Question

What accounts for the different in online penetration between books (about 50% of sales are online), apparel (about 25% of sales are online) and groceries (about 1% of sales are online) in the US? What is the value network, and distinctive capabilities underlying each of the two business models (Amazon online versus Walmart Supercenters)?

Answer 1

- Nowadays buying anything you want is easier than ever before; just go online and order it with a few clicks. It's  difficult to even imagine that just a decade ago physical stores were the only possible place to make purchases.

- Example-

- CUSTOMERS SHOPPING BEHAVIOUR-

- Another important thing should be considered is a generation gap in online buying. Of course, young consumers buy more online than their parents.

- They have grown up with digital technologies and have fewer hesitations while making online purchases.

- Example-

-In such E- commerce giants like UK and Germany growth of new consumers will not be so steep: the majority is already buying online. However, it doesn't mean tha European markets with highly developed e- commerce sectors will not face extension . It will happen mainly because consumers will move more their consumption to the internet : the range of products purchased will expand.

- According to data provided by Eurostat, biggest growth in EU28 is among individuals aged 20-24 : the % of individuals having last purchased online in the last 3 months among internet users grew by 25% between 2013& 2017, going from 51% to 64%, where for all other individuals, this increase was only 14% .

- At the same time, the latest research of the USA

E- commerce market shows that Gen Z ( 18- 21 years old) spends twice or even triple more on shopping. On social channels than any other average consumer.

- According to the Eurostat survey the main reasons for not buying online as follows-

-1- Prefer to shop in person, like to see a product, loyalty to shops or force of habit.

-2- Payment security or privacy concerns.

-3- Concerns about the return policy, complaint/ redress concerns.

-4- Delivery of goods is a problem.

-US- Top Payment Gateways

1- checkout

2- Authorize.net

3- Paypal

4- Stripe

-UK - Top Payment Gateways

1- WorldPay

2- Paypal

3- Stripe

4- Amazon Pay

-Canada- Top Payment Gateways

1- Beanstream

2- Chase Paymentech

3- Moneris Solutions

4- Stripe

Example-

- According to the Eurostat data, most purchases by a third or more of e- shoppers, involved clothes and sports goods(64%) , travel and holiday accommodation (53%) , household goods(45%) , tickets for events (39%) and books, magazines and newspapers (32%) .Fewer than one in five e - shoppers bought telecommunication services (20%) , computer hardware (17%), medicines (14%) and

E- learning material (7%)

- E- commerce is a rapidly growing market and new trends constantly arise .

-Amazon is closing in and set to officially surpass Walmart as the leading retailer in the world if current trends remain unchanged.

- The time frame in which this may come about will depend on which variables are considered and Walmart's response to the Amazon challenge.

- By now, Doug Mcmillon and his board at Walmart have figured that their most recent initiatives, and despite the success of their new buying online and free Pickup in- Store service, are not sufficient to hold off Amazon 's assault on their #1 rank .

- They have also assessed that Amazon 's sales are vastly underestimated and their impact is much more significant than initially thought.