M03_TURB9235_03_SE_WC03.QXD 8/13/10 8:11 PM Page W3.1 ONLINE FILE W3.1 SOME CURRENT TRENDS IN B2C EC Some important trends in B2C EC need to be noted at this point. First, many offline transactions are now heavily influenced by research conducted online, with approximately 85 percent of online shoppers now reporting that they used the Internet to research and influence their offline shopping choices (Jupitermedia.com 2006). Furthermore, it is estimated that by 2010, the Internet will influence approximately 50 percent of all retail sales, a significant increase over just 27 percent of all sales in 2005 (Jupitermedia.com 2006). Thus, multichannel retailers, those that have a physical presence and an online presence, seem destined to be the winners. They support the convenience of online research and sales, offer excellent order fulfillment and delivery if the sale is completed online, and enable customers to touch and feel and try on an item in a physical store. The need and opportunity to integrate offerings across all channels and to seek incentives for cross-channel sales is seen as an important development in the future (Mulpuru 2006). This becomes extremely important as the number of online shoppers reaches saturation, and successful e-tailers will be those who are able to increase the spending of existing buyers rather than purely focusing on attracting new buyers (Jupitermedia.com 2006). Another trend in B2C is the use of rich media in online advertising. For example, virtual reality is used in an online mall (Lepouras and Vassilakis 2006). Scene7.com is a leading vendor in the area. Finally, the use of cell phones to shop online is increasing rapidly. For example, in Japan about 25 percent of all B2C is done from cell phones (see Online File W3.1.1). M03_TURB9235_03_SE_WC03.QXD 8/13/10 8:11 PM Page W3.2 W3.2 Part 2: Internet Consumer Retailing Online File W3.1.1 Mobile B2C Shopping in Japan Although EC in Japan is only 20 percent of that in the United States, m-commerce in Japan is growing exponentially and now represents the largest amount of m-commerce sales in the world. Over 60 million Japanese are using their cell phones to buy while riding the trains—even their train tickets. Such shopping is popular with busy single parents, executives, and teenagers (who are doing over 80 percent of their EC shopping from cell phones). Cell phones allow direct communication with consumers; they are the ultimate one-to-one channel (see Chapter 4). Traditional retailers in Japan, such as 7-Eleven and I Holding Company, have been losing millions of customers to Web shopping companies such as Rakuten Inc. A group of convenience stores and 7-Eleven Japan Co. have set up 7dream.com, offering online services for music, travel, tickets, gifts, and other goods to its 8,000 7-Eleven stores in Japan. Meanwhile pure m-commerce operators such as Xavel Inc. (branding.jp) are growing rapidly, forcing traditional retailers, such as Marui department stores, to expand their e-commerce to include m-commerce. A major contributor to the success of m-commerce is the spread of 3G high-speed mobile phone services that are offered on a flat-fee (e.g., monthly) basis. According to the Daiwa Institute of Research (reported by Izumi 2006), impulse shopping accounts for most of the purchases that are done on mobile phones, but only if the shoppers are using a flat-fee-based service. Sources: Compiled from Izumi (2006) and PBS.org (2006). REFERENCES FOR ONLINE FILE W3.1 Izumi, S. “Mobile Commerce Seen as Retailer’s Next Lepouras, G., and C. Vassilakis. “Adaptive Virtual Big Thing.” Japan Times, September 20, 2006. Reality Shopping Malls,” in Khosrow-Pour (2006). Jupitermedia.com. “JupiterResearch Forecasts Online Mulpuru, S. “2005 U.S. eCommerce: The Year in Retail Spending Will Reach $144 Billion in 2010, a Review.” Forrester.com. forrester.com/Research/ CAGR of 12% from 2005.” June 6, 2006. Document/Excerpt/0,7211,38809,00.html jupitermedia.com/corporate/releases/06.02.06- (accessed February 2009). newjupresearch.html (accessed February 2009). PBS.org. “B2B Japan.” Nightly Business Report, January 9, Khosrow-Pour, M. (Ed.). Encyclopedia of E-Commerce, 2006. pbs.org/nbr/site/research/educators/060106_ E-Government, and Mobile Commerce. Hershey, PA: 04b (accessed February 2009). Idea Group Reference, 2006. ONLINE FILE W3.2 Application Case CATTOYS.COM, A SPECIALTY E-TAILER CatToys.com is a specialized e-tail site that sells cat Marketing is mostly accomplished through search engines toys. Its Web site (cattoys.com) is designed to appeal to and an affiliate program in which any cat lover can par- cat enthusiasts, with cat images everywhere and informal ticipate. The site has no membership or personalization typefaces to put buyers at ease. It has no banner ads, is features. easy to navigate, is updated weekly, and displays CatToys.com hosts its site through Yahoo!’s products in clear categories. The company’s