E-Commerce

1. E-Business Level 2 Instructor: Safaa S.Y. Dalloul Try to be the Best 2013-2014 E-Commerce Retailing in E-Commerce (E-Tailing)

2. Lecture Elements • Electronic Retailing (E-Tailing) and B2C Market Growth. • Consumer Purchase Process and the Marketing Plan • Online Purchase Decision Aids • E-Tailing Business Models • Digital Delivery: Music, Software, News, and More • Successful Click-and- Mortar Strategies • Problems with E-Tailing and Lessons Learned

3. Electronic Retailing: A Retailing Process that is conducted online, over the Internet. • E-Tailers: They are retailers who sell over the internet. • We will focus on B2C marketing, primarily on those companies that sell so-called hard goods that shipped to a customer, as opposed to soft goods or digital goods such as information and news, which can be downloaded via internet easily. Electronic Retailing (E-Tailing) and B2C Market Growth

4. Direct Relationship with consumers without intermediaries is one of the most important characteristics of B2C commerce. • Manufacturers with established brands such as Dell, are able to execute a successful direct marketing strategy if they pay attention to the basic rules of successful direct marketing and efficiently deliver quality merchandise to the consumer. • In early days, traditional retailers' web sites were typically used as brochure-ware and lacked interactivity Electronic Retailing (E-Tailing) and B2C Market Growth

5. Successful strategies are now implemented by traditional e-tailers, for combining an online presence with their physical retail stores ("brick-and-mortar" stores). The strategy of having both off-line and online presence is called a "click-and-mortar" model or "brick-and-click". Electronic Retailing (E-Tailing) and B2C Market Growth

6. Characteristics of Successful Retailing • 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 Electronic Retailing (E-Tailing) and B2C Market Growth

7. Here we are to talk about the role of Marketing, and the consumer purchasing process. • To understand the managerial process of successfully selling merchandise directly to consumer, we must first look at the process that consumers follow when they shop and purchase items. Consumer Purchase Process & the Market Plan

8. Consumers usually give far more thought to the decision of purchasing a car than to buying a carton of milk. But the purchasing process is the same for both. • The process starts with pre-purchase steps, followed by actual purchase and finally ends with post-purchase steps. Consumer Purchase Process & the Market Plan

9. Consumers begins with an awareness that they need to make a purchase and identify the basic need or want. They then establish a decision criteria and refine it may be by having recommendations form others or collecting information from different resources. • Finally, consumers use the stage of "information search and evaluation alternatives" in which they make a decision toward a specific product or service after making comparisons. Consumer Purchase Process & the Market Plan

10. Once consumer purchase an item, he or she is often presented with options regarding item configuration or personalization, this can often be made directly on the web site. • For example, consumer may need to assistance for product installation, say dishwasher. With physical stores this was done using the telephone, but now online helpdesks are used to help customers for maintaining their products without costing them to visit the store or use the telephone calls. Consumer Purchase Process & the Market Plan

11. Types of Online Shoppers • Time-starved consumers: found in two income homes, will be willing to pay higher prices or extra fees to save time on shopping. • Shopping avoiders: dislike shopping and may use the internet just to avoid people, lines or traffic. • New Technologists: often young and comfortable with technology in general, may just shop online "because it's cool". Consumer Purchase Process & the Market Plan

12. Types of Online Shoppers • Time-sensitive materialists: only use the internet to look for products, they prefer to make their purchases from traditional stores because of security concerns or other reasons. • Traditional: just prefer stores, and may never adopt online shopping behaviors. • Hunter-gatherers: about 20% of all online shoppers, enjoy the process of price comparison and the search for good services. Consumer Purchase Process & the Market Plan

13. Types of Online Shoppers • Brand loyalists: consumers who shop online for a particular brand, probably account for the greatest per-person profit levels. • Single shoppers: about 16% of online shoppers, prefer the internet not only for shopping, but also for banking, communications, game playing, news, and other activities. Consumer Purchase Process & the Market Plan

14. Decision Criteria • Value Proposition: what a retailer offers may be unique and valuable to the consumer-customer service, better prices, or higher quality. Price is often most important criteria. • Personal Service: Firms that treat each customer as a unique individual will outsell firms that do not do it. Consumer Purchase Process & the Market Plan

