DIGITAL MARKETING - A Practical Approach
Alan Charlesworth
Chapter 6 – e-commerce
A caveat is that some B2B purchases are actually made in the same way as a retail
purchase that is ordered and paid for online using a (company) credit card or other
pre-arranged debit account. Such purchases are normally limited in both scope of
product (usually, repeat purchases for consumable goods) and value (accountants
like to control purchasing via invoices to be paid at a later date rather than credit
cards in the hands of employees). Effectively, these purchases are made in the same
way as retail sales, with an example of such outlets being Screwfix, which promotes
itself as the UK’s number 1 trade catalogue but operates as a retailer and welcomes
non-trade customers. Non-consumable B2B products and services are for the most
part bespoke in nature and
pricing and so some negotiation takes place before contracts are signed. Websites
deliver-ing e-commerce services can be divided into two main
categories:
1. Pure-play – where the organization trades online only. In this case, the online
sale is the be all and end all of the site’s objectives. The site’s design and content
must
reflect this.
2. Multi-channel (sometimes called bricks and clicks) – where the firm sells
goods both offline (bricks) and online (clicks). Although online sales are important to
such an organization, they are not the only source of sales income. However, the
website can also act as a sales lead generator for the offline element of the business.
Niche sellers
If the established offline retailers were slow to react to the digital age, there was one
group who were swift to recognize the opportunity presented by the Internet. I have
classified this group as micro retailers, and they tend to service specialist markets,
withniche products. Such retailers may or may not have a physical retail presence,
but are smaller businesses than both the pure-play and the multi-channel companies
described above. It is worthwhile considering the role that the Internet has played on
the development of micro sellers and niche markets in the B2C environment.
Click-and-collect
Although it was towards the end of the century’s first decade that click-and-collect
grew in popularity, its potential had been recognized by some retailers more than ten
years earlier. However, these were mainly large department stores that catered for a
local market for whom visiting the physical store was not a problem. What these
shops discovered was something that has become the foundation for many
traditional retail brands’ acceptance and promotion of click-and-collect. That is, that
, when customers visit the shop to collect their ordered goods, they are very likely to
make other purchases while they are there. In other words, the sale of one (or some)
items online is actually a form of associated or up-selling; buying a tie to go with the
online-purchased shirt, for example, or a bottle of wine to complement that ready
meal. Or is the online sale an inducement for the customer to visit the shop – and so
increase footfall – in the same way as posters in the window or ads on television?
Reserve-and-collect
A close relative to click-and-collect, but one that is potentially more lucrative for
multi-channel retailers is reserve-and-collect. This is where customers order rather
than buy a product online – they go through a similar checkout procedure, but
without making a payment. This means that consumers come into a physical store
with an order that still requires payment – and so they are more inclined to make
additional purchases once in the physical shop. Furthermore, research by Vanson
Bourne (vansonbourne.com) found that UK buyers were keen to use such a method
of buying.
For the company that actually carries stock, the same issues of stock control that
impact offline apply equally online. However, with regard to out-of-stock (OoS)
products, there are a number of issues unique to the online sales environment. These
include:
● In an offline store, the salesperson can direct customers to substitute
products or the customer – having made the effort to visit the store – will look for
alternatives. Online, however, in one click of their mouse or touch of the screen,
consumers can easily switch to another website which has the goods in stock.
● Online, it is easy to withdraw a product from sale or post a temporary out of
stock notice – preferably with an indication of when it will be available again.
Offline, nothing looks worse than empty shelves.
● If the OoS is temporary (e.g. a day or two), the customer need never know if
shipping/delivery time is outside that period.
Over the years, a number of initiatives have been tried to address the issue of
unattended and deferred home deliveries. These include basic arrangements such as
having the delivery driver phone the recipient an hour or so before their expected
time of arrival or more accurately predicted delivery times using GPS tracking. Other
more complex schemes have been the subject of numerous start-up business models
– all recognizing that any system that might be widely accepted will generate healthy
profits. The following have been, or are being, tried, but to date nothing has really
caught the public’s imagination:
● Redelivery services – the customer directs goods to a depot, from where
they collect it.
