Tag Archive | Network

Technology of the Week “B2C e-commerce”: The future of shopping

deprives-you-of-tangibility

Since the rise of the internet in our everyday life, a lot has changed. Firms had to revolutionise their product strategies, adapt to a whole new 4Ps conception, and serve a whole new platform of markets, namely e-markets. The trend of e-shopping was then introduced in order for firms to increase sales via the e-commerce channel. This lead to further innovations in order to contrast the vicious competitive environment of e-markets, while trying to transfer the in-store shopping experience directly online. With that being said, this article will introduce two new emerging technologies that are involved in the realistic transition between in-store and online shopping through Augmented Reality (AR).

Social Shopping

Social shopping is an e-commerce methodology bridging social media and online shopping together. Social media impacts the shopping behaviour in a way in which other people like friends, family, bloggers and celebrities recommend and suggest certain products and services to the consumers. The idea behind a social shopping website is that it provides the potential customer with blogs and virtual communities to help him in his decision in buying consumer goods and services. This is achieved by the average consumer share his shopping ideas, exchanging opinions on products, and recommending one another on what to buy and what not to buy.

A research on social shopping in 2010 found out that consumers’ trust in product recommendations had not only a direct and significant positive effect on their purchase intentions, but also a strong indirect positive effect on buying the product from that specific website where the information was originally found. The intention of a consumer to purchase a good directly from the website could in that case directly be affected by the trust in the website, thus creating an incentive to build a online shopping platform (Yu, 2010).

To better understand this, we used Shopcade as an example to analyse the technology further, and base conclusions.

shopcade

Shopcade is a website and mobile app that creates a community of fashionistas and allows anyone to easily purchase the items that they see posted. The site has two main sections: the trending section and the feed section.

The trending feed is curated by the app itself. This means that it is a section with content posted only by the Shopcade team. This content comes usually in the form of blog posts regarding different fashion trends, whether it is for clothing, accessories or other items (for example, one post gave the most recent trends in duvet covers). Being a content provider as well as a service provider definitely adds value for the customers of the company. On the other hand, the feed section contains content created exclusively by bloggers and members of the community. This adds even more to the social aspect of Shopcade, giving a very Instagram-like feel to the whole social experience. This is what Shopcade does successfully. It actually created a situation where online shopping offers an experience that would be awkward to achieve in the store.

Below, the SWOT analysis of Social Shopping can be observed. It is directly applicable to the case of Shopcade.

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When it comes to their revenue model, Shopcade offers nothing new. As can be expected from such a business, they make money from affiliate marketing and sales. This means that they receive commission for all the purchases made from their website. In addition, some brands want more exposure, which requires them to pay more money to Shopcade.

Virtual Fitting Room (VRF)

Fitsme-has-built-a-virtual-fitting-room-platform-that-can-be-easily-integrated-onto-the-sites-of-online-retailers.

VRFs are the online substitution of in-store fitting rooms. It is available on PC-laptop and mobile devices. VFRs rely heavily on Augmented Reality (AR), which employs specialized software and hardware to merge the digital and the physical worlds by immersing digital information into real video to generate persuasive looking scenes in real-time. Personal measurements can be included online to allow the framework to build a 3-D avatar of the customer fitting the item. It’s built on a three-step algorithm: it builds/scan the user body through data measurements (size, width, length…), reference points (i.e face and figure) via AR, and finally, it builds the avatar incorporating the clothes on a superimposed 3D image.

Software companies such as Virtusize, Fits.me and Clothes Horse have all adapted this new technology providing it to big retail companies, attempting to tackle the fit challenge with a range of technology-based solutions, from “morphing mannequins” to size recommendation engines, all with the goal to simulate the physical fit and sizing experience (G. Randall, 2015).

Often enough shoppers complain about long waiting lines in shops and poorly set up fitting rooms. Conditions such as terrible lighting and a lack of space in the room tend to dominate the endless list of complaints. The slow but steady introduction of VFR has revolutionised the shopping industry, specifically the e-commerce aspect of it.

Using VRFs could actually increase the pleasure of shopping in many ways. Firstly, there is no hassle of having to physically put on several different clothes. The ability to take pictures whilst “trying on” these clothes means that customers can easily compare outfits. Furthermore, many side-menus can be added into the technology, this would be up to a firm to research what sort of features its customers need when trying on clothes. Some great features that many shoppers and experts posted include the ability to like and dislike garments, save pictures of outfits for later, see reviews and prices of products, as well as the ability to call in real-time service (LinkedIn, 2015).

Below, the SWOT analysis of Social Shopping can be observed, applicable to every aspect of the VRFs. As it can be observed, it is filled with opportunities leaving thoughts and space for improvement.

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Future perspectives

With the VFR component only, the customers missed the social element of shopping. On the other side, the current social shopping services do not offer a developed VFR experience yet, making a visit to the store easily a necessity. We believe these technologies will merge together as the result will provide an improved customer experience. In the future those various digital resources – VFR and Social Shopping included- will be combined in an overall bigger market. Indeed, as someone will be shopping from his home -trying out clothes through the VFR system-, the person will be able to ask the opinion of a friend or a shopping assistant; involving social shopping (IBM, 2010).

The combination of those two technologies presses the question whether physical retail shops will exist in the future. It seems not to be a question of “If” but “When” physical stores will become obsolete. The reader should ask himself in how much time this change would have taken place: 5, 10, 20 years? It is difficult to say. Humans tend to think linearly, however the rate at which technology imposes itself on the world rather corresponds to an exponential curve as Ray Kurzweil and the institution of Singularity University (2012) are professing.

