The Advertising model
On the Internet, this model takes the form of advertisement banners mixed on other web pages. The banners refer to e-companies selling products and services. The visitor can follow the link from the main page to the banner’s page, in order to find out more on the advertised company’s products/services. This kind of model is most efficient when the number of viewers is very large and/or highly specialized. Advertising models include portals, classifieds, query-based paid placement, and contextual advertising
The Infomediary Model
Infomediary companies have collected and analyzed large quantities of data about consumers, products and e-companies. These data have been analyzed and processed in such ways to be useful to any person looking for a specific product/service, a specific target group, and/or a specific e-tailer. Infomediary companies can either be advertising networks, incentive marketing companies, or audience measurement services, to name a few.
The Merchant Model
This model refers to the more traditional wholesalers and retailers of goods and services who use the Internet as a new sales outlet. The sales take place either based on list prices or on auction basis. Such ‘merchants’ can be virtual, catalog, click and mortar or bit vendor.
The Manufacturer (Direct) Model
Traditional manufacturers of goods add the Internet as a new sales outlet, thereby also canceling the services of the distributors. Among the advantages of this model, are the fact that company will deal directly with the end, offering better prices, and improving its understanding of the needs of the consumers.
The Affiliate Model
E-tailers, who use this model, will give the web user who is simply surfing the opportunity to make advantageous purchases on a pop-up basis. If a sale is performed, then the affiliate company will receive a commission from the e-tailer, if not, it will be at no cost to either.
The Community model
This model is based on consumer loyalty. The users of those sites voluntarily share their knowledge and expertise on specific subjects, and therefore, each participant can gain from such free and voluntary exchanges. Examples are the open source sites, where developers present their findings and may find solutions from other users, and the knowledge network, where open discussion are held by experts from a same field.
The Subscription model
Against a fee, which is independent of the actual number of visits a user may make, the user can have access to a regular publication s/he subscribes to.
The Utility Model
In contrast to the above model, in this model, the user is charged for the number of
times s/he visits the sites. The best example of this model is the metered telephones, where the subscriber will pay for the actual number of units used.
FROM PHYSICAL STORE TO The e-STORE
Companies that wish to offer their products and services online need to build an electronic storefront, which must contain three interrelated subsystems. The layout should be attractive for the visitor of the site in order to create positive feelings towards making a buying. Firstly, the storefront should contain company’s catalog with products, prices, offers and promotions, where a shopping card or basket is included. Secondly, a transaction system for processing orders, payments and other aspects of the transaction. Lastly, a multiple payment option gateway that routes payments through existing financial systems primarily for the purpose of credit card authorization and settlement (Turban et all, 2002). Besides, complex e-Shops have many more features (Whiteley, 2000), such as:
- Customer Registration (stores the customer details on a database)
- Personalized Web Pages (a page generated for a specific customer)-customer profile
- Online Delivery (software, information and music can be downloaded)
- Loyalty Schemes (customers can collect points for each purchase they make)
Trust & Loyalty and Security
This can turn out to be a strong competitive advantage for the firm that goes on line. Trust can be transformed into loyalty and consequently into more sales and increase in market share. This can be accomplished by offering special products that cannot be bought offline. Moreover, by making attractive offers and giving bonuses. Also, the security issue for transactions online is very important. If the customer feels secure will tend to buy more. Security has to do with credit card information and privacy. For companies adopting Internet technology it has been estimated that the cost for attracting new customers is five times more the cost of keeping existing customers satisfied (Chaston, 2001).
Legal Part
The retailers who go online will have to be aware of the legal issues concerned, meaning that what might be legal in one country or state be illegal in another country or state. So, they have to monitor every legal move to be ready to adjust their content or methods of selling by the Internet.
Latest News
In retail e-commerce sales there is an increasing trend every year. According to the U.S. census bureau, preliminary first-quarter 2005 retail e-commerce statistics show a growth of 24 percent on a year-over-year basis (Sean Michael Kerner).
In the artuicle by Keith Regan we find that The State of Retailing Online 8.0, the annual report produced by Shop.org -- the online arm of the National Retail Federation -- and , said 2004 sales reached US$141.4 billion, an increase of 23.8 percent. "One way retailers will grow sales over the next several years will be by launching country-specific sites and operations to accommodate a growing number of international customers,"said Carrie Johnson, Forrester Research analyst and author of the report. Moreover the number of women shopping online continues to grow, leading to the increase of sales gor items such as flowers, gifts and personal care ones.
Last year, online accounted for 6.5 percent of total retail sales, up from 5.4 percent in 2003 ( Enid Burns). In 2005, online sales are expected to account for 7.7 percent of total retail sales.Health and beauty increased 58percent.Sporting goods shot up 43 percent. Computer hardware and software tied auto and auto parts, both growing by 13 percent.
ANALYSIS OF QUESTIONAIRE ABOUT E-COMMERCE
We have made a research about e –commerce in Greece. We ask 140 persons 52% was men and 48% was woman. We concentrate more in the ages 20-30 82% of the total sample.
More than 90% of the people that have been asked use the Internet. The bigger part of remain 10% belongs to the category of female over the age of thirty. We also want to recognize the reasons that Greeks use the Net. We finally found out that over 80% use it for entertainment and foe information and only 8% for purchases. This percentage was disappointing for us because it small and it is really smaller than the average of the EU accordingly with the national statistical service. In this point we try to evaluate the reasons that Greeks do use the internet for buying products. In this point we have to consider that over the 70% answer that he\she is familiar with e-commerce and almost 1 of 2 has at least once buy a product through the net but this is not the main reason to use the net.
