Page 91 - Introduction to Electronic Commerce and Social Commerce

70 3 Retailing in Electronic Commerce: Products and Services

prices as well as online via auctions. E-tailing helps manufac- about B2C EC sales, it is important that care is taken in inter-
turers (e.g., Dell) sell directly to customers. This chapter preting the figures.
examines the various types of e-tailing and related issues.
Note that the distinction between B2C and B2B EC may Developments in B2C E-Commerce
be unclear. For example, Amazon.com sells to both individu-
als and organizations. Walmart (walmart.com) sells to both The first generation of B2C e-commerce sold books, soft-
individuals and businesses (via Sam’s Club). Dell sells its ware, and music—simple to understand small items (known
computers to both consumers and businesses from dell.com, as commodity items) that were easily shipped to consumers.
Staples sells to both markets at staples.com, and insurance The second wave of online growth started in 2000, as con-
sites sell to both individuals and corporations. sumers started researching and buying complex products
such as furniture, large appliances, and expensive clothing
(see Case 1.1 on Net-a-Porter, p. 11). Today consumers
Size and Growth of the B2C Market research product information and purchase online from cat-
egories such as bedding, spas, expensive jewelry, designer
B2C e-commerce is growing rapidly, especially in develop- clothes, appliances, cars, flooring, big-screen TVs, and
ing countries (e.g., China, Russia, and India). building supplies. Consumers are also buying many services
The statistics for the volume of B2C EC sales, including such as college educations and insurance policies.
forecasts for future sales, come from many sources. Reported
amounts of online sales deviate substantially based on how
the numbers are derived, and thus it is often difficult to obtain Characteristics and Advantages
a consistent and accurate picture of the growth of EC. Some of Successful E-Tailing
of the variation stems from the use of different definitions
and classifications of EC. Another issue is how the items for Many of the same success factors that apply to physical
sale are categorized. Some sources combine certain products retailing also apply to e-tailing. In addition, a scalable and
and services; others do not or use different methods. Some secure infrastructure is needed. However, e-tailers can offer
sources include online travel sales in the statistics for EC special consumer services not offered by traditional retailers.
retail; others do not. Sometimes different time periods are For a comparison of e-tailing and retailing, including advan-
used in the measurement. Therefore, when reading data tages, see Table 3.1.

Table 3.1 Retailing versus e-tailing
Factor Retailers E-Tailers
Increase of sales volume • Expansion of locations, stores, and space • Going out of their regular area and even
globally to find customers
More visitors, but less revenue • Expand marketing efforts to turn “window • Expand marketing communications to turn
shoppers” into active shoppers viewers into shoppers
Use of technology • Automation store technologies such as POS, • Ordering, payments, and fulfillment systems
self-check, and information kiosks • Comparisons and customer testimonials
• Instant delivery of digital products
Customer relations and handling • Face-to-face, stable contacts • Anonymous contacts, less stability
of complaints
• More tolerance of disputes due to face-to-face • More responsiveness to complaints due to
contacts potential negative publicity via social media
platforms (e.g., Facebook, Twitter)
Competition • Local competition • More competitors
• Fewer competitors • Intense due to comparisons and price reductions
• Global competition
Customer base • Local area customers • Wide area (possibly global) customers
• Lack of anonymity • Anonymity most of the time
• High increase of customer loyalty • Easy to switch brands (less loyalty)
Supply chain cost • High cost, interruptions • Lower cost, more efficient
Customization and • Expensive and slow • Fast, more efficient
personalization • Not very popular • Popular
Price changing • Expensive and slow, not done often • Inexpensive, can be done anytime
Adaptability to market trends • Slow • Rapid
Sources: Based on Li et al. (2011), Ingham et al. (2015), and authors’ experiences