Saturday, June 12, 2010

E-marketing : Benefits

Whilst there are many benefits for consumers shopping online, business that start their operations or transfer their operations online greatly benefit from doing so. Some of these benefits will be briefly discussed.

Data collection

Every time a customer transacts with the company online, that transaction is captured. The firm can use this data in a number of ways. Firstly information can be analyzed to find out most popular products/services sold. Secondly the data can be used to assist in segmenting their customers, profiling them and sending customers promotional material based on past buying habits.

There has been much controversy over the amount of information that is being collected online by various companies in particular social networking sites and whether customers should be able to opt out of that information being shared to third party users.

Personalization of web experience

When customers log into their accounts businesses can make their web experience almost unique. From offering special offers to that particular customer, offering add on to their recent purchase, much like Amazon.com does, or by allowing the customer to personalize their own products, like Nike does with their trainers . Personalization allows the firm to form stronger bonds online with customers and form long term online relationships ensuring customers come back regularly.

Competitor analysis

The internet allows businesses to analyze their competitor’s online strategy. A firm can keep abreast of new products that are released, react to price changes, or use the internet to discover secondary data on their competitors. The internet allows a firm to react quickly to a change in their competitor’s strategy, and try to provide a service that allows them to match or beat their competitors.

Cost reduction

One of the major benefits of setting up or moving a business online is the cost advantages of doing so. A firm can save a number of costs. These include:

  1. Staffing costs: Fewer staff are needed online then in the high street thus reducing costs.
  2. Premises: The Company will not need retail outlet just a centralized office and possibly warehouse space, saving on potential retail costs.
  3. Disintermediation: The channel of distribution is shorter online as the consumer has the opportunity to buy directly like with Dell. As one of the intermediaries is cut out this process is known as disintermediation.
  4. Financial management: As consumers pay for the product before it is dispatched, this improves the cash flow for the company, making sure for the firm that they can pay their suppliers and other costs on time.

No comments:

Post a Comment

Does the website provide useful Information?