Lesson 03
Retailing in Electronic
Commerce
ISM 41113, Electronic Commerce
By:
M. Fathima Rashida
Lecturer in MIT
Department of MIT
Faculty of Management and Commerce, SEUSL
Learning Objectives
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Describe electronic retailing (e-tailing) and its characteristics.
Define and describe the primary e-tailing business models.
Describe how online travel and tourism services operate and their impact
on the industry.
Discuss the online employment market, including its participants,
benefits, and limitations.
Discuss cyber banking and online personal finance.
Describe on-demand delivery of groceries and similar products/services.
Describe the delivery of digital products and online entertainment.
Discuss various online consumer aids, including comparison-shopping
aids.
Describe disintermediation and other B2C strategic issues.
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Internet Marketing
and Electronic Retailing
• Overview Of Electronic Retailing
A retailer is a sales intermediary, a seller that operates between
manufacturers and customers
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Electronic Retailing (E-tailing)
Retailing conducted online, over the Internet called as e-tailing
E- tailers
Retailers who sell over the Internet  B2C: B2B
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Internet Marketing
What Sells Well On The Internet
and Electronic Retailing
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Travel
Computer hardware and software
Consumer electronics
Office supplies
Sport and fitness goods
Books and music
Toys and hobbies
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Health and beauty
Entertainment
Apparel and clothing
Jewelry
Cars
Services
Food and drugs
Pet supplies
Others
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Internet Marketing
and Electronic Retailing
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Characteristics Of Successful E-tailing
Following characteristics are expected to facilitate higher sales
volume:
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High brand recognition  Dell, Sony
A guarantee provided by highly reliable or well-known vendors  Dell
Digitized format  software, music or videos
Relatively inexpensive items  office suppliers, vitamins
Frequently purchased items  groceries, prescriptions drugs
Commodities with standard specifications  books, CDs, airline
tickets
Well-known packaged items that cannot ne opened even in a
traditional store  food, chocolates vitamins
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E-Tailing Business Models
• B2B, B2C
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E-Tailing Business Models
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Classification By Distribution Channel
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Direct marketing by mail-order retailers that go online
Broadly, marketing that takes place without intermediaries between
manufacturers and buyers
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Direct marketing by manufacturers
Pure-play e-tailers
Firms that sell directly to consumers over the Internet without
maintaining a physical sales channel
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General purpose  amazon
Specialized e-tailers  Cattoys.com
Click-and-mortar retailers
Internet (online) malls
Online shopping center where many online stores are located
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E-Tailing Business Models
• Other B2C Models And Special Retailing
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Transaction brokers
Information portals
Community portal and social networks
Content creators or disseminators
Viral marketing
Market makers
Make (build)-to-order
B2B2C
Service providers
• B2C In Social Networks
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Travel and Tourism
(Hospitality) Services Online
• Online travel bookings and associated travel services are
one of the most successful e-commerce implementations
• Special Services Online
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Conventional services +
Wireless services
Direct marketing
Alliances and consortia
Travel-Oriented Social Networks
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Travel and Tourism
(Hospitality) Services Online
• Benefits And Limitations Of Online Travel Services
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Benefits
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The amount of free information is tremendous
Information is accessible at any time from any place
Substantial discounts
Limitations
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Many people do not use the Internet
The amount of time and the difficulty of using virtual travel agencies can be significant
Complex trips or those that require stopovers might not be available online
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Travel and Tourism
(Hospitality) Services Online
• Corporate Travel
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Many large corporations receive additional services from large travel
agencies
To reduce corporate travel costs, companies can make arrangements that
enable employees to plan and book their own trips
Travel authorization software that checks availability of funds and
compliance with corporate guidelines is usually provided by travel
companies
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Travel and Tourism
(Hospitality) Services Online
• Impact Of EC On The Travel Industry
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Direct impacts because customers increasingly using the Internet to make
bookings
Indirect impacts because airlines and hotel chains encouraging customers
to book direct or through online wholesalers, bypassing travel agents
Investing in content (information, travel advice, and the like) is a
requirement for success in this competitive market
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Employment Placement and the
Job Market Online
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Employment Placement and the
Job Market Online
• The Internet Job Market
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The following parties use the Internet job market:
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Job seekers  hotjobs
Employers seeking employees
Classified ads
Job agencies  hotjobs, AOL
Government agencies and institutions  jobsearch.gov.au
A Consortium of Large Employers and College Career Advisors
Online Job Markets on Social Networking
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Employment Placement and the
Job Market Online
• Benefits And Limitations Of The Electronic Job Market
Probably the biggest limitation of the online job market is the fact
that some people do not use and do not have access to the Internet,
although this problem has declined substantially
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Banking and
Personal Finance Online
• Electronic (online) banking or e-banking
Various banking activities conducted from home or the
road using an Internet connection; also known as
cyberbanking, virtual banking, online banking, and home
banking
• Home Banking Capabilities
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Informational, administrative, transactional, portal, and others
• Virtual Banks
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Have no physical location; only conduct online transactions
• International And Multiple-currency Banking
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Support global transactions
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Banking and
Personal Finance Online
• Online Financial Transaction Implementation Issues
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Securing Financial Transactions
Access to Banks’ Intranets by Outsiders  Bank of America
Imaging Systems
Fees Online Versus Fees for Offline Services
Risks
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Online Billing and Bill Paying
Taxes
• Personal Finance Online
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On-Demand Delivery of Products,
Digital Items, Entertainment, and Gaming
• On-demand Delivery Of Products
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e-grocer
A grocer that takes orders online and provides deliveries on a daily or
other regular schedule or within a very short period of time
on-demand delivery service
Express delivery made fairly quickly after an online order is received:
Albertsons.com, woolworths.com.au
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On-Demand Delivery of Products,
Digital Items, Entertainment, and Gaming
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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
• Business Ratings Sites
• Trust Verification Sites
• Other Shopping Tools
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Issues in E-Tailing
• Disintermediation
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The removal of organizations or business process layers
responsible for certain intermediary steps in a given supply
chain
Reintermediation
The process whereby intermediaries (either new ones or
those that had been disintermediated) take on new
intermediary roles
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Issues in E-Tailing
• Cybermediation (Electronic Intermediation)
The use of software (intelligent) agents to facilitate
intermediation
• Channel Conflict
Situation in which an online marketing channel upsets the
traditional channels due to real or perceived damage from
competition
• Determining The Right Price
• Product And Service Customization And Personalization
• Fraud And Other Illegal Activities
• How To Make Customers Happy
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