Chapter 3 Retailing in Electronic Commerce: Products and Services

Learning Objectives 1.Describe electronic retailing (e-tailing) and its characteristics. 2.Classify the primary e-tailing business models. 3.Describe how online travel and tourism services operate and how they influence the industry. 4.Discuss the online employment market, including its participants and benefits. 5.Describe online real estate services. 6.Discuss online stock-trading services.

Learning Objectives 7.Discuss cyberbanking and online personal finance. 8.Describe on-demand delivery of groceries and similar perishable products and services related to them. 9.Describe the delivery of digital products such as online entertainment. 10.Discuss various online consumer aids, including price comparison sites. 11.Describe the impact of e-tailing on retail competition. 12.Describe disintermediation and other B2C strategic issues.

Internet Marketing and B2C Electronic Retailing Overview of Electronic Retailing o *Electronic retailing (e-tailing) o *E-tailers Size and Growth of the B2C Market What Sells Well on the Internet? o Developments in B2C E-Commerce Characteristics and Advantages of Successful E- Tailing o Advantages of E-Tailing

E-Tailing Business Models * Business Model Classification of Models by Distribution Channel 1. Traditional mail-order retailers that also sell online 2. Direct marketing by manufacturers 3. Pure-play e-tailers 4. Click-and-mortar ("brick-and-click") retailers 5. Internet (online) malls 6.Flash sales

E-Tailing as an Enterprise EC System

E-Tailing Business Models o *Direct Marketing by Mail-Order Companies o Direct Sales by Manufacturers and Make-to-Order o *Virtual (Pure-Play) E-Tailers o Click-and-Mortar Retailers and Multichanneling *Click-and-mortar retailer *Brick-and-mortar retailer o Retailing in Online Malls Referring Directories Malls with Shared Services

E-Tailing Business Models Other B2C Models and Special Retailing B2C Social Shopping o Flash Deals (Deals of the Day) o Online Group Buying o Personalized Event Shopping *Event Shopping o *Private Shopping Clubs o Group Gifting Online o *Location-Based E-Commerce (l-commerce) o Shopping in Virtual Worlds Virtual Visual Shopping

Online Travel and Tourism (Hospitality) Services Characteristics of Online Travel o Services Provided Special Online Travel Services o Using Mobile Devices o Social Travel Networks Benefits, Limitations, and Competition in Online Travel Services Competition in Online Travel Corporate Travel

Employment and the Online Job Market The Internet Job Market o Online Job Markets on Social Networks o Global Online Portals for Job Placement o Virtual Job Fairs Benefits and Limitations of the Electronic Job Market

The Referral Power of Social Networks in Job Matching

Online Real Estate, Insurance, and Stock Trading Real Estate Online o Zillow, Craigslist, and Other Web 2.0 Real Estate Services Insurance Online Online Stock Trading and Investments o Online Investments o The Risk of Online Stock Trading and Other E-Finance Activities

Online Electronic Stock Trading

Online Banking and Personal Finance * Electronic (online) banking (e-banking) E-Banking Online Banking Capabilities Pure Virtual Banks o P2P Lending International and Multiple-Currency Banking

Online Banking and Personal Finance Online Financial Transaction Implementation Issues o Securing Financial Transactions o Imaging Systems o Fees for Online Versus Fees for Offline Services o Risks Online Billing and Bill Paying o Taxes o Mobile Banking

On-Demand Delivery of Products, Digital Items, Entertainment, and Gaming On-Demand Delivery of Products o *E-grocer o *On-demand delivery service o The Case of E-Grocers o Speed of Delivery Online Delivery of Digital Products, Entertainment, and Media o Online Entertainment o iTunes o Online Ticketing o Internet TV and Internet Radio *Internet TV *Internet radio Pandora Radio

On-Demand Delivery of Products, Digital Items, Entertainment, and Gaming *Social Television (TV) o Characteristics of Social TV o Technology and Services of Social TV o Adult Entertainment o Internet Gaming

Other B2C Services: From Dating Services to Wedding Planning Online Dating Services Planning a Wedding o What About After the Wedding? Buying Cars Online Selling-Build-to-Order Cars Online Other Online Services o Online pharmacies are all over the Internet. o Stamps online. o Online flower delivery. o Online food ordering. o Virtual farmer’s marketplaces are becoming popular in many countries.

Online Purchasing-Decision Aids * Shopping Portals Helping Communities Price and Quality Comparison by Shopbot Software Agents o *Shopping robots ( shopping agents, shopbots) o Google Enterprise Search and Enterprise Search Appliance o “Spy” Services

Online Purchasing-Decision Aids Ratings, Reviews, and Recommendation Sites o Customer ratings and reviews. o Customer testimonials. o Expert ratings and reviews. o Sponsored reviews. o Conversational marketing. o Video product review. o Bloggers post reviews. o Recommendations from Other Shoppers and Friends and Family *Referral economy Comparison Shopping Websites Trust Verification Sites o Concerns about Reviews, Ratings, and Recommendations

Online Purchasing-Decision Aids Comparison Shopping Websites Trust Verification Sites o Concerns about Reviews, Ratings, and Recommendations Other Shopping Assisting Tools o Must-Have Shopping Tools o Barcode Readers for Price Comparisons o Digital Coupons o Self Service Virtual Visual Shopping Mobile Apps o Wireless Shopping Comparisons

The New Face of Retail Competition: Retailers versus E-Tailers The Online versus Offline Competition: An Overview o Customers’ search cost. o Delivery time. o Distribution costs. o Tax differences. o Price. o Information available to buyers. o Other influencing factors. o Global Competition

The New Face of Retail Competition: Retailers versus E-Tailers Retailers vs. E-Tailers o Examples of Click-and-Brick Retailers Gap Inc. Best Buy. SM Chain of Malls in the Philippines HHGregg o Niche Markets o Other Strategies What Can Traditional Retailers Do? o Can Small Businesses Survive? o Going Global o Conclusion

Issues in E-Tailing and Lessons Learned *Disintermediation and *Reintermediation o Resistance to Change o *Channel Conflict Possibility of a Price Conflict and Determining the Right Price by Sellers Product and Service Customization and Personalization Fraud and Other Illegal Activities Lessons Learned from Failures and Lack of Success of E-Tailers

Disintermediation and Reintermediation in the B2C Supply Chain

Managerial Issues 1.What are the limitations of e-tailing? Where is e- tailing going? 2.How should we introduce wireless shopping? 3.Do we have ethics and privacy guidelines? 4.How will intermediaries act in cyberspace? 5.Should we try to capitalize on social networks? 6.How should we manage multichannel marketing to avoid channel and/or price conflicts? 7.What are the major potential limitations of the growth of B2C EC? 8.How to deal with “big data?”

Summary 1.The scope and characteristics of e- tailing. 2.Classify e-tailing business models. 3.How online travel/tourism services operate. 4.The online employment market and its benefits. 5.The electronic real estate marketplace. 6.Online trading of stocks and bonds.

Summary 7.Cyberbanking and online personal finance. 8.On-demand delivery service. 9.Delivery of digital products. 10.Aiding consumer purchase decisions. 11.The new face of retail competition. 12.Disintermediation and other B2C strategic issues.