Retail

Management
Lesson 3
 Web Based Firms
Now that we finished discussing about the
brick and mortar we can move on to the WEB
BASED FIRMS that is making a big Impact
on todays retailing

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 WEB BASED
FIRMS or
1 ONLINE/ELECTR
ONIC
RETAILING
 What is online/Electronic
Retailing???
✗ A process that allows the customers to search, select
and purchase the products, services and information
remotely over the Internet.
✗ A type of electronic commerce whereby consumers
buy goods or services directly from a seller through the
Internet using a web browser.
✗ A form of electronic commerce that enables consumers
to shop from anywhere using web based applications.

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How Electronic Retailing (E-tailing)
Works
✗ Electronic retailing includes a broad range of
companies and industries. However, there are
similarities between most e-tailing companies
that include an engaging website, online 
marketing strategy, efficient distribution of
products or services, and customer data
analytics.

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How Electronic Retailing (E-tailing)
Works
✗ Successful e-tailing requires strong branding. Websites
must be engaging, easily navigable, and regularly
updated to meet consumers' changing demands.
Products and services need to stand out from
competitors' offerings and add value to consumers' lives.
Also, a company's offerings must be competitively priced
so that consumers do not favor one business over
another just for price reasons.

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How Electronic Retailing (E-tailing)
Works
✗ E-tailers need distribution networks that are prompt and efficient.
Consumers cannot wait for long periods for the delivery of products
or services. Transparency in business practices is also important, so
consumers trust and stay loyal to a company.
✗ There are many ways companies can earn revenue online. Of course,
the first income source is through the sales of their product to
consumers or businesses. Both B2C and B2B companies can earn 
revenue by selling their services through a 
subscription-based model such as Netflix (NFLX), which charges a
monthly fee for access to media content.

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How Electronic Retailing (E-tailing)
Works
✗ Revenue can also be earned through online advertising. For
example, Meta (FB), formerly Facebook Inc., earns money mainly 
from ads placed on its Facebook website by companies looking to
sell to the millions who are "on Facebook," regularly checking their
pages.

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 Advantages of online ELECTRIC retail
• Easy access to market - in many ways the access to market for
entrepreneurs has never been easier. Online marketplaces such
as eBay and Amazon allow anyone to set up a simple online
shop and sell products within minutes. See 
selling through online marketplaces.
• Reduced overheads - selling online can remove the need for
expensive retail premises and customer-facing staff, allowing
you to invest in better marketing and customer experience on
your e-commerce site.

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 Advantages of online ELECTRIC retail
• Potential for rapid growth - selling on the internet means traditional constraints to
retail growth - eg finding and paying for larger - are not major factors. With a good
digital marketing strategy and a plan a scale up order fulfilment systems, you can
respond and boost growing sales. See planning for e-commerce.
• Widen your market / export - one major advantage over premises-based retailers is
the ability expand your market beyond local customers very quickly. You may discover
a strong demand for your products in other countries which you can respond to by
targeted marketing, offering your website in a different language, or perhaps
partnering with an overseas company. See basics of exporting.
• Customer intelligence - ability to use online marketing tools to target new customers
and website analysis tools to gain insight into your customers' needs. For advice on
improving your customer's on-site experience, read how to 
measure your online marketing.

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 Disadvantages of online retail
• Website costs - planning, designing, creating, hosting, securing
and maintaining a professional e-commerce website isn't cheap,
especially if you expect large and growing sales volumes. See 
common e-commerce pitfalls.
• Infrastructure costs - even if you aren't paying the cost of
customer-facing premises, you'll need to think about the costs
of physical space for order fulfilment, warehousing goods,
dealing with returns and staffing for these tasks. See 
fulfilling online orders.

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 Disadvantages of online retail
• Security and fraud - the growth of online retail market has
attracted the attention of sophisticated criminal elements. The
reputation of your business could be fatally damaged if you
don't invest in the latest security systems to protect your
website and transaction processes. See 
e-commerce pitfalls - security weaknesses.
• Legal issues - getting to grips with e-commerce and the law can
be a challenge and you'll need to be aware of, and plan to cope
with, the additional customer rights which are attached to online
sales. See the law and selling online.

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 Disadvantages of online retail
• Advertising costs - while online marketing can be a very efficient way
of getting the right customers to your products, it demands a generous
budget. This is especially true if you are competing in a crowded sector
or for popular keywords. See 
pay-per-click and paid search advertising.  
• Customer trust - it can be difficult to establish a trusted brand name,
especially without a physical business with a track record and face-to-
face interaction between customers and sales staff. You need to
consider the costs or setting up a good customer service system as part
of your online offering. See manage your customer service.

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Electronic Retailing (E-tailing)
Transaction Subcategories
✗ Regardless of whether a transaction is being
conducted online or in person, there are two
specific subcategories of transactions that
are executed. They are B2C and B2B
transactions, and they carry different
implications when conducted in the
electronic retailing market.
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 Electronic Retailing (E-tailing)
Transaction Subcategories
✗ Business-to-Business (B2B) E-tailing
✗ Business-to-business (B2B) e-tailing occurs when a business purchases a
product or service from another business’s website, for its own use or to use as
a component in its own products. The business model differs in B2B
transactions when conducted online because fast shipping, quality, and price
become increasingly more prominent.
✗ Generally, when a business purchases wholesale products online, they are
buying large quantities of goods. Therefore, it is important to negotiate
reasonable prices with fast shipping and safe handling.
✗ In order to develop the best e-tailing business model for B2B transactions, the
wholesale business must offer quantity discounts, reasonably fast shipping, and
ensure that the goods remain undamaged.

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 Electronic Retailing (E-tailing)
Transaction Subcategories
✗ Business-to-Consumer (B2C) E-tailing
✗ Business-to-consumer (B2C) e-tailing transactions are when a
consumer buys a product or service from a business’s website,
such as shoes off a sports apparel company’s website. The
business model differs in B2C transactions when conducted
online because consumers are very demanding and expect fast
delivery and guarantees that the product’s quality matches the
online description.
✗ This makes shipping times and handling standards very
important in any company’s e-tailing business model.

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Types of Electronic Retailing (E-
tailing)
1. Pure Play E-tailers
✗ Pure play e-retailers are the types of business
that only offer e-tailing and do not operate any
sort of physical stores that customers can walk
into.
✗ Examples of pure play e-retailers are businesses
such as Amazon, Ali Express, Ali Baba, and drop-
shipping businesses.

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Types of Electronic Retailing (E-
tailing)
2. Brick and Click E-tailers
✗ Brick and click e-tailers are businesses that offer
both e-tailing and maintain physical brick-and-
mortar stores that customers can shop at.
✗ Almost every brick-and-mortar business uses
some form of e-tailing but more prominent brick
and click e-tailers that offer exceptional service
include Apple, Foot Locker, and Sport Chek.

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 Quiz….
Please open the Quiz Inserted Below on the
classwork

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Than
ks!
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