E-retailing: the virtual channel
This section looks at how the Internet is being used as a channel to market, examining
the activities retailers are engaging with online with customers. Retail channelis a term
introduced by Doherty et al. (1999) to describe companies’ multi-purpose adoption of
the Internet, using it as both a communication and transactional channel concurrently
in business-to-consumer markets. Traditionally the term channeldescribes the flow of a
product from source to end-user. This definition implies a passive unidirectional system
whereby the manufacturer or producer markets through a wholesaler or retailer to the
consumer. Recent developments in information technology are changing this orienta-
tion by enabling retailers to focus their marketing efforts on managing customers more
effectively (Mulhern, 1997). Therefore, the Internet brings the customer even closer to
the retailers via a new combined marketing and distribution channel, in effect an inter-
active retail channel. This move may also suggest a shift towards a bidirectional
retailer–consumer relationship, in which more power accrues to the customer (Hagel
and Armstrong, 1997). As a result of the technological capacity e-retailers are becoming
increasingly creative with how they are using the Internet and associated digital tech-
nologies to serve the needs of their online customers.As we have seen, businesses trading in consumer markets can choose to serve their cus-
tomers via different combinations of physical and digital channels. Whatever online
format a business chooses, decisions will also be taken about the actual function of any
Internet- and web-based activities. These will primarily fall into one of two categories:
information functions or interactive functions.Information functions
Web sites provide retailers with an important opportunity to give customers informa-
tion. Many companies see the web as a means of expanding customer services through
offering their customers wider ranges of information than is possible in-store. One of the
greatest advantages of the web according to UK retailers is its ability to facilitate the dis-
persion of low-cost information. Retailers have been proactive about providing
information on their web sites, and offer a wider range of different types of information:
Product informationincludes product descriptions and prices, promotional informa-
tion and web advertisements, colour swatches and graphical images.
Financial informationincludes company reports, annual statements and investor infor-
mation. The depth of coverage can vary considerably, as can the extent of accessibility.
Company informationincludes such items as history of the company, store location
information, details of employees and company incentive schemes.
Press releasesappear in various forms. Some companies use press releases as part of
their consumer promotions whereas others include such information in their corpo-
rate web sites aimed at enhancing the overall profile of the brand(s) (see how Ben and
Jerry’s are using the web, Figure 10.4).
Recruitment information– companies have recruitment features providing potential
applicants with job details.E-retail activities
Core tenants
A shopping centre or
mall is usually a
centrally owned
managed facility. In
the physical world, the
management will aim
to include in the mall
stores that sell a
different but
complementary range
of merchandise and
include a variety of
smaller and larger
stores. The core tenants
or ‘anchor stores’, as
they are often called,
are the dominant large-
scale store operators
that are expected to
draw customers to the
centre.
Retail channel
Retailers’ use of the
Internet as both a
communication and a
transactional channel
concurrently in
business-to-consumer
markets.
E-retail activities