B2C E-business in the U.S. will develop to $87 billion by 2003 from $17 billion in 1999.


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What We Have Learned About B2C Electronic Commerce Dr. Bert Rosenbloom Professor of Marketing and Rauth Chair in Electronic Commerce Management Drexel University, USA B2C E-business in the U.S. will develop to $87 billion by 2003 from $17 billion in 1999
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What We Have Learned About B2C Electronic Commerce Dr. Bert Rosenbloom Professor of Marketing and Rauth Chair in Electronic Commerce Management Drexel University, USA

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B2C E-business in the U.S. will develop to $87 billion by 2003 from $17 billion in 1999 B2C E-trade worldwide will approach $200 billion by 2003

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Even however significant development will happen, 95% of "immaculate play" speck coms are relied upon to leave business by 2003 Of those staying just a little minority will be productive

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Much of the online B2C deals volume will be created by ordinary (blocks and mortar) retailers utilizing the Internet as simply one more showcasing channel to achieve their clients "Snaps and Mortar"

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Online Sales (1999) Pure E-tailers versus Multichannel Retailers Source: (Business Week E-B:2 10/23/000:EB 36)

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What have we adapted so far about what works and what does not work in B2C E-Commerce? How about we investigate...

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Real Businesses Still Need to be Built The Dot-Com Formula First Mover Advantage for snappy name acknowledgment Get most extreme number of eyeballs to visit Website Convert eyeballs to paying clients Then make sense of how to make a business out of It Doesn`t Work Internet is useful for correspondence with existing clients yet loathsome for pulling in new clients

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Focus on Customers Not Investors Dot-coms more intrigued by drawing in speculators than clients Companies get to be coincidental to the stock value Greater blockhead hypothesis and force contributing - "imbecilic cash" Huge business sector tops made - however little if any client esteem created

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Differentiation Crucial for Survival Online offers of numerous purchaser item classifications will develop in overabundance of half every year throughout the following 2-3 years. (Forrester Research) Yet 95% of the world\'s website organizations will come up short amid the following two years. (Gartner Group) Most fundamental reason for death? Absence of separation - Failure to emerge from the group (Business 2.0)

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Customer Acquisition Costs Too High In the U.S. in 1999, e-tailers burned through 110% of incomes on advertising Average expense of securing every client was $84.00 yet $200 per client was not surprising Expensive TV promotions not financially savvy Banner advertisements are not powerful - little navigate Name acknowledgment and collaboration required from "area based" retailers (clicks & mortar) McKinsey & Co. Study - 4 times higher client securing cost for online versus logged off

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Better Website Design Needed Too frequently capacity is relinquished for blaze Designed by "techies" instead of advertisers Surveys find that half of clients go specifically to pursuit catch to discover items Website outline must start with comprehension of buyer conduct Just 22% of clients who place things in their electronic shopping baskets really buy; 78% desert their trucks

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Merchandising Expertise Vital Selecting the right items to offer is still a workmanship and a science (can\'t avoid retailing) Items with higher gross edges required for e-trade Wider determination makes stock issues Amazon.com discounted $39 million for unsalable stock in 1999

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Reliable and Efficient Fulfillment Systems Key Online customers expect tried and true and brisk shipment Small request satisfaction is costly particularly when work power is high More robotized stockrooms expected to build proficiency and lower costs

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Back End at any rate as Important as Front End E-business and E-tailing can\'t escape satisfaction and logistics Arthur Andersen study found more than 40% of conveyances to clients were late Back End Problem Area (1999 Holiday) % of Consumers Mentioning Untimely Delivery 40% Product out of stock 24% High transporting & taking care of costs 21% Long dispatching time 18% Slow email response 10% ____________________ Source: Jupiter Communications; eMarketer

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Customer Service is Crucial Pure Internet shopping is a myth Must have genuine individuals (client administration agents) whom clients can reach effortlessly by phone and/or email Lands\' End has 2500 client administration delegates to answer questions by telephone or email Perceived danger of shopping online results in very nearly 80% of clients not finishing buys online If only 10% of online surrendered shopping baskets could be rescued through better client administration, over $60 billion in lost deals could be recuperated (Datamonitor)

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Returns Problem Needs to be Addressed Study led by Electron Economy of 60 driving Websites found the accompanying: 80% obliged clients to pay return shipping 49% gave return postal packs and preaddressed return marks with request 28% required Return Merchandise Authorization (RMA) "Clients did not require consent to buy a thing, so why if they require consent to return it." (BUSINESS 2.0; 10/10/00:181) Returns include "reverse logistics "

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Internet Has Not Caused Intense Price Competition Online Comparison Shopping Services (shopping bots) have not been a noteworthy power: Dealtime.com BottomDollar.com PriceScan.com MySimon.com Consumers don\'t utilize shopping bots consistently Real-time looks yield moderate and untrustworthy data Database looks speedier however regularly not opportune Consumers look for different variables: notoriety, dependability, speed, and administration

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Banner Ads Not Effective Online publicizing becoming drastically - from $3.5 billion in 1999 to $16.5 billion by 2005 But Click-through rates now just 0.3% - 0.5% Far beneath standard mail reaction rate of 1% - 3% Online publicizing may need to concentrate more on brand mindfulness

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Privacy is Becoming a Major Concern The dull side of e-business The same innovation used to cut expenses and improve correspondence can leave a trail of individual data "Treats" - may give data buyers don\'t need uncovered Regulations may rise which while securing protection may restrict adaptability of e-business

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Use "Snaps and Bricks" to Create Synergy "Immaculate plays" not financially suitable Promotional costs too high for unadulterated plays versus multi-channel firms (unadulterated play) Etoys 37c in advancement for every dollar of offers (bks. & mtr.) Williams-Sonoma 11c in advancement for every dollar of offers Order preparing costs too high for unadulterated plays - too much "onsies and eachies"

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Products Need to be "Internetable" Physical items can\'t be digitized Physical items have size and weight and consume up room Physical items should be chosen, stuffed and dispatched Physical items are transported at moderate paces Internetable items are those that have a high esteem to weight or size proportion

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Clicks-and-Mortar Firms Have the Advantage Channel Conflict developing into "Channel Confluence" Real force of Internet might be as a supplemental channel as opposed to select channel Synergy and higher income results from offering clients numerous channels

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Bricks and Mortar Retailers Here To Stay Online Retail Sales as Percentage of Total Retail Sales Source: Jupiter Research

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