Page 34 - Introduction to Electronic Commerce and Social Commerce

Case 1.1: EC Application: Net-a- Porter: Dress for Success 11

Cyber Monday, Singles’ Day as Cisco, Target, General Electric, IBM, Intel, and Schwab
also have seen great success. Additional success stories
An interesting evidence for the growth of online shopping is include start-ups such as Alloy.com (a young-adult- oriented
the volume of shopping during Cyber Monday in the USA portal), Blue Nile (Chapter 2), Ticketmaster, Amazon.com,
and Singles’ Day in China (11/11). For the magnitude of Net-a-Porter (Case 1.1), Expedia, Yelp, TripAdvisor, and
Singles’ Day in China, in the automotive industry see Li and GrubHub (Online File W1.2).
Han (2013). See also Ad Age Staff (2013).

Social Commerce CASE 1.1: EC APPLICATION
NET-A- PORTER: DRESS FOR SUCCESS
The explosion of social media and networks, as well as Web
2.0 tools (e.g., wikis, blogs), resulted in new ways of con- Will a woman buy a $2000 dress online without trying it on?
ducting e-commerce by making it social. Several new and Net-a-Porter (a UK online retailer, known as “the Net”) bet
modified EC models were created, rejuvenating the field as on it and proved that today’s women will purchase their
described in several chapters in the book, especially in dresses (for success) online, especially if the luxury clothing
Chapter 7, and in Turban et al. (2016). and accessories are international brands such as Jimmy Choo
or Calvin Klein (see Pressler 2015).
EC Failures

Starting in 1999, a large number of EC companies, especially The Opportunity
e-tailing and B2B exchanges, began to fail. Well- known B2C
failures include Drkoop, MarchFirst, eToys, and Boo. Well- When talking about e-commerce (EC), most people think
known B2B failures include Webvan, Chemdex, Ventro, and about buying online books, vitamins, CDs, or other com-
Verticalnet. (Incidentally, the history of these pioneering modity items. And this indeed was what people bought in the
companies is documented by David Kirch in his Business mid-1990s, when EC began. But in 2000, Natalie Massenet,
Plan Archive, businessplanarchive.org.) A survey by a fashion journalist, saw an opportunity because of the suc-
Strategic Direction (2005) found that 62% of dot- coms lacked cess of luxury online stores such as Blue Nile (see Chapter 2)
financial skills, and 50% had little experience with marketing. and the fact that professional women are very busy and will-
Similarly, many companies failed to have satisfactory order ing to do more purchasing online.
fulfillment and enough inventory to meet the fluctuating and
increasing demand for their products. The reasons for these
and other EC failures are discussed in Chapters 3, 4, and 11. The Solution
As of 2008, many start-ups related to Web 2.0 and social
commerce started to collapse (see blogs.cioinsight.com/it- Natalie decided to open an online business for luxury fash-
management/startup-deathwatch-20.html). ion. She created a comprehensive, socially oriented, e-tailing
Does the large number of failures mean that EC’s days are site, naming it Net-a-Porter.
numbered? Absolutely not! First, the dot-com failure rate is According to net-a-porter.com, some experts, and the
declining sharply. Second, the EC field is basically experiencing company:
consolidation as companies test different business models and
organizational structures. Third, some pure EC companies, • Opened an e-tailing store
including giants such as Amazon.com and Netflix, are expand- • Offered merchandise from over 350 top designers; most
ing operations and generating increased sales. Finally, the click- off-line stores offer a few dozen
and-mortar model seems to work very well, especially in • Offered its own designs in addition to others
e-tailing (e.g., GAP, Walmart, Target, Apple, HP, and Best Buy). • Arranged global distribution systems to over 170 countries
For supplementary history, see plunkettresearch.com/ • Opened physical stores in London and New York to sup-
ecommerce-internet-technology-market-research/industry- port the online business
and-business-data. • Arranged same day delivery in London and New York and
overnight delivery elsewhere
EC Successes • Organized very fast cycle time for producing and intro-
ducing new clothes and other products that match cus-
The last few years have seen the rise of extremely successful tomers’ preference
EC companies such as eBay, Pandora, Zillow, Google+, • Devised prediction methods of fashion trends based on
Facebook, Yahoo!, Amazon.com, Pay Pal, Pinterest, VeriSign, customer feedback through social media
LinkedIn, and E*TRADE. Click-and-mortar companies such • Ran online fashion shows