The reasons that they do not use the net for purchase are:
1st that prices are equal with the price in the market
2nd the privacy, they believe that they can the info they get for their advantage
3rd security, in Greece we believe that the Net is less securing that to make hour purchase in the stores
4th delays of delivery, most of the stores are not accurate in their delivery and this is big problem
5th the immediate gratification and the feeling. When you buy through the net you have to wait for your product and you can not try it or touch it, this is the reasons that they do not buy clothes and luxuries through the net.
At this point it is important to mention a comment that have been made from the people that answer our questionnaire, they said “that shopping is a type of entertainment and socialization they love it “
As we said before over 70% is familiar with e commerce and the 80% has visit an e- commerce site. Most of the products that they buy are high-tech devices and they made their reservations. They prefer the net because you can safe time, you can access it 24 for hour a day, it is user friendly because the structure is really good as you get much more detailed information and accurate.
Most people prefer to pay on delivery but the ones that really use the net for purchase prefer credit cards.
The Greek e-commerce site that they are known is GERMANOS, E-SHOP, and PLAISIO. The only just e-commerce site is E-SHOP. GERMANOS and PLAISIO are known more from their stores than through the net. So one of the reasons Greek e-commerce site is not use is the fact that people are not familiar with them.
The oxymorous in our research that people that use the net more believe that e-commerce and the net are not developed well enough in Greece and they that use the net less believe that it is.
To conclude we have to understand that e-commerce in our country is not developed, people are afraid of the net; they do not know where to look for the e-shops and only 30% prefer the Greeks sites because they do not feel secure with not well known Greek sites. This is the reason that only 3% of the sample is heavy e-buyers. So the e-market is good market to expand as it is not used properly yet, so we have the opportunity to create a e-shop try to make it know through the media and to establish a relationship of respect and reliable relationship through us and our customers.
QUESTIONAIRE
1) Do you use Internet?
- Yes var1
- No
2) For what reasons do you use Internet? (Choose at most 2)
- Just information
- Entertainment var2
- Purchases
3) Where from? (Choose at most 2)
- Work
- School
- Internet café var3
- Office
- Home
4) Are you familiar with e-commerce?
- Yes
- No var4
5) Have you ever made an on-line purchase?
- Yes
- No var5
6) If Yes how often?
Rarely 1 2 3 4 5 Very often var6
7) Have you ever visited an e-commerce site?
- Yes
- No var7
8) Name two of them (Greek)
a._________
b._________ var8
9) What kind of products do you buy? (Choose at most 2)
- Clothing
- High-tech devices
- E-banking var9
- Booking/ Reservations
- Other
10) Which sites do you prefer?
- Greek
- USA var10
- EU
11) Which Greek sites are you familiar with? (Choose at most 2)
- Germanos
- E-shop
- Plaisio var11
- Other
12) What do you believe about e-commerce? (rate)
Very cheap 1 2 3 4 5 Very expensive var12
Easy to use 1 2 3 4 5 Difficult to use var13
Low variety 1 2 3 4 5 High variety var14
13) How would you rate the following advantages?
- Cheap 1 2 3 4 5 var15
- Variety 1 2 3 4 5 var16
- User friendly 1 2 3 4 5 var17
- Privacy 1 2 3 4 5 var18
- Time convenient 1 2 3 4 5 var19
- 24 hrs per day 1 2 3 4 5 var20
14) How would you rate the following disadvantages?
- Security 1 2 3 4 5 var21
- Quality 1 2 3 4 5 var22
- Privacy 1 2 3 4 5 var23
- Structure 1 2 3 4 5 var24
- Delay of delivery 1 2 3 4 5 var25
- Taste-feeling 1 2 3 4 5 var26
15) Which way do you prefer to pay?
- Credit card
- Debit card
- Pay on delivery var27
- Other
16) Which products you would not buy from an e-commerce site?
(Choose at most 2)
- Clothes
- Luxuries
- Every day products var28
- Services
- Other
17) In what range do you believe Internet is developed in Greece?
Low 1 2 3 4 5 High var29
18) Gender
- Male
- Female var30
19) Age
- Under 20
- 20-30 var31
- 30-50
20) Education level
- Basic
- High var32
- Higher
21) Occupation
- Student
- Employee
- Unemployed var33
d. Employer
Sources (for latest news)
(Sean Michael Kerner -Retail e commerce growth outpacing the pack
( Keith Regan, Times-e commerce)
(Enid Burns-on line growth robust)
Sources
Chaston I (2001) e-Marketing Strategy, Berkshire, McGraw Hill.
Nickerson R C (2000) Business and Information Systems, 2nd edition, Prentice Hall.
O’Connor J, Galvin E (1998) Creating Value through E-Commerce, London, Financial Times-Pitman Publishing.
Turban E, King D, Lee J, Warkentin M, Chung H M (2002) Electronic Commerce, A Managerial Perspective, New Jersey, Prentice Hall.
Whiteley D. (2000) E-Commerce: Strategy, Technologies and Applications, London, McGraw-Hill International (UK) Limited.