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Made in Italy.
Made in Italy Brand.
Made in Italy is a merchandise mark indicating that a product is all planned, manufactured and packed in Italy, especially concerning the design, fashion, food, manufacturing, craftsmanship, and engineering industries.
Hist. Made in Italy,
Made in Italy brand has been used since 1980 to indicate the international uniqueness of Italy in four traditional industries: fashion, food, furniture and mechanical engineering (automobiles, industrial design, machineries and shipbuilding).
In Italian also known as "Four A", Abbigliamento (clothes), Agroalimentare (food), Arredamento (furniture) and Automobili (automobiles). Italian products have often been associated with quality, high specialization and
differentiation, elegance, and strong links to experienced and famous Italian industrial districts often connected with the concept of luxury. Since 1999, Made in Italy has begun to be protected by associations such as Istituto per la Tutela dei Produttori Italiani (Institute for the Protection of the Italian Manufacturers) and regulated by the Gucci company to the Italian government.
In recent times the merchandise mark Made in Italy has become decisive for Italian exports and so common worldwide to be often considered as a separate product category. In January 2014, Google Cultural Institute, in collaboration with the Italian government and the Italian Chamber of Commerce, launched an online project aimed to promote Made in Italy by using virtual showrooms about several famous Italian products.
In 2009, the Italian law (Law 135, September 25th, 2009 - Chamber of Deputies, Parliament of Italy) stated that only products totally made in Italy (planning, manufacturing and packaging) are allowed to use the labels Made in Italy, 100% Made in Italy, 100% Italia, tutto italiano in every language, with or without the flag of Italy. Each abuse is punished by the Italian law.
Compared with "Made in Germany"
('all essential manufacturing steps') and "Made in the USA" ('all or virtually all'), Italian regulation is more restrictive ('totally') in determining what qualifies for the use of the "Made in Italy" label.
Tod's / Illy espresso machine. / Artemide Alistro Lamp designed by Ernesto Gismondi. / Ferrari F12 Berlinetta; Ferrari is one of the most well-known brands in the world closely linked to Made in Italy / Jar of Nutella and many others
Economists and business analysts have identified five companies in particular whose names are closely associated with Made in Italy:
- Barilla - food company;
- Benetton - global fashion brand; / Ferrero - manufacturer of chocolate and other confectionery products;
- Indesit - home appliances; / Luxottica - the world's largest eyewear company.
- Alberto Fermani
- Bottega Veneta Breil
- Brunello Cucinelli Buccellati
- Calzedonia Canali Cesare Attolini
- Cesare Paciotti
- Corneliani others
- Dolce & Gabbana
- E. Marinella
- Emilio Pucci
- Franklin & Marshall
- Gas Jeans
- Harmont & Blaine
- Loro Piana
- Max Mara
- Miu Miu Moncler
- Officine Panerai
- Pal Zileri
- Persol Peg-Perego Piquadro
- Roberto Botticelli
- Roberto Cavalli
- Salvatore Ferragamo
Shopify a Profile(s)
Shopify Inc. is a Canadian e-commerce company headquartered in Ottawa, Ontario. It is also the name of its proprietary e-commerce platform for online stores and retail point-of-sale systems.
Shopify offers online retailers a suite of services "including payments, marketing, shipping and customer engagement tools to simplify the process of running an online store for small merchants.”
The company reported that it had more than 800,000 businesses in approximately 175 countries using its platform as of December 31, 2018, with total gross merchandise volume exceeding $41.1 billion for 2018. Results are anticipated to be higher for forthcoming years.
History of Shopify
Shopify was founded in 2004 by Tobias Lütke, Daniel Weinand, and Scott Lake after attempting to open Snowdevil - an online store for snowboarding equipment. Dissatisfied with the existing e-commerce products on the market, Lütke, a computer programmer by trade, instead built his own. Lütke used the open source web application framework Ruby on Rails to build Snowdevil's online store and launched it after only two months of development.
The Snowdevil founders launched the platform as Shopify in June 2006.
In June 2009, Shopify launched an application programming interface (API) platform and App Store. The API allows developers to create applications for Shopify online stores and then sell them on the Shopify App Store.
In April 2010, Shopify launched a free mobile app on the Apple App Store. The app lets Shopify store owners view and manage their stores from iOS mobile devices.] In 2010, Shopify started its Build-A-Business competition, in which participants create a business using its commerce platform. The winners of the competition received cash prizes and mentorship from entrepreneurs, such as Richard Branson, Eric Ries and others. Shopify was named Ottawa’s Fastest Growing Company by the Ottawa Business Journal in 2010.
The company received $7 million from an initial series A round of venture capital financing in December 2010. Its Series B round raised $15 million in October 2011.
In February 2012, Shopify acquired Select Start Studios Inc ("S3"), a mobile software developer, along with 20 of the company's mobile engineers and designers.
In August 2013, Shopify acquired Jet Cooper, a 25-person design studio based in Toronto. In August 2013, Shopify announced the launch of Shopify Payments, which allowed merchants to accept credit cards without requiring a third party payment gateway. The company also announced the launch of an iPad-centric point of sale system. It uses an iPad to accept payments from debit and credit cards. The company received $100 million in Series C funding in December 2013.
By 2014, the platform hosted approximately 120,000 online retailers, and was listed as #3 in Deloitte’s Fast50 in Canada, as well as #7 in Deloitte’s Fast 500 of North America. Shopify earned $105 million in revenue in 2014, twice as much as it raised the previous year.
On April 14, 2015, Shopify filed for an initial public offering (IPO) on the New York Stock Exchange and Toronto Stock Exchange under the symbols "SHOP" and "SH" respectively.
Shopify went public on May 21, 2015, and in its debut on the New York Stock Exchange, started trading at $28, more than 60% higher than its USD$17 offering price, with its IPO raising more than $131 million.
In September 2015, Amazon.com announced it would be closing its Amazon Webstore service for merchants, and had selected Shopify as the preferred migration provider;Shopify's shares jumped more than 20% upon the news.
On October 3, 2016, Shopify acquired Boltmade. In November 2016, Shopify partnered with Paystack which allowed Nigerian online retailers to accept payments from customers around the world. On November 22, 2016, Shopify launched Frenzy, a mobile app that improves flash sales. On December 5, 2016, Shopify acquired Toronto-based mobile product development studio Tiny Hearts. The Tiny Hearts building has been turned into a Shopify research and development office.
In January 2017, Shopify announced integration with Amazon that would allow merchants to sell on Amazon from their Shopify stores. Shopify's stock rose almost 10% upon this announcement.
In April 2017, Shopify introduced a Bluetooth enabled debit and credit card reader for brick and mortar retail purchases. The company has since released additional technology for brick and mortar retailers, including a point-of-sale system with a Dock and Retail Stand similar to that offered by Square, and a tappable chip card reader.
In September 2018, Shopify announces plans to locate thousands of employees in Toronto's King West neighborhood in 2022 as part of the "The Well" complex, jointly owned by Allied Properties REIT and RioCan REIT.
Online cannabis sales in Ontario used Shopify's software when the drug was legalized in October 2018. Shopify's software will also be used for in-person cannabis sales in Ontario when it is legalized in 2019. In January 2019, Shopify announced the launch of Shopify Studios, a full-service television and film content and production house.
On March 22, 2019, Shopify and email marketing platform Mailchimp ended an integration agreement over disputes involving customer privacy and data collection. In April 2019, Shopify announced an integration with Snapchat to allow Shopify merchants to buy and manage Snapchat Story ads directly on the Shopify platform. The company had previously secured similar integration partnerships with Facebook and Google.
In May 2019, Shopify acquired Handshake, a business-to-business e-commerce platform for wholesale goods. The Handshake team was integrated into Shopify Plus, and Handshake founder and CEO Glen Coates was made Director of Product for Shopify Plus.
According to a media release, Shopify is venturing out of cyberspace with a permanent location in LA where business owners can come to both get advice from staff, and also to connect with other members of the entrepreneurial community.
In their new locale, aspiring entrepreneurs can take educational classes and get involved with a workshop to further their careers. In addition, events will be held monthly to showcase new products, provide networking opportunities, and host panels to discuss the ups and downs of independent business ownership.
In 2017, the #DeleteShopify called for a boycott of Shopify for allowing Breitbart News to host a shop on its platform. Shopify's CEO, responded to the criticism, saying "refusing to do business with the site would constitute a violation of free speech". In October 2017, activist short-seller Andrew Left released a detailed report which described the e-commerce platform as a "get-rich-quick" scheme that is against Federal Trade Commission regulations.
The day the report was released, the stock plunged more than 11%. The main question he posed was "Outside the roughly 50,000 verifiable merchants working with Shopify, who are the other 450,000 the company says it has?" Third-party marketing tactics are expected to be improved going forward.
From Wikipedia the free encyclopedia
From Wikipedia, the free encyclopedia
Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser.
Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine, which displays the same product's availability and pricing at different e-retailers. As of 2016, customers can shop online using a range of different computers and devices, including desktop computers, laptops, tablet computers plus smartphones.
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MADE IN ITALY
An online shop evokes the physical analogy of buying products or services at a regular "bricks-and-mortar" retailer or shopping center; the process is called business-to-consumer (B2C) online shopping. When an online store is set up to enable businesses to buy from another businesses, the process is called business-to-business (B2B) online shopping. A typical online store enables the customer to browse the firm's range of products and services, view photos or images of the products, along with information about the product specifications, features and prices.
Online stores usually enable shoppers to use "search" features to find specific models, brands or items. Online customers must have access to the Internet and a valid method of payment in order to complete a transaction, such as a credit card, an Interac-enabled debit card, or a service such as PayPal. For physical products (e.g., paperback books or clothes), the e-tailer ships the products to the customer; for digital products, such as digital audio files of songs or software, the e-tailer usually sends the file to the customer over the Internet. The largest of these online retailing corporations are Alibaba, Amazon.com, and eBay and others.
