CH 4 Building an E-commerce Presence
1. Why did Dick's decide to leave eBay and take over its own e-commerce operations?
Dick’s e-commerce grew by 40% from 2010 to 2015. For nearly 10 years eBay handled Dick’s back-end fulfillment processes and most of their e-commerce presence. eBay collected fixed commissions on sales, whether small of big. By 2015 Dick’s grew into a large company and the agreement with eBay stared to cost them a lot of revenue. As for eBay, their costs were the same for processing expensive and cheap items. Dick’s had to move their e-commerce to in-house in order to have control over it and to reduce the processing expenses. Dick’s were able to save $20 to $25 million per year after leaving eBay.
2. What is Dick's omnichannel strategy?
After leaving eBay, Dick’s had full control over their e-commerce operations. It allowed them to provide better support for unique omnichannel features. Dick’s began to use their physical stores as distribution centers for online orders. They were able to turn the weakness of bricks-and-mortar into an advantage which gave them efficiency and better delivery time. About 80% of Dick’s online orders are shipped within of geographical area of the physical store. Also, customers are able to pick up online orders at the closest Dick’s store.
3. What are the three steps in Dick's migration to its new website?
At first, Dick’s began creating their proprietary e-commerce platform and integrating its existing systems. Then, they moved two of their smaller brands, Field & Stream and Golf Galaxy, to the platform to make sure that everything works and that there are no issues. At the end, after some developments, Dick’s moved all of their website onto the platform. After the launch, the online sale grew but there were some glitches.
4. What are the primary benefits of Dick's new system?
The main feature of the new e-commerce platform is the ability to buy online and pick up items at the store as well as the ability to ship from or to the store. The platform also has the ability to test different strategies for marketing and pricing in different regions, a better search system, and better analysis. The e-commerce sales have doubled in regions where they opened new stores, and that multichannel customers spend 3x as much as single-channel ones. Dick’s also developed a mobile platform to increase the brand loyalty. At last, their new system allows Dick’s to have better control over development cycles and speeds up its testing processes.
Projects p. 251
Question 2: Visit several e-commerce sites, not including those mentioned in this chapter, and evaluate the effectiveness of the sites according to the eight basic criteria/functionalities listed in Table 4.11. Choose one site you feel does an excellent job on all the aspects of an effective site and create a PowerPoint or similar presentation, including screen shots, to support your choice.
Question 3: Imagine that you are in charge of developing a fast-growing startup's e-commerce presence. Consider your options for building the company's e-commerce presence in-house with existing staff or outsourcing the entire operation. Decide which strategy you believe is in your company's best interest and create a brief presentation outlining your position. Why choose that approach? And what are the estimated associated costs, compared with the alternative? (You'll need to make some educated guesses here-don't worry about being exact.)