Pureplays– ‘clicks-only’ or virtual retailers are organisations that operate entirely
online. In reality it is almost impossible for a business to operate online without a
point of access to the Internet. Therefore, generally speaking, the term ‘pureplay’
refers to retailers that do not have fixed-location stores (e.g. http://www.figleaves.com)..) (The
broader definition creates confusion with the term ‘clicks and mortar’. Perhaps the
most feasible explanation for the lack of commonly understood e-terminology is the
immaturity of Internet business in general.) A variation of this category are digital
retailersthat sell products in digitised form (Dennis et al., 2004).
Intermediaries– who link Internet technology and the retail supplier with the con-
sumer. Such organisations perform the mediating task in the world of e-commerce
between producers, suppliers and consumers by using consumer data, which is care-
fully analysed and used to target marketing campaigns. Some firms function as
infomediaries(information intermediaries) assisting buyers and/or sellers to understand
a given market. Established businesses might lack the resources, in terms of both staff
and technological infrastructure, to operate their web activities internally. This creates
an opportunity for the intermediary to step in and provide web solutions and they
could eventually replace established retail businesses. The growth in importance of
intermediaries has led to the use of the term ‘reintermediation’ (see Chapter 1).
A good example of an online retail format intermediary is Respond.com
(www.respond.com). This company uses the Internet and the web to connect buyers
and sellers by e-mail. The buyer fills in an online form giving details of the product he
or she wants, together with its price. This form is then sent as an e-mail to the sup-
plier who may be able to service the enquiry. Respond.com then sends e-mails to the
consumer, providing him or her with the offer.
Manufacturers of consumer goods– also see the Internet as an opportunity to regain
some of their power lost to the retailers in the past by the shortening of distribution
channels. The process of disintermediation works by the manufacturer excluding the
retailer altogether and marketing directly to the customer, thus shortening the value
chain and/or the supply chain by trading electronically and shifting the balance of
power closer to the end-consumer. Early examples of disintermediation originated
within the banking industry, when it was noticed that information technology and
industry regulation had reduced the need for retail banks as intermediaries.
Any one of these formats could become the archetypal e-retailerand could thus affect
the future growth of the online retail market as a retail environment. Potentially, if vir-
tual merchants (brick and clicks, pureplays, intermediaries) prove to be highly
successful, established retailers operating from a fixed-location store could find them-
selves increasingly being replaced by new Internet-based retail formats (Van Tassel and
Weitz, 1997). The implications are considerable, as Internet shopping is beginning to
fundamentally alter the way that consumers shop and thus revolutionise the retail envi-
ronment, transforming the local high street into a global virtual high street. New entrants
may benefit from financial freedom to develop an organisation suited to supporting the
logistical demands of the new format (thus addressing the ‘last mile’ problems faced by
established retailers). Established retailers can create competitive advantages from brand
equity and high levels of customer service – effectively preventing new entrants from
establishing a foothold in highly competitive retail markets. However, if established
retailers continue to dominate retail supply and develop their current integrated
approach to retailing through the use of technologies such as EPOS (electronic point of
sale), EFTPOS (electronic funds transfer at point of sale) and loyalty cards, bringing them
closer to the customer, then the Internet could be used to support these operations. In
this scenario, revolution is less likely to occur. The next section considers which retail
channel and the types of activities offered by e-retailers.
E-RETAILING