Thursday, October 16, 2014

E-COMMERCE SPECIAL....................... Customer's location is critical in e-commerce,

Customer's location is critical in e-commerce




There was a time when anyone looking to set up a retail venture would be offered the same bit of advice. Only three things matter in retail, they would be told: location, location, location. With e-commerce rapidly gaining ground you'd think this cliched advice would cease. Turns out it isn't so.
David Bell, the Xinmei Zhang and Yongge Dai professor at the Wharton School, University of Pennsylvania has just written his first book on internet marketing and it's called Location is (Still) Everything. "The twist on location here isn't the location of your physical store but the location of your customers relative to their offline circumstances," he says over the phone from Brazil where he's giving a lecture on location based marketing.

While the store may have moved to the cloud, it is wrong to assume that the physical world no longer has an impact on sales. "What's interesting with respect to the internet is that the critical retail decision of where do you put your store is not relevant. What matters are the offline options around the customers and how they interact with people around them," says Bell.

When Jeff Bezos started amazon.com, the first customer stayed 50 miles away from the nearest bookstore and was attracted to shopping online because his offline conditions were such. So it would be unwise to isolate the real world from the virtual because that still holds considerable sway over how we behave online. Bell has an acronym ("you need to have an acronym for a popular book," he says) called GRAVITY.
These are primarily geographical factors which have an impact on a customer's online buying behaviour. Geography has a certain structure to it - the way cities develop and where people decide to live are not random decisions and understanding this is the foundation to predicting online behaviour.

Resistance is the friction that the internet has helped us overcome, both in terms of easy availability of information as well as geographic friction or access to goods and services. Adjacency explains how and why demand spreads in pockets as well as how it is impacted through word of mouth.
Further, the internet allows an online seller to bring together people with similar demands from different physical geographies into the same online vicinity to cater to their requirements, something that might not be possible in the physical world. Isolation explains why people who are under-served by their offline environment make great customers for online sellers. 


Priyanka Sangani, ETCD141010

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