Interactive Home Shopping: Consumer, Retailer, and Manufacturer Incentives to Participate in Electronic Marketplaces

Abstract

The authors examine the implications of electronic shopping for consumers, retailers, and manufacturers. They assume that near-term technological developments will offer consumers unparalleled opportunities to locate and compare product offerings. They examine these advantages as a function of typical consumer goals and the types of products and services being sought and offer conclusions regarding consumer incentives and disincentives to purchase through interactive home shopping vis-à-vis traditional retail formats. The authors discuss implications for industry structure as they pertain to competition among retailers, competition among manufacturers, and retailer-manufacturer relationships.

Personalization versus Privacy: An Empirical Examination of the Online Consumer’s Dilemma

“…The construction of individual-specific profiles allows vendors to target customers on a oneto-one basis, which in turn helps them in improving customer satisfaction, developing customer loyalty, and increasing cross-selling possibilities [1,43]. For example, a consumer who has already personalized her shipping and gift information on one Web-based retailer may exhibit some inertia in moving to a competitor even if there may be some marginal differences in prices, as such switching would imply numerous fill-in forms again.…”

“…Such inability to address customers individually results in increased customer arbitrage and sellers' inability to price discriminate [11]. Further, customer information is also crucial for product differentiation, offering products that are more valuable to consumers [1], as well as supply chain management. Many strategies such as JIT have evolved primarily on the notion of accurately forecasting demand [15,30,36] and having suppliers to move at the same pace as the firm [37].…”

“…The FTC provides a set of guidelines known as the Fair Information Practices [25] that are built upon testimonials of researchers in this field and prior findings. 1 Consistent with the CFIP scale developed by Smith et al [49], the guidelines incorporate rules that define how vendors should collect information, how they should fix any errors regarding personal information, how they should inform consumers regarding subsequent use of their information and how the vendors should prevent any unauthorized access to information. Similarly, consistent with findings of Culnan and Armstrong [13] and Hoffman et al [28], the guidelines require that vendors should provide consumers control over all aspects of information collection and usage.…”

“…For example, vendors invest in personalization and information acquisition capabilities such as Customer Relationship Management (CRM) tools and personalization engines to manage various customer retention strategies [56]. While in some cases personalization serves the distinct purpose of increasing customer loyalty and as a deterrent to switching [1], in others it can even be characterized as a competitive necessity as virtually every online vendor offers some form of personalization. Unlike its offline counterpart, online personalization in itself is seldom used to extract price premiums.…”

The impact of age and shopping experiences on the classification of search, experience, and credence goods in online shopping

“…In this new online environment, no goods can be inspected directly, and only limited interactions with service providers are possible (Alba et al 1997). Thus, by default it seems, goods in online shopping automatically become either experience or credence goods.…”