A model for supporting Business and Consumers within an Internet Retailing Environment

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Utilizing Information Processing for Enhancing Value: towards a model for supporting Business and Consumers within an Internet Retailing Environment

Global Networked Organizations

Twelfth International Bled Electronic Commerce Conference

Bled, Slovenia, June 7 - 9, 1999

Utilizing Information Processing for Enhancing Value: towards a model for supporting Business and Consumers within an Internet Retailing Environment

Adam P. Vrechopoulos

Brunel University, Information Systems & Computing                                                                                         Uxbridge, Middlessex UB8 3PH, UK                                                                                                                      Tel/Fax: +30 1 8203160, 8203154                                                                                                                              email [email protected]

Katherine C. Pramataris

Athens University of Economics & Business, Information Systems Department                                                                 76 Patision Street, 104 34, Athens, Greece                                                                                                              tel/fax: +30 1 8203160, 8203154                                                                                                                                     email [email protected]

Georgios I. Doukidis

Athens University of Economics & Business, Information Systems Department                                                                        76 Patision Street, 104 34, Athens, Greece                                                                                                                     tel/fax: +30 1 8203160, 8203154                                                                                                                                       email

Adam Vrechopoulos, Katherine Pramatari, Georgios Doukidis

Abstract

Information processing composes a critical success factor for business effectiveness. Consumer and Sales data comprise the core concept for supporting businesses to apply personalized Marketing/Sales strategies to satisfy consumers and gain competitive advantage. Towards this strategic objective, businesses are facilitated by the huge technology capabilities incorporated in an Electronic Commerce environment, facing an attractive business opportunity. Internet, as an “information intensive” trading channel, offers the appropriate framework for realizing such an objective. This paper defines an Internet Consumer Behavior Framework (ICBF) or in other words the information that a virtual retail store must collect (consumer, sales and navigation data). Furthermore, based on this information/data, it introduces a framework for providing Consumer (Consumer Support Model) and Business (Business Support Model) support. Finally, it examines the way that the various virtual store components contribute to this framework, by providing and exploiting the available information.    

1.   Introduction

Web as a virtual hypermedia environment incorporating interactivity with people and computers (Hoffman and Novak, 1996) represents a revolution in marketing. The Electronic Commerce model requires a very different approach to customer acquisition, support, promotion, merchandising and distribution (Aldridge and Borehamwood, 1998). Evidence shows that the Internet and Electronic Commerce with all their new developments will redefine the meaning of the Marketing 4 P’s (Stil and Zimmerman, 1996). The fact is that traditional marketing mix is no longer sufficient to generate growth and it is no longer the case that the application of classic marketing tools is sufficient to achieve a competitive edge (ECR Europe Report - How to create Consumer Enthusiasm - Roadmap to growth). Processing information is now generally accepted as the fifth “P” of the marketing mix and a large number of studies has shown that effective management of information systems/information technology can be a powerful source of enhancing value and bringing competitive advantage (Hamill and Grecory, 1997).

 

Information can compose a key success factor for influencing effectively the consumer behavior by utilizing the huge capabilities offered by the new sales channel in a successful manner (Stil and Zimmerman, 1996). The key question then is what type of information is required to support consumers and business processes, and how can this information be collected.

The purpose of this paper is to define what data should be collected and processed from a virtual retail store in order to enable it support both its consumers and its business partners. The paper first refers to the peculiarities of Internet as a trading channel and to the transformation of Consumer Behavior over it. It emphasizes the importance of Information processing and proceeds with the presentation of three models. The first model (ICBF) defines the data that should be collected by the virtual store while the other two (CSM and BSM) define the support provided to consumers and business partners. Finally, it presents an overall framework relating the contribution of each component of the retail store to the support of consumers and business activities respectively.    

2.   The Consumer Buying Process

The convenience, depth and variety of information available on the Internet may well change the nature of consumer information search behavior and evaluation of alternatives process in the future and transform generally the traditional model of the buying process (Hawkins et al, 1998). Information processing composes a key issue and a strategic component for a company who decides to “sell through the Net”.

While a growing number of retailers have successfully implemented electronic commerce solutions, the experience of these early adopters provides valuable insights into how new value chains are constructed (Aldridge and Borehamwood, 1998). Online markets are significantly different in a number of aspects from the structure of “classical” or physical markets. Their typology, client potentials, price competition and client-producer interactions are considerably different from the same phenomena encountered in classical markets, where physical presence of the products and parties involved, distribution and transportation, advertisements and clearance of transactions play a role they do not yet have and to an extend never can achieve in online markets.

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Personalized marketing and mass customization techniques through Web sites seem to be at a preliminary stage, at least for the moment. This is a fact that requires knowledge and evaluation of the consumer’s requirements but, most importantly, it requires the constant study of the consumer’s behavior in the store and generally the data created by him/her (POS data).

As far as Consumer Behavior Analysis is concerned, this seems to be completely unknown in the Internet environment (Hoffman and Novak, 1996).  The fact is that Web changes the nature of communication between firms and customers and customers have ...

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