How is Ecommerce used by Retailers Retail Technology and the Internet Sales to Consumers Supply Chain Management Customer Service Build a Relationship with Customers Online Retail Sales are Rising In 2005 online retail sales are expected to be 172 billion up 22 from 2004 Internet sales account for 5 5 of all retail sales Special Offers and Coupons Customer Feedback Provide Information to Consumers Promote New Products What are the Biggest Benefits to Businesses Largest category Travel at 62 8 billion Efficiency Broaden and Deepen Customer Relationships Fastest growth categories flowers cosmetics jewelry luxury goods Reasons Consumer Use the Web Grow a Business and Reach New Segments Seeking information Entertainment Looking for value Good Prices Convenience Choice Price Comparison Sites http www shopping com bought by EBay http www PriceGrabber com http www shopzilla com http www LowerMyBills com Consumers who use the comparison sites spend 25 30 more on the web than those who don t Forrester They save 18 2 0 1 Next Generation of Price Comparison Sites http www Smarter com http www BuySafeShopping com Toolbar alerts you to other lower prices http www Become com Brochure Web Site Commerce Web Site Web Site Integrated with Existing Processes Webified Store Site Integrated with Manufacturing Systems Lessons Learned Groceries Mfr must send a single item to a consumer vs a truckload to distributors Capture and use customer information develop databases Buyers have more bargaining power than sellers http www bizrate com Small firms have more opportunities Alternative distribution channel http www sneakerpimp com Product info and research on same page Types of Web Presences Sidebar with special offers and product reviews http www dealio com Fraud Insurance http www BrilliantShopper com Additional coupons and retail discounts How is the Web changing the way Business is Done Demise of Webvan Streamline com HomeRuns com and ShopLink com Traditional Firms are building online services to increase overall sales Stop n Shop has http www peapod com Safeway has http www GroceryWorks com Fills orders from existing inventories in stores and only invests in more trucks and grocery pickers Successful Strategies Dell uses the Internet to the advantage of both consumers and suppliers Customers can track orders and get service information Suppliers can plan production and lower inventory Lessons Learned Furniture Demise of Living com Furniture com Goodhome com Success with Regional Furniture stores catering to online shoppers like http www furniturefind com Maintains no inventory items are built when ordered Keeps a close eye on deliveries and offers free deliveries on orders over 1499 Sends swatches to customers for touch and feel effect Staffs call centers 7 days a week Sponsorship fee to Yahoo to come out on top of browser search for furniture 2 Lessons Learned Wine Bricks and Mortar Retailers on the Web Demise of wineshopper com and winebuyer com Success of http www wines com by eVineyard A virtual retailer with a virtual inventory that only offers wines available by regional distributors Expanding slowly and moving state by state to get licensed as a retailer What kinds of Investments do ERetailers need to potentially make Customer service centers Technology Drop Shipping How it Works Synergies between Bricks and Clicks Is Cannibalism a Problem Another Possibility Drop Shipping Allows small online retailers look big eBags sells nearly 8 000 backpacks purses suitcases etc but maintains little or no inventory of their own Rely on mfrs or wholesale distributors to ship products directly to customers Internet links retailers mfrs and suppliers InSourcing UPS Retailer takes an order Electronically transfers it to the mfr or distributor Drop shipper packages and ships it in a day or two in the retailer s name Distribution and inventory Warehouses conveyor belts and scanners shipping vs outsourcing Whether to offer discount pricing on the Internet Advantages Dilemma Synchronizing global supply chains not just delivering packages Reinvented themselves as a Dynamic Supply Chain Manager UPS helps small companies act big and go global and big companies act small The World is Flat Tom Friedman 3 Using the Internet to Understand Consumer Behavior Cognitive Computing Improve web sites based on consumer preferences to make them easy and intuitive to use Using the Web to Understand Customers Track preferences through click patterns Provide custom tailored ads and promos Findings As clicks required for a purchase go up actual purchases Visual cues used more than text A site can recognize you and be tailored to your taste New Software Create databases based on what customers buy Site acts like a personal shopper and friend that knows you 4