Want to go on holiday? Instead of visiting an archaic travel agency (80/90s style), consider diving into an online auction where you might bargain your way into a luxurious 5-star hotel in Manhattan, New York City. Or stay at someones mansion in Kenya and take care of the giraffes in the backyard.
The former, Priceline.com applies a B2C business model offering exclusive hotels to offer up their otherwise vacant rooms on an anonymous basis, whilst the latter applies a C2C business (or, collaborative consumption – Botsman & Rogers, 2010) model offering consumer a means to earn some additional income whilst away from home themselves.
The anonymous feature of Priceline.com implies a higher level of uncertainty than normal for consumers in exchange for a lower price, i.e. the option to trade down, whilst still being relatively certain preferences (location, star-rating etc.) are fulfilled. Also, organisational learning is applied. Airbnb basically offers all available information, including house rules set by the host, reviews of hosts about guests and vice versa (word-of-mouth). Prices are fixed but fellow consumers can find something fitting their preferences in detail. A simple comparison: Priceline.com uses the information provided by consumers to search their database and find the consumer a match to bid on; Airbnb uses the information provided by consumers to offer a complete list of potentials where even more lodge-specific information can be found and allows the consumer to make up his/her own mind. However, both businesses aim to offer a solution to properties that would otherwise be vacant and have disrupted the hospitality-industry, offering consumers increasingly more options to choose from. In other words, the buying power of consumers has increased.
So, how would you book your holiday?
At ShoppingToday, an e-commerce event about the latest trends in online retail, online travel and finance, various interesting insights were given to offline and online retailers.
First, Cor Molenaar, Professor of eMarketing at Erasmus University, discussed the importance of disruption and emphasized that retailers should not fall behind on the latest trends. According to Professor Molenaar, the future of online retailing will be in mobile websites (not in apps!) and therefore all retailers should create a mobile website as soon as possible. In addition, he explained how physical shops will become important again as online retailers are now starting to work together with local shops to provide one-hour delivery (eg eBay Now). Consequently, he urged online retailers to start thinking about ways to improve their delivery times, potentially by integrating their physical stores with their websites.
Second, PriceWaterhouseCoopers discussed future trends and technologies. According to PWC, five key trends can be identified:
- Big Data and Analytics: Gathering and analyzing customer data and providing the customer with interesting offers at the purchase decision
- Internet of Things: Being connected 24/7 by means of a smartphone
- Digital Payment: eg Google Wallet and eBay’s Paypal
- Digitalization of the shopping experience: Currently we are still talking about multi-channel shopping, while retailers should offer the customer a ‘one-channel experience’, in which offline and online channels become fully integrated
- Digitalization of products and services: How music, movies and books have become digitalized, many more categories will follow
Last, Edwin de Jong, 21-year old founder of Fietsuniek.nl, Omafiets.nl and Bakfietsweb.nl, elaborated on his success story. Indeed, quite remarkably, nearly three years after having founded his business, Edwin already holds over 1% of the bicycle market. His business model is focused around drop shipping. Drop shipping is a supply chain management technique in which retailers deliver goods from the manufacturer directly to the customer. Thus, the retailer does not own inventory. It took Edwin three years to successfully set up this technique.
His key insights:
- Founders should not be too emotionally involved with their business. Indeed, Edwin explained that he did not have any affection for bikes nor for webshops. Yet, he saw an opportunity within the bicycle market and consequently acted upon this opportunity
- It is worth investing in a domain name. Domain names can be quite expensive, but one has to make a tradeoff between paying a high cost-per-click (CPC) in Google Adwords, and investing in a domain name. (Omafiets.nl apparently cost over 50.000 euros, while the CPC for ‘fiets’ is 1 euro)
- Startups should advertise effectively. For his webshops, Edwin uses affiliation, Marktplaats.nl (the Dutch eBay), Google Adwords and makes sure that potential customers can find him on Google (SEO).
My personal key insights from ShoppingToday
- Big Data is the future
- If you want to start up your business, just do it!
