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Implications of click and mortar e-commerce for customer value and geographical market reach Wan Li.

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Presentation on theme: "Implications of click and mortar e-commerce for customer value and geographical market reach Wan Li."— Presentation transcript:

1 Implications of click and mortar e-commerce for customer value and geographical market reach Wan Li

2 Introduction Click-and-Mortar E-commerce derive synergies from the integration make purchase easier and less costly for customer Traditional commerce face-to-face customer interaction touch and feel merchandise make purchases with cash retain customers:advertisement and store loyalty programs Purely Web-based Commerce 24/7 open, communicate with customers anyplace and anytime Offer deeper product selection target wide range markets :different languages retain customers:product customization,e-mail reminders and electronic suggestion service

3 Coordination strategies Mutually advantageous conjunction retail stores :sensitive to distance web-site:new customers and distant market, greater than a simple addition Merger of channels benefits to local customer,distant customer and new customer Benefits of synergies cost reduction greater customer value Geographical market reach extension

4 Enhancing customer value What is customer value? relationship between costs and value generated when firms interact customers lead to an improved financial performance Enhance customer value for both existing and new customers: Service quality:24-hour, deeper selection and face-to-face Product attributes:customize or personalize products Price: reducing the price of a product, due to the low cost of channel

5 New and existing customer Existing customer Sell more to existing customer retain and strengthen the relationship reduce the costs to contact New customer reduce the costs to extend new markets enable the firm to attract new customers

6 Geographical market reach extension Geographical market reach extension: increase the geographical range decrease the threshold of a product Reach new markets: exporting products or establish a physical store ability to combine the advantage of the two different forms attract new or distant customers that would not go to the stores or enable customers to check inventory within one store provide more service for existing customers by costs reduced from stores

7 Channel conflict one of the channels competes with another one decrease cooperation across the channels confuse customers defame each other intangible and hard to measure the contributions of Internet channel

8 Relations between customer value and geographical market reach Over-served markets: consolidate market share, intensify demand lower the costs of stores:move activities to Internet help to retain customers:share customer data Under-served markets: not big enough to create stores higher prices or long travel time order products online pre-sales and after-sales services Un-served markets physical store:costs of contacting new customer,shipping costs,adaptation to local culture website :a closer proximity to prospective customer

9 Summary Used to strengthen relations with existing customers in existing markets Re-contact with customers who have moved away or find lost customer Make it easies and less costly to purchase within existing markets Less used to penetrate new,more distant markets compared with web-based commerce

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