The World of E-Commerce

The World of e-Commerce

The internet has spawned a new set of retailers offering consumers the opportunity to buy merchandise and services at fixed prices.

Customer satisfaction with online shopping is improving to the point where online stores/services have higher satisfaction scores than store-based retailers.

In addition to the convenience and security of shopping from home or work at any time, the electronic channel has the potential for offering a greater selection of products and more personalized information about products and services.

Here we take a look at 2 competitive e-commerce websites that has evolved into a huge phenomena - Amazon.com and Jetstar.

Amazon.com

History & Purpose of Site

Amazon.com is an American electronic commerce company based in Seattle, Washington. It was one of the first major companies to sell goods over the Internet As a founder and CEO of Amazon.com, Jeff Bezos is a pioneer in e-commerce. In 1994, the early year of the mainstream internet, Jeff Bezos founded Amazon.com. Bezos saw the potential of the internet; while the largest brick-and mortar bookstore might sell upwards of 200,000 titles, an online bookstore could sell many times more So, Bezos started his aspiration, he launched Amazon.com Inc. on Web in June 1995 and it began service in the following month.

Amazon.com could rapidly go up to be the Web’s largest and most influential retailer because Bezos had his own business strategies. Bezos could fulfill his business strategies, which included building a happy working team, branding the site, keeping customers by offering values, setting up a distribution network, growing strategic alliances as well as acquisitions and so on. These business strategies had earned Amazon its leading-edge status as an online retailer. In many ways, Amazon.com is perhaps the company that is most closely tied with the E-Commerce phenomenon. The Seattle, WA based company has grown from a book seller to a virtual Wal-Mart of the Web selling products as diverse as Music CDs, Cookware, Toys and Games and Tools and Hardware. The company has also grown at a tremendous rate with revenues rising from millions in 1997 to billions in 2001.

BUSINESS MODEL

As Amazon.com was being established, the delivery of information, goods, or services to end customers employed one strong business. This business model takes title to the newly manufactured products that they sell and often rely on third party providers. Like Amazon.com, it needed third party providers, such as Borders and Barnes & Noble, to maintain its sufficient supplies.

There are three operational strategies that have helped Amazon.com to enhance its competitive advantage, including cost-leadership, customer differentiation and focus strategies:

1) Cost-leadership by differentiating itself primarily on the basis of price. Amazon.com always makes sure that it offers the same quality products as other companies for a considerably less price.

2) Customer Diffentiation. Amazon.com provided current and prospective customers with differentiation though design quality or convenience and Amazon.com always selects a differentiator that is different among the competitor.

3) Focus strategy which takes one of the two earlier strategies and applies it to a niche within the market. Amazon.com fouses on outstanding customer service as a niche but not the whole market because each niche has its own demand and requirement.

PAYMENT SCHEME


Amazon.com was the first Internet retailer to perfect the ultimate ease-of-buying device, “1-Click” ordering which allows registered users with a valid credit card on file to literally order a book by clicking a single button.

The introduction of Amazon.com’s patented 1-Click Shopping allows consumers to designate and preset credit card information and shipping details, adding value to the online shopper overall experience by enabling repeat customers to submit an order with literally one click of the mouse. The 1-Click feature also assigns customers a unique identification number that allows them to be recognized without even having to log on.


Steps:
Providing the order is placed with a credit card, the 1-Click ordering service is activated immediately after the consumer’s first order is placed. The function can be turned on and off, according to preferences and details can be changed or reviewed as necessary. The order placed through the 1-Click function can be sent to any address previously shipped to and the consumer’s account will be automatically referenced for shipping and billing information.


1-Click ordering is a secure process, with only information pertaining to the ordered items sent to Amazon.com. It forms the easiest and fastest method of order processing at Amazon.com, however if problems are encountered, Amazon.com also has a help feature that explains the process and details of the function.

It has been a highly successful function, which has lead to competitors, such as Barnes & Noble, and other online merchants copying the ordering system, resulting in Amazon.com petitioning the court to protect its intellectual property (IP). Although its seems that every company has decided to patent some part of its internet operations, Jeff Bezos, and many other companies argue that patents are an extremely valid device which ensures that larger companies cannot just copy such features and put the smaller companies out of business (Miller, 2000, pp.7-9). Amazon.com may not be such a small company, however Barnes & Noble, its biggest rival, is larger, and with the use of Amazon's IP, it may have the power to overtake.


The only problem that has been encountered with the feature, occurred in its initial testing phase, before its implementation for public use. It was revealed that purchasers did not realise that they had completed the order, so Amazon.com changed the post-purchase text to ensure that customers were aware of the simplicity of order processing. The implementation of the 1-Click ordering process aided in satisfying more Amazon.com customers, building customer loyalty, customer retention and ultimately a more customer friendly shopping experience.