Alan Charlesworth
Chapter 6 – e-commerce
A caveat is that some B2B purchases are actually made in the same way as a retail
purchase that is ordered and paid for online using a (company) credit card or other
pre-arranged debit account. Such purchases are normally limited in both scope of
product (usually, repeat purchases for consumable goods) and value (accountants
like to control purchasing via invoices to be paid at a later date rather than credit
cards in the hands of employees). Effectively, these purchases are made in the same
way as retail sales, with an example of such outlets being Screwfix, which promotes
itself as the UK’s number 1 trade catalogue but operates as a retailer and welcomes
non-trade customers. Non-consumable B2B products and services are for the most
part bespoke in nature and
pricing and so some negotiation takes place before contracts are signed. Websites
deliver-ing e-commerce services can be divided into two main
categories:
1. Pure-play – where the organization trades online only. In this case, the online
sale is the be all and end all of the site’s objectives. The site’s design and content
must
reflect this.
2. Multi-channel (sometimes called bricks and clicks) – where the firm sells
goods both offline (bricks) and online (clicks). Although online sales are important to
such an organization, they are not the only source of sales income. However, the
website can also act as a sales lead generator for the offline element of the business.
Niche sellers
If the established offline retailers were slow to react to the digital age, there was one
group who were swift to recognize the opportunity presented by the Internet. I have
classified this group as micro retailers, and they tend to service specialist markets,
withniche products. Such retailers may or may not have a physical retail presence,
but are smaller businesses than both the pure-play and the multi-channel companies
described above. It is worthwhile considering the role that the Internet has played on
the development of micro sellers and niche markets in the B2C environment.
Click-and-collect
Although it was towards the end of the century’s first decade that click-and-collect
grew in popularity, its potential had been recognized by some retailers more than ten
years earlier. However, these were mainly large department stores that catered for a
local market for whom visiting the physical store was not a problem. What these
shops discovered was something that has become the foundation for many
traditional retail brands’ acceptance and promotion of click-and-collect. That is, that
, when customers visit the shop to collect their ordered goods, they are very likely to
make other purchases while they are there. In other words, the sale of one (or some)
items online is actually a form of associated or up-selling; buying a tie to go with the
online-purchased shirt, for example, or a bottle of wine to complement that ready
meal. Or is the online sale an inducement for the customer to visit the shop – and so
increase footfall – in the same way as posters in the window or ads on television?
Reserve-and-collect
A close relative to click-and-collect, but one that is potentially more lucrative for
multi-channel retailers is reserve-and-collect. This is where customers order rather
than buy a product online – they go through a similar checkout procedure, but
without making a payment. This means that consumers come into a physical store
with an order that still requires payment – and so they are more inclined to make
additional purchases once in the physical shop. Furthermore, research by Vanson
Bourne (vansonbourne.com) found that UK buyers were keen to use such a method
of buying.
For the company that actually carries stock, the same issues of stock control that
impact offline apply equally online. However, with regard to out-of-stock (OoS)
products, there are a number of issues unique to the online sales environment. These
include:
● In an offline store, the salesperson can direct customers to substitute
products or the customer – having made the effort to visit the store – will look for
alternatives. Online, however, in one click of their mouse or touch of the screen,
consumers can easily switch to another website which has the goods in stock.
● Online, it is easy to withdraw a product from sale or post a temporary out of
stock notice – preferably with an indication of when it will be available again.
Offline, nothing looks worse than empty shelves.
● If the OoS is temporary (e.g. a day or two), the customer need never know if
shipping/delivery time is outside that period.
Over the years, a number of initiatives have been tried to address the issue of
unattended and deferred home deliveries. These include basic arrangements such as
having the delivery driver phone the recipient an hour or so before their expected
time of arrival or more accurately predicted delivery times using GPS tracking. Other
more complex schemes have been the subject of numerous start-up business models
– all recognizing that any system that might be widely accepted will generate healthy
profits. The following have been, or are being, tried, but to date nothing has really
caught the public’s imagination:
● Redelivery services – the customer directs goods to a depot, from where
they collect it.
