Business-to-Consumer E-Commerce

1. Business-to-Consumer E-Commerce Chapter 8

2. Learning Objectives • Summarize the principles of the main types of online business-to-consumer (B2C) activities • List the major players in the B2C arena • Explain the challenges of B2C firms • Articulate the difficulties of e-retailing in general and delivery in particular

3. Learning Objectives • Explain the concept of channel conflict • Contrast failure and success factors in online B2C ventures • List the major future developments that are anticipated in online B2C commerce

4. Business-to-consumer (B2C) hoopla • Why consumers shop on the Internet: • Convenience • Saving time • Comparative shopping

5. The business of e-retailing Characteristics, issues, and challenges

6. Retailing waves Grocery market example Intimacy Special services Small variety Shopper picks, packs, delivers Huge variety Lower prices Retailer picks, packs, delivers No intimacy No immediacy Greater variety Lower prices No intimacy Shopper picks, packs, delivers Corner grocer Supermarket Online grocer

7. Elements of e-retailing • E-tailing site must: • Promote the items offered for sale • Provide a search mechanism • Comparison software • Provide the means to process purchases and payments

8. Diminishing importance of brand names • A brand name is a short cut when there is no convenient access to information about a product • The plentiful and easily accessible information available on the Internet reduces the need to rely on brand names

9. Repeat business challenge • Attract web surfers to spend more time at the e-tailing site • Convert visitors into buyers • A major challenge Conversion rate - the rate at which visitors are converted into buyers

10. Delivery challenge • Prompt delivery is the greatest challenge for B2C businesses

11. Channel conflict • A direct manufacturer-to-consumer channel may compete with the traditional distribution channels • How to circumvent channel conflicts? • Sell online items that are not distributed through retailers • Use a different brand name for items sold online

12. Challenging warehouse-to-retail transition

13. Great difference in logistics between traditional and e-retail • Labor & transportation costs shift from the customer to the retailer

14. “Last mile” problem

15. Portal strategy • A firm offers many different, but related services to consumers • By aggregating service requests, economies of scale are achieved

16. Buildover strategy • The firm builds its own infrastructure by building fulfillment centers • Significant investment

17. Caching strategy • Filled orders are aggregated, or cached, in one delivery location • Collection centers • More convenient than home delivery for both the firm and its customers

18. Speed strategy • Quick delivery of products • Customers willing to pay more than if they purchase items the traditional way

19. Niche strategy • A niche market on which the firm specializes • Does not require a new infrastructure • Relatively narrow selection of products

20. Successful B2C business models • Reservation systems • Consumer auctions • Reverse auctions • Stock trading • Gambling • Content

21. Software sales • Perishables online • Bill presentment and payment • “Do well by doing good” • Online customer service

22. Failures: not all that glitters is gold

24. Boo.com • Foofoo.com • Cookexpress.com • Toysmart.com

25. Ingredients for success • Meet a consumer need • Consumers buy only what they need • Total service • Offer a host of related services as one package • Aggregate online products and services offered in a traditionally fragmented industry

26. Interaction and personalization • Enable customers to conduct live human-to-human interaction with the firm • Create customer profiles • Use of technology • Use the latest technology to update your site

27. Trends in B2C commerce • Mergers of B2C firms • Clicks-and-mortar gravitation • Sounder business models • Mobile commerce • M-commerce

28. Business-to-Consumer E-Commerce Chapter 8