Chapter 3
Retailing in Electronic Commerce:
Products and Services
Electronic Commerce Prentice Hall? 2006 2
Learning Objectives
1,Describe electronic retailing (e-tailing) and its
characteristics.
2,Define and describe the primary e-tailing
business models.
3,Describe how online travel and tourism services
operate and their impact on the industry.
Electronic Commerce Prentice Hall? 2006 3
Learning Objectives
4,Discuss the online employment market,including
its participants,benefits,and limitations.
5,Describe online real estate services.
6,Discuss online stock-trading services.
7,Discuss cyberbanking and online personal
finance.
8,Describe on-demand delivery by
e-grocers.
Electronic Commerce Prentice Hall? 2006 4
Learning Objectives
9,Describe the delivery of digital products and
online entertainment.
10,Discuss various e-tail consumer aids,including
comparison-shopping aids.
11,Identify the critical success factors and failure
avoidance tactics for direct online marketing and
e-tailing.
12,Describe reintermediation,channel conflict,and
personalization in e-tailing.
Electronic Commerce Prentice Hall? 2006 5
Internet Marketing
and Electronic Retailing
Overview of Electronic Retailing
electronic retailing (e-tailing)
Retailing conducted online,over the Internet
e-tailers
Retailers who sell over the Internet
Electronic Commerce Prentice Hall? 2006 6
Internet Marketing
and Electronic Retailing
Size and Growth of the B2C Market
– Reported amounts of online sales deviate
substantially based on how the numbers are derived
Annual online 2004 sales were estimated to be over $70
billion
The average online shopper spent over $350 per quarter
Forrester Research estimates that e-tailing will reach
$316 billion by 2010
Electronic Commerce Prentice Hall? 2006 7
Internet Marketing
and Electronic Retailing
Computer hardware
and software
Consumer electronics
Office supplies
Sporting goods
Books and music
Toys
Health and beauty
Apparel and clothing
Jewelry
Cars
Services
Others
What Sells Well on the Internet?
Electronic Commerce Prentice Hall? 2006 8
Internet Marketing
and Electronic Retailing
Characteristics of Successful E-Tailing
– High brand recognition
– A guarantee provided by highly reliable or well-known vendors
– Digitized format
– Relatively inexpensive items
– Frequently purchased items
– Commodities with standard specifications
– Well-known packaged items that cannot be opened even in a
traditional store
Electronic Commerce Prentice Hall? 2006 9
E-Retailing Business Models
Classification by Distribution Channel
1,Mail-order retailers that go online
2,Direct marketing from manufacturers
3,Pure-play e-tailers
4,Click-and-mortar retailers
5,Internet (online) malls
Electronic Commerce Prentice Hall? 2006 10
E-Retailing Business Models
direct marketing
Broadly,marketing that takes place without
intermediaries between manufacturers and buyers; in
the context of this book,marketing done online between
any seller and buyer
Electronic Commerce Prentice Hall? 2006 11
E-Retailing Business Models
Direct Sales by Manufacturers
– Sellers can understand their markets better because
of the direct connection to consumers
– Consumers gain greater information about the
products through their direct connection to the
manufacturers
Electronic Commerce Prentice Hall? 2006 12
E-Retailing Business Models
virtual (pure-play) e-tailers
Firms that sell directly to consumers over the Internet
without maintaining a physical sales channel
click-and-mortar retailers
Brick-and-mortar retailers that offer a transactional Web
site from which to conduct business
Electronic Commerce Prentice Hall? 2006 13
E-Retailing Business Models
brick-and-mortar retailers
Retailers who do business in the non-Internet,physical
world in traditional brick-and-mortar stores
multichannel business model
A business model where a company sells in multiple
marketing channels simultaneously (e.g.,both physical
and online stores)
Electronic Commerce Prentice Hall? 2006 14
E-Retailing Business Models
Retailing in Online Malls
– Referring Directories
– Malls with Shared Services
Representative B2C Services