CHARACTERISTICS

Amazon.com has remodeled its website to suit its customers’ tastes and preferences. It ensured that the website is accessible, convenient and easy for its customers to find items in each and every one of the many departments they offer.

Design


Amazon.com lets its customers participate on deciding and improving of its web design through feedbacks and made changes based on their opinions. It has traveled around the world, inviting customers to come and try out the new features and design. The web design today reflects the input of many real-life customers of its U.S. and international websites.

FEATURES OF WEBSITE

• Amazon.com concentrated on shopping, searching, saving, and buying--the four activities that of most important to its customers. These activities are now prominently featured at the top of every page on the site.


• Shopping: Customers are able to jump to any department from the upper left of any page. Individual departments are grouped into categories like "Food & Grocery" and "Apparel, Shoes & Jewelry" to make them easier to find.
  
• Searching: Find someone's Wish List or registry from the top of any page.
  
• Saving and Buying: Your Lists--where you can save all the items you'd like to look at later on--and your cart are more prominent and easier to find.
  
• Amazon.com also consolidated links to their bargain features in the "Today's Deals" section at the top of each page. Now you can get directly to Gold Box, Today's Deals, Outlet, and the Friday Sale from the top of every page.
  
  - Bestsellers: Look for the "Amazon Bestsellers" link under "Amazon Exclusives" in the Features & Services box on the left-hand side of the Amazon homepage. Bestsellers (or top sellers) for each department can also be found under the search bar in that department.
  - E-cards: Find free e-cards under the search bar in the Gifts store. To get to the Gifts store, just click on the "Gifts & Wish Lists" link above the Search box on any page.

- International websites: The easiest way to navigate to their international sites is to scroll all the way down to the bottom of any page where the links of the other sites are.

- Daily Blog: Provides information on products as well as ratings from various users and media.

- Personalization: Amazon.com has an electronic agent that recommends books based on the customer's previous purchases.

- Customer Participation: Amazon.com also ensured that all their customers are satisfied by considering all their comments as they continue to work to improve the site.







STRENGTHS OF AMAZON.com:

- Product focus: Product focus is to make a products or line of products that will be interest by customers.


- Customer focus: Amazon.com tries to find a way to satisfy customers needs and expectation through a variety of products and services.

- Technology focus: Amazon.com attempts to use technology to solve real problems. Now, technology has been used for easy ordering (e.g. One-Click System), securing customer credit card numbers, speeding delivery and new and exciting offerings that draw people to check it out.

- Distribution focus: Amazon.com tries to expand its business, so it needs to expand its product distribution. Now, Amazon.com operates its retail websites not only in the US, but also in Canada, UK, Japan, Germany, France and so on.

- Amazon.com's edge is its ability to drive customer traffic to its site with its wide breadth of products.


- Customer Retention: Amazon.com team sends out targeted e-mail campaigns to shoppers based on what they have bought in the past


WEAKNESSES OF AMAZON.com:

- Amazon.com is similar to that of many online companies like Barnes & Noble that offers almost similar product variety.

- Amazon.com's weakness is that it is not an authority on most of its products for example like toys, and doesn't have the relationship with makers to keep hot toys in stock.

- Higher prices as compared to other e-commerce retailers due to its need to maintain or add on its product variety.

Jetstar Asia Airways Pte Ltd (捷星亚洲航空公司)

Objective: To provide consistent low fares to Australian, New Zealand and Asian leisure travellers.

Vision: To provide a fresh and vibrant approach towards low cost travel in the region.

Jetstar’s Australian operation is wholly owned by Qantas but is managed separately and operates independently. Our Australian headquarters are in Melbourne. Jetstar’s intra Asian operation is a Singapore-based partnership between Qantas (49%), local businessmen Tony Chew (22%) and FF Wong (10%) and Temasek Holdings (19%) with the hub based in Singapore.

Due to its belated entry into the market, the airline intended to differentiate itself from its competitors by flying to any destination within a 5-hour radius from Singapore. Jetstar take pride in keeping costs to a minimum in order to allow customers to travel more often and achieving a comfortable and enjoyable travel experience through its' brand-new fleet, great destinations and friendly crew.

Jetstar Asia and Valuair merged on the 24 July 2005, in the first major consolidation of Southeast Asia's crowded low-cost airline industry. Jetstar Asia and Valuair said they would continue to operate their normal routes under their own brands in the meantime, with little or no change to the service offered by either airline. The new company is to expect a cash injection of around more than 50 million Singapore dollars in fresh capital into the new entity, largely to be provided by Qantas.

