Page 115 - Introduction to Electronic Commerce and Social Commerce

94 3 Retailing in Electronic Commerce: Products and Services

they have access to less expensive services (insurance, tion is also coming from Chinese and other foreign
mortgages, etc.). Eventually, agents’ commissions on online vendors.
regular transactions are expected to decline as a result of 12. Disintermediation and other B2C strategic issues.
the electronic market for real estate, as more online sales Direct electronic marketing by manufacturers results in
directly by owner become popular. disintermediation by removing wholesalers and retail-
6. Online trading of stocks and bonds. One of the fastest ers. However, online reintermediaries provide additional
growing online businesses is the online trading of secu- services and value, such as helping consumers select
rities. It is inexpensive, convenient, and supported by a among multiple vendors. Traditional retailers may feel
tremendous amount of financial and advisory informa- threatened or pressured when manufacturers decide to
tion. Trading is very fast and efficient, almost fully auto- sell directly to customers online; such direct selling can
mated, and is moving toward 24/7 global trading. cause channel conflict. Pricing of online and off-line
However, security breaches are more possible, so good products and services is also an issue that frequently
security protection is essential. needs to be addressed.
7. Cyberbanking and online personal finance. Branch
banking is on the decline due to less expensive, more
convenient online banking as the world becomes more KEY TERMS
accustomed to and trusting in cyberbanking. Today,
most routine banking services can be done from any- Brick-and-mortar retailer
where. Banks can reach customers in remote places, and Business model
customers can conduct transactions with banks outside Channel conflict
their community. This makes the financial markets more Click-and-mortar retailer
efficient. Online personal finance applications, such as Direct marketing
bill paying, monitoring of accounts, and tax preparation, Disintermediation
also are very popular. E-grocer
8. On-demand delivery service. On-demand delivery ser- Electronic (online) banking (e-banking)
vice is needed when items are perishable or when deliv- Electronic retailing (e-tailing)
ering medicine, express documents, or urgently needed E-tailers
supplies. One example of on-demand delivery is Event shopping
e- groceries; these may be ordered online and are shipped Internet Radio
or ready for store pickup within 24 h or less. Internet TV
9. Delivery of digital products. Anything that can be digi- Location-based e-commerce (l-commerce)
tized can be successfully delivered online. Delivery of Multichannel business model
digital products such as music, software, e-books, mov- On-demand delivery service
ies, and other entertainment online has been a success. Private shopping club
Some print media, such as electronic versions of maga- Reintermediation
zines or electronic books, also are successful when digi- Shopping portals
tized and delivered electronically. Shopping robots (shopping agents, shopbots)
10. Aiding consumer purchase decisions. Purchase deci- Social TV
sion aids include shopping portals, shopbots and com- Virtual (pure-play) e-tailers
parison agents, business rating sites, recommendations
(including electronic ones), trust verification sites, and
other tools. Tools include real-time mobile devices and DISCUSSION QUESTIONS
extensive support from social networks.
11. The new face of retail competition. The surge in B2C 1. Discuss the importance of comparison tools, product
has resulted in pressure on traditional retailers to add reviews, and customer ratings in online shopping.
online channels and reduce prices. Even large compa- 2. Discuss the advantages of a specialized e-tailer, such as
nies such as Best Buy are struggling. The online retail DogToys.com (dogtoys.com). Could such a store sur-
giants, Amazon.com and eBay, are becoming more vive in the physical world? Why or why not?
aggressive and competitive (e.g., adding same-day 3. Use Google to find the benefits of travel-related social
delivery), so their consumers are enjoying lower prices networking sites. Discuss five of them.
and better service. Traditional retailers also need a strat- 4. Discuss the benefits of salary.com. Are there any
egy to deal with the intense competition. New competi- disadvantages?