| The Kathmandu post
,Wednesday, April 25,2001
by Arnout Bruins
|You are going to the movies with your friends and after
arriving at the cinema you see people are walking back, disappointed. The sign says, 'sold
out ' , but you have got tickets because you made your reservation over the Internet! This
is an example of combining Internet and shopping.
During the first years when Internet was used in organisations, the dot com's, newly built
organisations who focused all their business activities on the Internet, got a lot
attention. It was expected that these newly built organisations would dominate many
industries.The traditional organisations would get uge problems in competing with the
newly founded e-companies who did not have the high cost associated with buildings,
inventories and other characteristics of the "old economy".
However, recently it is recognised that the more traditional organisations might be strong
conpetitors that will not disappear so easily. Take the example of t-commerce
(telephone-commerce) , with t-commerce a customer can get product information, make
inquiries about delivery terms, or order a product. No one will get real excited nowadays
about t-commerce technology, when you pick up a phone you expect it to work.
All major organisations use t-commerce in some form. We think that in future e-commerce
will also be used by all major organisations. They will embed e-commerce in their
activities and blend it seamlessly in the daily way of operations. These traditional
organisations will use their shops and the Internet in an integrated manner.
When a customer buys a product, three phases in the buying process can be recognised :
first the consumer needs product information and negotations about price and delivery
terms, second , the settlement and delivery of the product and third, the after-sales .
Each phase can be performed in a shop or on the Internet. If only the shop is used the
company is pure physical, if only the Internet is used the company is a pure virtual one.
But other forms are also possible. In a mirror strategy the shop and Internet are
look-alikes who sell the same product at the same price with the same service. In an
anti-mirror strategy the the shop and Internet can sell different products, or the same
product at a different price, or give differnt service level.
The last strategy is called synergy, here the shop and the Internet complement each other,
e.g. provide product information on the Internet and pick-up in the shop. Services the
Internet can provide in the first phase are searching for suppliers, giving extensive
product information, product configuration assistance and price information.
With the second phase the internet can be used for credit card payment and delivery by
mail or courier, the shop can be used for payment in cash and product pick-up. In the shop
the consumer can get personalised advice. In the third phase the Internet can be used to
fill out an evaluation form, to give additional product information and point the buyer at
The shop can be used to repair a defective product. In our resaerch we studied twenty
organisations in the Netherlands.
||Some examples of organisations that combine the Internet and
the shops are following. A large chain of stationary shops has a limited number of the
most popular book titles available in the shops, but over the Inernet 1000,000 titles are
available for sale.
The customer can browse over the Internet and order online, but pick-up the book in the
shop after a couple of days. A CD-shop has the most popular Cds on stock but the Cds not
selling in large quantities can be ordered over the Internet and be picked-up from the
shop.In the near future it becomes even possible to go to a shop, select a number of
songs, the music will be downloaded over the Internet and the Cd will be made directly in
Another example are travel agencies where you can get information about airplane tickets ,
book and pay online and pick the tickets up at the airport. Also within the travel
industry you can get information about a Journey in the shop, think about the offer over a
cup of tea at home and book online without going back to the shop. It is also possible to
buy and sell stocks online; these orders can be dealt with in the stock exchange
In the trade between business, called business-to-business e-commerce, there are also some
striking examples. When a contract between two businisses is established the daily buying
of products can be dealt with over the Internet. This is called e-procurement. Experts
state that at 70% reduction in operational trading posts is possible with e-procurement.
Nepal is different in a lot of ways compared to Europe. Businisses in Nepal are
much smaller, and most of them use craftsmanship as the most important production factor.
In Europe organisations are large and they generate mass-production without much human
But there are possibilities for e-commerce in Nepal, especially when an organisation
can make the buying process easier for a customer (e.g. the customer does not need to
travel to the shop every time) or to reduce expensive stock ( but still have all products
available) . For example with Pilgrimes bookshop (http://www.pilgrimsbooks.com), it is possible to
browse online through the available titles, order online and the books are sent through
Nepal at no additional charge. This is very usefull for remote areas to get access to
products when there are no shops nearby.
The physical bookshops build trusts with the customers , they can call or go to the shop
if there are problems. Computer access is a problem in Nepal since computers are expensive
and not many Nepali people can afford to have one. Large companies do have their own
computers, small businesses can use the facilities offered by internet cafes, and maybe in
the near future the STD-ISD shops will also offer internet facilities in the more remote
To conclude, e-commerce is not different from commerce, therefore shop and Internet should
built on eachother, the answer is not Internet or shop,but the combination of Internet and