3 Moreover consumers can also search for and order a book within minutes

3 moreover consumers can also search for and order a

This preview shows page 3 - 5 out of 15 pages.

3 Moreover, consumers can also search for and order a book within minutes, without the need to travel to a bookstore. The only obvious disadvantage of an online store is that consumers must wait several days to receive their parcels, and readers cannot do browsing of the content of the books (or can only do so for select items which have partial scans of the contents). Furthermore, an online bookstore may not be able to match the atmosphere of a brick-and-mortar bookstore. Meanwhile, since physical bookstores have limited shelf space, they must consider the popularity of each book they stock. Profit considerations demand that books on the shelf be popular. Conversely, an online bookstore can provide almost any book in its virtual inventory at near zero cost. Online bookstores thus can offer a considerably wider variety of books than a physical bookstore. That is, physical bookstores can only provide the most popular books (known within the industry as the “head”), whereas online bookstores can provide both popular and obscure books (i.e. “head” and “tail”). 4 Anderson [ 1 ] terms this market for low 1 Actually, Amazon sells not only books but also CDs, DVDs, electronics, jewelry, office products, shoes, software, toys and other items. 2 In fact, Amazon may still have a “first-mover advantage” in e-commerce [ 10 ]. Many people experienced their first online purchase at Amazon. Once they set up their account in Amazon, it is easy to revisit it again. Actually, the website of Amazon is very user-friendly and thus this early experience largely affected people’s choice among many websites. Moreover, the online sector and non-online sectors in a physical bookstore may have some conflicts, such as business types, profit sharing, and professional skills, which may cause their online business to be less attractive than that of Amazon. 3 Another advantage is that online stores can stay open 24 hours a day, whereas this is very costly for physical stores. Moreover, most online bookstores provide personalized recommendation tools, whereas physical stores have difficulty providing service staff on continuous standby. Therefore, the searching cost for online customers is lower than that in physical bookstores. Finally, online stores can collect reader reviews for potential purchasers to browse. However, to simplify the model, this study does not consider these factors. 4 Actually, Brynjolfsson et al. [ 3 , p. 67] found that “30–40 % of (Amazon) sales are of books that would not normally be found in a brick-and-mortar store.”
Image of page 3
On the competition between an online bookstore and a physical bookstore 143 popularity products the “long tail,” and stresses that it can be endless if inventory costs are eliminated. Although numerous book industry surveys and electronic business discus- sions exist, such as Brynjolfsson et al. [ 2 , 3 ], Chevalier and Goolsbee [ 4 ], Clay et al. [ 6 ], Forman et al. [ 8 ], and Sorensen [ 13 ], 5 very limited theoretical models describe the competition between online and physical bookstores in the areas of product variety and price. This article provides a theory describing
Image of page 4
Image of page 5

You've reached the end of your free preview.

Want to read all 15 pages?

  • Winter '19
  • martin

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern

Stuck? We have tutors online 24/7 who can help you get unstuck.
A+ icon
Ask Expert Tutors You can ask You can ask You can ask (will expire )
Answers in as fast as 15 minutes