Alternative names for the activity are "e-tailing", a shortened form of "electronic retail" or "e-shopping", a shortened form of "electronic shopping". An online store may also be called an e-web-store, e-shop, e-store, Internet shop, web-shop, web-store, online store, online storefront and virtual store. Mobile commerce (or m-commerce) describes purchasing from an online retailer's mobile device-optimized website or software application ("app"). These websites or apps are designed to enable customers to browse through a companies' products and services on tablet computers and smartphones.
History: online shopping
One of the earliest forms of trade conducted online was IBM's online transaction processing (OLTP) developed in the 1960s and it allowed the processing of financial transactions in real-time. The computerized ticket reservation system developed for American Airlines called Semi-Automatic Business Research Environment (SABRE) was one of its applications. Here, computer terminals located in different travel agencies were linked to a large IBM mainframe computer, which processed transactions simultaneously and coordinated them so that all travel agents had access to the same information at the same time.
The emergence of online shopping as we know today developed with the emergence of the Internet. Initially, this platform only functioned as an advertising tool for companies, providing information about its products. It quickly moved on from this simple utility to actual online shopping transaction due to the development of interactive Web pages and secure transmissions. Specifically, the growth of the internet as a secure shopping channel has developed since 1994, with the first sales of Sting album 'Ten Summoner's Tales'.
Wine, chocolates, and flowers soon followed and were among the pioneering retail categories which fueled the growth of online shopping. Researchers found that having products that are appropriate for e-commerce was a key indicator of Internet success. Golf was also popular at the time as a platform.
Many of these products did well as they are generic products which shoppers did not need to touch and feel in order to buy. But also importantly, in the early days, there were few shoppers online and they were from a narrow segment: affluent, male, 30+.
Online shopping has come along way since these early days and -in the UK- accounts for significant percents (depending on product category as percentages can vary).
Growth in online shoppers amazing reports Google
As the revenues from online sales continued to grow significantly researchers identified different types of online shoppers, Rohm & Swaninathan identified four categories and named them "convenience shoppers, variety seekers, balanced buyers, and store-oriented shoppers".
They focused on shopping motivations and found that the variety of products available and the perceived convenience of the buying online experience were significant motivating factors. This was different for offline shoppers, who were more motivated by time saving and recreational motives.
Michael Aldrich was considered a pioneer of online shopping in the 1980s. His system connected a modified domestic TV to a real-time transaction processing computer via a domestic telephone line. He believed that videotex, the modified domestic TV technology - with a simple menu-driven human–computer interface, was a 'new, universally applicable, participative communication medium — the first since the invention of the telephone.'
This enabled 'closed' corporate information systems to be opened to 'outside' correspondents not just for transaction processing but also for e-messaging and information retrieval and dissemination, later known as e-business. His definition of the new mass communications medium as 'participative' was fundamentally different from the traditional definitions of mass communication and mass media and a precursor to the social networking on the Internet 25 years later.
In March 1980 he launched Redifon's Office Revolution, which allowed consumers, customers, agents, distributors, suppliers and service companies to be connected on-line to the corporate systems and allow business transactions to be completed electronically in real-time. During the 1980s he designed, manufactured, sold, installed, maintained and supported many online shopping systems, using videotex technology.
These systems which also provided voice response and handprint processing pre-date the Internet and the World Wide Web, the IBM PC, and Microsoft MS-DOS, and were installed mainly in the UK by large corporations.
The first World Wide Web server and browser, created by Tim Berners-Lee in 1989, opened for commercial use in 1991. Thereafter, subsequent technological innovations emerged in 1994: online banking, the opening of an online pizza shop by Pizza Hut, Netscape's SSL v2 encryption standard for secure data transfer, and Intershop's first online shopping system. The first secure retail transaction over the Web was either by NetMarket or Internet Shopping Network in 1994. Immediately after, Amazon.com launched its online shopping site in 1995 and eBay was also introduced in 1995.
Alibaba's sites Taobao and Tmall were launched in 2003 and 2008, respectively. Retailers are increasingly selling goods and services prior to availability through "pretail" for testing, building, and managing demand.
Statistics show that in 2012, Asia-Pacific increased their international sales over 30% giving them over $433 billion in revenue. That is a $69 billion difference between the U.S. revenue of $364.66 billion. It is estimated that Asia-Pacific will increase by another 30% in the year 2013 putting them ahead by more than one-third of all global ecommerce sales. The largest online shopping day in the world is Singles Day, with sales just in Alibaba's sites at US$9.3 billion in 2014.
Online customers must have access to the Internet and a valid method of payment in order to complete a transaction.
Generally, higher levels of education and personal income correspond to more favorable perceptions of shopping online. Increased exposure to technology also increases the probability of developing favorable attitudes towards new shopping channels.
Customer buying behaviour in the digital environment
The marketing around the digital environment, customer's buying behaviour may not be influenced and controlled by the brand and firm, when they make a buying decision that might concern the interactions with search engine, recommendations, online reviews and other information. With the quickly separate of the digital devices environment, people are more likely to use their mobile phones, computers, tablets and other digital devices to gather information. In other words, the digital environment has a growing effect on consumer's mind and buying behaviour. In an online shopping environment, interactive decision may have an influence on aid customer decision making. Each customer is becoming more interactive, and though online reviews customers can influence other potential buyers' behavior.
Subsequently, risk and trust would also are two important factors affecting people's' behavior in digital environments. Customer consider to switch between e-channels, because they are mainly influence by the comparison with offline shopping, involving growth of security, financial and performance-risks In other words, a customer shopping online that they may receive more risk than people shopping in stores.
There are three factors may influence people to do the buying decision, firstly, people cannot examine whether the product satisfy their needs and wants before they receive it. Secondly, customer may concern at after-sale services.
Finally, customer may be afraid that they cannot fully understand the language used in e-sales. Based on those factors customer perceive risk may as a significantly reason influence the online purchasing behaviour.
Online retailers has place much emphasis on customer trust aspect, trust is another way driving customer's behaviour in digital environment, which can depend on customer's attitude and expectation. Indeed, the company's products design or ideas can not met customer's expectations. Customer's purchase intension based on rational expectations, and additionally impacts on emotional trust.
Moreover, those expectations can be also establish on the product information and revision from others.
Product Selection and Choices
Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine. Once a particular product has been found on the website of the seller, most online retailers use shopping cart software to allow the consumer to accumulate multiple items and to adjust quantities, like filling a physical shopping cart or basket in a conventional store.
A "checkout" process follows (continuing the physical-store analogy) in which payment and delivery information is collected, if necessary. Some stores allow consumers to sign up for a permanent online account so that some or all of this information only needs to be entered once. The consumer often receives an e-mail confirmation once the transaction is complete. Less sophisticated stores may rely on consumers to phone or e-mail their orders (although full credit card numbers, expiry date, and Card Security Code, or bank account and routing number should not be accepted by e-mail, for reasons of security).
Payment Methods are vast
Online shoppers commonly use a credit card or a PayPal account in order to make payments. However, some systems enable users to create accounts and pay by alternative means, such as:
- Billing to mobile phone and landlines
- Cash on delivery (C.O.D.)
- Cheque/ Checks
- Debit cards
- Direct debit in many countries
- Electronic money of various types
- Gift cards vary greatly
- Postal money orders
- Wire transfer/delivery on payments
- Invoice, especially popular in some markets such as Switzerland
- Bitcoin or other cryptocurrencies which are expanding greatly
Some online shops will not accept international credit cards. Some require both the purchaser's billing and shipping address to be in the same country as the online shop's base of operation. Other online shops allow customers from any country to send gifts anywhere.
The financial part of a transaction may be processed in real time (e.g. letting the consumer know their credit card was declined before they log off), or may be done later as part of the fulfillment process.
Product delivery expanding
Once a payment has been accepted, the goods or services can be delivered in the following ways. For physical items:
- Shipping: The product is shipped to a customer-designated address. Retail package delivery is typically done by the public postal system or a retail courier such as FedEx, UPS, DHL, or TNT.
- Drop shipping: The order is passed to the manufacturer or third-party distributor, who then ships the item directly to the consumer, bypassing the retailer's physical location to save time, money, and space.
- In-store pick-up: The customer selects a local store using a locator software and picks up the delivered product at the selected location. This is the method often used in the bricks and clicks business model.
For digital items or tickets:
- Downloading/Digital distribution: The method often used for digital media products such as software, music, movies, or images.
- Printing out, provision of a code for, or e-mailing of such items as admission tickets and scrip (e.g., gift certificates and coupons). The tickets, codes, or coupons may be redeemed at the appropriate physical or online premises and their content reviewed to verify their eligibility (e.g., assurances that the right of admission or use is redeemed at the correct time and place, for the correct dollar amount, and for the correct number of uses).
- Will call, COBO (in Care Of Box Office), or "at the door" pickup: The patron picks up pre-purchased tickets for an event, such as a play, sporting event, or concert, either just before the event or in advance. With the onset of the Internet and e-commerce sites, which allow customers to buy tickets online, the popularity of this service has increased.
Shopping cart systems: Options
Simple shopping cart systems allow the off-line administration of products and categories. The shop is then generated as HTML files and graphics that can be uploaded to a webspace. The systems do not use an online database.
A high-end solution can be bought or rented as a stand-alone program or as an addition to an enterprise resource planning program. It is usually installed on the company's web server and may integrate into the existing supply chain so that ordering, payment, delivery, accounting and warehousing can be automated to a large extent. Other solutions allow the user to register and create an online shop on a portal that hosts multiple shops simultaneously from one back office.
Examples are BigCommerce, Shopify and FlickRocket. Open source shopping cart packages include advanced platforms such as Interchange, and off-the-shelf solutions such as Magento, osCommerce, Shopgate, PrestaShop, and Zen Cart. Commercial systems can also be tailored so the shop does not have to be created from scratch. By using an existing framework, software modules for various functionalities required by a web shop can be adapted and combined.
