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Online retailing

Online retailing. Retailer’s concerns. Reduced impulse buying online Greater consumer price sensitivity. Buyer’s concerns. Technology time consuming to learn, switching costs Technology too intrusive Security risk Privacy of their information. Lessons learned.

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Online retailing

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  1. Online retailing

  2. Retailer’s concerns • Reduced impulse buying online • Greater consumer price sensitivity

  3. Buyer’s concerns • Technology time consuming to learn, switching costs • Technology too intrusive • Security risk • Privacy of their information

  4. Lessons learned 1.      Use technology to create an immediate, tangible benefit for the consumer - Else consumers suspect technology will be used against them. Concern re: UPCs, electronic labels, IBM's video camera to identify good customers. 2.      Make technology easy to use - 20 min to navigate on internet, 3 min in shop, technology has many unrelated failure points - no paper in printers 3.      Execution matters 4.      Recognize consumers response to technology varies 5.      Build systems compatible with how a customer shops

  5. Lessons learned 6.      Study the effect of technology on shopping – 1. Consumers more price sensitive when reading text than seeing pictures 2. On internet brand names become less important as other information is provided. 7.      Coordinate between technologies - Consumers should get same service from one mode or the other 8.      Revisit technologies that failed in the past 9.      Tailor marketing programs to individuals. 10.  Build systems that leverage existing competitive advantages

  6. Factors affecting store choice: • Breadth and depth of product assortment • Price • Service • Convenience of the shopping experience (hours, travel time, parking, layout) • Ambience

  7. Suggestions for offline retailers • Critical differentiation: Interaction with salespeople and ambience • Improve consistency of service - on the internet service is very predictable. • Low-end merchandisers selling on low price are at risk. • Decide what your focus is - price, assortment, or service?

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