What is Online Shopping?The online selling of or enablingthe sale of products or services toconsumers.
How did OnlineShopping come about?Online shopping emerged with thedevelopment of the internet.Entrepreneurs saw the potential inonline shopping and sprung at thechance to make virtual storefronts, sothat consumers could shop withoutleaving their homes.
Growth of Online ShoppingThere are over 70,000 new websitesput on the internet every hour.Internet traffic is doubling every threemonths.Projected annual internet commercerevenue has grown from $35 billion in1998 to $1.4 – $3.2 trillion in 2003.(Taken from CISCO Systems WEB Site)
Risks & Disadvantages of Online ShoppingFraud- Do you know the Company?Security- Is your credit card safe?Privacy- Is your information being sold?Shipping- Are you getting the correctproduct at the requested time?Difficulty- Do you know how to shoponline?
Consumer BenefitsConvenience-Geographic-Store hours-Ease of transaction-Quick and efficient shopping processInformation-Quick location of items-Easy price/attribute comparisons
Firm BenefitsLess dependence on intermediaries-Geographic distribution-Holdup-Time to deliveryMarketing-Target marketing-Direct customer relationships-Customer service
Online Shopping VS. Traditional ShoppingDifferences-Cannot try or test product beforepurchase.-Minimum human interaction if any.-Cannot pay by cash.-Shop anytime online.
Online Shopping VS. Traditional ShoppingSimilarities-Advertisement.-Security.-Convenience.
2005 expected pattern of electronic shopping users % items shopped Consumer acceptance(%) electronically1 15-20% "hard core" 50-75%2 15-20% occasionals 25-35%3 15-20% experimenting 10-20%4 All the rest still irregulars! 5%
Key Findings of Michael De Kare-Silver in e- shock:• Already about 15-20% of consumers say they’d prefer to shop electronically rather than visiting the shops.• It only takes a drop of about 15% in store traffic to make many stores unprofitable.• This revolution will achieve critical mass as early as 2005.• Manufactures can seize the opportunity to decide whether to establish their own direct consumer distribution and bypass existing retail chains.