Design + Design Work
Customers are attracted to online shopping not only because of high levels of convenience, but also because of broader selections, competitive pricing, and greater access to information.
Business organizations seek to offer online shopping not only because it is of much lower cost compared to bricks and mortar stores, but also because it offers access to a worldwide market, increases customer value, and builds sustainable capabilities.
Designers of online shops are concerned with the effects of information load. Information load is a product of the spatial and temporal arrangements of stimuli in the web store. Compared with conventional retail shopping, the information environment of virtual shopping is enhanced by providing additional product information such as comparative products and services, as well as various alternatives and attributes of each alternative, etc. Two major dimensions of information load are complexity and novelty.
Complexity refers to the number of different elements or features of a site, often the result of increased information diversity. Novelty involves the unexpected, suppressed, new, or unfamiliar aspects of the site. The novelty dimension may keep consumers exploring a shopping site, whereas the complexity dimension may induce impulse purchases.
Consumer needs and “expectations”
According to the output of a research report by Western Michigan University published in 2005, an e-commerce website does not have to be good looking with listing on a lot of search engines. It must build relationships with customers to make money.
The report also suggests that a website must leave a positive impression on the customers, giving them a reason to come back. However, resent research has proven that sites with higher focus on efficiency, convenience, and personalised services increased the customers motivation to make purchases.
Dyn, an Internet performance management company conducted a survey on more than 1400 consumers across 11 countries in North America, Europe, Middle-East and Asia and the results of the survey are as follows:
- Online retailers must improve the website speed
- Online retailers must ease consumers fear around security
These concerns majorly affect the decisions of almost two thirds of the consumers.
An automated online assistant, with potential to enhance user interface on shopping sites.
The most important factors determining whether customers return to a website are ease of use and the presence of user-friendly features. ]Usability testing is important for finding problems and improvements in a web site. Methods for evaluating usability include heuristic evaluation, cognitive walkthrough, and user testing. Each technique has its own characteristics and emphasizes different aspects of the user experience.
The popularity of online shopping continues to erode sales of conventional retailers. For example, Best Buy, the largest retailer of electronics in the U.S. in August 2014 reported its tenth consecutive quarterly dip in sales, citing an increasing shift by consumers to online shopping.
Amazon.com has the largest market share in the United States. As of May 2018, a survey found two-thirds of Americans had bought something from Amazon (92% of those who had bought anything online), with 40% of online shoppers buying something from Amazon at least once a month.
The survey found shopping began at amazon.com 44% of the time, compared to a general search engine at 33%. It estimated 75 million Americans subscribe to Amazon Prime and 35 million more use someone else's account.
There were 242 million people shopping online in China in 2012. For developing countries and low-income households in developed countries, adoption of e-commerce in place of or in addition to conventional methods is limited by a lack of affordable Internet access.
Convenience tops the list
Online stores are usually available 24 hours a day, and many consumers in Western countries have Internet access both at work and at home. Other establishments such as Internet cafes, community centers and schools provide internet access as well. In contrast, visiting a conventional retail store requires travel or commuting and costs such as gas, parking, or bus tickets, and must usually take place during business hours.
Delivery was always a problem which affected the convenience of online shopping. However to overcome this many retailers including online retailers in Taiwan brought in a store pick up service. This now meant that customers could purchase goods online and pick them up at a nearby convenience store, making online shopping more advantageous to customers. In the event of a problem with the item (e.g., the product was not what the consumer ordered or the product was not satisfactory), consumers are concerned with the ease of returning an item in exchange for the correct product or a refund.
Consumers may need to contact the retailer, visit the post office and pay return shipping, and then wait for a replacement or refund. Some online companies have more generous return policies to compensate for the traditional advantage of physical stores. For example, the online shoe retailer Zappos.com includes labels for free return shipping, and does not charge a restocking fee, even for returns which are not the result of merchant error.
Note: In the United Kingdom, online shops are prohibited from charging a restocking fee if the consumer cancels their order in accordance with the Consumer Protection (Distance Selling) Act 2000.
A 2018 survey in the United States found 26% of online shoppers said they never return items, and another 65% said they rarely do so. Surprising stats.
Information and reviews
Online stores must describe products for sale with text, photos, and multimedia files, whereas in a physical retail store, the actual product and the manufacturer's packaging will be available for direct inspection (which might involve a test drive, fitting, or other experimentation). Some online stores provide or link to supplemental product information, such as instructions, safety procedures, demonstrations, or manufacturer specifications. Some provide background information, advice, or how-to guides designed to help consumers decide which product to buy. Some stores even allow customers to comment or rate their items.
There are also dedicated review sites that host user reviews for different products. Reviews and even some blogs give customers the option of shopping for cheaper purchases from all over the world without having to depend on local retailers. In a conventional retail store, clerks are generally available to answer questions. Some online stores have real-time chat features, but most rely on e-mails or phone calls to handle customer questions. Even if an online store is open 24 hours a day, seven days a week, the customer service team may only be available during regular business hours.
Price and selection
One advantage of shopping online is being able to quickly seek out deals for items or services provided by many different vendors (though some local search engines do exist to help consumers locate products for sale in nearby stores). Search engines, online price comparison services and discovery shopping engines can be used to look up sellers of a particular product or service. Shipping costs (if applicable) reduce the price advantage of online merchandise, though depending on the jurisdiction, a lack of sales tax may compensate for this. Shipping a small number of items, especially from another country, is much more expensive than making the larger shipments bricks-and-mortar retailers order.
Some retailers (especially those selling small, high-value items like electronics) offer free shipping on sufficiently large orders.
Another major advantage for retailers is the ability to rapidly switch suppliers and vendors without disrupting users' shopping experience.
Fraud and security concerns always a factor
Given the lack of ability to inspect merchandise before purchase, consumers are at higher risk of fraud than face-to-face transactions. When ordering merchandise online, the item may not work properly, it may have defects, or it might not be the same item pictured in the online photo. Merchants also risk fraudulent purchases if customers are using stolen credit cards or fraudulent repudiation of the online purchase.
However, merchants face less risk from physical theft by using a warehouse instead of a retail storefront. Secure Sockets Layer (SSL) encryption has generally solved the problem of credit card numbers being intercepted in transit between the consumer and the merchant. However, one must still trust the merchant (and employees) not to use the credit card information subsequently for their own purchases, and not to pass the information to others. Also, hackers might break into a merchant's web site and steal names, addresses and credit card numbers, although the Payment Card Industry Data Security Standard is intended to minimize the impact of such breaches. Identity theft is still a concern for consumers.
A number of high-profile break-ins in the 2000s has prompted some U.S. states to require disclosure to consumers when this happens. Computer security has thus become a major concern for merchants and e-commerce service providers, who deploy countermeasures such as firewalls and anti-virus software to protect their networks. Phishing is another danger, where consumers are fooled into thinking they are dealing with a reputable retailer, when they have actually been manipulated into feeding private information to a system operated by a malicious party. Denial of service attacks are a minor risk for merchants, as are server and network outages.
Quality seals can be placed on the Shop web page if it has undergone an independent assessment and meets all requirements of the company issuing the seal. The purpose of these seals is to increase the confidence of online shoppers. However, the existence of many different seals, or seals unfamiliar to consumers, may foil this effort to a certain extent.
A number of resources offer advice on how consumers can protect themselves when using online retailer services. These include:
- Sticking with well-known stores, or attempting to find independent consumer reviews of their experiences; also ensuring that there is comprehensive contact information on the website before using the service, and noting if the retailer has enrolled in industry oversight programs such as a trust mark or a trust seal.
- Before buying from a new company, evaluating the website by considering issues such as: the professionalism and user-friendliness of the site; whether or not the company lists a telephone number and/or street address along with e-contact information; whether a fair and reasonable refund and return policy is clearly stated; and whether there are hidden price inflators, such as excessive shipping and handling charges.
- Ensuring that the vendor address is protected with SSL (see above) when entering credit card information. If it does the address on the credit card information entry screen will start with "HTTPS".
- Using strong passwords which do not contain personal information such as the user's name or birthdate. Another option is a "pass phrase," which might be something along the lines: "I shop 4 good a buy#" These are difficult to hack, since they do not consist of words found in a dictionary, and provides a variety of upper, lower, and special characters. These passwords can be site specific and may be easy to remember.
Although the benefits of online shopping are considerable, when the process goes poorly it can create a thorny situation. A few problems that shoppers potentially face include identity theft, faulty products, and the accumulation of spyware. If users are required to put in their credit card information and billing/shipping address and the website is not secure, customer information can be accessible to anyone who knows how to obtain it.
Most large online corporations are inventing new ways to make fraud more difficult. However, criminals are constantly responding to these developments with new ways to manipulate the system. Even though online retailers are making efforts to protect consumer information, it is a constant fight to maintain the lead. It is advisable to be aware of the most current technology and scams to protect consumer identity and finances. Product delivery is also a main concern of online shopping.
Most companies offer shipping insurance in case the product is lost or damaged. Some shipping companies will offer refunds or compensation for the damage, but this is up to their discretion.
Lack of full cost disclosure a problem
The lack of full cost disclosure may also be problematic. While it may be easy to compare the base price of an item online, it may not be easy to see the total cost up front. Additional fees such as shipping are often not visible until the final step in the checkout process. The problem is especially evident with cross-border purchases, where the cost indicated at the final checkout screen may not include additional fees that must be paid upon delivery such as duties and brokerage. Some services such as the Canadian-based Wishabi attempts to include estimates of these additional cost, but nevertheless, the lack of general full cost disclosure remains a concern.
Privacy of personal information is a significant issue for some consumers. Many consumers wish to avoid spam and telemarketing which could result from supplying contact information to an online merchant. In response, many merchants promise to not use consumer information for these purposes, Many websites keep track of consumer shopping habits in order to suggest items and other websites to view.
