E-tailers (Goods and Services)
E-tailers are firms that provide goods and services through the Internet. Pure e-tailers are those firms that conduct business exclusively through
the Internet. such as Amazon.corn or e-trade. These services typically have their counterparts in brick-and-mortar establishments. In many cases. however. e-tail operations are part of a larger organization that also has brick-and-mortar location . such as Barnes and Noble or Wall- lart. Some of these firms (often referred to as bricks and clicks or clicks and mortar) such as The Gap also provide access to their websites at their brick-and-mortar locations, thereby making the difference between the two even fuzzier. The major challenge for pure e-tailers that sell goods is to have the necessary infrastructure in place that can efficiently and quickly deliver the goods to its customers. The lack of such infrastructures was clearly evident during the 199Q holiday season when many irate customers who had made purchases through the Internet didn't receive delivery until
well into January 2000. Some e-tailers such as Amazon have elected to build their own infrastructures in terms of distribution centers. while others have elected to partner with established brick-and-mortar retail operations. E-tailers that offer services typically do not need the supply chain infrastructure required of those e-tailers that provide goods. This allow" for faster entry into the market. significantly less investment costs, and consequently a quicker return on investment. For example. the online
travel industry is one of the first e-service industries that is generating profits. A major challenge for pure e-tailers is the lack of tangibi lit). With a brick-and-mortar operation. the customer has a place to go for customer service or to voice a complaint. There is nothing more frustrating for a customer than to wait endlcsxly 011 the phone for customer service, and to have no other recourse, as is the C<l"C when dealing with pure c-tailcrx.
The Role of Technology in Operations l~l Equally important for e-tailers is how they can differentiate themselves in the marketplace. Without differentiation. these services offer only commodities, and therefore must
compete solely on price. This translates into very small profit margins, which cannot sustain growth.