15. Decision Criteria • Convenience: time is a valuable commodity. Busy consumers look for ways to save time and add convenience. The web offers many ways to make shopping more convenient. Creating effective, easy user interfaces for web sites can enhance the convenience of shopping Consumer Purchase Process & the Market Plan

16. Decision Criteria • Other criteria: service after sale may be more important for certain purchases, such as cars, computers, or software. If the consumer believes that there may be difficulties in installation. Consumers prefer an e-tailer with 24/7 telephone support or web site with help features. Consumer Purchase Process & the Market Plan

17. Marketing Management is the process of making it attractive and easy for consumers to buy a firm's ideas, goods, or services. • This is done by influencing the portfolio of items available for sale, the price of them and the promotion of the products through advertising, and the packaging or distribution of products, in other words these are the marketing 4P's. Consumer Purchase Process & the Market Plan

18. 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. For example, Mysimon.com searches the web to find the best price for thousands of popular items. Online Purchase Decision Aids

19. Wireless Shopping Comparisons, Enable shoppers to compare prices any time from anywhere, including from any physical store • Business Rating Sites: Bizrate.com and Gomez.com are two of many sites that purport to rate various e-tailers and online products, based on multiple criteria. At Gomez.com, the consumer can actually specify the relative importance of different criteria when comparing online banks, toy sellers or e-grocers. Online Purchase Decision Aids

20. Other shopper tools: Amazon.com’s A9 Search Engine do the followings • 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 Online Purchase Decision Aids

21. Subscription Model: charge a monthly or annual subscription fee for the service. • Transaction fee models: Charge a service fee based on the level of transactions offered. • Advertising-supported models: instead of charging to users, charge to the advertising companies. But the revenue by advertising service can be applied with the subscription and transaction fee models. • Sponsorship Models: the companies who can benefit or who are willing to donate beyond financial reasons may sponsor the business. E-Tailing Business Models

22. 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 • Sites from manufacturers such as Dell, Nike or Sony site. • Disintermediation: The removal of organizations or business process layers responsible for certain intermediary steps in a given supply chain • Reinter-mediation: The process whereby intermediaries (either new ones or those that had been disinter-mediated) take on new intermediary roles. • Direct Marketing E-Tailing Business Models

24. Pure-Play e-tailers: They are the firms that sell directly to consumers over the internet without maintaining a physical sales channel. such as Amazon.com • Traditional retailers with Web Sites: which are called click-and-mortar retailers, such as Wal-Mart or Home Depot. E-Tailing Business Models

25. 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. Digital Delivery : Music, Software, News and More

26. A traditional brick-and-mortar store with a mature Web site uses a click-and-mortar strategy to: • Speak with one voice: First, a firm can link all of its back-end systems to create an integrated customer experience. Whether the customer accesses information or services through face-to-face encounters with store personnel, web pages, or sales staff. Successful Click-and-Mortar Strategies

27. A traditional brick-and-mortar store with a mature Web site uses a click-and-mortar strategy to: • Leverage the multi-channels: The innovative retailer will offer the advantages of each marketing channel to customers from all channels. Whether the purchase is made online or at the store, the customer should benefit from the presence of both. Successful Click-and-Mortar Strategies

28. A traditional brick-and-mortar store with a mature Web site uses a click-and-mortar strategy to: • Empower the customer: By utilizing various technologies to ensure that customers are empowered with information and by giving the customers the opportunities to use online technologies to perform various functions interactively, the seller creates a powerful 24/7 channels for service and information. Successful Click-and-Mortar Strategies

29. Don’t ignore profitability: One fundamental lesson is that each marginal sale should lead to marginal profits. It has been said that if it doesn’t make cents, it doesn't make sense. • Watch the cost of branding: Branding has always been considered to be a key to the success of e-tailers, but the drive to establish brand often leads to excessive spending. Problems with E-Tailing and Lessons Learned

30. The Web site must be effective: today internet shoppers expect web sites to offer superior technical performance, fast page loads, quick database searches, streamlined graphics, etc. web sites should be designed in a way that doesn't frustrate customers. Problems with E-Tailing and Lessons Learned

31. Static Design: web sites without dynamic content will bore returning visitors. Today, most e-tailers offer valuable tips and information of consumers, who often come back just for that content and may purchase something in the process. Problems with E-Tailing and Lessons Learned

32. Any Question