Brick-and-mortar stores also collect consumer information. Some ask for a shopper's address and phone number at checkout, though consumers may refuse to provide it. Many larger stores use the address information encoded on consumers' credit cards (often without their knowledge) to add them to a catalog mailing list. This information is obviously not accessible to the merchant when paying in cash or through a bank (money transfer, in which case there is also proof of payment).
Many successful purely virtual companies deal with digital products, (including information storage, retrieval, and modification), music, movies, office supplies, education, communication, software, photography, and financial transactions. Other successful marketers use drop shipping or affiliate marketing techniques to facilitate transactions of tangible goods without maintaining real inventory.
Some non-digital products have been more successful than others for online stores. Profitable items often have a high value-to-weight ratio, they may involve embarrassing purchases, they may typically go to people in remote locations, and they may have shut-ins as their typical purchasers. Items which can fit in a standard mailbox—such as music CDs, DVDs and books—are particularly suitable for a virtual marketer.
Products such as spare parts, both for consumer items like washing machines and for industrial equipment like centrifugal pumps, also seem good candidates for selling online. Retailers often need to order spare parts specially, since they typically do not stock them at consumer outlets—in such cases, e-commerce solutions in spares do not compete with retail stores, only with other ordering systems.
A factor for success in this niche can consist of providing customers with exact, reliable information about which part number their particular version of a product needs, for example by providing parts lists keyed by serial number. Products less suitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings—most notably clothing—and products where colour integrity appears important. Nonetheless, some web sites have had success delivering groceries and clothing sold through the internet is big business in the U.S.
High-volume websites, such as Yahoo!, Amazon.com, and eBay, offer hosting services for online stores to all size retailers. These stores are presented within an integrated navigation framework, sometimes known as virtual shopping malls or online marketplaces.
Impact of reviews on consumer behavior Important:
One of the great benefits of online shopping is the ability to read product reviews, written either by experts or fellow online shopper.
Online Shopping Rewards
From Wikipedia, the free encyclopedia
Online shopping rewards are a type of loyalty program to e-commerce shoppers.
The advent of online shopping has resulted in the rapid development of a large number of rewards programs that offer incentives for shopping. These programs may be points-based (redeemable for products or vouchers), cashback, airline frequent flyer-miles-based, hotel points, donations to charity, or even carbon offsets.
These programs are often presented to the consumer as coalitions of large numbers of retailers, but are probably better described as competitive loyalty programs, to differentiate them from their precursors the original single retailer non-competitive loyalty program.
The Marketing Model
Rewards portals have grown very rapidly in most major markets, especially in the US, Canada, UK, and Australia. While they have roots in traditional off-line non-competitive loyalty programs, such portals often add considerably greater value to the customer than their traditional off-line equivalent, which accounts for their dramatic growth and high levels of customer acceptance.
Cash back and reward-based websites operate using a marketing model known as affiliate marketing, which is a performance-based marketing tool. Affiliate marketing networks make it possible to track in detail where users come from (which website is referring the customers), what users buy (down to the product) and when. Rewards-based websites track and reconcile this information with their own user database, and pass on a proportion or even all of the commission received to the customer.
From the customer's perspective they are getting something back, usually at no extra cost and often with an additional discount or bonus. From the retailer's perspective, the role and costs of marketing are passed on almost entirely to the affiliate. While hundreds of thousands of websites can easily use affiliate programs to advertise products and retailers (from sports blogs, fanzines through to almost any niche website), cash back and rewards-based programs are much fewer in number, because of the need to track, store, and retrieve individual customer information with a high degree of precision.
A particular typology is the incentive program. Online shopping programs tend to be consumer-oriented points-based or cash back programs. Traditional programs focus their proposition on extrinsic motivation and rewards: cash back or a choice of attractive rewards. A variant, though not unique to online shopping programs, is the intrinsic reward.
Cause related websites, much like affinity credit card schemes, give their users the opportunity to donate the cash or points to a charity, school, or club. Others still give their users a range of options. With consumer concern about climate change growing, a number of green rewards shopping portals have appeared. Instead of cash back or points these websites offer carbon credits (also known as carbon offsets) or green gadgets to encourage consumers to shop with particular retailers or make changes to their lifestyle.
Points-based web sites may have different currencies, which makes it difficult to compare the customer benefit. Most reward websites retain a proportion of the commission, and only industry insiders are aware of the nuances of the business model used and therefore the customer benefit. From the consumer's perspective it may not always be clear whether the benefit going to the supported cause is the most effective way of raising funds. For example, in some countries like the UK, a significant tax benefit can be provided to the charity by donating in cash.
While the majority of green reward websites also offer some useful information and advice on greener living, few of them seem to encourage more sustainable consumption.
From Wikipedia, the free encyclopedia
Various loyalty cards or Loyalty Programs are structured marketing strategies designed by merchants to encourage customers to continue to shop at or use the services of businesses associated with each program.
These programs exist covering most types of commerce, each one having varying features and rewards-schemes.
In marketing generally, and in banking, entertainment, hospitality, retailing, and travel more specifically, a loyalty card, rewards card, points card, advantage card, club card is a plastic or paper card, visually similar to a credit card, debit card, or digital card that identifies the card holder as a participant in a loyalty program.
Loyalty cards (both physical and digital) relate to the loyalty business-model.
Cards typically have a barcode or magstripe that can be easily scanned, although some are chip cards or proximity cards.
By presenting such a card, purchasers typically receive either a discount on the current purchase, or to an allotment of points that they can use for future purchases. Hence, the card is the visible means of implementing a type of what economists call a two-part tariff.
Application forms for cards usually entail agreements by the store concerning customer privacy, typically non-disclosure (by the store) of non-aggregate data about customers. The store uses aggregate data internally (and sometimes externally) as part of its marketing research. Over time the data can reveal, for example, a given customer's favorite brand of beer, or whether he or she is a vegetarian. Where a customer has provided sufficient identifying information, the loyalty card may also be used to access such information to expedite verification during receipt of cheques or dispensing medical prescription preparations, or for other membership privileges such as access to an airport lounge using a frequent-flyer card.
In recent years, businesses now offer these loyalty cards in the form of a loyalty app, which means users are less likely to lose their card. Almost all major casino chains also have loyalty cards, which offer members tier credits, reward credits, comps, and other perks based on card members' "theo" from gambling, various demographic data, and spend patterns on various purchases at the casino, within the casino network, and with the casino's partners. Examples of such programs include Caesars Rewards (formerly called Total Rewards) and MGM Resorts International's Mlife.
Loyalty programs have been described as a form of centralized virtual currency, one with unidirectioal cash flow, since reward points can be exchanged into a good or service but not into cash.
The Social Credit System is a loyalty program operated by the state and private businesses. Individuals with high social credit scores can get faster internet, use high speed trains, and take mainland flights.
Hong Kong offers many loyalty programs. They include Octopus Rewards, operated by Octopus Cards Limited, which allows Octopus card users to earn points in certain shops, including McDonald's fast food outlets and Wellcome supermarkets.
The MTR Corporation also operates MTR Club for regular customers of its transport network. In terms of shopping or purchasing groceries, different chain stores under common ownership often share the same loyalty program, such as A.S. Watson Group's Money Back, which can be used at Parknshop, Watsons, and Fortress stores, as well as the corporation's retail partners.
PAYBACK India is India's largest coalition loyalty program, with over 50 million members, over 50 partners and 3000 network partner outlets. German loyalty program operator Loyalty Partner took a controlling interest in i-mint in June 2010 and renamed the program PAYBACK India in July 2011. BPCL's PetroBonus fuel card program has 2 million members. Indian Oil's fleet card program XTRAPOWER and retail program XTRAREWARDS claim a combined customer base of 3 million.
The first Iranian loyalty program launched in 1996 by Iran Credit Card Group Zarrin Card. East Credit Card Group Kish launched its loyalty program in 2005.
Genting Highlands Resort has a loyalty card, WorldCard, that is primarily used to gain points in Genting Highlands' Resorts and Attractions. However, it can also be used for Starbucks, Coffee Bean and Häagen-Dazs and it is valid in three countries: Malaysia, Singapore and Hong Kong. Loyalty program can also build in term of app version, which widely use in Starbucks app, TK Bakery App, Loudspeaker App, AppPay.
In the Philippines, several brands of establishments and stores offer membership cards that the card owner can use to earn points and redeem rewards. The gigantic shopping mall chain, SM Supermalls offers the SM Advantage Card or SMAC that can be used as a loyalty card that earns points as you shop and its partner bank, BDO Unibank also offers BDO Rewards Card that functions the same as the SM Advantage Card. Retailers accepting the card include: The SM Store, SM Supermarket, SM Hypermarket, ACE Hardware and Watsons Pharmacy.
Another mall chain, Robinsons Malls has a program named Robinsons Rewards. It can also be used when shopping in Robinsons Department Stores, Robinsons Supermarkets, and Toys "R" Us branches in the Philippines.
Jollibee, the fast food giant and its subsidiaries (Chowking, Greenwich Pizza, and Red Ribbon launched the HappyPlus card, in which the cardholder can use the card to earn happy points and use the points to get a free food. It is also planned to be used in Mang Inasal, the most recent member of the Jollibee Foods Corporation.
The country's largest drug store, Mercury Drug also introduced the Suki Card in which the membership is free but the applicant will need to purchase at least PhP 1000 worth of single or cumulative purchases.
In Singapore, the three largest loyalty programs are Plus!, WorldCard and SAFRA Card. The Plus! LinkPoints Programme has more than 1 million members and over 600 participating merchant outlets.
Loyalty programs are very popular in Finland. 80% of people are in at least one loyalty program and over 50% are member of at least two programs. Two major coalitions with loyaly programs operating in multiple business sectors. These are S-Group with S-Etukortti (70% of population, 2014]) and Kesko with K-Plussa (67%). These cards can be equipped with Visa or MasterCard Debit / Credit payment features. Both loyalty programs are being aggressively pushed to consumers. New major player in Finnish and Baltic markets is Pins(19%).
