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ABC: An Introduction to E-Commerce

Get an overview of e-commerce from the experts

PAGE 3

• What is B2C e-commerce?
• What is the difference between B2C and B2B e-commerce?
• Why was there so much hype surrounding B2C e-commerce when it got its start in the late 1990s?
• How should companies organize their B2C initiative?
• What are the major challenges of B2C e-commerce?
• What is channel conflict and how can I avoid it?
• Can B2C e-commerce be profitable?
• Do I need a privacy policy for my B2C initiative?
• Do I have to worry about Internet taxation?

What are the major challenges of B2C e-commerce?

• Focus on personalization: A wide array of software is available to help e-commerce sites create unique boutiques that target specific customers. For example, American Airlines has personalized its website so that business fliers view it as a business airline and leisure travelers see it as a vacation site. Amazon, which built its own personalization and customer relationship management (CRM) systems, is well known for its ability to recognize customers' individual preferences.
• Create an easy-to-use customer service application. Providing just an e-mail address can be frustrating to customers with questions. Live chat or, at the very least, a phone number will help.
• Focus on making your site easy to use.
• Fulfillment — E-commerce has increased the focus on customer satisfaction and delivery fulfillment. One cautionary tale is Toys "R" Us' holiday debacle in 1999, when fulfillment problems caused some Christmas orders to de delivered late. Since then, companies have spent billions to improve their logistical systems in order to guarantee on-time delivery. Providing instant gratification for customers still isn't easy, but successful B2C e-commerce operations are finding that fulfillment headaches can be eased with increased focus and investment in supply chain and logistical technologies.

 

What is channel conflict and how can I avoid it?

Channel conflict, or disintermediation, occurs when a manufacturer or service provider bypasses a reseller or salesperson and starts selling directly to the customer. Some sectors, including the PC and automobile industries, are particularly vulnerable, as are service industries such as insurance and travel. Levis, for example, pulled its website after its resellers protested. And in the fall of 1999, General Motors tried to buy back 700 franchises and sell cars direct -mostly to build out a possible Internet channel. But the plan backfired, upsetting dealers and prompting discussions with GM.

Now, some that struggled with channel conflict are finding ways to approach e-commerce without upsetting their salespeople. For example, big car companies and manufacturers such as Maytag are setting up websites that allow customers to decide what they want before being redirected to a local dealer. Companies that started in the brick-and-mortar world now realize that the web is a viable sales channel. They need to devote resources to it as part of their branding and commerce.

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