Page 111 - Introduction to Electronic Commerce and Social Commerce

90 3 Retailing in Electronic Commerce: Products and Services

moving to smaller stores to cut expenses. The future of Best
Buy, which was one of the most successful electronic retail- • Protect privacy. Amazon tracks customers’ move-
ers just a few years ago, is improving but still uncertain as of ments on the Web.
April 2014. Because of customers engaging in “showroom- • Concentrate on local markets.
ing,” in early 2013, Best Buy decided to price match not only • Provide outstanding customer service.
all local retail competitors but also 19 “major online com- • Prices should be competitive.
petitors.” The price-matching initiative was temporary dur- • Maintain their reputation using such strategies as
ing the 2012 holiday season, but due to its popularity, Best many small companies have done; either pure-play,
Buy decided to make it permanent (see businessinsider. brick-and-mortar, or click-and-brick can survive
com/best-buy-new-price-matching-policy-2013-2). and succeed.

SM Chain of Malls in the Philippines
According to Magdirila (2014), this huge chain (over 230
malls and supermarkets across the Philippines) is preparing Going Global
for full-scale online operations by 2016.
Some small companies (e.g., dogtoys.com) have many
Other Strategies global customers. Big companies like Amazon.com are also
According to VOA News (2013), many retailers are provid- very active globally. For example, according to Brohan
ing apps that help shoppers locate items while they are inside (2012), Amazon.com is Europe’s largest online retailer.
physical stores. The retailers can also provide digital dis- Large companies acquire local EC companies or need to
count coupons and make it easier for shoppers to place online enter into joint ventures with them.
orders for out-of-stock merchandise. For more on these strat-
egies, see Krupnik (2013). Examples
Ralph Lauren Corporation (ralphlauren.com), apparel
designer, manufacturer, and retailer, is selling aggressively
What Can Traditional Retailers Do? online in Europe. In 2013, it started to sell online in Japan.
Online sales increased about 30% in FY 2012 (internetre-
In addition to opening online channels and closing the least tailer.com/2012/05/25/ralph-lauren-sees-more-global- e-
profitable stores, traditional companies have a few strategies commerce-coming-soon). A similar global expansion was
to defend themselves. Here are representative examples: done by Baccarat, a large French manufacturer of jewelry,
crystal, and stemware products. For details on how Baccarat
Can Small Businesses Survive? is growing its online sales, see Enright (2012). For more on
companies going global, see Chapter 12.
While large retailers such as Best Buy and HHGregg may go
out of business, some small businesses may survive. Small Conclusion
businesses such as dogtoys.com and dell.com were pioneers
of e-commerce and are still doing well. It seems that the suc- According to Isidore (2014) and many others, the future of
cess of small e-tailers is related to a strategy that includes: brick-and-mortar retail does not look good. Many stores
already have gone out of business. In addition, many retailers
will go out of business sooner or later. Note that the online
business is becoming more diversified. For example,
Amazon.com is experimenting with the same-day delivery of
vegetables and fruits, and China’s e-commerce companies
• Niche markets. Products that cannot be produced in are moving on to banking (see Riley et al. 2014).
mass production (e.g., non-commodities) should be
considered by a small business (e.g., provide
custom- made and specialized products). SECTION 3.9 REVIEW QUESTIONS
• Faster delivery than Amazon. Uniquely distributed
products in local markets are ideal for small compa- 1. What are the major advantages of e-tailers over retailers?
nies. (However, now Amazon offers same-day 2. Why is off-line retailing in bad shape?
delivery in select cities via its “Local Express 3. Discuss some strategies for small businesses to survive
Delivery” service.) and succeed.
4. Why do e-tailers go global?