In Georgia the biggest loyalty card program is run by Universal Card Corporation since 2010. Universal scheme unifies more than 250 companies where customers collect bonus points on UNICARD while purchasing food, goods, garments/clothing, fuel, travel packages, tickets, pharmacy, GYM passes or other services. UNICARD holders can redeem their bonus points on any products presented within the particular partner's stores where redemption is available or into desirable gifts presented within UNICARD's online catalogue.
The largest loyalty program in Germany is Payback, which was launched in 2000. According to a study in August 2007 by GfK, 61% of German households have a Payback card. It listed the HappyDigits [de] program as having a 42% share, with the Shell ClubSmart program as third most popular with 13%.
In March 2008, the coalition program DeutschlandCard [de] was launched by Arvato. As at March 2009 it had more than 4.5 million active cardholders. HappyDigits was disbanded at the latest of the year 2009/2010.
Two coalition loyalty programs in Hungary are SuperShop and Multipoint. SuperShop, established in April 2000, is backed by partners SuperShop Spar, OBI, OMV, Photo hall, Burger King.
After the exit of Nectar from the market in 2015, Payback is the most popular coalition loyalty program with more than 10 million card holders and relevant anchor partners such as Carrefour, Esso, H3G (Tre), Mediaset Premium, BNL BNP Paribas and more than 60 online partners.
Supermarket chains Esselunga, Coop and Il Gigante also have well established loyalty programs. Other stores such as Interio, a furniture retailer, are also joining the market with loyalty cards and store-based incentivised credit cards.
Loyalty programs are also widely spread in the consumer goods Industry, where companies use this powerful tool to establish long-lasting brand-consumer relationships.
The very first example of a loyalty program in the food industry has been the 2008 Lavazza Carmencita digital collection followed by many other brands such as Barilla, Casa Modena-Giravolte and Tena Lady of the Multinational Sca Hygiene Products.
One of the largest loyalty programs in Latvia which is working as operator for many merchants is Pins. Walmoo is a loyalty platform that was launched in 2013 that allows their users to create their own loyalty program.
The largest Norwegian loyalty program is Trumf. Trumf is a «brick and mortar» loyalty program owned by NorgesGruppen, a grocery wholesaling group in Norway. KickBack.no is one of the largest online loyalty program and cashback site in Norway. KickBack.no is owned by Schibsted Media Group.
Republic of Ireland
In the Republic of Ireland loyalty cards have been in operation since 1993, when Superquinn introduced its SuperClub loyalty card scheme. This is regarded as having been the prototype for such schemes in Europe. However, loyalty cards did not expand until 1997, when Tesco Ireland introduced its Clubcard scheme, shortly after its purchase of Power Supermarkets. This was an expansion of the UK scheme—cards for this are identical to those used by Tesco in the UK and can be used in both countries. Dunnes Stores responded with the introduction of their own ValueClub scheme in June 1997.
Today these are three main schemes operating in Ireland, although ValueClub has been withdrawn from Dunnes' Northern Ireland stores. SuperValu has introduced their own loyalty club called Real Rewards.
All five major petrol station chains in the country operated a scheme during the late 1990s—Esso had Tiger Miles (with Tesco ClubCard points offered as an alternative), Maxol had Points Plus, both of which operated on the principle of getting items from a gift catalogue, with Shell using Dunnes' scheme, Texaco using the SuperQuinn system, and Statoiloperating a cash-back system, Premium Club. Due to increasing oil prices and tightening of margins, these schemes ended by the end of 2005. Tesco Ireland's petrol stations still, however, give Clubcard points.
Game, a major computer game and hardware retailer also operate a cashback card scheme, which was merged with Electronics Boutique's programme following the separation of their northern European stores into the hands of Game. The scheme returns one-fortieth of the spend, more than twice as generous as Tesco.
Rewards From Us To You is a hotel loyalty program for independent hotels in Belgium, Holland, Ireland & the United Kingdom. It was founded in November 2011 by parent hotel management company PREM Group, who is based in Dublin, Ireland. This program does not issue loyalty cards but does everything electronically through email.
This company has over 33 participating hotels and serviced apartments. Guests earn points every time they stay with any hotel in the club. Guests can later redeem free night stays or gift cards. In addition to this all members receive exclusive perks for signing up and staying at the hotel.
Loyalty programs are popular in Switzerland, with the two main supermarket chains, Migros and Coop prominent. The M-Cumulus card can be used at the Migros supermarkets, Ex Libris, SportXX, and other retailers. The Coop Supercard earns points on purchases at Coop and a variety of other associated stores.
Other stores such as Interio, a furniture retailer, are also joining the market with loyalty cards and store-based incentivised credit cards. The only coalition loyalty scheme in Switzerland is Bonus Card with a network of over 300 independent retail partners. In recent years, online loyalty programs have also started to target the Swiss. First to make an offering in Switzerland was German-based Webmiles. Claiming to be Switzerland's first online bonus program, Bonuspoints was launched in early 2008 and offers incentives for shopping at 70 different online stores.
MALINA is a Russian coalition program. MALINA was launched in 2006 by Loyalty Partners Vostok. MALINA is a loyalty card scheme comprising partner companies including BP, Rosinter Restaurants, Beeline, 36,6, and Raiffeisenbank.
Another Russian loyalty program is Mnogo.ru. This project is fully independent. Members of the club who own clubcards can gain points in exchange for daily purchases made both online and offline at partners' shops. A customer receives points while answering the quiz, playing games and getting special offers. Cumulative points can be exchanged for prizes from the company's partners.
Voilà Hotel Rewards was launched in June 2008 with Husa Plus, a co-branded loyalty program for Husa Hoteles. The Husa Plus program is offered at approximately 145 Husa Hotels, primarily located in Spain. Barcelona-based online travel agency Budgetplaces launched its loyalty programme in early 2011. My budgetplaces lets clients earn credit every time they make a reservation.
Pegasus Airlines has a loyalty program called Pegasus Plus which gives rewards for every flight. Passengers can spend reward points as a discount without waiting to cover a full flight. Turkish Airlines has a loyalty program called Miles&Smiles.
The loyalty card market in the UK is one of the most significant in the world, with most major chains operating some form of reward system. Passcard has been claimed to be the first reward scheme or discount card, created around by Gary Wilson in 1981 and later known as Passkey. One of the first loyalty cards backed by a major chain is believed to be the Sainsbury's Homebase Spend and Save Card in 1982.
Of the "big four" supermarkets, Sainsburys and Tesco and Morrisons operate loyalty cards for general supermarket shopping.Tesco's Clubcard scheme have been criticised for not offering value for money. When Clubcard or Nectar points are used for money off supermarket shopping, they roughly equate to a 0.5% discount, although offers can increase this discount by as much as four times for certain rewards. Some retailers with banking operations also award points for every pound spent on their credit cards, and bonus points for purchasing financial services.
A report in The Economist suggested that the real benefit of loyalty cards to UK outlets is the massive marketing research database potential they offer. Since 2015 Morrisons operates a "More" reward scheme which replaces the "Morrisons Miles" fuel purchases reward scheme. Unusually, customers' personal details are not collected so purchases appear not to be tracked. Vouchers are delivered at point of sale.
After trials in 1994, Tesco launched its Clubcard program, the UK's first nationwide supermarket-only loyalty card scheme, in 1995 with dunnhumby. Sainsbury's launched its Reward Card in 1996. This was replaced by the Nectar card in 2002, which was launched in partnership with other major brands.
Boots UK began planning a loyalty card in November 1993, but building a CRM-focussed loyalty program. With an investment in excess of GB£30 million, the Boots Advantage Card, launched in 1997, is the largest smart card retail loyalty card scheme in the world, and the third-largest retail loyalty scheme in the UK in terms of cards issued.
The Advantage scheme has 16.4 million cardholders using the card online and in store and at 3rd party retailers. The scheme gives a cardholder four points for every pound spent in a Boots store under normal shopping circumstances. Most stores have kiosks which can be used in conjunction with the cards for "exclusive offers" which are printed on vouchers and can be used at the till. These vouchers enable money off specific purchases, extra points for specific purchases, or money off or extra points when spending has reached an amount specified on the voucher, or other offers such as double points on either everything of specific products. For example, a customer may get a voucher which provides 250 extra points when they have spent £50 in one transaction.
Points equal pence in store, and can be spent at any time and on anything in store, providing the card has enough points to cover the entire cost of the merchandise. The kiosk system was replaced with the Boots App in 2014, where customers can automatically load offers on to their Advantage Card straight from their smartphone.
Safeway's ABC Card was discontinued in 2000. Airlines, Hotels and other loyalty schemes also offer cards. Marks and Spencer and the John Lewis Partnership have credit cards which give vouchers in return for spending, and do issue separate loyalty cards such as the myJohnLewis card, myWaitrose card in the John Lewis Partnership and the Sparks Card in by Marks and Spencer. Game has a reward card scheme for which every pound spent a customer is rewarded 10 points; for every 1000 points that one collects, one gets £2.50 to redeem in the store, or online. Preorders earn a customer 20 points per pound.
HMV has a reward card called purehmv which allows the customer to claim a variety of rewards, including in-store discounts.
The UK's largest retail bookmaker Ladbrokes launched the Odds ON! loyalty programme in late 2007, the first retail betting loyalty scheme in Europe. Customers earn points on each bet which can be redeemed for bonus jokers and free bets. Ladbrokes Poker operates a loyalty program for its online poker players where players are able to exchange their poker points for gift & prizes.
Maximiles is an online coalition program claiming 1.6 million members in the UK. Maximiles also operates online programs in France, Spain and Italy.
The opening of the first Best Buy store in the UK—at Thurrock, Essex, in 2010—was accompanied by the launch of a customer engagement program called My Best Buy. This was described as "a tiered, digital loyalty and customer engagement program that is designed to build a lifelong relationship with the customer by providing a personalized experience through which they can manage their digital and technology needs." However, this business ceased trading in 2012: the 11 stores were closed in January, and My Best Buy closed on February 29.
