E-Commerce the Emerging Distribution Channel

Username: damienlai / Student ID: 215288904

Electronic Commerce better known as e-commerce is widely used as a emerging distribution channel. It is expanding for Business to Business (B2B) and Business to Customer (B2C) activities where it started to substitute the conventional way of purchasing and interaction for businesses and customers. This has rapidly changed the marketing mix landscape for businesses where goods can be sold to their customers without a need for a physical store or face-to face personal interaction with customers. Alibaba Amazon ebayFurthermore, businesses can reach additional potential customers by setting an online store on platforms such as Amazon, Ebay and Alibaba where it can be accessed globally.

E-commerce distribution channel has been growing due to advancement in technology equipment and internet access availability. Through e-commerce channel, it has provided mutual benefits for both businesses and customers. Businesses can lower the selling cost by reducing operating expenses as there is no need for a physical store. In addition, additional savings can be obtained by the elimination of distribution channels such as wholesaler and retailer which lead to “disintermediation”. Furthermore, customers find it convenient as it saves money and time travelling to the store.

However, for a business to be successful in e-commerce distribution channel, the business needs be mindful of their online and offline features of their online store. This will determine the success or failure of e-commerce distribution channel.

What are the features that an online store must have?

Online features that a business must have for e-commerce are system quality, information quality and service quality. Businesses must provide a system that has high integrity where all customer’s privacy and confidential information are maintained. User friendliness of a system is also important for a customer’s shopping experience such as flawless website functionality and easiness of accessing the online store by a non-technology savvy customer.

As customers are not physically in store to evaluate product information, the online store is required to provide the same quality of information to a customer. This includes detailed product information such as accuracy, timeliness, completeness and understandably description to the customer. Although there is no physical interpersonal relationship between a customer and the business, excellent customer service must be maintained. Feedback from online customers should be addressed on a timely basis to provide good service quality to customers. This is to ensure that the online shopping customer have an excellent online purchasing experienced where they would return to the online store for their next purchases.

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Why do we need offline features for an online store?

Products selling or purchasing via e-commerce distribution channels are unlike via retailer or wholesaler where there is an exchange of product and monetary term simultaneously. The transaction between a business and a customer is not complete after checking out from the online store. Customers would expect the offline features to be up to their expectation when they receive their purchases.

Hence, the logistic capability to deliver the products to customers on a timely basis is vital for e-commerce. The logistic capability for e-commerce differs from the conventional logistic expectation. The logistic capability is challenging as e-commerce delivery would be on a smaller order size, high volume with same day delivery expectations. The business is expected to deliver the product as soon as the goods been purchase via online store and delivery tracking system should be in place and shared with the customer.

Products that are delivered to customers must also meet the expectation of the customers in terms of the quantity and quality. The business should provide an assurance of the quality of the product which otherwise provides a full refund to the customer. Failure in offline features of the online store such as failure to deliver the products on a timely basis and product quality issues will lead to failure in the e-commerce distribution channel.



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