WebIT Ch9 Review Questions

In 2020, it was estimated that about what percentage of Internet users over the age of 14 would make a purchase at an online retail store? - 80% - 60% - 70% - 40%

- 80%

Consumers are primarily price-driven when shopping on the Internet. - True - False

- False

Online retail constitutes about 20% of the total retail market today. - True - False

- False

The online retail sector of the retail industry is most similar to the ________ sector. - mail order/telephone order (MOTO) - specialty stores - consumer durables - general merchandise

- mail order/telephone order (MOTO)

Apart from Amazon, the top online retail firms in terms of online sales are all primarily ________ firms. - manufacturer-direct - catalog merchant - web-only - omni-channel

- omni-channel

Current liabilities are debts of the firm that will be due within: - two years. - three months. - six months. - one year.

- one year.

Which of the following has the highest share of online retail sales? - virtual merchants - catalog merchants - manufacturer-direct - omni-channel merchants

- virtual merchants

For a quick check of a firm's short-term financial health, examine its: - long-term debt. - gross margin. - working capital. - cost of sales.

- working capital.

All of the following statements about Amazon are true except: - Amazon purchased Jet.com, one of its discount competitors, to give it a more robust network for delivering goods. - Amazon Web Services delivers more profits than Amazon's entire retail business. - eBay can be considered a competitor of Amazon's. - Amazon generates the bulk of its overall revenue by selling products.

- Amazon purchased Jet.com, one of its discount competitors, to give it a more robust network for delivering goods.

Which of the following is not a digitally native vertical brand (D2C)? - Wayfair - Caspar - Everlane - Warby Parker

- Wayfair

The lower the ________ compared to revenue, the higher the gross profit. - cost of sales - gross margin - assets - operating expenses

- cost of sales

All of the following statements about the MOTO sector are true except: - improvements in telephone systems and the expansion of the credit card industry and associated technologies fueled the development of the MOTO sector. - MOTO was the last technological retailing revolution that preceded e-commerce. - the MOTO sector is also referred to as the specialty store sector. - compared to general merchandisers, the transition to e-commerce was easier for MOTO firms.

- the MOTO sector is also referred to as the specialty store sector.

Which of the following is not categorized as an operating expense? - amortization of goodwill - marketing costs - administrative overhead - the cost of products being sold

- the cost of products being sold

Which of the following enabled MOTO firms to make an easier transition to e-commerce? - the fact that they already had efficient customer order fulfillment processes - the national toll-free call system - falling long distance telecommunications prices - the growth of the credit card industry

- the fact that they already had efficient customer order fulfillment processes

Which of the following provides a financial snapshot of a company's assets and liabilities (debts) on a given date? - Balance sheet - Working capital - Operating margin - Gross margin

- Balance sheet

Which of the following is not an example of a virtual merchant? - Wayfair - Newegg - Dell - Overstock

- Dell

Personal consumption of retail goods and services accounts for over 80% of total gross domestic product (GDP). - True - False

- False

Which of the following statements is not true about the automobile, and automobile parts and accessories, online retail category? - Automobile manufacturers use the Internet to deliver branding advertising. - Most of the revenue in this category is generated from the sales of automobiles. - Automobile retailing is dominated by dealership networks. - U.S. franchising law prohibits automobile manufacturers from selling cars directly to consumers.

- Most of the revenue in this category is generated from the sales of automobiles.

Which of the following is a subscription-based retailer using predictive marketing and big data? - Dell - Lands' End - Stitch Fix - Macy's

- Stitch Fix

Which of the following is not a major trend in online retail for 2020-2021? - The number of online buyers continues to increase. - The Covid-19 pandemic is expected to create a decrease in e-commerce retail purchases. - Buying online has become a normal, mainstream, everyday experience. - The average annual purchase of online buyers continues to increase.

- The Covid-19 pandemic is expected to create a decrease in e-commerce retail purchases.