After reading the articles about electronic market places and auctions for the upcoming session and thinking about the business solution we have to come up with for Designing Business Applications, I started to think about how we make and create business around us. ‘Apps’ are entering the market place on a daily basis; people manage to come up with ‘solutions’ where some people did not even know a ‘problem’ existed. Thus, we are not always using information (i.e. disgruntled people) to come up with solutions. As technology is within reach for most of the developed world, many of the proposed solutions are technical in nature.
However one can also create a business by letting people tell them about their problems, instead of making them up ourselves. Fetchamsterdam.nl is an example of such a business. This Dutch company basically acts as a temporary employment agency. Or, put in terms of the upcoming lecture: Fetch has created an electronic marketplace for personal assistants. People can come up with the most bizarre requests; Fetch will scour its pool of PAs and find someone to do the job. Look at the request of the week below:
For non-Dutch speakers: someone lost his/her keys in a drain in front of their house while in a hurry. They requested Fetch to send someone to dig for the keys, lock the bike and leave the keys on a table as the person in question had to go to work.
This way, Fetch simply sits back and waits whilst people inform them about their hitch. Customers mention in detail what they wish Fetch to do and the company selects someone from their pool able to do the job (they also have people skilled in plumbing, (house) repair work or willing to book your concert or flight tickets). Using social media and word-of-mouth, Fetch manages to use technology to create a very low threshold for people to approach them with their (often bizarre – check out the other “request of the weeks” on their Facebook) problems. Besides, having an actual PA is simply too posh in the down-to-earth Dutch culture. Also, people know exactly what they want Fetch to do and thus provide the firm with detailed information, leaving less room for errors. So, would you pay someone to FETCH your problem?
Social media and mobile phones changed the world. We are the first generation that finds it normal to talk to 10 different people in 10 different countries at the same time while walking to school. Being able to do this is quite amazing, but at what price?
In Marc Maron’s: The ‘social’ media generation the author shows a dark side of mobile social media (see link below). He specially points out the emotionally unhealthy attachment we have to social media. The reason for this attachment is the need of acknowledgement that people have.
Need for acknowledgement is in human nature and as children we are always looking for it from our parents, or the people close to us. But with the introduction of social media, the whole world is close to us. This means that our need for acknowledgement grows from our inner circle to the whole world.
Looking for acknowledgement is an intensive process, and it means that we are always looking at our phones to see what those 10 different people in 10 different people have to say to, and about us.
According to the author this results in an unhealthy addiction which he depicts in his own way in his comic.
It is something we do every week and you simply can’t avoid it: shopping for groceries. After all, eating and drinking are one of the primary necessaries and the products you need to fulfill these needs have to be purchased. We are used to walk or drive to a supermarket, take the shopping cart or basket, zigzag through the store to collect the products you want. Arriving at the checkout, we are often faced with one of our biggest annoyances: long queues .
Anno 2013 shopping for groceries hasn’t changed a lot, but that doesn’t mean there are no developments in this area. For example major grocery stores such as Costco in the USA have tried to introduce self-checkout lanes, enabling customers to do the checkout themselves. But after a period of testing, the company decided to eliminate self-service checkout from all their stores. According to Costco’s CEO Craig Jelinek “they are great for low-volume warehouses, but we don’t want to be in the low-volume warehouse business”. He believes human cashiers are more efficient in doing the ‘checkout-job’. At the same time, competitor Wal-Mart was adding 10,000 self-service checkout systems to stores .
A new trend among grocery stores can be identified: e-commerce. Two new ways of shopping for groceries have emerged: delivery-at-home and self-pick-up online shopping. I will briefly introduce both concepts.
Delivery-at-home online shopping is already a well-known concept in e-commerce. Often referred to as click-and-mortar, companies start a webshop to allow customers to order products online and deliver the products at the customers’ homes. An example of this concept is Albert.nl, an initiative of Koninklijke Ahold NV. Founded in 2002, it is the online variant of grocery store Albert Heijn (AH) which provides customers with the ability to order their groceries online and have them collected and shipped to their homes by the company. Recently, AH updated its mobile shopping-assistant app ‘Appie’, expanding the features of the app with order and delivery functions .
