Online sales

Forrester Research, Inc. expects that business-to-consumer online sales will reach 184.5 hUhon in 2004 and business-to-business e-commerce will grow to 1.33 trilUon by 2003 (see, e.g., Massie 2000). The explosion of e-commerce will change the way the company distributes its products due to an increasing number of small, unpredictable orders for individual customers. E-commerce requires that warehouses deal with unit quantities of inventories rather than pallet loads of inventories and subsequently accommodate high frequency of small parcel delivery services. Because the role of warehouses has become more of flow-through transshipment facilities intended for quick order fulfillment and product return than traditional storage facdities, their locations need to be dispersed in... 

Nearly two-thirds of all North American households have purchased online. Although the majority of retail sales still take place at traditional brick-and-mortar stores, online sales overthe next five years are expected to grow at a compounded annual growth rate of 14% (Forrester, 2005). The fast growth rate of Internet retailing provides new challenges for management. 

Conditions under which M will favor each arrangement are obtained as a function oft, m, and 1. One key finding is that M can increase market coverage (sales) by supplementing its retail distribution with an online store. However, this intensifies the price competition with D, which in turn lowers the wholesale price necessary to appease the retailer, ultimately decreasing M s total profits. The authors offer this as an explanation of the financial ineffectiveness of the Compaq online store initiative, and a rationalization of the decision by manufacturer Levi Strauss to terminate its direct online sales activities. 

One of the most successful and well-known internet retailers is Amazon.com. In less than 10 years of existence, they have become a retailing giant with 2002 revenue of nearly 4 billion, coming entirely from online sales. They neither manufacture the products they sell, nor maintain a traditional retail channel. They participate in a supply chain that includes product manufacturers (Random House, HarperCollins, Sony, etc.) that are separate entities from the traditional retailers (Barnes Noble, Borders, Waldenbooks, etc.) against which Amazon competes. The pricing decisions made by new, online retailers will have an important impact on the performance of all the members of the supply chain. 

The apparel retailers are facing challenges from Internet or online sales, which continues to upend the apparel sector. Brick-and-mortar companies are brainstorming to harness the power of Internet sales. As the proliferation of Internet-only companies continues, there will be stiff competition among them. In addition, Internet selling always involves the risk of incorrect fit and the wrong material, colour and style. 

Industry and Business Sectors. Computer science has led to the creation of electronic retailing (e-tailing). Online sales rose 15.5 percent in 2009, while brick and mortar (traditional) sales were up 3.6 percent from the previous year. Online-only outlets such as Amazon.com have been carving out a significant part of the retail market. Traditional businesses, such as Macy s and Home Depot, are finding that they must have an online presence. Online sales for the 2009 Christmas season were estimated at 27 billion. 

Almost 8 million Kindles were sold in 2010. Online sales for the 2010 holiday shopping season were estimated to total more than 36 billion. 

For more information, pricing enquiries or to order a free trial, contact your local online sales team. 

UK and Rest of World online.sales rtandf.co.uk US, Canada and Latin America e-referencet taylorandfrancis.com... 

Do you think Zara s responsive replenishment infrastructure is better suited for online sales or retail sales ... 

Designing Distribution Networks and Applications to Online Sales... 

Understand how online sales have affected the design of distribution networks in different industries. 

In this section, we use ideas discussed earlier in the chapter to see how the Internet has affected the structure and performance of various distribution networks. The goal is to understand what drove the successful introduction of online sales in some networks and not others, and how these networks are likely to evolve. 

Similar to our consideration with distribution networks, we build a scorecard based on how online sales affect a supply chain s ability to meet customer needs and the cost of meeting those needs. We now detail the contents of each scorecard category. 

As with distribution networks considered earlier, we start by studying how online sales affect customer service elements such as response time, product variety, availability, customer experience, time to market, visibility, and retumability. We also look at factors such as direct sales and the ability to offer flexible pricing that help companies selling online. 

---