– Postal Services
– Services and Products for Adults
– Wedding Channels
– Gift Registries
Electronic Commerce Prentice Hall? 2006 15
Travel and Tourism Services Online
Online travel is probably the most successful
e-commerce implementation
Services provided include:
– General information
– Reserving and purchasing tickets,accommodations,
and entertainment
– Travel tips
– Electronic travel magazines
– Fare comparisons
Electronic Commerce Prentice Hall? 2006 16
Travel and Tourism Services Online
Benefits of Online Travel Services
– Benefits to consumers
Large amount of free information available 24/7
Substantial discounts can be found
– Benefits to providers
Airlines,hotels,and cruise lines are selling otherwise-
empty spaces
Direct selling saves the provider’s commission and its
processing
Electronic Commerce Prentice Hall? 2006 17
Travel and Tourism Services Online
Limitations of Online Travel Services
– Many people do not use the Internet
– The amount of time and the difficulty of using virtual
travel agencies may be significant
– Complex trips or those that require stopovers may not
be available online because they require specialized
knowledge and arrangements
Electronic Commerce Prentice Hall? 2006 18
Travel and Tourism Services Online
Corporate Travel
– To reduce corporate travel costs,companies can make
arrangements that enable employees to plan and book
their own trips using online optimization tools provided
by travel companies,such as those offered by
Rosenbluth International
– Travel authorization software that checks availability of
funds and compliance with corporate guidelines is
usually provided by travel companies
Electronic Commerce Prentice Hall? 2006 19
Travel and Tourism Services Online
Intelligent Agents in Travel Services
– Software agents emulate the work and behavior of
human agents in executing organizational processes
like travel authorization,planning or decision making
– Each agent is capable of acting autonomously,
cooperatively,or collectively to achieve the stated
goal
Electronic Commerce Prentice Hall? 2006 20
Employment Placement
and the Job Market Online
The Internet Job Market
– Job seekers
– Employers seeking employees
– Job agencies
– Government agencies and institutions
The Internet is a global online portal for job
seekers
Electronic Commerce Prentice Hall? 2006 21
Employment Placement
and the Job Market Online
Limitations of the Electronic Job Market
– Many people do not use the Internet,This limitation is
even more serious with non-technology-oriented jobs
– Security and privacy,resumes and other online
communications are usually not encrypted,so one’s
job-seeking activities may not be secure
Electronic Commerce Prentice Hall? 2006 22
Exhibit 3.7 Intelligent Agents Match
Resumes with Available Jobs
Electronic Commerce Prentice Hall? 2006 23
Real Estate,Insurance,
and Stock Trading Online
Real Estate Applications
– Advice to consumers on buying or selling a home
– Commercial real estate listings
– Listings of residential real estate in multiple databases
– The National Association of Realtors (realtor.com) has
links to house listings in all major cities
Electronic Commerce Prentice Hall? 2006 24
Real Estate,Insurance,
and Stock Trading Online
Real Estate Applications
– Maps are available
– Information on current mortgage rates
– Mortgage brokers can pass loan applications over the
Internet and receive bids from lenders who want to
issue mortgages
– Online lenders can tentatively approve loans online
– Automated closing of real estate transactions
Electronic Commerce Prentice Hall? 2006 25
Real Estate,Insurance,
and Stock Trading Online
Real Estate Applications
– Property management companies (residential,
commercial,and industrial) are using the Internet for
many applications ranging from security to
communication with tenants
– Sites for persons who want to sell their homes privately,
without using a real estate agent
– Rental properties are listed
Electronic Commerce Prentice Hall? 2006 26
Real Estate,Insurance,
and Stock Trading Online
Insurance Online
– An increasing number of companies use the Internet to
