Bài giảng E-commerce (Third Edition) - Chapter 10: Retailing on the Web

Copyright © 2006 Pearson Education, Inc. Slide 10-1 E-commerce Kenneth C. Laudon Carol Guercio Traver business. technology. society. Third Edition Copyright © 2006 Pearson Education, Inc. Slide 10-2 Chapter 10 Retailing on the Web Copyright © 2006 Pearson Education, Inc. Slide 10-3 Blue Nile Sparkles For Your Cleopatra Class Discussion „ Why is selling (or buying) diamonds over the Internet so difficult? „ How has BlueNile built its supply chain to keep costs low? „ How has BlueNile reduced consumer anxiety over online diamond purchases? „ What are some vulnerabilities facing BlueNile? „ Would you buy a $5,000 engagement ring at BlueNile? Copyright © 2006 Pearson Education, Inc. Slide 10-4 Major Trends in Online Retail, 2006 See also Table 10.1, Page 575. „ Online retail increasingly profitable „ Buying online becomes normal, mainstream experience „ Selection of goods online increases, including customized goods „ Average annual amount of purchases increases „ Specialty retail sites show most rapid growth „ Increased emphasis on improved shopping experience „ Increased use of interactive multimedia marketing „ Retail intermediaries strengthen in many areas „ Retailers increasingly efficient at integrating multiple channels „ Customized goods, especially in apparel, become financially successful, and begin to spread to many sites beyond specialty retailers. „ Online shopping becomes more multi-seasonal „ Most online shopping occurs at work, evenings at home Copyright © 2006 Pearson Education, Inc. Slide 10-5 The Retail Sector „ Most important theme in online retailing is effort to integrate online and offline operations „ U.S. retail market accounts for over $7.7 trillion of total GDP (2/3rds of all economic activity) „ Retail industry can be divided in segments, each of which offers opportunities for online retail „ Biggest opportunities for online retail sales: Those segments that sell small ticket items (specialty stores, general merchandisers, mail-order catalogs, groceries) „ Mail order/telephone order (MOTO) sector most similar to online retail sector Copyright © 2006 Pearson Education, Inc. Slide 10-6 Composition of the U.S. Retail Industry Figure 10.1, Page 576 SOURCE: Based on data from U.S. Census Bureau, 2005. Copyright © 2006 Pearson Education, Inc. Slide 10-7 Online Retailing: The Vision „ Greatly reduced search costs on the Internet would encourage consumers to abandon traditional marketplaces in order to find lower prices for goods „ Market entry costs would be much lower than those for physical storefronts, and online merchants would be more efficient than offline competitors „ Traditional offline physical store merchants would be forced out of business „ Some industries would become disintermediated as manufacturers built direct relationship with consumer „ Ultimately, few of the above assumptions proved to be correct, and structure of retail marketplace in the U.S. has not be revolutionized Copyright © 2006 Pearson Education, Inc. Slide 10-8 The Online Retail Sector Today „ Online retailing segment, although smallest segment of retail industry, is growing at exceptionally fast rate „ Online retail revenues: $85 billion, 115 million consumers estimated for 2005 „ Primary beneficiaries of growing consumer support: Established offline retailers with an online presence Copyright © 2006 Pearson Education, Inc. Slide 10-9 Online Retail and B2C E-commerce is Alive and Well Figure 10.3, Page 581 SOURCE: Based on data from U.S Department of Commerce, 2005; eMarketer, Inc, 2005a; Shop.org and Forrester Research, 2005, authors’ estimates. Copyright © 2006 Pearson Education, Inc. Slide 10-10 Insight on Business: Merlot by Mail Class Discussion „ Why is eVineyard one of the few online surviving wine retailers? „ What was the key to eVineyard’s success? „ How will changes in state laws open up online wine sales? „ How did the Supreme Court decision effect wine retailing and wineries in the United States? Copyright © 2006 Pearson Education, Inc. Slide 10-11 Analyzing the Viability of Online Firms: Strategic Analysis „ Strategic analysis of economic viability of a firm focuses on both industry as a whole and firm „ Key industry strategic factors: ƒ Barriers to entry ƒ Power of suppliers ƒ Power of customers ƒ Existence of substitute products ƒ Industry value chain ƒ Nature of intra-industry competition Copyright © 2006 Pearson Education, Inc. Slide 10-12 Analyzing the Viability of Online Firms: Strategic Analysis (cont’d) „ Strategic factors that pertain to firm include: ƒ Firm value chain ƒ Core competencies ƒ Synergies ƒ Technology ƒ Social and legal challenges Copyright © 2006 Pearson Education, Inc. Slide 10-13 Analyzing the Viability of Online Firms: