Virtual Communities

1
Virtual Communities

• Virtual community is a network of members sharing
  common interests that interact with each other
  electronically.
• Examples
• IVillage Women
• Pricegrabbers.com Epinion.comproduct
  comparisons and reviews
• Flypaper.com talks about fashion
• ThisNext.com, Kaboodle.com, Wists.com,
  StyleHive.com social shopping that combines
  shopping and social networking

2
(No Transcript)
3
Virtual communities

• Source. Future Trends in Microelectronics and IT,
  IBM Research from http//www.ibm.com

4
What People Buy Over the Internet

• Travel
• PC/Electronics/Toys
• Books/Software
• Apparel
• Home Garden
• Jewelry Watches

5
What Merchandise Will Be Sold Successfully
Through Electronic Channel?

• Look and See attributes vs. Touch and Feel
  attributes (?)
• Degree to which information can be used to
  predict satisfaction prior to purchase
• Gifts
• Services
• Might not need to Touch and Feel
• Touch and Feel not useful - Gifts
• Superior presentation of Touch and Feel
• Branding

6
How to Sell Over the Internetand eliminate
returns
How Can the Electronic Channel Overcome
Limitations?

• Branding
• National brands provide a consistent experience
  for customers to overcome not being able to touch
  and feel.

The McGraw-Hill Companies, Inc./Jill Braaten,
photographer
7
How Can the Electronic Channel Overcome
Limitations?

• Use technology to convert touch and feel
  information into look and see information
• 3-D Imaging
• Zoom Technology
• Live Chat
• 360 Degree Viewing
• Virtual Models
• conversion rates of consumers who buy the
  product after viewing it

Technology increases conversion rates
8
My Virtual Model Try It On

• Link to My Virtual Model H M

9
How Can the Electronic Channel Overcome
Limitations?
The Electronic Channel Provides Superior Benefits
for

• GIFTS
• Saves time
• Saves effort in packing
• Saves effort in delivery
• SERVICES
• No Shipping Problems
• Examples
• Travel websites
• Banking
• Newspapers

Janis Christie/Getty Images
10
How Can the Electronic Channel Overcome
Limitations?

• Use the Internet to Improve Multichannel shopping
  experience
• Instantaneous and easy data collection on how and
  why customers shop, and how theyre dissatisfied
  or satisfied with their electronic shopping
• Store and website layout design tailored to
  customers buying habits

11
Perceived Risks of Electronic Shopping
Don Farrall/Getty Images

• Security of credit card transaction security
  problems have not arisen in actual usage
• Potential privacy violations consumers are
  concerned about retailers collecting their
  personal information

12
Evolution Toward Multichannel Retailing

• Traditional store-based and catalog retailers are
  placing more emphasis on their electronic
  channels and evolving into multichannel
  retailers.
• E-channel gives a way to overcome limitations of
  existing format
• With electronic channel, retailers can reach out
  to new markets
• Builds share of wallet
• E-channel enables retailers to give insights into
  customers shopping behaviors

13
Recreation Equipment Inc. (REI) A Leader in
Multichannel Retailing
14
Overcoming Existing Format

• Size of the store is the greatest constraint for
  stores
• By blending store with internet-enabled kiosks,
  retailers expand assortments offered to shoppers.
• Store based retailers face inconsistent execution
• Kiosks can be used by both sales associates and
  customers for up-to-date product information,
  stock information and price reduction on
  clearances.

15
Percentage of Cross Channel Shoppers
16
Capabilities for Multi-Channel Retailing

• To effectively operate and realize the
  benefits of multi-channel retailing, firms need
  to have skills in
• Developing assortments and managing inventory
• Managing employees in distant locations
• Distribute merchandise efficiently from DCs to
  stores
• Present merchandise in catalogs
• Present merchandise on websites
• Process orders electronically
• Efficient distribution of individual orders to
  homes
• Operate information systems for all channels

17
Who Has These Critical Resources?Capabilities
for Multi-Channel Retailing
18
Resources Possessed by Different Firm Types
19
Resources Possessed by Different Firm Types
20
Resources Possessed by Different Firm Types
21
Resources Possessed by Different Firm Types