offer standard insurance policies (auto,home,life,or
health) at a substantial discount
– Third-party aggregators offer free comparisons of
available policies
– Several large insurance and risk-management
companies offer comprehensive insurance contracts
online
Electronic Commerce Prentice Hall? 2006 27
Exhibit 3.8 Online Electronic Stock Trading
Electronic Commerce Prentice Hall? 2006 28
Real Estate,Insurance,
and Stock Trading Online
Investment Information Online
– Current financial news
– Municipal bond prices
– Many tools are available to help investors in the bond
market
– Free ―guru‖ (expert) advice
– Stock screening and evaluation tools
Electronic Commerce Prentice Hall? 2006 29
Real Estate,Insurance,
and Stock Trading Online
Investment Information Online
– Articles from the Journal of the American Association of
Individual Investors
– Schwab Trader encourages consumers to practice
trading strategies
– The latest on funding and pricing of IPOs
– Earnings estimates
The major risk of online trading is security
Electronic Commerce Prentice Hall? 2006 30
Banking and Personal Finance Online
electronic banking (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
Electronic Commerce Prentice Hall? 2006 31
Exhibit 3.9 Online Banking Capabilities
Electronic Commerce Prentice Hall? 2006 32
Banking and Personal Finance Online
Virtual Banks
– Virtual banks have no physical location,but only conduct
online transactions
International and Multiple-Currency Banking
– Hong Kong and Shanghai Banking Corporation
(hsbc.com.hk)
– Tradecard and MasterCard for global transactions (see
tradecard.com)
– Bank of America and most other major banks
– Fxall.com is a multidealer foreign exchange service
Electronic Commerce Prentice Hall? 2006 33
Banking and Personal Finance Online
Implementation Issues in Online Financial
Transactions
– Securing financial transactions
– Access to banks’ intranets by outsiders
– Using imaging systems
– Pricing online versus off-line services
– Risks
Electronic Commerce Prentice Hall? 2006 34
Banking and Personal Finance Online
Online Billing and Bill Paying
– Automatic transfer of mortgage payments
– Automatic transfer of funds to pay monthly utility
bills
– Paying bills from online banking accounts
– Merchant-to-customer direct billing
– Using an intermediary for bill consolidation
– Person-to-person direct payment
– Pay bills at bank kiosks
– Taxes
Electronic Commerce Prentice Hall? 2006 35
On-Demand
Delivery Services and E-grocers
on-demand delivery service
Express delivery made fairly quickly after an online
order is received
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
Electronic Commerce Prentice Hall? 2006 36
Online Delivery of Digital Products,
Entertainment,and Media
Certain goods,(software,music,or news stories) may be
distributed in a physical form or they may be digitized and
delivered over the Internet
For sellers,the costs associated with the manufacture,
storage,and distribution of physical products can be
enormous
Inventory management also becomes a critical cost issue,
and so does delivery and distribution
Electronic Commerce Prentice Hall? 2006 37
Online Delivery of Digital Products,
Entertainment,and Media
Interactive Entertainment
– Web browsing
– Internet gaming
– Fantasy sport games
– Single and multiplayer games
– Adult entertainment
– Card games
– Participatory Web sites
– Reading
Electronic Commerce Prentice Hall? 2006 38
Online Delivery of Digital Products,
Entertainment,and Media
Noninteractive Entertainment
– Event ticketing
– Restaurants
– Information retrieval
– Retrieval of audio and video entertainment
– Live events
Electronic Commerce Prentice Hall? 2006 39
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
Wireless Shopping Comparisons—Enable shoppers to
compare prices any time from anywhere,including from
any physical store
Electronic Commerce Prentice Hall? 2006 40
Online Purchase-Decision Aids
Business Ratings Sites
Trust Verification Sites
Other Shopper Tools
– Escrow services
– Communities of consumers who offer advice and
opinions
– E-wallet (or e-purse)
Electronic Commerce Prentice Hall? 2006 41
