INMA_A01.QXD

that they can compete and in many instances surpass dot-com start-ups (pureplays),

which only use the Internet as a route to market. According to Dennis et al. (2004) online

shoppers prefer shopping at web sites operated by established high-street retailers.

As adoption of the web has expanded a number of different formats have been

adopted by companies wishing to serve online consumers. According to Levy and Weitz

(1995) retailers survive and prosper by satisfying customer needs more effectively than

the competition, addressing customer needs through type of merchandise, variety and

assortment of merchandise, and levels of customer service. Traditionally, there are two

main types of established retail companies: those operating from fixed-location stores,

such as department and convenience stores; and non-store-based operations such as cat-

alogue retailing and direct selling. The fine detail of these various operating styles has

gradually evolved to accommodate current customer needs. E-retailing has rapidly

emerged, emulating non-store-based operations and new entrants like Amazon demon-

strate how the Internet can potentially completely redefine customer needs using the

Internet and the web to create a virtual retail environment with extensive global cover-

age. Currently there are several different formats that have been adopted by companies

operating in B2C markets, including:


Bricks and clicks– established retailers operating from bricks-and-mortar stores inte-

grate the Internet into their businesses either strategically or tactically as a marketing

tool or channel to market. Currently, the most successful online retailer in the world

is Tesco.com, where personal shoppers select the customers’ goods in local stores. This

is not the only approach a business might choose to fulfil customer orders – networks

of strategically placed warehouses provide another option.


Clicks and mortar– virtual merchants designing their operating format to accommodate

consumer demands by trading online supported by a physical distribution infrastruc-

ture. Virtual channels have distinct advantages over traditional marketing channels in

that they potentially reduce barriers to entry. The location issue, considered to be the

key determinant of retail patronage (Finn and Louviere, 1990), is in the physical sense

reduced, along with the need for sizeable capital investment in stores. The best-known

virtual merchant using this format is Amazon.com, the world’s largest online bookstore.

CHAPTER 10· BUSINESS-TO-CONSUMER INTERNET MARKETING

Figure 10.3E-retailing and strategic focus

Market focus of online content:

Transitional

Content is changed in order to

become aligned with the

developing strategy

Unspecified

Company tends to use existing

company and product information

to create an online presence

Weak: lack of

understanding of the

online potential – no

clear e-stratgey

Specific

Content is created and tailored

to meet and exceed the needs

of the online consumer

Strategic contribution:

Developing: strategic

focus emerging,

corporate competencies

and market potential

being evaluated

Strong: core business

is designed to

support online

operations