Mobile Commerce Chapter 9

role of online channels

• target more customers

• sell more products to the same customer pool

• better service customers

• more traffic to online store form online channel

webroom effect

The phenomenon where customers research products online before purchasing them in physical stores, enhancing their shopping experience.

online retail business models

• virtual merchants

• omnichannel merchants

• manufacturer direct

• catalog merchants

virtual merchants 

single channel ecommerce firms that generate almost all revenue from online sales; amazon, shein

challenges of virtual merchants

• building business and brand name quickly

• low barriers to entry invite competition

• substantial costs to build and maintain web presence

• steep learning curve

omnichannel merchants

have a network of physical stores as primary retail channel but also have online operations. They integrate various sales channels to enhance customer experience. walmart, best buy, staples

challenges of omnichannel. merchants

• high cost of physical buildings and staff

• need to coordinate prices across channels

• need to develop methods for handling cross channel operations

• building credible e commerce presence 

negative spillover effect

occurs when poor performance or issues in one sales channel adversely affect customer perceptions and sales in another channel.

substitution effect

occurs when consumers replace one product with another due to changes in price or availability, impacting sales across different channels.

omnichannel contagion effect

refers to the phenomenon where positive or negative experiences in one sales channel influence customer behavior and perceptions across other channels.

contingency effect

occurs when consumer behavior is influenced by unexpected changes or circumstances in one channel, affecting their decisions in others.

mobile app effect

describes how the use of mobile applications can enhance customer engagement and influence purchasing behavior across different channels.

omnichannel store closure strategy

• anticipate wilder sales decline beyond closed location

• targeted mobile app communication to redirect affect customers

manufacturer direct

single or multichannel manufacturers who sell to consumers online without intervention of intermediaries ex. apple. 

challenges of manufacturer direct

• switching from supply push model to demand pull model

• developing credible ecommerce presence

• channel conflict 

supply push model

A retail strategy where products are pushed through the supply chain to retailers and consumers based on forecasted demand, rather than actual sales data.

demand pull model

A retail strategy that focuses on meeting consumer demand by aligning production and inventory with actual sales patterns, rather than relying on forecasts.

channel conflicts

Disputes among distribution channels due to differing objectives or interests.

how can manufactuers reduce channel conflict

fostering better communication among channels, aligning their goals with those of the distributors, and implementing consistent pricing strategies across all sales platforms.

average retailers

decrease assortment, increase price

billboard effect

A marketing phenomenon where a firm's advertising in one channel increases sales in another, often by creating brand awareness.

large retailers

bill board effect

multichannel retailer

increase assortment and price

specialist retailer

increase assortment decrease price

can crombugge takeways - retailers

• large multichannel retailers can leverage brand exposure from the manufactuers site to attract traffic

• smaller retailers shuld differentiate assortments or focus on complemetary brands instead of competing head on

• price and assortment coordination with manufacturers is key to preventing unnecesary value destruction

van crombugge takeways - manufacturer

• expect conflict and heterogeneity for direct channel entry

• cooporate wil large and multichannel retailers while offering support

• communicate billboard effect

catalog merchants

established companies that have a national offline catalog operation as their largest retail channel, but who also have online capabilities. Canadian tire, hudsons bay

challenges of catalog merchants

• high printing and mailing costs'

• need to leverage existing assets and competencies to new technology environment

• need to develop cross channel operations 

• building credible ecommerce presence

online services

• financial and banking

• brokerage

• mortgage and lending services

• insurance

• real estate

• travel

• job recruitment and career

• on demand service companies

online financial services

e commerce has transformed banking and financial services, most online consumers now use online financial services 

covid accelerated usage 

consumer behaviour

people expect fast, conveneient, mobile first services

FIN Tech

companies using technology to deliver financial services differently

• mobile payments

• crowdfunding

• roboadvisors

why fintech matters

startups disrupt tradtional banks by offering cheaper, faster, easier serviecs. traditional banks respond by adopting new technologies themselves 

drivers of fintech adoption

• ease of use and trust

• perceived risk stops adoption unless reduced by transparency and regulation

• social influence matters, especially among younger users 

Online Banking

national banks dominate online banking market share

• 80% of adults use online banking

• mobile banking adoption is highest among millennials and gen z

• covid 19 fostered accelerated adoption

Online brokerage

platforms that allow users to buy and sell stocks, efts, mutual funds and crypto. EX wealthsimple

online mortgage and lending services

market is dominated by traditional mortgage vendors, online financial firms and large online banks

why growth of online mortgages is slower

• mortgages are complex leading to longer decision making process

• strict regulations and compliance requirements

• consumers need high trust before borrowing large amounts

online insurance services

• mostly used for research and comparison, most purchases still happen offline

Insuretech

tech driven startups using big data and ai, ie lemonade and hippo, reduce administrative cost n

Online real estate services

less reliance on agents, with tools ike loan calculators, research data and virtual tours 

limitations of online real estate services

• actual property transactions still occur online 

• industry structure hasnt radically changes despite more information

Online travel services

more convenient, ability to compare price and browse selections any time

fake reveiws and their consequences

high qaulity sellers have no incentive to fake reveiws, low qaulity sellers dine fake reveiws to costly to sustain

online job recruitment and career services

faster and more efficient, lower hiring costs, can widely distribute resumes

on demand service companies

platforms enabling peer to peer sharing of rescourc’s or labout; uber, airbnb

success factors on on demand services

• lower costs than traditional

• use of customer reviews

• convenient mobile apps