The Ice Organisation launched MyIce.com in 2010, a scheme which rewards consumers for shopping in a more sustainable way. Ice's mission is to promote greener goods and services to mitigate climate change, and works with national and local retailers to encourage more local, sustainable consumerism.
The Co-operative Food, the brand adopted by many of the larger members of the UK co-operative movement does not operate a traditional loyalty card scheme. Instead, as consumer co-operatives, they operate a profit sharing scheme whereby an annual dividend is paid to all member-owners which is proportional to the total spend with the businesses during the previous year. Such dividend schemes have existed since the Rochdale Pioneers of the 1840s. Paper record-keeping transformed in the 1960s into a trading stampscheme managed by the Co-operative Wholesale Society (CWS), which was gradually withdrawn as margins declined.
The loyalty card concept was used by some co-operatives to restore dividend payments at the turn of the 21st century, notably by the CWS's "Dividend" card, which was replaced by The Co-operative Membership card program. The current members' dividend scheme is provided using the national co-operative brand and allows members of The Co-operative Group and many of the larger regional co-operative societies to earn their 'share of the profits' based upon their spend at many of the outlets which use The Co-operative brand rather than just at their own co-operative society (e.g. The Co-operative Group or the Midcounties Co-operative).
Formerly operated by British Airways, Airmiles was the most popular flight-related loyalty program in the UK, with 2.2. million members in 2011. Members could collect Airmiles each time they flew with British Airways or affiliated airlines, both within the International Airlines Group and the Oneworld Alliance; points could then be redeemed for flights, and was popular with both commercial and business customers. Airmiles-based programs frequently allow members to also collect points by spending on affiliated cards, such as British Airways Premium Plus credit card.
A re-brand of the program in 2011 from Airmiles to Avios caused controversy as members were now required to pay taxes and fees on flights they used for redemption. The scheme became more flexible and included redemption opportunities such as car hire and days out, broadening the ways in which members can spend their points.
North America (USA / Canada and now Mexico)
The oldest loyalty program in Canada is Canadian Tire money, in which the Canadian Tire company gives out coupons which look like currency.
Air Miles is Canada's largest loyalty program – Air Miles can be earned at more than 100 different sponsors and almost a thousand different rewards. More Rewards founded in 1992 operates mostly in the Western Canadian provinces with close relations to its grocery partnerships with the Overwaitea Food Group and its small coalition of other retailers.
Aeroplan began in 1984 as Air Canada's frequent flier program, but since 2008 has been owned by Aimia Inc. (previously Groupe Aeroplan Inc.).
Example of companies that run their own programs include HBC Rewards, which began at Zellers in 1986 as Club Z; the PC Optimum program for free groceries (from Loblaws), The Body Shop's Love Your Body Card, Staples Business Depot's easyRewards Savings Card (formerly Dividends) and Sobeys' Club Sobeys card. The plum rewards program is Canada's largest loyalty program for reading enthusiasts, offering everyday discounts and special coupons at Chapters, Indigo Books and Music, Coles, SmithBooks, and chapters.indigo.ca.
PetPerks is PetSmart's reward program where members get a pre determined discount on any item in the store that displays a PetPerks tag under the regular price tag. Vicinity is loyalty platform for small business retailers that was launched in May 2013 by Rogers Communications Inc.
Almost every gas station chain in Canada offers some sort of loyalty program itself or in partnership. For example, Air Miles at Shell gas stations, PC Plus at Esso and Mobil, Petro Points and More Rewards at Petro-Canada, Canadian Tire money at Canadian Tire gas stations, or a coupon that grants the customer 3.5 cents off per litre of fuel purchased at Sobeys Fast Fuel locations that can be used at a Sobeys banner store.
In the USA, several major retail chains, movie theatre networks, supermarket and fish market chains, and the three major pharmacy chains require the cards in order for customers to receive the advertised loyalty price. They include (each through both its own name and its related regional chains), AMC Theatres, Best Buy, Circle K, County Market, CVS/pharmacy, Giant-Carlisle and its sister chains Giant Eagle and Giant-Landover, Hallmark, Hy-Vee, IKEA, Ingles, JCPenney, Kohl's, Kroger, Menards, Office Max, Price Chopper, Regal Entertainment Group, Rite Aid, Safeway, Sears (also used by Kmart), ShopRite, Stop & Shop, Target, Tops, Toys "R" Us (also used by Babies "R" Us), Walgreens, Wegmans, and Winn-Dixie.
Many retailers allow accumulation of fuel discounts. Some have tie-ins with airline frequent-flyer programs, and some agree to donate a percentage of sales to a designated charity. Most notably, Walmart does not have a loyalty card plan, although anyone who purchases a gift card can generally get a 3 cent discount per gallon of gas at the fuel stations located on Walmart premises, in the 23 states with those Walmart fuel stations.
The practice is common among book and music retailers, from large chains to independent retailers. In some instances, the customer purchases the card and receives a percentage discount on all purchases for a period of time (often one year), while in other instances, a customer receives a one-time percentage discount upon reaching a specified purchase level. For example, a bookseller's loyalty card program might provide a customer with a 10% off coupon once the customer has spent US$200 at the bookseller.
Best Buy and Searsoffer loyalty programs that offer points redeemable for dollar-amount discounts after accumulating a set number of points along with other discounts from time to time.
Independent hardware stores, such as Ace Hardware and True Value, added customer loyalty programs in order to compete more effectively against larger chains as well as gather customer data. Customers with an association with a particular brand feel benefits for being part of the program. Ace's program also offers customers a way at the time of purchase to get items at a price which would normally require completing a mail-in rebate.
In addition, office supply retailers Staples and Office Depot started issuing club cards in 2005: they offer rewards in the form of credits towards future purchases on items purchased in the store or online (which items and how much credit changes periodically).
Almost all major hotel chains (Best Western, Choice Hotels, Holiday Inn, Marriott, Super 8 Motels, etc.) have cards that allow guests to earn either points (redeemable for discounts, future stays, or other prizes) and/or airline miles Hilton's HHonors program allowed guests to earn both points and miles (referenced as double-dipping) on the same stay, the only program to date that did so but which ended April 1, 2018]. All major U.S. airlines also offer rewards credit cards. Other travel related reward programs include SeaMiles, with points that can be redeemed for cruises.
Some American retailers have not implemented club cards, including grocery stores ALDI, Publix, and Whole Foods. Between 2007 and 2013 (before their purchase of Safeway), Acme Markets, Albertsons, Jewel-Osco, and Shaw's (all owned by Albertsons LLC) eliminated their loyalty cards in favor of discounts for all shoppers. Few states regulate club cards. As an example, supermarkets in California are subject to the Supermarket Club Card Disclosure Act of 1999.
Prominent online loyalty programs include Belly, FatWallet, Fivestars, Memolink, MonaBar, Mypoints, Perka, and Swagbucks. Some online loyalty programs focus on "other-directed" consumers including iGive.com, Schoolpop, The BSP Rewards Network, and Upromise.
Cardmobili, Foursquare, and Shopkick focus on using smartphones such as the Android and iPhone. Since March 2011, Foursquare has partnered with American Express to provide Foursquare points when using an American Express card, and since November 21, 2011, Shopkick has partnered with Visa to provide Shopkick points when using a Visa card at locations such as Best Buy, Old Navy, or Toys "R" Us.
Mexico is becoming a huge online shopping e-commerce environment as residents are now finally trusting the use of Amazon as a platform to process their credit card payments and orders effectively. Other marketplaces like Facebook, Bonanza are making strides in ecommerce. The growth should be dynamic the next 7 years for online shopping in Mexico especially in Mexico City.
Many loyalty programs operate in Australia, ranging from retail chains, individual stores, hotels, car hire businesses, credit card schemes, besides others. The largest loyalty program is flybuys, established in 1994 and owned by Coles. It has more than 10 million cardholders in over 5.5 million Australian households.
A consumer study of Australian loyalty programs in 2013 showed flybuys as easily the most popular program in Australia. Rival retailer Woolworths launched its Everyday Rewards fuel discount card nationally in 2009 and by August 2010 had 5.1 million cardholders, with 2.7 million linked to the Qantas Frequent Flyer program.
Among other Australian retailers, the largest programs are Myer's MYER one program, the Priceline Club Card, Amcal Club, Millers Retail Club, and the BB Retail Capital Pulse Rewards program. Pulse has more than a million members.
All major Australian banks offer credit cards with reward programs. Many are linked directly to airline rewards programs such as the Qantas Frequent Flyer program or Virgin Australia's Velocity Frequent Flyer program.
Alternatively, some banks and credit card companies have their own programs, with points being either redeemable or transferable to various airline rewards programs.
The largest loyalty program in New Zealand is Fly Buys. Other programs include the New Zealand Automobile Association AA Smartfuel programme and Countdownsupermarket's Onecard. Kachingo was a short-lived "card free" programme.
Mobile Loyalty Programs
Mobile online loyalty programs
There has been a move away from traditional magnetic card, stamp, or punchcard based schemes to online and mobile online loyalty programs. While these schemes vary, the common element is a push toward eradication of a traditional card, in favour of an electronic equivalent. The choice of medium is often a QR code. Some prominent examples are Austrian based mobile-pocket established in 2009, the US-based Punchd (discontinued from June 2013,), which became part of Google in 2011 and an Australian-based loyalty card application called Stamp Me which incorporates iBeacon technology. Others, like Loopy Loyalty (HK), Loyalli (UK), Perka (US), and Whisqr Loyalty (CA), have offered similar programs. Passbook by Apple is the first attempt to standardize the format of mobile loyalty cards.