Online Purchase-Decision Aids
Other Shopper Tools
– Amazon.com’s A9 Search Engine
Remembers information
A user can make notes about any Web page and search
them
Offers a new way to store and organize bookmarks
Recommends new sites and favorite old sites specifically for
the user to visit
Electronic Commerce Prentice Hall? 2006 42
Successful Click-and-Mortar Strategies
A traditional brick-and-mortar store with a mature
Web site uses a click-and-mortar strategy to:
– Speak with one voice
– Leverage the multichannels
– Empower the customer
Electronic Commerce Prentice Hall? 2006 43
Problems with E-tailing
and Lessons Learned
Don’t ignore profitability
Manage new risk exposure
Watch the cost of branding
Do not start with insufficient funds
The Web site must be effective
Keep it interesting
Electronic Commerce Prentice Hall? 2006 44
Issues in E-Tailing
disintermediation
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
Electronic Commerce Prentice Hall? 2006 45
Exhibit 3.12 Disintermediation and Reintermediation
in the B2C Supply Chain
Electronic Commerce Prentice Hall? 2006 46
Issues in E-Tailing
cybermediation (electronic intermediation)
The use of software (intelligent) agents to facilitate
intermediation
hypermediation
Extensive use of both human and electronic intermediation
to provide assistance in all phases of an e-commerce
venture
Electronic Commerce Prentice Hall? 2006 47
Issues in E-Tailing
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
Personalization
Fraud and illegal activities
How to make customers happy
Electronic Commerce Prentice Hall? 2006 48
Summary
1,The scope of e-tailing.
2,E-tailing business models.
3,How online travel/tourism services operate.
4,The online job market and its benefits.
5,The electronic real estate market.
6,Online trading of stocks and bonds.
Electronic Commerce Prentice Hall? 2006 49
Summary
7,Cyberbanking and personal finance.
8,On-demand delivery service.
9,Delivery of digital products.
10,Aiding consumer purchase decisions.
11,Critical success factors.
12,Disintermediation and reintermediation.
Retailing in Electronic Commerce:
Products and Services
Electronic Commerce Prentice Hall? 2006 2
Learning Objectives
1,Describe electronic retailing (e-tailing) and its
characteristics.
2,Define and describe the primary e-tailing
business models.
3,Describe how online travel and tourism services
operate and their impact on the industry.
Electronic Commerce Prentice Hall? 2006 3
Learning Objectives
4,Discuss the online employment market,including
its participants,benefits,and limitations.
5,Describe online real estate services.
6,Discuss online stock-trading services.
7,Discuss cyberbanking and online personal
finance.
8,Describe on-demand delivery by
e-grocers.
Electronic Commerce Prentice Hall? 2006 4
Learning Objectives
9,Describe the delivery of digital products and
online entertainment.
10,Discuss various e-tail consumer aids,including
comparison-shopping aids.
11,Identify the critical success factors and failure
avoidance tactics for direct online marketing and
e-tailing.
12,Describe reintermediation,channel conflict,and
personalization in e-tailing.
Electronic Commerce Prentice Hall? 2006 5
Internet Marketing
and Electronic Retailing
Overview of Electronic Retailing
electronic retailing (e-tailing)
Retailing conducted online,over the Internet
e-tailers
Retailers who sell over the Internet
Electronic Commerce Prentice Hall? 2006 6
Internet Marketing
and Electronic Retailing
Size and Growth of the B2C Market
– Reported amounts of online sales deviate
substantially based on how the numbers are derived
Annual online 2004 sales were estimated to be over $70
billion
The average online shopper spent over $350 per quarter
Forrester Research estimates that e-tailing will reach
$316 billion by 2010
Electronic Commerce Prentice Hall? 2006 7
Internet Marketing
and Electronic Retailing
Computer hardware
and software
Consumer electronics
Office supplies
Sporting goods
Books and music
Toys
Health and beauty
Apparel and clothing
Jewelry
Cars
Services
Others
What Sells Well on the Internet?
