UK population by using a store-based model whereas ASDA, which offers less product
lines, has based its model on the classical warehouse model. However, it is equally
important to remember that the lack of a suitable infrastructure can be limiting in how
the technology can be used (see Chapter 11).
Marketing and salescan be used in customer-centric value creation strategies in the
form of interactive marketing communications strategies (see Chapter 4 for a detailed
discussion) and revenue streams. Indeed according to Dennis et al. (2004), there are four
revenue stream business models, which in turn are based on advertising, merchandising
and sales, transaction fees and subscriptions.
Strategic implications for retailers wishing to be successful online are far reaching and
require a retailer to develop a carefully informed strategy, which is guided by a business
model that can satisfy corporate objectives through the deriving value from corporate
capabilities whilst effectively meeting the expectations of the online consumer. The
target market and the product category can have a significant influence on success. Now
read Mini Case Study 10.5 and consider the offline impact of online marketing.IMPLICATIONS FOR E-RETAIL MARKETING STRATEGYTable 10.6Performance gaps and managerial implications
Performance gap Commentary Managerial implicationsThe disparity between The gap between Internet use and the Companies need to develop web sites to
consumer expectations lack of web site development means capture this behaviour
and web site offer there is still the potential to capture A failure to do so will result in lost sales as
browse and buy behaviour consumers browse and/or buy elsewhere
i.e. the effect is both ‘on’ and ‘off’ line
The disparity between brand Retailer brand strength is frequently not The first ‘dot-com’ wave was concerned
strength offline vs online reflected online. This may dilute current with establishing first mover advantage.
brand perception and leaves an opening This second wave is concerned with
for competitors to establish a stronger ‘bricks and mortar’ retailers establishing
online brand presence even if they are their brand strengths online i.e. a ‘brand’
weaker ‘offline’ wave
Any lack of investment will deliver mind
share advantages to competitors even if
they have a lesser brand. In this second
wave it will be difficult to recover a
competitive position once any brand
advantage has been lost
A lack of alignment between The most advanced entrants are from The market is still at an early stage in many
the nature of the online overseas or national catalogue retail categories. There remains a potential
competitive environment companies, the larger retailers (to a competitive advantage for a ‘bricks and
and the maturity of variable extent) and specialist niche mortar’ retailer to ‘grab this window of
consumer demand companies opportunity’
Inertia in decision-making There is a ‘battle for budgets’ within Barriers to customer contact need to be
retailers i.e. retrench and invest in core removed. Budgetary constraints are
business at the expense of new channels misaligned where the cost of doing
Some retail cultures run counter to nothing means lost opportunity at best and
non-traditional means of ‘doing business’ and at worst lost competitive advantage
The maturing outsourcing market may
unblock the cost-benefit perception
Source: Allegra Strategies (2005)