Page 262 - DMGT550_RETAIL_MANAGEMENT

Unit 14: Information System in Retailing

Customer Interaction Notes

The greatest benefit of online commerce is its ability to interact with the customers. Such an
interaction allows the retailers to reach the individual customers and react appropriately to
their responses. Interaction acts as a vital tool for mass customization. The common examples
include online marketing of books, flowers, software and education. This has also led to greater
satisfaction among the online buyers. According to a research agency, 81% of the buyers were
found to be highly satisfied with their online purchases.

Mass Media

A supermarket is limited in its area of operation. It caters to a specific geographical location such
as a city and/or its suburbs. However, a web site is globally accessible leading to a worldwide
reach and an increased potential customer base.

Search Option

With web search capabilities (which need further development) it is easier to find the particular
types of goods required by a customer. The consumer decides what he wants to buy rather than
the retailer offering what he wants to sell. This ultimately translates into consumer
empowerment.
User Friendly

Customers can execute transactions via the same medium the information is provided, so there
is no disconnect between the desire to purchase and the ability to purchase. (Payment schemes
are still evolving and therefore this advantage is likely to become more apparent in the future.)

Effective Price Discrimination

E-tailers can use price discrimination in an effective and efficient manner. E-tailers can use
previous transactions to identify the likelihood of products being purchased at certain price
points and use this information for price discrimination.
Customized Product Placement

E-tailers can change the online placement/display of a product based on the previous transactions
so to increase the visibility of goods that the user is more likely to buy based on the previous
encounter at the time purchase. This allows a contextual design of placement to ensure conversion
of a visit/hit to the web site into a sale.

Global Reach

Customers have a much wider choice at their fingertips (a variety of e-tail sites to choose from
etc.) In this way, the web creates a global market place that brings together multiple consumers
and retailers.

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