Purpose of Site: In the technology-savy age, the setting up of an interactive online website provides another mode of purchase for consumers which ease convenience for both companies and individuals. It allows consumers to check the availability of flight, confirm their bookings and purchases at the comfort of their home or office. In addition, the consumers are able to access the website 24/7 and according to their availability of spare time.

Business Strategy: Click and Mortar

Business Model: Business-to-Business (B-to-B) and Business-to-Consumer (B-to-C)

Procedures for Payment Scheme:
Search - Select Flight -Passengers and Payment - Confirmation

Step 1: Search
The consumer has to select his/her departing and arrival destination along with the prefered date of travel.

Step 2: Select Flight
The consumer will have to make a choice between the 2 flights that took off during the day. There is a variation in price according to whether the consumer is interested in getting the JetFlex or JetSaver.

Step 3: Passengers and Payment
After confirmation of the flight, the booking summary will be generated and the consumer will be led to the payment stage.

There are numerous payment methods offered by Jetstar including payment online by international credit cards or offline at SingPost or 7-11. Jetstar allows up to 48 hours prior to the time of booking for offline payment at the destinated outlets.

In terms of online payment, they allow payments by international credit cards or through the vouchers issued.

At the payment stage, the IP address will be recorded for security reasons and also as a mode of evidence should credit card fraud cases occur.

Step 4: Confirmation
Once the payment is verified, Jetstar will send a copy of the booking reference to the registered email address.


Links: Jetstar advertised various links to prepare a customer for his/her travel, some of the links include, insurance, hotel deals and most importantly, a free online download of the destination guide for your arrival country.

With the advertising of links all in one portal, it will ease the convenience of consumers in sourcing for their required needs. Jetstar understand that their customers are interested in low air fares, therefore, they ensures that the links advertised are also of reasonable pricing.

Using everyday POSB card to pay for the purchases will entitle the customers to a 5% discount.

Additional Features: Jetstar is deem on providing the lowest fare for travel to various destinations, therefore, if customers find published internet airfare on another airline that is lower than the lowest available 3K JetSaver fare on Jetstar.com - for a direct flight on the same route at a comparable time, and he/she purchase the JetSaver fare through their call centre, Jetstar will email the consumer a Jetstar voucher for double the fare difference, provided they can verify the lower fare when the consumer calls to book.

Design Scheme, Graphics: User Friendly. Eye Catching with its' vibrant colours
Jetstar’s website has been designed such that users can access and navigate easily. The booking system for flight tickets have been placed in a way such that users can book their tickets in an instant without having the trouble to click on other links to proceed to the booking system. The features and services have been arranged neatly for user to browse through with ease.


Catching the attention of the user is one of the most important factors in enhancing the change of the consumers purchasing air tickets. Jetstar uses big fronts, bright colors and attractive prices to catch the attention of the user.
Color contrasting is also an important factor for viewing pleasure, therefore, Jetstar made a right choice in choosing distinctive colours such as orange and white for the background and catchy verses for the upcoming promotions.

Strength:
(1) Jetstar provides a free online booking of seats whereas, other budget carriers (Tiger Airways) only allow booking of seats at a fee.
(2) Jetstar allows a differentiation in cost which provides the customers with a choice of purchasing the JetFlex or JetSaver.
(3) Jetstar provides up to 20kg of bagagge allowance which is an increment of 5kg as compared to other budget carriers.
(4) Jetstar creates the option of special service assistance for the handicapped and pets that are travelling on-board the flight.
(5) Jetstar provides a Login Page for regular patrons and organizations which customize the entire shopping experience and allows Jetstar to recall their favourite destinations and desired promotion package.
(6) Jetstar provides different means of correspondance, which includes both emailing and contacting them via the hotline.
(7) Jetstar creates an online mailing list option such that when a customer signs up with them, he/she will be able to receive the latest promotions.
(8) Jetstar managed to maintain its' consistent standard of close to 100% of on-time performance which is a crucial factor for consumers as a delayed flight will alter their entire schedule.
(9) Jetstar provides a booking backtracking option such that customers are able to back-track and alter their flight details without having to make their way down to the store. It enhances convenience of the customer as they are able to alter the information at their own spare time.
(10) Jetstar creates a competiting advantage between them and their competitors by providing customers with vouchers should they find a published internet airfare on another airline that is lower than the lowest available 3K JetSaver fare on Jetstar.com.
Weakness:
(1) Jetstar might be challenged by the insufficient travel destinations available as customers will prefer to travel to different places each trip.
(2) Jetstar might lose out to their competitors as their flight charges of $434.00 on a two-way flight from Singapore to Hong Kong and back is only a $100.00 cheaper than the fare SIA provides on certain days. They may lose out in terms of lack of in-flight entertainment and applicable food charges which are attainable by purchasing tickets priced at $100.00 more.
(3) Jetstar might be challenged in terms of, cramped leg space for long hours flight.