Page 92 - Introduction to Electronic Commerce and Social Commerce

3.2 E-Tailing Business Models 71

Goods with the following characteristics are expected to
sell the most: • Better understand customers and interact with them.
• Sell specialized items countrywide, or even worldwide
(e.g., surfing-related merchandise by the Australian
company surfstitch.com).
• Brand name recognition (e.g., Apple, Dell, Sony). A • Engage customers in interesting search, compari-
service guarantee provided by well-known vendors
son, and discussion activities.
(e.g., Amazon.com, BlueNile.com). For example, • Contact customers who are not reachable by tradi-
return policies and expedited delivery; free shipping.
tional methods of communication.
• Digitized format (e.g., software, music, e-books, or
videos).
• Relatively inexpensive items (e.g., office supplies, The major benefits to the buyers are to:
vitamins).
• Frequently purchased items (e.g., books, cosmetics,
office supplies, prescription drugs).
• Commodities for which physical inspection is not • Pay less than in traditional or even discount stores.
necessary (e.g., books, CDs, airline tickets). • Find products/services not available in local stores.
• Well-known packaged items that you normally do • Shop globally: compare prices and services.
not open in a physical store (e.g., canned or sealed • Shop anytime and from anywhere.
foods, chocolates, vitamins). • Find it unnecessary to go to the store wasting time
and gasoline, and being pressured by salespeople.
• Create their own designs and products (e.g., see
spreadshirt.com).
Advantages of E-Tailing • Find collectors’ items.
• Buy in groups: buy with friends and engage in
E-tailing provides advantages to both sellers and buyers. The social shopping.
advantages of e-commerce, described in Chapter 1, also
apply here.
The major advantages to sellers are:
The next section examines the major business models that
have proven successful in e-tailing.

• Lower product cost, thus increasing competitive
advantage. SECTION 3.1 REVIEW QUESTIONS
• Reach more customers, many outside the vendor’s
region, including going global. For example, some 1. Describe the nature of B2C EC.
Chinese and Taiwanese e-tailers operate sites that 2. What are the characteristics of high-volume products and
sell electronic products all over the world (e.g., services?
E-Way Technology Systems Corp.; ewayco.com). 3. Describe the major trends in B2C.
• Change prices and catalogs quickly, including the 4. Why is B2C also called e-tailing?
visual presentation. Such flexibility increases com- 5. List the major characteristics of B2C.
petitive advantage. 6. What are the benefits of B2C for both buyers and
• Lower supply chain costs. sellers?
• Provide customers with a wealth of information
online as a self-service option, thus saving customer
service costs. 3.2 E-TAILING BUSINESS MODELS
• React quickly to customer needs, complaints, tastes,
and so forth. In order to understand e-tailing better, let us look at it from
• Provide customization of products and services, the point of view of a retailer or a manufacturer that sells to
self-configuration, and personalization of customer individual consumers (see Figure 3.1). The seller has its own
care. organization and must also buy materials, goods, and ser-
• Enable small companies to compete with larger vices from others, usually businesses (B2B in Figure 3.1). As
companies. also shown in the figure, e-tailing, which is basically B2C
(right side of the figure), is done between the seller (a retailer