Mobile off-line loyalty programs
With the introduction of host card emulation (HCE) and near field communication (NFC) technology for mobile applications, traditional contactless smart cards for prepaid and loyalty programs are emulated in a smartphone. Google Wallet adopted these technologies for mobile off-line payment application.
The major advantage of off-line over the on-line system is that the user's smartphone does not have to be online, and the transaction is fast. In addition, multiple emulated cards can be stored in a smartphone to support multi-merchant loyalty programs. Conequently, the user does not need to carry many physical cards anymore.
Disloyalty cards In three cities, some independent coffee shops have set up experimental 'disloyalty card' programs, which reward customers for visiting a variety of coffee shops.
Some companies complain that loyalty programs discount goods to people who are buying their goods anyway, and the expense of participating in these programs rarely generates a good return on the investment. Some other critics regard discounted prices and rewards as bribes to manipulate customer loyalty and purchasing decisions, or in the case of infrequent spenders, a means of subsidizing them.
A 2015 study found that most supermarket loyalty cards in the United States do not offer any real value to their customers. In fact, commercial use of customers' personal data collected as part of loyalty programs has the potential for abuse; it is highly likely that consumer purchases are tracked and used for marketing research to increase the efficiency of marketing and advertising, which oftentimes is one of the purposes of the loyalty card. For some customers, participating in a loyalty program (even with a fake or anonymous card) funds activities that violate privacy. Consumers have also expressed concern about the integration of RFID technology into loyalty-card systems.
One may view loyalty and credit-card reward plans as modern-day examples of kickbacks. Employees who need to buy something (such as an airline flight or a hotel room) for a business trip, but who have discretion to decide which airline or hotel chain to use, have an incentive to choose the payment method that provides the most cash back, credit-card rewards, or loyalty points instead of minimizing costs for their employer.
From Wikipedia, the free encyclopedia
E-commerce is the activity of buying or selling of products on online services or over the Internet. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. https://youtu.be/dN3GP9wOEhA
Modern electronic commerce typically uses the World Wide Web for at least one part of the transaction's life cycle although it may also use other technologies such as e-mail. Typical e-commerce transactions include the purchase of online books (such as Amazon) and music purchases (music download in the form of digital distribution such as iTunes Store), and to a less extent, customized/personalized online liquor store inventory services.
There are three areas of e-commerce: online retailing, electronic markets, and online auctions. E-commerce is supported by electronic business.
E-commerce businesses may also employ some or all of the following:
- Online shopping for retail sales direct to consumers via Web sites and mobile apps, and conversational commerce via live chat, chatbots, and voice assistants
- Providing or participating in online marketplaces, which process third-party business-to-consumer or consumer-to-consumer sales
- Business-to-business buying and selling
- Gathering and using demographic data through web contacts and social media
- Business-to-business (B2B) electronic data interchange
- Marketing to prospective and established customers by e-mail or fax (for example, with newsletters).
- Engaging in pretail for launching new products and services
- Online financial exchanges for currency exchanges or trading purposes
In the United States, certain electronic commerce activities are regulated by the Federal Trade Commission (FTC). These activities include the use of commercial e-mails, online advertising and consumer privacy. The CAN-SPAM Act of 2003 establishes national standards for direct marketing over email. The Federal Trade Commission Act regulates all forms of advertising, including online advertising, and states that advertising must be truthful and non-deceptive.
The Ryan Haight Online Pharmacy Consumer Protection Act of 2008, which came into law in 2008, amends the Controlled Substances Act to address online pharmacies.
Conflict of laws in cyberspace is a major hurdle for harmonization of legal framework for e-commerce around the world. In order to give a uniformity to e-commerce law around the world, many countries adopted the UNCITRAL Model Law on Electronic Commerce (1996).
Internationally there is the International Consumer Protection and Enforcement Network (ICPEN), which was formed in 1991 from an informal network of government customer fair trade organisations. The purpose was stated as being to find ways of co-operating on tackling consumer problems connected with cross-border transactions in both goods and services, and to help ensure exchanges of information among the participants for mutual benefit and understanding. From this came Econsumer.gov, an ICPEN initiative since April 2001. It is a portal to report complaints about online and related transactions with foreign companies.
There is also Asia Pacific Economic Cooperation (APEC) was established in 1989 with the vision of achieving stability, security and prosperity for the region through free and open trade and investment. APEC has an Electronic Commerce Steering Group as well as working on common privacy regulations throughout the APEC region.
In Australia, Trade is covered under Australian Treasury Guidelines for electronic commerce and the Australian Competition and Consumer Commission regulates and offers advice on how to deal with businesses online, and offers specific advice on what happens if things go wrong.
In the United Kingdom, The Financial Services Authority (FSA) was formerly the regulating authority for most aspects of the EU's Payment Services Directive (PSD), until its replacement in 2013 by the Prudential Regulation Authority and the Financial Conduct Authority. The UK implemented the PSD through the Payment Services Regulations 2009 (PSRs), which came into effect on 1 November 2009. The PSR affects firms providing payment services and their customers. These firms include banks, non-bank credit card issuers and non-bank merchant acquirers, e-money issuers, etc. The PSRs created a new class of regulated firms known as payment institutions (PIs), who are subject to prudential requirements. Article 87 of the PSD requires the European Commission to report on the implementation and impact of the PSD by 1 November 2012.
In India, the Information Technology Act 2000 governs the basic applicability of e-commerce.
In China, the Telecommunications Regulations of the People's Republic of China (promulgated on 25 September 2000), stipulated the Ministry of Industry and Information Technology (MIIT) as the government department regulating all telecommunications related activities, including electronic commerce. On the same day, The Administrative Measures on Internet Information Services released, is the first administrative regulation to address profit-generating activities conducted through the Internet, and lay the foundation for future regulations governing e-commerce in China. On 28 August 2004, the eleventh session of the tenth NPC Standing Committee adopted The Electronic Signature Law, which regulates data message, electronic signature authentication and legal liability issues.
It is considered the first law in China's e-commerce legislation. It was a milestone in the course of improving China's electronic commerce legislation, and also marks the entering of China's rapid development stage for electronic commerce legislation.
Contemporary electronic commerce can be classified into two categories. The first category is business based on types of goods sold (involves everything from ordering "digital" content for immediate online consumption, to ordering conventional goods and services, to "meta" services to facilitate other types of electronic commerce). The second category is based on the nature of the participant (B2B, B2C, C2B and C2C).
On the institutional level, big corporations and financial institutions use the internet to exchange financial data to facilitate domestic and international business. Data integrity and security are pressing issues for electronic commerce. Aside from traditional e-commerce, the terms m-Commerce (mobile commerce) as well (around 2013) t-Commerce have also been used.
In 2010, the United Kingdom had the highest per capita e-commerce spending in the world. As of 2013, the Czech Republic was the European country where e-commerce delivers the biggest contribution to the enterprise’s total revenue. Almost a quarter (24%) of the country's total turnover is generated via the online channel.
Among emerging economies, China's e-commerce presence continues to expand every year. With 668 million Internet users, China's online shopping sales reached $253 billion in the first half of 2015, accounting for 10% of total Chinese consumer retail sales in that period. The Chinese retailers have been able to help consumers feel more comfortable shopping online.
e-commerce transactions between China and other countries increased 32% to 2.3 trillion yuan ($375.8 billion) in 2012 and accounted for 9.6% of China's total international trade. In 2013, Alibaba had an e-commerce market share of 80% in China. In 2014, there were 600 million Internet users in China (twice as many as in the US), making it the world's biggest online market. China is also the largest e-commerce market in the world by value of sales, with an estimated US$899 billion in 2016.
Recent research clearly indicates that electronic commerce, commonly referred to as e-commerce, presently shapes the manner in which people shop for products. The GCC countries have a rapidly growing market and are characterized by a population that becomes wealthier (Yuldashev). As such, retailers have launched Arabic-language websites as a means to target this population. Secondly, there are predictions of increased mobile purchases and an expanding internet audience (Yuldashev). The growth and development of the two aspects make the GCC countries to become larger players in the electronic commerce market with time progress.
Specifically, research shows that e-commerce market is expected to grow to over $20 billion by the year 2020 among these GCC countries (Yuldashev). The e-commerce market has also gained much popularity among the western countries, and in particular Europe and the U.S. These countries have been highly characterized with consumer-packaged-goods (CPG) (Geisler, 34). However, trends show that there are future signs of a reverse. Similar to the GCC countries, there has been increased purchase of goods and services in online channels rather than offline channels. Activist investors are trying hard to consolidate and slash their overall cost and the governments in western countries continue to impose more regulation on CPG manufacturers (Geisler, 36). In these senses, CPG investors are being forced to adapt e-commerce as it is effective as a well as a means for them to thrive.
In 2013, Brazil's e-commerce was growing quickly with retail e-commerce sales expected to grow at a double-digit pace through 2014. By 2016, eMarketer expected retail e-commerce sales in Brazil to reach $17.3 billion. India has an Internet user base of about 460 million as of December 2017.
Despite being third largest user base in world, the penetration of Internet is low compared to markets like the United States, United Kingdom or France but is growing at a much faster rate, adding around 6 million new entrants every month. In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-retail activities. The India retail market is expected to rise from 2.5% in 2016 to 5% in 2020.
The future trends in the GCC countries will be similar with that of the western countries. Despite the forces that push business to adapt e-commerce as a means to sell goods and products, the manner in which customers make purchases is similar in countries from these two regions. For instance, there has been an increased usage of smartphones which comes in conjunction with an increase in the overall internet audience from the regions. Yuldashev writes that consumers are scaling up to more modern technology that allows for mobile marketing. However, the percentage of smartphone and internet users who make online purchases is expected to vary in the first few years. It will be independent on the willingness of the people to adopt this new trend (The Statistics Portal).
For example, UAE has the greatest smartphone penetration of 73.8 percent and has 91.9 percent of its population has access to the internet. On the other hand, smartphone penetration in Europe has been reported to be at 64.7 percent (The Statistics Portal). Regardless, the disparity in percentage between these regions is expected to level out in future because e-commerce technology is expected to grow allowing for more users.