Electronic Commerce Prentice Hall? 2006 8
Internet Marketing
and Electronic Retailing
Characteristics of Successful E-Tailing
– High brand recognition
– A guarantee provided by highly reliable or well-known vendors
– Digitized format
– Relatively inexpensive items
– Frequently purchased items
– Commodities with standard specifications
– Well-known packaged items that cannot be opened even in a
traditional store
Electronic Commerce Prentice Hall? 2006 9
E-Retailing Business Models
Classification by Distribution Channel
1,Mail-order retailers that go online
2,Direct marketing from manufacturers
3,Pure-play e-tailers
4,Click-and-mortar retailers
5,Internet (online) malls
Electronic Commerce Prentice Hall? 2006 10
E-Retailing Business Models
direct marketing
Broadly,marketing that takes place without
intermediaries between manufacturers and buyers; in
the context of this book,marketing done online between
any seller and buyer
Electronic Commerce Prentice Hall? 2006 11
E-Retailing Business Models
Direct Sales by Manufacturers
– Sellers can understand their markets better because
of the direct connection to consumers
– Consumers gain greater information about the
products through their direct connection to the
manufacturers
Electronic Commerce Prentice Hall? 2006 12
E-Retailing Business Models
virtual (pure-play) e-tailers
Firms that sell directly to consumers over the Internet
without maintaining a physical sales channel
click-and-mortar retailers
Brick-and-mortar retailers that offer a transactional Web
site from which to conduct business
Electronic Commerce Prentice Hall? 2006 13
E-Retailing Business Models
brick-and-mortar retailers
Retailers who do business in the non-Internet,physical
world in traditional brick-and-mortar stores
multichannel business model
A business model where a company sells in multiple
marketing channels simultaneously (e.g.,both physical
and online stores)
Electronic Commerce Prentice Hall? 2006 14
E-Retailing Business Models
Retailing in Online Malls
– Referring Directories
– Malls with Shared Services
Representative B2C Services
– Postal Services
– Services and Products for Adults
– Wedding Channels
– Gift Registries
Electronic Commerce Prentice Hall? 2006 15
Travel and Tourism Services Online
Online travel is probably the most successful
e-commerce implementation
Services provided include:
– General information
– Reserving and purchasing tickets,accommodations,
and entertainment
– Travel tips
– Electronic travel magazines
– Fare comparisons
Electronic Commerce Prentice Hall? 2006 16
Travel and Tourism Services Online
Benefits of Online Travel Services
– Benefits to consumers
Large amount of free information available 24/7
Substantial discounts can be found
– Benefits to providers
Airlines,hotels,and cruise lines are selling otherwise-
empty spaces
Direct selling saves the provider’s commission and its
processing
Electronic Commerce Prentice Hall? 2006 17
Travel and Tourism Services Online
Limitations of Online Travel Services
– Many people do not use the Internet
– The amount of time and the difficulty of using virtual
travel agencies may be significant
– Complex trips or those that require stopovers may not
be available online because they require specialized
knowledge and arrangements
Electronic Commerce Prentice Hall? 2006 18
Travel and Tourism Services Online
Corporate Travel
– To reduce corporate travel costs,companies can make
arrangements that enable employees to plan and book
their own trips using online optimization tools provided
by travel companies,such as those offered by
Rosenbluth International
– Travel authorization software that checks availability of
funds and compliance with corporate guidelines is
usually provided by travel companies
Electronic Commerce Prentice Hall? 2006 19
Travel and Tourism Services Online
Intelligent Agents in Travel Services
– Software agents emulate the work and behavior of
human agents in executing organizational processes
like travel authorization,planning or decision making
– Each agent is capable of acting autonomously,
cooperatively,or collectively to achieve the stated
goal
