtual models” enable buyers to “walk through” three-dimensional mock-ups of homes

Real Estate (cont.)


Real Estate Applications

Advice to consumers on buying or selling a home assist2sell.com

International Real Estate Directory and News is a comprehensive real estate Web site ired.com

National listing of properties for sale homesinamerica.com

Commercial real estate listingscommercialproperty.com


Real Estate Applications (cont.)

Searching residential real estate in multiple databases homegain.com realestate.yahoo.com

National Association of Realtors, has links to property listings in all major US citiesrealtor.com

Real estate related mapsmapquest.com


Information on current mortgage rates bankrate.comeloan.com

Mortgage comparisons, calculations, and other financing information; mortgage application eloan.com quickenloans.quicken.com

Online lenders can approve loans onlinearcsystems.com




Automated closing of real estate transactions datatrac.net

Home seller sites provide a place for persons who want to sell their homes privately, without using a real estate agentowners.com

Rental properties homestore.net

Several services are available, including a virtual walk-through of some listings



Online real estate is supporting rather than replacing existing agentsReal estate agents are still charging high commissionsSeveral Web sites have started to offer services at lower commissions assist2sell.com

To find mortgage interest rates online uselendingtree.com eloan.com


Insurance Online

Insurance—auto, home, life, and health at a substantial discount

Insureate.comOrder.comQuotesmith.com


Online Stock Trading

Costs between $5 and $29 per transaction (vs. $10 - $35 in traditional discount brokerage ad ~$100 for full service broker )No waiting on busy telephone linesNo oral communication, less chance for errorsPlace orders from anywhere, any time, day or nightNo biased broker to push youConsiderable amount of free information


Exhibit 3.6Online Electronic Stock Trading


For current financial news

cnn.com, hoovers.com, bloomberg.com

For municipal bond pricing

bloomberg.com

For overall market information and many links

cyberinvest.com

For free Guru advice see

upside.com

Investment Information


Investment Information (cont.)

For stock screening and evaluation:multexinvestor.com money.cnn.comFor articles from the Journal of the American Association of Individual Investorsaaii.com

For reports the latest findings and pricing of IPOshoovers.com/ipo

For chart loversbigcharts.com


For mutual funds evaluation and other interesting investment informationmorningstar.comFor earning estimates and much morefirstcall.comFor almost anything you need finance.yahoo.comOnline trading is expanding to includeMutual funds, commodities, financial

derivatives

Investment Information (cont.)


Banking & Personal Finance Online (cont.)

Electronic banking (e-banking)—various banking activities conducted from home or the road using an Internet connection; also known as:

Cyberbanking Virtual bankingOnline banking Home banking

Electronic bankingSaves time and money for usersOffers an inexpensive alternative to branch banking

Many traditional banks around the world offer diversified e-banking services

main.hangseng.com





main.hangseng.com





main.hangseng.com


Capabilities of Home Banking

Get current account balances any time

Obtain charge and credit card statements

Pay bills

Download account transactions

Transfer money between accounts

Balance accountsSend e-mail to the bankExpand the meaning of “banker’s hours”Handle finances when travelingAdditional services

Free phone bankingWaive checking fees


International and Multiple-Currency Banking

Some international retail purchasing can be done by credit cardOther transactions may require international banking support

Hong Kong Bank’s HEXAGON provides e-banking in AsiaTradecard and MasterCard developed a multiple-currency system for global transactions (tradecard.com)A multidealer foreign exchange service that enables faster and cheaper foreign exchange transactions (fxall.com)


Using bank intranetsBanks provide large business customers with personalized service by allowing them access to the bank’s intranet to access accounts, historical transactions, intranet-based decision-support applications

Imaging systems—allow customers to view images of all:

Incoming checksInvoicesOther related online correspondence

Implementation Issues in Online Financial Transactions


Online Security at Bank of America

Safeguards provided by Bank of America:1. Encryption and digital certification

verification—assures users that they are connected to the B of A

2. Information flows through a direct Web server, then goes through an internal firewall to the application server

3. The bank maintains accurate information and corrections are made quickly


Online Security at Bank of America (cont.)

4. Information is shared among the company’s family of partners only for legitimate business purposes

5. The company uses “cookies” to learn about its customers; customers can control both the collection and use of the information

6. The bank provides suggestions on how users can increase security ( “Use a browser with 128-bit encryption”)


Online Security at Bank of America (cont.)