Financial Analysis „ Financial analysis helps us understand how a firm is performing „ Includes two main parts: Statement of Operations and Balance Sheet „ Statement of Operations: Tells us how much income or loss a firm is achieving based on current sales and costs „ Balance sheet: Provides a financial snapshot of a company’s assets and liabilities Copyright © 2006 Pearson Education, Inc. Slide 10-14 Analyzing the Viability of Online Firms: Financial Analysis (cont’d) „ Factors to look for when assessing Statements of Operations ƒ Revenues: growing and at what rate? ƒ Cost of sales: compared to revenues ƒ Gross margin (gross profit divided by net sales): increasing or decreasing? ƒ Operating expenses: What are they; increasing or decreasing? ƒ Operating margin: Indication of company’s ability to turn sales into pre-tax profit after operating expenses are deducted ƒ Net margin (net income or loss divided by net sales or revenue): increasing or decreasing? Copyright © 2006 Pearson Education, Inc. Slide 10-15 Analyzing the Viability of Online Firms: Financial Analysis (cont’d) „ Factors to look for when assessing a Balance Sheet: ƒ Current assets ƒ Current liabilities ƒ Ratio of current assets to liabilities (working capital) ƒ Long-term debt Copyright © 2006 Pearson Education, Inc. Slide 10-16 E-tailing Business Models „ Four main types of online retail business models: ƒ Virtual merchant ƒ Bricks-and-clicks ƒ Catalog merchant ƒ Manufacturer direct Copyright © 2006 Pearson Education, Inc. Slide 10-17 Virtual Merchants „ Single channel Web firms that generate almost all revenues from online sales „ Example: Amazon.com Copyright © 2006 Pearson Education, Inc. Slide 10-18 E-commerce in Action: Amazon.com „ Vision: Earth’s biggest selection, most customer- centric „ Business Model: Virtual merchant that sells merchandise owned by Amazon, online storefronts for other merchants, merchandise owned by individuals; e-commerce services „ Financial Analysis: Greatly improved overall operational position, but not yet consistently profitable Copyright © 2006 Pearson Education, Inc. Slide 10-19 E-commerce in Action: Amazon.com „ Strategic Analysis: Business strategy: Maximize revenue while cutting costs „ Strategic Analysis: Competition: General merchandisers who are both offline and/or online „ Strategic Analysis: Technology: Largest, most sophisticated collection of online retailing technologies available „ Strategic Analysis: Social, Legal: Securities, anti-trust lawsuits „ Future Prospects: Long-term profitability still uncertain Copyright © 2006 Pearson Education, Inc. Slide 10-20 Multi-channel Merchants: Bricks and Clicks ƒ Companies that have a network of physical stores as primary retail channel, but also online offerings ƒ Examples: Wal-Mart, J.C. Penney, Sears Copyright © 2006 Pearson Education, Inc. Slide 10-21 Catalog Merchants ƒ Established companies that have a national offline catalog operation as largest retail channel, but also have online capabilities ƒ Examples: Lands’ End, L.L. Bean, Eddie Bauer, Victoria’s Secret, Lillian Vernon Copyright © 2006 Pearson Education, Inc. Slide 10-22 Manufacturer-Direct ƒ Single or multi-channel manufacturers who sell directly online to consumers without intervention of retailers ƒ Example: Dell Copyright © 2006 Pearson Education, Inc. Slide 10-23 Insight on Society: Internet Taxation: The Tax Man is Coming Class Discussion „ Why should online retailers collect state sales taxes? „ What is the Streamlined Sales Tax Project and how will it potentially effect the collection of online sales taxes? „ Why do some major online stores like Wal- Mart collect sales taxes? Copyright © 2006 Pearson Education, Inc. Slide 10-24 Distribution of Online Retail Sales by Type of Merchant Figure 10.3, Page 603 SOURCE: Based on data from Internet Retailer, 2005. Copyright © 2006 Pearson Education, Inc. Slide 10-25 Common Themes in Online Retailing „ Online retail fastest growing channel, has fastest growing consumer base, growing penetration rate across many categories of goods „ Many online retail firms have begun to raise prices „ Disintermediation has not occurred, and most manufacturers use Web primarily as an informational resource „ Most significant online growth has been that of offline giants who are focusing on extending brand to online channel „ Second area of rapid growth: specialty merchants Copyright © 2006 Pearson Education, Inc. Slide 10-26 Insight on Technology: Using the Web to Shop ‘Till You Drop Class Discussion „ What do shopping bots and comparison sites offer consumers? „ Why are shopping bots more successful with hard goods than soft goods? „ What is the strategy of Become.com? „ How can shopping bots compare luxury goods? „ How will adding content to comparison sites help consumers?