Electronic Commerce Prentice Hall? 2006 20
Employment Placement
and the Job Market Online
The Internet Job Market
– Job seekers
– Employers seeking employees
– Job agencies
– Government agencies and institutions
The Internet is a global online portal for job
seekers
Electronic Commerce Prentice Hall? 2006 21
Employment Placement
and the Job Market Online
Limitations of the Electronic Job Market
– Many people do not use the Internet,This limitation is
even more serious with non-technology-oriented jobs
– Security and privacy,resumes and other online
communications are usually not encrypted,so one’s
job-seeking activities may not be secure
Electronic Commerce Prentice Hall? 2006 22
Exhibit 3.7 Intelligent Agents Match
Resumes with Available Jobs
Electronic Commerce Prentice Hall? 2006 23
Real Estate,Insurance,
and Stock Trading Online
Real Estate Applications
– Advice to consumers on buying or selling a home
– Commercial real estate listings
– Listings of residential real estate in multiple databases
– The National Association of Realtors (realtor.com) has
links to house listings in all major cities
Electronic Commerce Prentice Hall? 2006 24
Real Estate,Insurance,
and Stock Trading Online
Real Estate Applications
– Maps are available
– Information on current mortgage rates
– Mortgage brokers can pass loan applications over the
Internet and receive bids from lenders who want to
issue mortgages
– Online lenders can tentatively approve loans online
– Automated closing of real estate transactions
Electronic Commerce Prentice Hall? 2006 25
Real Estate,Insurance,
and Stock Trading Online
Real Estate Applications
– Property management companies (residential,
commercial,and industrial) are using the Internet for
many applications ranging from security to
communication with tenants
– Sites for persons who want to sell their homes privately,
without using a real estate agent
– Rental properties are listed
Electronic Commerce Prentice Hall? 2006 26
Real Estate,Insurance,
and Stock Trading Online
Insurance Online
– An increasing number of companies use the Internet to
offer standard insurance policies (auto,home,life,or
health) at a substantial discount
– Third-party aggregators offer free comparisons of
available policies
– Several large insurance and risk-management
companies offer comprehensive insurance contracts
online
Electronic Commerce Prentice Hall? 2006 27
Exhibit 3.8 Online Electronic Stock Trading
Electronic Commerce Prentice Hall? 2006 28
Real Estate,Insurance,
and Stock Trading Online
Investment Information Online
– Current financial news
– Municipal bond prices
– Many tools are available to help investors in the bond
market
– Free ―guru‖ (expert) advice
– Stock screening and evaluation tools
Electronic Commerce Prentice Hall? 2006 29
Real Estate,Insurance,
and Stock Trading Online
Investment Information Online
– Articles from the Journal of the American Association of
Individual Investors
– Schwab Trader encourages consumers to practice
trading strategies
– The latest on funding and pricing of IPOs
– Earnings estimates
The major risk of online trading is security
Electronic Commerce Prentice Hall? 2006 30
Banking and Personal Finance Online
electronic banking (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
Electronic Commerce Prentice Hall? 2006 31
Exhibit 3.9 Online Banking Capabilities
Electronic Commerce Prentice Hall? 2006 32
Banking and Personal Finance Online
Virtual Banks
– Virtual banks have no physical location,but only conduct
online transactions
International and Multiple-Currency Banking
– Hong Kong and Shanghai Banking Corporation
(hsbc.com.hk)
– Tradecard and MasterCard for global transactions (see
tradecard.com)
– Bank of America and most other major banks
– Fxall.com is a multidealer foreign exchange service
Electronic Commerce Prentice Hall? 2006 33
Banking and Personal Finance Online
Implementation Issues in Online Financial
Transactions
– Securing financial transactions
– Access to banks’ intranets by outsiders
– Using imaging systems
– Pricing online versus off-line services
– Risks
Electronic Commerce Prentice Hall? 2006 34
Banking and Personal Finance Online