The e-commerce business within these two regions will result in a competition. Government bodies at country level will enhance their measures and strategies to ensure sustainability and consumer protection (Krings, et al.). These increased measures will raise the environmental and social standards in the countries, factors that will determine the success of e-commerce market in these countries. For example, an adoption of tough sanctions will make it difficult for companies to enter the e-commerce market while lenient sanctions will allow ease of companies. As such, the future trends between GCC countries and the Western countries will be independent of these sanctions (Krings, et al.).
These countries need to make rational conclusions in coming up with effective sanctions.
The rate of growth of the number of internet users in the Arab countries has been rapid – 13.1% in 2015. A significant portion of the e-commerce market in the Middle East comprises people in the 30–34 year age group. Egypt has the largest number of internet users in the region, followed by Saudi Arabia and Morocco; these constitute 3/4th of the region’s share. Yet, internet penetration is low: 35% in Egypt and 65% in Saudi Arabia.
E-commerce has become an important tool for small and large businesses worldwide, not only to sell to customers, but also to engage them.
In 2012, e-commerce sales topped $1 trillion for the first time in history.
Mobile devices are playing an increasing role in the mix of e-commerce, this is also commonly called mobile commerce, or m-commerce. In 2014, one estimate saw purchases made on mobile devices making up 25% of the market by 2017.
For traditional businesses, one research stated that information technology and cross-border e-commerce is a good opportunity for the rapid development and growth of enterprises. Many companies have invested enormous volume of investment in mobile applications. The DeLone and McLean Model stated that three perspectives contribute to a successful e-business: information system quality, service quality and users' satisfaction. There is no limit of time and space, there are more opportunities to reach out to customers around the world, and to cut down unnecessary intermediate links, thereby reducing the cost price, and can benefit from one on one large customer data analysis, to achieve a high degree of personal customization strategic plan, in order to fully enhance the core competitiveness of the products in company.
Modern 3D graphics technologies, such as Facebook 3D Posts, are considered by some social media marketers and advertisers as a preferable way to promote consumer goods than static photos, and some brands like Sony are already paving the way for augmented reality commerce. Wayfair now lets you inspect a 3D version of its furniture in a home setting before buying.
Logistics in e-commerce
Logistics in e-commerce mainly concerns fulfillment. Online markets and retailers have to find the best possible way to fill orders and deliver products. Small companies usually control their own logistic operation because they do not have the ability to hire an outside company. Most large companies hire a fulfillment service that takes care of a company's logistic needs.
Contrary to common misconception, there are significant barriers to entry in e-commerce.
Impacts on Markets and retailers
Store closing flags outside a Toys R Us in New Jersey. Despite investments, the chain struggled to win market share in the age of digital commerce.
E-commerce markets are growing at noticeable rates. The online market is expected to grow by 56% in 2015–2020. In 2017, retail e-commerce sales worldwide amounted to 2.3 trillion US dollars and e-retail revenues are projected to grow to 4.88 trillion US dollars in 2021. Traditional markets are only expected 2% growth during the same time. Brick and mortar retailers are struggling because of online retailer's ability to offer lower prices and higher efficiency. Many larger retailers are able to maintain a presence offline and online by linking physical and online offerings.
E-commerce allows customers to overcome geographical barriers and allows them to purchase products anytime and from anywhere. Online and traditional markets have different strategies for conducting business. Traditional retailers offer fewer assortment of products because of shelf space where, online retailers often hold no inventory but send customer orders directly to the manufacturer. The pricing strategies are also different for traditional and online retailers. Traditional retailers base their prices on store traffic and the cost to keep inventory. Online retailers base prices on the speed of delivery.
There are two ways for marketers to conduct business through e-commerce: fully online or online along with a brick and mortar store. Online marketers can offer lower prices, greater product selection, and high efficiency rates. Many customers prefer online markets if the products can be delivered quickly at relatively low price.
However, online retailers cannot offer the physical experience that traditional retailers can. It can be difficult to judge the quality of a product without the physical experience, which may cause customers to experience product or seller uncertainty. Another issue regarding the online market is concerns about the security of online transactions. Many customers remain loyal to well-known retailers because of this issue.
Security is a primary problem for e-commerce in developed and developing countries. E-commerce security is protecting business' websites and costumers from unauthorized access, use, alteration, or destruction. The type of threats include: malicious codes, unwanted programs (ad ware, spyware), phishing, hacking, and cyber vandalism. E-commerce websites use different tools to avert security threats. These tools include firewalls, encryption software, digital certificates, and passwords.
Impact on supply chain management
For a long time, companies had been troubled by the gap between the benefits which supply chain technology has and the solutions to deliver those benefits. However, the emergence of e-commerce has provided a more practical and effective way of delivering the benefits of the new supply chain technologies. View: https://www.XanderShopping2.com
E-commerce has the capability to integrate all inter-company and intra-company functions, meaning that the three flows (physical flow, financial flow and information flow) of the supply chain could be also affected by e-commerce.
The affections on physical flows improved the way of product and inventory movement level for companies. For the information flows, e-commerce optimised the capacity of information processing than companies used to have, and for the financial flows, e-commerce allows companies to have more efficient payment and settlement solutions.
In addition, e-commerce has a more sophisticated level of impact on supply chains: Firstly, the performance gap will be eliminated since companies can identify gaps between different levels of supply chains by electronic means of solutions; Secondly, as a result of e-commerce emergence, new capabilities such implementing ERP systems, like SAP ERP, Xero, or Megaventory, have helped companies to manage operations with customers and suppliers. Yet these new capabilities are still not fully exploited.
Thirdly, technology companies would keep investing on new e-commerce software solutions as they are expecting investment return. Fourthly, e-commerce would help to solve many aspects of issues that companies may feel difficult to cope with, such as political barriers or cross-country changes. Finally, e-commerce provides companies a more efficient and effective way to collaborate with each other within the supply chain.
Impact on employment
E-commerce helps create new job opportunities due to information related services, software app and digital products. It also causes job losses. The areas with the greatest predicted job-loss are retail, postal, and travel agencies. The development of e-commerce will create jobs that require highly skilled workers to manage large amounts of information, customer demands, and production processes.
In contrast, people with poor technical skills cannot enjoy the wages welfare. On the other hand, because e-commerce requires sufficient stocks that could be delivered to customers in time, the warehouse becomes an important element. Warehouse needs more staff to manage, supervise and organize, thus the condition of warehouse environment will be concerned by employees.
Impact on customers
E-commerce brings convenience for customers as they do not have to leave home and only need to browse website online, especially for buying the products which are not sold in nearby shops. It could help customers buy wider range of products and save customers’ time. Consumers also gain power through online shopping.
They are able to research products and compare prices among retailers. Also, online shopping often provides sales promotion or discounts code, thus it is more price effective for customers. Moreover, e-commerce provides products’ detailed information; even the in-store staff cannot offer such detailed explanation. Customers can also review and track the order history online.
E-commerce technologies cut transaction costs by allowing both manufactures and consumers to skip through the intermediaries. This is achieved through by extending the search area best price deals and by group purchase. The success of e-commerce in urban and regional levels depend on how the local firms and consumers have adopted to e-commerce.
However, e-commerce lacks human interaction for customers, especially who prefer face-to-face connection. Customers are also concerned with the security of online transactions and tend to remain loyal to well-known retailers. In recent years, clothing retailers such as Tommy Hilfiger have started adding Virtual Fit platforms to their e-commerce sites to reduce the risk of customers buying the wrong sized clothes, although these vary greatly in their fit for purpose. When the customer regret the purchase of a product, it involves returning goods and refunding process. This process is inconvenient as customers need to pack and post the goods. If the products are expensive, large or fragile, it refers to safety issues.
Impact on the environment
In 2018, E-commerce generated 1.3 million tons of container cardboard in North America, an increase from 1.1 million in 2017. Only 35 percent of North American cardboard manufacturing capacity is from recycled content. The recycling rate in Europe is 80 percent and Asia is 93 percent.
Amazon, the largest user of boxes, has a strategy to cut back on packing material and has reduced packaging material used by 19 percent by weight since 2016.azon also has an 85-person team researching ways to reduce and improve their packaging Amazon is requiring retailers to manufacture their product packaging in a way that doesn't require additional shipping packaging.
E-commerce has grown in importance as companies have adopted pure-click and brick-and-click channel systems. We can distinguish pure-click and brick-and-click channel system adopted by companies.
- Pure-click or pure-play companies are those that have launched a website without any previous existence as a firm.
- Bricks-and-clicks companies are those existing companies that have added an online site for e-commerce.
- Click-to-brick online retailers that later open physical locations to supplement their online efforts.
Types of digital channels
E-commerce may take place on retailers' Web sites or mobile apps, or those of e-commerce marketplaces such as on Amazon, or Tmall from AliBaba. Those channels may also be supported by conversational commerce, e.g. live chat or chatbots on Web sites. Conversational commerce may also be standalone such as live chat or chatbots on messaging apps and via voice assistants.
The contemporary e-commerce trend recommends companies to shift the traditional business model where focus on "standardized products, homogeneous market and long product life cycle" to the new business model where focus on "varied and customized products". E-commerce requires the company to have the ability to satisfy multiple needs of different customers and provide them with a wider range of products.
With more choices of products, the information of products for customers to select and meet their needs become crucial. In order to address the mass customization principle to the company, the use of recommender system is suggested.
This system helps recommend the proper products to the customers and helps customers make the decision during the purchasing process. The recommender system could be operated through the top sellers on the website, the demographics of customers or the consumers' buying behavior.
However, there are 3 main ways of recommendations: recommending products to customers directly, providing detailed products' information and showing other buyers' opinions or critiques. It is benefit for consumer experience without physical shopping. In general, recommender system is used to contact customers online and assist finding the right products they want effectively and directly.
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