BUS510 \ CH09
In 2022 retail e-commerce was apprx. XXX percent of total retail sales in the United States.
15
In 2022, the number of online buyers in the United States was around XXX million.
215 MILLION
Virtual merchants account for WHAT % of online retail sales
47% - but includes Amazon at 35%
U.S. personal consumption of goods was what
5.5 trillion, 24% of GDP
The lower the ________ compared to revenue, the higher the gross profit. In 2022, more than ________ of the U.S. population are online buyers.
75%
Service sector is about what % of US GDP
80 percent
Pro forma earnings
AKA EBITDA
virtual merchants example
Amazon
Example of barriers to entry keep new rivals out
Apple uses brand loyalty & innovation
Leading online purchase category in 2021, and %.
Computers and consumer electronics, 19%
Top 3 online categories in terms of the revenue generated
Computers/consumer electronics, apparel/accessories, furniture/home goods
manufacturer-direct example
Dell & Apple & Sony
The online mortgage industry has transformed the process of obtaining a mortgage.
FALSE
Strategic analysis focus
Focuses on both industry and firm itself - strong market position & value proposition
Omni channel challenges:
High cost of physical buildings and staff, coordinate prices, cross-channel operations, build e-commerce presence
Omnichannel integration
Integrating web operations with physical store operations (online order, in store pick up)
NATURE OF INTRA-INDUSTRY COMPETITION
Is the basis of competition based on differentiated products and services, price, scope of offerings, or focus of offerings? Future changes?
INDUSTRY VALUE CHAIN
Is the chain changing in ways that benefit or harm the firm?
Catalog example
Land's End, L.L. Bean, C D W Corp, Cabela's
Digitally native vertical brand (D2C) examples
Lemonade, Carvana, Vroom, Chime, Warby Parker, Stitch Fix, Casper, Everlane
Job major platform for social recruiting is
3 top online job sites
LinkedIn, CareerBuilder, Monster
on-demand delivery top 2 issues
Low margins & high delivery costs
Amazon Vision
Lowest prices, best selection, most customer-centric
Online recruiting advantages
More efficient, cost-effective, reduces total time-to-hire, easier for job hunters
One of the 1st and most common types of omni-channel integration.
Online order, in-store pickup (BOPIS/click-and-collect)
FIRM VALUE CHAIN
Operation that allow it to be most efficient in industry? Ability to roll with tech changes.
TECHNOLOGY
Proprietary tech? Operational technologies that work well like CRM, fulfillment, supply chain management, inventory control, and HR.
Amazon Business model:
Retail, third-party merchants, and Amazon Web Services
channel conflict
Retailers of products must compete on price and inventory directly vs manufacturers
SYNERGIES
Strategic partnerships and alliances to access other's abilities?
Online retail revenues are expected to XXX from 2019 to 2026
TRIPLE
Example: Same-day delivery requires huge investment T/F
TRUE
Most jobs are found on mobile platforms T/F
TRUE
Most people trust online reviews as much as a personal recommendation T/F
TRUE
Personal consumption of retail goods accounts for about 24% of total GDP. T/F
TRUE
Pro forma earnings are always BETTER than GAAP earnings T/F
TRUE
Today, more travel is booked online than offline. T/F
TRUE
the online mortgage industry has NOT transformed the process of obtaining a mortgage
TRUE
CORE COMPETENCIES
Uniqueness that cannot be easily duplicated by other s
omnichannel merchant example (bricks and clicks)
Walmart, Macy's, Target, Staples
Digital native vertical examples
Warby Parker, Everlane
SOCIAL AND LEGAL CHALLENGES
Ways to address consumer privacy and security issues? Lawsuits? Intellectual property issues? Internet taxation?
transaction brokering
acting as an intermediary to facilitate a transaction
6 key industry strategic factors are
barriers to entry, power of suppliers, power of consumers, existence of sub. Products, industry value chain, nature of intra-industry comp.
Direct merchant challenges
channel conflict, switch from supply-push to demand-pull, build e-commerce presence
The lower the ________ compared to revenue, the higher the gross profit.
cost of sales
working capital
current assets minus its current liabilities
Firm-specific factors:
differentiation, brand loyalty
On-Demand service providers are:
disrupters, lowering cost of services
operating margin
dividing operating income or loss by net sales revenue
The strategic factors that pertain specifically to the firm and its related businesses include:
firm value chain, core competencies, synergies, tech, social/legal challenges
7 sectors of US retail
general merch, consumer durables, online retails, gas/fuel, specialty, MOTO, food/beverage
gross margin
gross profit divided by net sales
E-commerce reality
intense competition, logistics challenges, high cost to acquire customer
Early e-commerce promises
lower prices, wide selection, convenience
Omnichannel
online + physical presence
digital native D2C verticals
online startup companies focused on direct sourcing of materials, control of their distribution channels, and direct connection to the consumer
Catalog merchant challenges
printing/mailing $, new tech, cross-channel ops, build e-presence
Within the major service industry groups, companies can be categorized generally into two categories?
providing hands-on services & transaction brokering
Virtual merchants
pure-play online stores
Subscription models
recurring revenue streams like Amazon Prime, Stitch Fix, HelloFresh
Stitch fixes uses AI for
reduce its inventory costs, to adjust production to demand, know its customers, and fill/ ship orders
service sector is good fit for e-commerce because
services are based on collecting, storing, and exchanging information
virtual merchants
single-channel e-commerce firms that generate almost all their revenue from online sales
Industry factors
size, growth, competitors
balance sheet
snapshot
assets
stored value
2 business analysis approaches
strategic & financial
Lemonade insurance was sued for & settled for what amount
violating biometric privacy laws; $4 million
4 main types of online retail business models:
virtual merchants, omnichannel merchandisers, manufacturer-direct firms and catalog merchants.