Self-pick-up online shopping is quite a new concept in e-commerce, allowing customers to order their products online and pick up the orders at a near pick-up point. This concept was implemented by AH too. Pick-up points provide customers with the benefits of choosing a preferable timeslot and location to pick up their groceries. The service is an easy and fast way of getting your groceries, but above all: it’s free-of-charge .
The latest development in self-pick-up online shopping is Superdirect.com, a new distribution concept in which consumers order groceries online and collect them at an automated distribution point. These distribution points – the first one being opened today in Eindhoven – look like drive-in checkouts without payment facilities (because payments are done online). After ordering the groceries online, customers receive a QR-code which they need to scan at one of the drive-in checkouts in order to collect the parcel with their ordered groceries. Groceries ordered on Superdirect.com before 10pm can be collected from 10am the next day .
I think the concept of Superdirect.com is very interesting, mainly because of the time savings. What do you think of this concept?
Is the end of ‘Please stow all electronic devices’ near?
As discussed in the class of the 23rd of September, mobile device and mobile internet usage are exploding. However, aviation ruling has not changed much in the mean time. As many, I could not have helped but wonder about the necessity of not using electronic devices during takeoff or landing. I can understand it to be a good thing for the pilot to hold off on these, but there has never been hard data on negative consequences of passenger’s electronic devices-use during these critique moments of flight. Or are there? And might there be possibilities of this changing for the better, and enabling internet on board? Maybe even in-flight online shopping?
Myths & Truths of in-flight smartphone & tablet-use:
To delve further in this topic it is good to bust some myths you might think are true and get into the real cause of this communications technology-ban in airplanes.
Myth 1: Interference with airplane equipment: This one is the most commonly known. However, aeronautical communication technology works with wavelengths below 500MHz, while consumer electronics work on wavelengths from up to 2GHz. Interference in that sense, is not possible.
Myth 2: The Federal Aviation Administration (FAA) does not want to test every device on possible interference: Also a myth. All mobile devices share the same communication components. Whether you are using an iPhone, Blackberry, or even a Nokia, it all works the same. So, separate testing is not a thing.
Myth 3: Everybody in the plane using it at the same time is the problem: Also wrong. Electromagnetics don’t work in the sense that they become stronger with more users using it at the same time, so this won’t cause problems.
A more viable hypothesis is the one stating that cell towers can overload due to the speed of movement of the mobile device users. This is actually technically true, but this is luckily also a technicality that can be managed by enough capacity. 
The Real Truth: Since all of these myths can be busted, what is the real reason for the ban on the use of electronic devices during takeoff & landing? It is your attention! Since only 8% of airplane accidents happen during the cruising-stage of a flight, and respectively 42% and 50% during takeoff and landing, the FAA simply tries to make sure you pay attention during these critique moments of flight… But, since us 2013-citizens almost live in our smartphones and tablets, is this reasoning still strong enough?
Oh yeah, something about the end of all of this might be near?
After delving into the myths & truths about the use of electronic devices on airplanes, let’s now take a look at the future. A lot seems to be changing. This Thursday, the advisory committee of the FFA voted to recommend easing the rules on device use on-board. If the FAA does accept this recommendation, which would then happen this Monday, some things are going to change. If the FAA accepts, it will be allowed to use your smartphone, tablet and laptop during takeoffs and landings, making calls or browsing the Internet is still a ‘no-go’. Just switch on airplane mode and you will be fine. 
A thing I have to admit, I have been doing for a lot of flights myself already. I mean there is not much better than watching some episodes of Lost while you are in the most critical parts of your flight, right?
Impact on mobile shopping?
After the allowance of using electronic devices during takeoff and landings, the next step seems to be in-flight internet. Even though it is only a small percentage of airlines are currently adopting it, it is a growing trend to offer Wi-Fi on longer flights. The impact of this on online shopping seems to be interesting to research. Will passengers shop for goods available on their destination? Will hotels be able to target last-minute bookings from passengers? Will it be possible to do tax-free shopping and pick this up at your destination airport? What would you like to buy, in-flight?