Big data plays an important role in predictive marketing. - True - False

- True

In 2020, the number of online buyers in the United States was around 205 million. - True - False

- True

Online retailing provides an example of the powerful role that intermediaries continue to play in retail trade. - True - False

- True

The existence of substitute products is a key industry strategic factor. - True - False

- True

All of the following have introduced social commerce functionality, such as buy buttons, shoppable ads, and marketplaces, except: - Facebook - Pinterest - Tumblr - Instagram

- Tumblr

Omni-channel merchants are also referred to as: - catalog merchants. - manufacturer-direct firms. - bricks-and-clicks companies. - virtual merchants.

- bricks-and-clicks companies.

All of the following are challenges faced by bricks-and-clicks firms except: - coordinating prices across channels. - building a brand name. - building a credible website. - handling returns of online purchases at retail outlets.

- building a brand name.

Virtual merchants face potentially large costs for all of the following except: - developing a brand name. - building and maintaining physical stores. - building an order fulfillment infrastructure. - building and maintaining a website.

- building and maintaining physical stores.

All of the following are challenges for catalog merchants except: - high costs of printing and mailing. - the need to bring staff in or manage new technology. - building sophisticated order entry and fulfillment systems. - building a credible website.

- building sophisticated order entry and fulfillment systems.

Which of the following categories generated the highest percentage of online retail revenue in 2019? - computers and electronics - books/music/video - automobile and automobile parts and accessories - apparel and accessories

- computers and electronics

Gross margin is defined as gross profit: - divided by cost of sales. - divided by net sales revenues. - minus total operating expenses. - minus net income.

- divided by net sales revenues.

What is another name for pro forma earnings? - net margin - generally accepted accounting principles (GAAP) earnings - operating income - earnings before income taxes, depreciation, and amortization (EBITDA)

- earnings before income taxes, depreciation, and amortization (EBITDA)

Which of the following is not one of the seven major segments of the retail industry? - electronics and computers - gasoline and fuel - food and beverage - specialty stores

- electronics and computers

All of the following are advantages of online retail except: - ability to change prices. - lower cost of distribution. - lower supply chain costs. - faster delivery of goods.

- faster delivery of goods.

All of the following are examples of the challenges that traditional manufacturers experience when using the Internet to sell directly to the consumer except: - developing a fast-response online order and fulfillment system. - channel conflict. - high-cost structures. - moving to a demand-pull model.

- high-cost structures.

Which of the following is not one of the central challenges facing the online retail industry? - inconvenience in returning goods - delivery delays - consumer concerns about the privacy of personal information - lack of physical store presence

- lack of physical store presence

Which of the following is not considered a current asset? - cash - accounts receivable - marketable securities - long-term investments

- long-term investments

The term supply-push refers to: - waiting for orders to be received before building a product. - channel conflict. - making products prior to orders being received based on estimated demand. - multi-channel manufacturers who sell directly online to consumers.

- making products prior to orders being received based on estimated demand.

All of the following were parts of the vision during the early days of e-commerce except the belief that: - online consumers were rational and cost-driven. - the cost of acquiring customers would be much lower. - entry costs to the online retail market would be much less than those needed to establish a physical storefront. - new, "first-mover" middlemen, with expertise in e-commerce, would force traditional intermediaries out of business.

- new, "first-mover" middlemen, with expertise in e-commerce, would force traditional intermediaries out of business.

Which of the following is not one of the methods used by traditional retailers to develop omni-channel integration? - online order, in-store pickup - online supply-push - online catalog - online promotions for offline purchases

- online supply-push

Operating margin is defined as: - net assets divided by net liabilities. - net sales revenues divided by net income or loss. - operating income or loss divided by total operating expenses. - operating income or loss divided by net sales revenues.

- operating income or loss divided by net sales revenues.

Which of the following is not a key industry strategic factor? - existence of substitute products - industry value chain - barriers to entry - synergies

- synergies