Personal Finance Online

Bill paying and e-checksTracking bank accounts etc.Portfolio managementInvestment trackingStock quotes and prices (past and current)

Budget organizationRecord keepingTax computationsRetirement goals, planning and budgeting


Online Billing and Bill Paying

Automatic transfer of mortgagesThis method has existed for several yearsThe payer authorizes its bank to pay the mortgage, including tax escrow payments

Automatic transfer of funds to pay monthly utility bills

Paying bills from online banking account


Online Billing and Bill Paying (cont.)

A merchant-to-customer direct billingA merchant posts bills on its Web siteCustomers can view and pay their bill

Using an intermediaryA third party consolidates all bills related to each customer in one site in a standard formatCollects a certain commission

Makes it convenient to complete transactions


Online Billing and Bill Paying (cont.)

Person-to-person direct paymentPaypal.com (now an eBay company)—enables you to send funds to another individual over the Internet

Online billing and bill-paying can be classified into B2C, B2B, or C2C. Opportunities exist in B2B services—can save businesses about 50 percent of billing costs

In Hong Kong, CitiCorp links suppliers, buyers, and banks on one platform, enabling automatic payments


On-Demand Delivery Service (ODDS)

On-demand delivery service (ODDS)—express delivery made fairly quickly after an online order is receivedOn-Demand Delivery Services (ODDS)

May own a fleet of delivery vehicles for regular deliveries and delivery within short time period


The Case of E-Grocers

E-grocer—a grocer that will take orders online and provide regular deliveries on a daily or other regular schedule or will deliver items within a very short period of time

All e-grocers offer consumers the ability to order items online and have them delivered to their houseSome e-grocers offer free regular “unattended” weekly delivery based on a monthly subscription model


The Case of E-Grocers (cont.)

Others offer on-demand deliveries with a surcharge or additional delivery charge added One e-tail grocer sells only nonperishable items shipped via common carrierMany offer additional services

Dry cleaning pickup and delivery“Don’t run out” automatic reordering Fresh flower deliveryMovie rentalsAnd more


Exhibit 3.7On-Demand Delivery Services Model


Who Are the Online Grocery Shoppers?

Shopping avoidersNecessity users—limited by their ability to shop offilineNew technologistsTime-starved consumersConsumers who gain a sense of self-worth from online shoppingOlder individuals who enjoy shopping in any type of store


Who Are the Online Grocery Shoppers? (cont.)

Repeat customers with an ongoing relationship with the grocer

Parknshop.com in Hong Kong offers a “personal shopping list” that helps customers easily order repetitive itemsTesco.com in the United Kingdom is another successful e-grocer


Who Are the Online Grocery Shoppers? (cont.)

Offers grocers an additional channel to increase their sales volume and serve customersIncreases their publicity by maintaining an Internet presenceDespite the promise that on-demand delivery seems to hold, virtual e-grocers have not been successful in this competitive market


Digital Delivery

Digital (“soft”) goodsMusic, movies, videos, software, newspapers, magazines, graphics, etc.Can be delivered in “hard” or “soft” form

Computer program on CD-ROM with owner’s manual and warranty cardDownload from Web site after payment


Napster Experience:Person-to-Person Sharing Tool

Enabled individual users to download music files from each other’s computers

Court ruled that as a manager of file exchanges, Napster must observe copyright laws Napster began charging customers for use of its file-sharing service

Napster entered into an agreement with Bertelsmann AG (now owns Napster)

The latest version of Napster’s file-swapping software features a “buy button” that links to CDNow, a Bertelsmann-owned Web site that sells traditional, physical music CDs


New Developments in Digital Delivery

Custom-publishing music CD sites—collection of personal favorites

Disintermediation of traditional print mediaJournals and magazinesNewspapers (e.g., Wall Street Journal)

Comprehensive portalsLinks to many different sellersShopping comparison sitesComparison tools are available


Shopping Portals (cont.)

