Topic 6 - Digital markets

Question 1

a) What experiences have you had with shopping online?

Oh gosh, too many to mention, eBay, Deals Direct, OO.com, the list is endless.

b) Describe a good experience.

A good experience for me is when I’ve made a purchase, I receive an email to say the order has been received, payment has been confirmed and an invoice has been issued, then an email to say the order has been dispatched and when delivery could be expected, and then the order arrives as described in the stated time frame.

c) What did you like about the online store you used?

The ease of finding the item I wanted, payment options and delivery times.

d) Describe a bad experience.

Oh Lordy, Lordy. Just this last Christmas. I bought wrestling figure for a friends son, delivery was meant to be before Christmas, didn’t show up until WELL into January, then arrived it wasn’t ‘New In Box’ as described (wasn’t from eBay surprisingly), and ended up getting PayPal involved to get a full refund. Was eventually resolved by PayPal. NOT GOOD ENOUGH DINODIRECT!!!

e) What problems did you have with the online store?

Described above

f) What features make an online store more appealing?

Good search function, payment options, good customer service (eg. Live chat on Deals Direct and prompt response to emails etc.) reasonable delivery charges and times.

g) What features make an online store less appealing?

BAD customer service is the worst.

h) Should we expect to see the prices of goods and services rise or fall due to the migration of consumers online?

I would expect the price of goods and services to fall simply because of competition. Sometimes a customer in Australia can source something from the US for a lot cheaper than they can get it here. Prime example, a friend of mine bought some craft supplies from an eBay seller, and paid $12 for 4 items, she bought the exact same things from China, $4.95 for 50 items.

Question 2

a) The dispersion of prices (that is, the spread between the lowest and highest price for a particular product) will narrow.

I don’t necessarily agree. As with traditional, physical stores, sometimes one store can offer a lower price than another. A perfect example is a new heater I was looking for, for my house. One store in Ballarat quoted the exact same model as being $3000, and another on the same day, quoted $2200, just 12 months ago. Now, I assume one had got a deal with the supplier/manufacturer and perhaps could get a shipment in bulk, thus paying less per unit as the other store and therefore passing on that saving to the customer. The same could be said for online stores, you have one store that may get a great deal through a supplier/manufacturer that another can’t, and for an online store, it may be a simple problem such as storage, that they don’t have enough space to order a particular product in bulk and store it until they sell. Or they may have access to a cheaper supplier that another store does not. I think the online market will reflect traditional physical markets, some sellers have access to cheaper items, others do not.

b) The importance of brand names will decrease.

Again, I don’t necessarily agree. Brand names are ‘trusted’, plain and simple. Once a brand name has been established and has stamped itself firmly in the marketplace, it takes a lot to remove it. See http://www.interbrand.com/en/knowledge/best-global-brands/best-global-brands-2008/best-global-brands-2010.aspx for brand movements in the last 12 months. The Google brand has jumped from 7^th position last year, to 4^th position this year. The top three brands, Coke, IBM and Microsoft have retained their top positions from the previous year also. Brands that have successfully secured themselves within the marketplace, will stay there, unless something drastic happens. I don’t think the internet will decrease the importance of brand names.

c) Price competition will make all products cheaper.

Again, I disagree. One seller can have access to a supplier/manufacturer that can sell to them cheaper. It’s one of those unwritten laws in business, some have access, some don’t. Some get a bargain, some miss out.

d) Digital markets will become dominated by a handful of mega-sites, like Amazon.com.

To an extent I agree. I think this comes down to brand names and reputation. If a site like Amazon retains its huge reputation, it will continue to boom. Generally speaking, sites like Amazon can afford to pay for 1^st rate marketing, thus when consumers search for a product, sites like Amazon will be the first to appear at the top of the search page. And again, generally speaking, even if they are selling an item for a slightly higher price than another online seller, they may well get that sale simply because of their brand name and trustworthiness.

e) How do you think the balance of power between buyer’s and seller’s will change?

With access to a wider range of sellers, consumers have a wider choice. Consumer power increases as more and more people buy online looking for the best quality for the best prices.

f) Prices are clustered online.

I think it depends on the type of product. If you’re looking for something like a mobile phone cover, then you’re looking at roughly the same prices no matter what site you’re looking at. However, I was looking at Etsy.com today (someone on Facebook mentioned it and I went for a quick squiz), it’s a site for handmade crafts and some of the items on there were selling for astronomical prices!!! A hand knitted scarf (http://www.etsy.com/listing/65565013/cabled-alpaca-scarf-long?ref=cat1_gallery_2) is selling for almost $50 USD. I can knit the same thing for less than $10 AUD. More ‘abstract’ items tend to attract higher prices, I believe.

g) Online prices are elastic. ( i.e. immune to change up and down with demand)

I think this is almost answered in the previous question. It depends on the product. Common products generally sell in a very narrow price range, whereas other ‘abstract’ items attract a price well above and beyond its value.

h) Online prices are generally transparent (the extent to which prices for a given product or service are known by buyers in the marketplace.).

I tend to agree. With the internet providing access to users from all four corners of the globe, consumers are able to see what things are selling for and where and with information at the touch of one’s finger tips, consumers are comparing more and more every day.

Question 3

a) What types of m-commerce services does your cell phone provider offer?

As far as I’m aware, they have an online App Store, not aware of any marketing etc.

b) Which of these services do you use?

Ummmmmmmmm, none!!! LOL Don’t need anything more than what my phone has already (that and i’m a little technically challenged in the mobile department!!!)

c) What types of transactions do you perform through your cell phone or other wireless device?

On my wireless laptop, I do everything, buying, selling, bill paying, banking. Just not confident or knowledgeable enough with my phone.....yet!!!

d) What types of transactions would you like to perform, but are currently unable to?

Nothing that I can think of.

e) What is your opinion of wireless advertising/mobile marketing?

I’ve not experienced it, but I think it would give me the irrits!!! As if we’re not already bombarded with millions of adverts in our regular daily lives, to get mobile advertising sent to me while I’m in the middle of cooking dinner for two half starved children, would be almost as bad as having a door-to-door salesman show up at the same time (and not know the meaning of NO, meanwhile my steak is burning in the pan on the stove!!!).