Ebiz Individual Assignment-1
Full name: He Xinqi(Sn:150311416)
Email: HXQ0624@gmail.com
Class-code: L42
Submitted on: 23/10/2015
Consumers are increasingly buying physical goods online.
a) Why? (60%)
a) Why? (60%)
With the
internet and technology development, there have more and more people prefer to
shop goods online than go to physical shops. And here are several reasons about
why people are increasingly buying physical goods online.
Convenience
As long as there
have internet, people can through their electronic products such as mobile
phone or laptop to shopping online. To use internet shopping online, there have
no time limited for customers, they can surf online shopping website anytime
and anywhere, online shopping helps a lot of customers who need to work on daytime
and who do not have enough time to go to shopping center to buy physical goods
easier and also save a lot of time for them. And online shop always provides
delivery services, so that customers no need to carry by themselves, and it
also make us life more convenience than before.
Lower cost
For suppliers,
there is easy for them to open an online shop on internet, and online shops
help them to save lots of operating cost, such as rent cost of buildings, less
salary they need to pay for their employees and less utilities cost.
And for
customers, they do not need to drive or take bus to shopping center, online
shopping can help them to reduce their travel cost. And customers can get their
goods on a cheaper price through online shopping.
Richness of
content
Customers can
get more than 100 million results when they key in what they want to search on
internet, so customers can read some information of a product first, and they
can make choice weather they should buy or not after research, so that incase
customer’s emotional consuming.
Wide range of
choices
And there have
lots choices for customers, whenever customer open a good website, there have
some relative goods display which is similar to the good that this customer are
looking, so that customers can through these link to compare similar good, and
it eliminating customers from some unnecessary hassle.
Customization
Today, customers
can through website to communicate with sellers directly, and show their wishes
to seller and seller will based on their customer’s required to customize
personal products for their customer.
MPR
Market process
reengineering is an innovation way of re-organizing market process,
capitalizing on “spaces of flow”.
Disintermediation
Disintermediation
is the removal of intermediaries such as distributors or brokers that formerly
linked a company to its customers. Before B2C appeared, the traditional
structure is that product from manufacture to wholesaler, then from middlemen
to retailers and finally to customers. Nowadays, internet can cause
disintermediation within the marketplace as an organization’s channel partners
such as wholesalers or retailers are bypassed. And internet also can as a new
platform with a different purpose are formed to help bring customers and
sellers together in a virtual marketplace.
Re-intermediation
Re-intermediation
is the creation of new intermediaries between customers and suppliers providing
services such as supplier search and product evaluation. For instants, Zuji as
an airline information platform, it shows all the airline companies prices for
customers, so that customers could compare tickets prices between different
airlines, and customers can buy a ticket at a lower price than they buy from
travel agents.
Infomediaries
Infomediaries is
relieve information overload, it is a new news platform, such as Trivago. It combines
a lot of hotels’ information, like price and place, so that customers can
easily go through and find which one is suitable for them.
b) How can conventional shops respond to such threats?
Discuss with relevant examples (40%) (2015)
Since 1999,
AliBaba has been became the largest C2C and B2C e-market in China and it total
sales revenue were beyond the total of Amazon and eBay in 2012.
And with the
emergence of AliBaba and Amazon, these e-business really bring a lot of change
to the world and people’s shopping behavior. In the past times, people would
like to go to retails or exclusive shop, but with the rise of internet, the
macro-environment is changing, people prefer to shop online rather than go to
physical shops, so retails and exclusive shops face a lot of competition
pressures, they need against with Amazon and AliBaba for example, so how could
they respond to such threats?
First of all, these
traditional shop need reposition. For many traditional companies, they have
brand and stable customers’ resources advantages on offline, so these tradition
companies can take these advantages as their online site’s foundation, and
through these advantages try to seek complementary advantages between online
and offline. And traditional companies also can sell their stocks by online
website, they can sell their stocks online at a cheap price, and this action
will not affect the image of their offline exclusive shop.
And second one
is physical stores can through adjust their structure of product， like cosmetic or luxury product which is customers to prefer to buy
at physical store than online shop. Otherwise, most of products are inclined to
sell glut of inventories or stocks, so physical stores should pay attention to new
products update, follow the newest tide of the world, and launch the newest
edition than online shop.
Physical stores
also need to improve their service, because most of customers are not only seek
they can buy anything they want immediately, the experiences when they are
shopping also important for them, so that physical stores can prove
customization service to their customers, and it will bring customers a different
shopping experience, and this is a reason that decide customers whether want to
come to this shop next time. Or provide delivery service, and it could make
customers feel relax in this shopping experience, because they not need to
carry goods by themselves.
And what is
more, physical stores should make differentiation marketing time. Physical
stores should avoid some special days such as 11.11 or 12.12 these days,
because in these days online shops such as Taobao and Jing Dong, they will have
a craze discount day, so in these special days customers will focus on shopping
in internet and spent less time to go to physical stores. And physical stores
can have more discount or promotion in some traditional festivals such as
Christmas or Spring Festival.
In total, for
those conventional shops, the most useful suggestion is join the big internet
party, and combine internet and extranet together, use their brand advantage to
attract more customers, and this way will help to respond the pressure from
internet shops.
Reference
《E-BUSINESS &
E-COMMERCE MANAGEMENT》Chapter 2
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