Shopping portals—niche orientedSpecialize in a certain line of productsSome collect referral fee onlyOthers have formal relationships with affiliates

Shopbots and agents—tools that scout the Web for specific search criteria requested by consumers

Mysimon.com - best prices on multiple itemsAutoBytel.com – carsZdnet.com/computershopper – computersOffice.com – office supplies


Business Rating Sites & Trust Verification Sites

Sites that rate e-tailersBizrate.com—compiles results provided by a network of shoppersGomez.com—consumer identifies relative importance of different criteria

Sites that evaluate and verify trustworthiness and integrity of e-tailers

TRUSTe seal of assuranceBBBOnLine


Other Shopping Tools

Escrow services—3rd party to assure qualityCommunities of consumers—offer advice and opinions on productsOther software agents and comparison sites are presented in Exhibit 3.9


Successful Click-and-Mortar Strategies

Click-and-mortar hybrid strategiesSpeak with one voiceEmpower the customerLeverage the channels

Return item purchased online at physical storeOrder via the Web at the physical store items not available there

Large, efficient established retailers are able to create the optimum value proposition for their customers by providing a complete offering of services


Transformation to Click-and-Mortarat CircuitCity

Educates customers about features and capabilities of productsCustomers can perform powerful searches to find most appropriate productsOffers extensive amount of information on electronics etc., organized very flexiblyOnline purchases are smooth, secure and seamless


Alliance of Virtual with Traditional Retailers: Amazon and Toys R Us

Toys R Us had limited logistics capabilities including distribution centersAmazon failed in the toy market lacking supplier relationships with toy manufacturersAlliance allows each partner to leverage each others core strengthsInnovative model still working out problems


Problems with E-Tailing & Lessons Learned

ProfitabilityLose money on every sale as they try to grow to a profitable size and scale

Get Big Fast!

Underlying cost and revenue models were not soundLong-run success requires financial viability

Manage new risk exposureLocal companies contend with local customers and local regulationsNational firms have more constituents Global firms deal with numerous cultural perspectives


Problems with E-Tailing & Lessons Learned (cont.)

Branding—drive to establish brand can lead to excessive spendingStarting with insufficient fundsKeep it interesting

Static design is a “turn-off”Dynamic sites with rich databases of information appeal most to customers


A Blooming Success

Ambassador.com.hk sells attractively packaged customized designer flower baskets, cakes, gourmet gift basketsExpanded the business by adding functions such as online paymentsSuccess factors that helped Ambassador’s online business blossom:

Extensive experience in the businessAnalysis that floral gift products are suitable for Internet sales


A Blooming Success (cont.)

Back-end operations for the online floral gift shop were already in placeMultichannel retailing strategyInitial pilot implementation that resulted in ordersPlans and budgets prepared for experimentationDecision to outsource the implementation from scratchIntegration of online store functions with other business models and IT systems


Disintermediation & Reintermediaries

Disintermediation—manufacturer sells directly to consumerReintermediearies—new intermediary roles in the digital environment offer new ways to:

Reach new customersBring value to customersGenerate revenues


Intermediary’s New Role

Role will shift to one that emphasizes value-added services such as:

Assisting customers in comparison shopping from multiple sourcesProviding total solutions by combining services from several vendorsProviding certifications and trusted third-party control and evaluation systems


Reintermediaries

Reintermediaries—intermediaries that have restructured their roles in the purchase process

Kbb.com—pricing information for consumers Edmunds.com—information about the dealer’s true costs

“Lead services” thatDirect buyers to member dealers Offer direct sales of new cars

autobytel.comcarsdirect.com (Amazon.com’s partner)


Cybermediation and Hypermediation

Cybermediation (electronic intermediation)—use of software (intelligent) agents to facilitate intermediationHypermediation—extensive use of both human and electronic intermediation to provide assistance in all phases of an

e-commerce venture


Conflict and Personalization

Channel conflict—situation in which an online marketing channel upsets the traditional channels due to real or perceived damage from competitionPersonalization—custom designed marketing plan

Tailored to buying patternsAppeal to sense of valueExcellent customer serviceMass customization


Managerial Issues

Should we grab a first-mover advantage or wait and learn?

Get big fast or get it right first?

What should our strategic position be?Are we financially viable?Should we recruit out of town?Are there international legal issues regarding online recruiting?Do we have ethics and privacy guidelines?How will intermediaries act in cyberspace?Should we set up alliances?


Summary

E-tailing business modelsThe major e-tail marketsClick-and-mortar strategyHow online travel/tourism services operateThe online job market,its drivers,and benefitsThe electronic real estate market


Summary (cont.)

Online stocks and bondsCyberbanking and personal financeOn-demand delivery serviceDelivery of digital productsAiding consumer purchase decisionsCritical success factorsDisintermediation and reintermediation

retailing in e commerce

Business

real estate

world offer

online grocery

banking activities

electronic

demand delivery

banking services

buying cars