retail prices Merchant Solutions (smallbusiness.yahoo.com/ are comparable with those of other pet stores and are ecommerce). This allows it to use sophisticated tech- kept low through aggressive cost control. Buyers can nologies (e.g., cookies for the shopping-cart process and receive discounts by donating cat toys to animal shelters. payment security) and have access to a large audience. (continued) M03_TURB9235_03_SE_WC03.QXD 8/13/10 8:11 PM Page W3.3 Chapter Three: Retailing in Electronic Commerce: Products and Services W3.3 ONLINE FILE W3.2 (continued) Because Yahoo! takes care of the Web site technology, Questions CatToys.com can concentrate on its core competency— selecting the right cat toys and marketing them effec- 1. Visit cattoys.com and examine the company’s tively. CatToys.com is an example of a low-volume revenue model. specialized store that attracts people with specific 2. Examine the relationship between cattoys.com and shopping needs. dogtoys.com. These two URLs are owned by the same A sister company is dogtoys.com, which offers company. Why do they have separate URLs for each similar services including gift certificates and the product, whereas Amazon.com is adding more ability to earn points. Both companies are evaluated products under one URL? at epinions.com. REFERENCES FOR ONLINE FILE W3.2 cattoys.com (accessed November 2009). embracepetcommunity.com (accessed November dogtoys.com (accessed November 2009). 2009). ONLINE FILE W3.3 Application Case GATEWAY’S “BOOK-IT-IN-THE-BOX” E-TRAVEL SOLUTIONS Gateway, Inc., a Fortune 500 computer manufacturing The results have been dramatic. The company company that employs 21,000 people globally, with sales projected $1.2 million in savings over the first 12 months and support centers on four continents, focuses on meet- of usage. A critical part of installing new software was ing clients’ technological needs through strong customer gaining employee acceptance. This can be especially tricky relationships. The company was purchased by Acer, a when it comes to corporate travel, because employees fear Taiwanese multinational electronics manufacturer in that they may be forced into uncomfortable or unfamiliar August 2007. travel habits. Gateway phased in the new program over a In 2002, the company’s travel expenses exceeded month and was successful in achieving employees’ behav- $10 million and were growing. Gateway took a proactive ioral change due to a number of factors: careful communi- step to address these operating costs by implementing an cation about the initiative, guiding employees through the Internet-based travel management service for its domestic process, and responding to employees’ questions. Teams travelers. With solutions from e-Travel (e-travel.com), from e-Travel and Gateway worked together to deliver a Gateway implemented the “Book-It-in-the-Box” travel pro- variety of useful tools to benefit employees, including gram. With this application, Gateway employees can plan, in-person and Web-based training sessions and placing a book, and purchase complete travel itineraries, including air, Book-It-in-the-Box icon on computer desktops company- car, rail, and hotel, using a standard Web browser. Also, the wide. E-Travel’s reservations were integrated with the company can incorporate the elements of its travel program, global distributions system of Gateway’s travel agency, including travel policies, preferred suppliers, and negotiated Rosenbluth International’s Senior-Level Management’s rates, into an Internet-based self-service system for travel Acceptance, which further validated the use of the planning and purchasing. program. Future initiatives will bring even more travel (continued) M03_TURB9235_03_SE_WC03.QXD 8/13/10 8:11 PM Page W3.4 W3.4 Part 2: Internet Consumer Retailing ONLINE FILE W3.3 (continued) functions online, including full integration with the travel Questions agency’s technology, rollout of e-Travel’s pretrip approval function, international bookings, and wireless access. 1. What category of e-commerce is this? E-Travel Mobile will give traveling employees the ability to 2. Identify the areas in which cost savings have mate- update existing travel plans, book new ones, and obtain rialized for Gateway. flight status. The wireless program will help Gateway 3. How was employee participation achieved? achieve its goal of 100 percent agent-free travel bookings. REFERENCES FOR ONLINE FILE W3.3 e-travel.com (accessed February 2009). gateway.com (accessed February 2009). ONLINE FILE W3.4 Application Case THE EUROPEAN JOB MOBILITY PORTAL (EURES CV-SEARCH) AND XING.COM EURES CV-Search (ec.europa.eu/eures) is an electronic ◗ Job-related news meeting point for employers and job seekers. Job seekers ◗ Personalized pages and accounts for applicants and can use the site to introduce themselves to employers; employers employers can use the site to find and contact promising ◗ Employment statistics candidates.