20181219051855D3328_Z11700010220174022Z11700000220154009P 17-18 Revised.pptx

Online Retail and Services
Session 17-18
Course : ISYS6204 E-Business
Design
Effective Period : February 2019

Learning Outcomes
•
Understand the environment in which the online
retail sector operates today.
•
Explain how to analyze the economic viability of an
online firm.
•
Identify the challenges faced by the different types of
online retailers.
•
Describe the major features of the online service
sector.
•
Discuss the trends taking place in the online financial
services industry.
•
Describe the major trends in the online travel
services industry today.
•
Identify current trends in the online career services
industry.

Acknowledgments
These slides have been
adapted from Kenneth C.
Laudon E-Commerce
2014. 10 Edition.
Pearson.

Outline
•
The Online Retail Sector
•
Analyzing the Viability of Online Firms
•
E-commerce in Action: E-tailing Business Models
•
The Service Sector: Offline and Online
•
Online Financial Services
•
Online Travel Services
•
Online Career Services

The Online Retail Sector

The Online Retail Sector
•
The Retail Industry
•
Online Retailing
–
E-commerce Retail: The Vision
–
The Online Retail Sector Today
–
Multi-Channel Integration

The Online Retail Sector
•
Most important theme in online
retailing is effort to integrate
online and offline operations
•
Personal consumption:
–
Services: 65%
–
Nondurable goods: 25%
–
Durable goods: 10%
•
“Goods” vs. “services” ambiguity

The Retail Industry
•
8 segments (clothing, durable goods,
etc.)
–
For each, uses of Internet may differ
•
Information vs. direct purchasing
•
General merchandisers vs. specialty
retailers
•
Mail Order/ Telephone Order (MOTO)
sector most similar to online retail
sector
–
Sophisticated order entry, delivery, inventory
control systems

Composition of the U.S. Retail Industry

The Online Retail Sector

The Online Retail Sector

E-commerce Retail:
The Vision
1. Reduced search and transaction costs;
customers able to find lowest prices
2. Lowered market entry costs, lower operating
costs, higher efficiency
3. Traditional physical store merchants forced out
of business
4. Some industries would be disintermediated
•
Few of these assumptions were correct—
structure of retail marketplace has not been
revolutionized
•
Internet has created new venues for multi-
channel firms and supported a few pure-play
merchants

The Online Retail Sector Today
•
Smallest segment of retail industry
(5%–6%)
•
Growing at faster rate than offline
segments
•
Revenues have resumed growth
•
Around 72% of Internet users bought
online in 2011
•
Primary beneficiaries:
– Established offline retailers with online presence (e.g.,
Staples)
–
First mover dot-com companies (e.g., Amazon)

Multi-Channel Integration
•
Integrating Web operations with
traditional physical store operations
–
Provide integrated shopping experience
–
Leverage value of physical store
•
Types of integration
–
Online order, in-store pickup
–