Online Billing and Bill Paying
– Automatic transfer of mortgage payments
– Automatic transfer of funds to pay monthly utility
bills
– Paying bills from online banking accounts
– Merchant-to-customer direct billing
– Using an intermediary for bill consolidation
– Person-to-person direct payment
– Pay bills at bank kiosks
– Taxes
Electronic Commerce Prentice Hall? 2006 35
On-Demand
Delivery Services and E-grocers
on-demand delivery service
Express delivery made fairly quickly after an online
order is received
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
Electronic Commerce Prentice Hall? 2006 36
Online Delivery of Digital Products,
Entertainment,and Media
Certain goods,(software,music,or news stories) may be
distributed in a physical form or they may be digitized and
delivered over the Internet
For sellers,the costs associated with the manufacture,
storage,and distribution of physical products can be
enormous
Inventory management also becomes a critical cost issue,
and so does delivery and distribution
Electronic Commerce Prentice Hall? 2006 37
Online Delivery of Digital Products,
Entertainment,and Media
Interactive Entertainment
– Web browsing
– Internet gaming
– Fantasy sport games
– Single and multiplayer games
– Adult entertainment
– Card games
– Participatory Web sites
– Reading
Electronic Commerce Prentice Hall? 2006 38
Online Delivery of Digital Products,
Entertainment,and Media
Noninteractive Entertainment
– Event ticketing
– Restaurants
– Information retrieval
– Retrieval of audio and video entertainment
– Live events
Electronic Commerce Prentice Hall? 2006 39
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
Wireless Shopping Comparisons—Enable shoppers to
compare prices any time from anywhere,including from
any physical store
Electronic Commerce Prentice Hall? 2006 40
Online Purchase-Decision Aids
Business Ratings Sites
Trust Verification Sites
Other Shopper Tools
– Escrow services
– Communities of consumers who offer advice and
opinions
– E-wallet (or e-purse)
Electronic Commerce Prentice Hall? 2006 41
Online Purchase-Decision Aids
Other Shopper Tools
– Amazon.com’s A9 Search Engine
Remembers information
A user can make notes about any Web page and search
them
Offers a new way to store and organize bookmarks
Recommends new sites and favorite old sites specifically for
the user to visit
Electronic Commerce Prentice Hall? 2006 42
Successful Click-and-Mortar Strategies
A traditional brick-and-mortar store with a mature
Web site uses a click-and-mortar strategy to:
– Speak with one voice
– Leverage the multichannels
– Empower the customer
Electronic Commerce Prentice Hall? 2006 43
Problems with E-tailing
and Lessons Learned
Don’t ignore profitability
Manage new risk exposure
Watch the cost of branding
Do not start with insufficient funds
The Web site must be effective
Keep it interesting
Electronic Commerce Prentice Hall? 2006 44
Issues in E-Tailing
disintermediation
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
Electronic Commerce Prentice Hall? 2006 45
Exhibit 3.12 Disintermediation and Reintermediation
in the B2C Supply Chain
Electronic Commerce Prentice Hall? 2006 46
Issues in E-Tailing
cybermediation (electronic intermediation)
The use of software (intelligent) agents to facilitate
intermediation
hypermediation
Extensive use of both human and electronic intermediation
to provide assistance in all phases of an e-commerce
venture
Electronic Commerce Prentice Hall? 2006 47
Issues in E-Tailing
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
Personalization
Fraud and illegal activities
How to make customers happy
Electronic Commerce Prentice Hall? 2006 48
Summary
1,The scope of e-tailing.
2,E-tailing business models.
3,How online travel/tourism services operate.
4,The online job market and its benefits.
5,The electronic real estate market.
6,Online trading of stocks and bonds.
Electronic Commerce Prentice Hall? 2006 49
Summary
7,Cyberbanking and personal finance.
8,On-demand delivery service.
9,Delivery of digital products.
10,Aiding consumer purchase decisions.
11,Critical success factors.
12,Disintermediation and reintermediation.
