Chapter 9:  Online Retailing and Services


3. Drawing on material in the chapter and your own research, prepare a short paper describing your views on the major social and legal issues facing online retailers.

A:        The number one complaint of online retailers is they are not getting enough visitors.  Many choose to get visitors the same way their competitors do. Online retailers try search engine placement, pay-per-clicks, banner ads and other marketing tactics.  Banners can cost as little as $1 per 1000 views. Email lists can be as inexpensive as $30 per 10,000 names. Despite these low prices, retailers are finding that many times these tactics don’t deliver enough sales to justify the cost.  Turning visitors into customers is the second biggest problem that online retailers face. This becomes a greater problem when retailers sell items that people prefer to see and touch before buying, such as clothing.  Another problem is Price-shopping.  If you sell something exclusive, price-shopping wouldn’t be a problem for you until competition shows up on the scene.  However, if you sell products that other websites offer, then you’ll find intense pressure to lower your prices. Search engines give prospective customers a list of options. Plus, there are price comparison websites like Pricegrabber, MySimon and Dealtime that make it easy for consumers to price-shop. They give their users prices from several websites.  And lastly, Shopping cart abandonment.  A visitor decides to buy from you. Somewhere between placing items in the shopping cart and completing the purchase they leave your website, usually for good.  More than 60 percent of online shoppers abandon purchases before completing the credit card transaction, according to Gartner Group, Inc. Which means if 40 people buy from you, 100 started to buy from you. Imagine how many more sales you’d have if you prevented some of these abandoned carts.


5. Together with a teammate, investigate the use of mobile apps in the online retail or financial services industries. Prepare a short joint presentation on your findings.

A:            The use of mobile apps in association of online retail industries continues to grow exponentially, making such companies large profits due to the wide accessibility and convenience of mobile shopping. For some companies, most of their yearly sales come from mobile sales applications. These apps make purchasing extremely convenient by using store locators, price comparisons and product information right at the fingertips, enabling no need to go to a register or a desktop for that matter. Companies also largely use promotional means through apps by offering exclusive coupons and discounts, further encouraging mobile app e-commerce. From a current perspective, “brick and mortar” stores need to figure out a game plan to drive traffic and promote in-store business.