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Implications

Finally, the bottom-left quadrant, alliances and outsourcing, suggests a nimble, highly interactive strategy that still seeks to exploit select aspects of your e-commerce busi- ness model (e.g., access to unique merchandise, pricing, and promotions). The focus on the online shopping experience is accomplished largely through strategic alliance partners and outsourcing arrangements, to provide a lower-cost option to match the smaller market potential forecast. This option also gives the fledgling business the chance to test their business model. The trade-off with this strategy is the less-than- optimal customer experience, and those companies protective of their brands will need to consider this risk.

Financially, this option minimizes up front capital investment and the outsourcing part- ners may be agreeable in relation to performance-based compensation to share the risk. This strategy may be deployed as a preliminary stage to test a new market’s potential, with the intent of migrating to one of the other quadrants should the test prove successful or the financial potential become upgraded.

  • Financial – The financial implications of developing an e-commerce strategy that is not in tune with the market’s needs, can spell the difference between a site meeting its goals or becoming a significant drain on capital with little return. While still signifi- cantly less than the cost of a brick-and-mortar store, the financial outlay for a new site can be substantial. Thus, lacking a set of realistic goals for its success, an e-commerce-driven website can be financially troublesome for a company, and quickly sour the senior management’s team support for such a sales channel.

  • Consumer – from the perspective of the customer, if a website’s positioning is not the same as the other assets of your brand, customers will be confused. If the customer is a store-based customer, their reluctance to shop online may increase, if they perceive the website does not carry the products they need. This, in turn, leads to lower sales and a likelihood that fewer and fewer people will shop the brand.

Visa e-commerce cross-border handbook for U.S. retailers

Copyright 2010 Visa. All rights reserved.

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