Sources:

Yu, K.-L. H.-C.-Y.-P. (2010). Antecedents and consequences of trust in online product recommendations”, Online Information Review.
Randall, G. (2015). Fashion ecommerce: are virtual fitting rooms the silver bullet?. [online] Econsultancy. Available at: https://econsultancy.com/blog/66058-fashion-ecommerce- are-virtual-fitting-rooms-the-silver-bullet/ [Accessed 18 Sep. 2015].
LinkedIn (2015). Virtual changing rooms will revolutionize fashion retail [online] Available at: https://www.linkedin.com/pulse/virtual-changing-rooms- revolutionize-fashion-retail-moles-mba

Team 13:
Claudio Corti
Maximilian Wiedmaier
Alex Furnica
Maxim Gggurevic
Paul Grandjouan

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Cork’d: A Social Network for Wine Lovers


F
ounded in 2006 by Dan Benjamin and Dan Cederholm, Cork’d is a playground for wine lovers. It is a free service for wine aficionados, allowing members to review, share and discover wine. Dan Cederholm and Dan Benjamin launched Cork’d publicly in May 2005. It was later acquired by internet wine star, Gary Vaynerchuk.

“The goal of Cork’d is to bring wine to the everyday person – to remove the snobbery often associated with the world of wine. The result is a fun, playful, easy-to-use site that’s enjoyable to explore and offers a service that focuses on community for keeping track of and discovering new bottles ” (simplebits.com)

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Cork’d as a social network

Cork’d is a social networking site which has attracted a niche market of wine enthusiasts, connecting wineries and people who have an interest in wine. Reflecting its CEO’s vision, Cork’d has been established and served as a social network, where its users and wineries can interact with each other. The site comprises specific features of a typical two-sided network, such as same-side and cross-side network effects. The large numbers of users of the platform on each side attracts more users in the other side, while the number of users on the same side also escalates. The key factor for such an attraction is values that users bring to each other’s and simultaneously, is values which are expected by people who intend to participate in the network. These values would be discussed in the following, from each direction:

Values that wineries bring to users

Firstly, from the perspective of users, the site provides them easier access to wine purchases or product offered by different wineries. It allows wineries to post information and provide links to their website, where wine can be purchased presumably. Owing to this feature, users may feel it convenient and enjoyable to purchase from guaranteed wineries about which they have just read reviews from other users. Moreover, they could effortlessly find information about wine-store opening hours, updated promotion and events from wineries. They could also search for information and reviews of nearby wineries around the corners of their districts. Besides reading reviews, users could also maintain a “wine-cellar”, create their preferred shopping list and more importantly, actively interact with their favorite wineries. All of these features create a so-called community feeling on local wineries, which is an essential sensation that users seek for in a typical social network.

Values that users bring to wineries

More than just being a place to post business information, Cork’d serves as a customer base for wineries, where they can find potential buyers for their products. Furthermore, It enables wineries to interact directly with their loyal customers and new buyers. The site provides data on customer preferences and wine tastes through reviews and rating system. These reviews, either positive or negative, may help wineries to improve their products and attract more consumers. On the other hand, a network effect to the outsides also occurs since the more users know about wineries, the more their reputations increase.

Values that users bring to users

The most obvious advantage seen by users when joining the site is the reviews and rating system about various types of wines. These reviews help them to have a clear impression on the wines that they intend to purchase or they have interest on, avoiding wasting money on poor quality wines or wines that do not suit their personal tastes. A more fabulous feature that Cork’d provides their users is the focused education system, where users may find it easily and exciting to learn about grapes, manufacturers and winemaking process. Most of these feature and utilities are generated by users themselves. Moreover, joining such a social network like Cork’d, users may find people sharing their mutual interest, making friend and expand their network based on similar interests on wines. However, like other social networks, the site itself could not avoid negative network effect since there are people, who are price sensitive and new to wine tasting, write their negative reviews, which may cause misleading negative impression.

Generally, Cork’d could be a potential platform-mediated network, as it owns an outstanding concept and gathers required attributes of a two-sided network. However, the site has been shuttled down in 2011 since Lindsay Ronga, the site’s CEO, decided to move to other opportunities and Vaynerchuk is involved in too many other projects.

Interested ? You may read more about the case in this article:

http://hbr.org/search/911064-PDF-ENG

Reference

http://simplebits.com/work/corkd/

 

Steam – a platform for multiplayer gaming

My interest in this blog is on a particular type of 2-sided networked market, namely gaming service platform, called STEAM. I will review the site as a platform for multiplayer gaming, based on the theory that we studied in last session.

Describe the service

Steam is a digital distribution, multiplayer and communication platform developed by Valve Corporation. From the perspective of the company, Steam is used to distribute games and related media online, from individual developers to large software providers. Through Steam, Valve introduces its own developing games as well as games of other third-party developers. Steam serves as a portal where gamers can purchase, play and update their favorite games. The site could be accessed at: http://store.steampowered.com/

Steam has more than 2000 computer games in various types, from action to strategy gameplay. Some of the games offered are for single players, who just play the game in offline mode, without the participation of other players. However, most of the games are offered with multiplayer feature, which is the core business of the site. In this online mode, the players need network connection to play the game together with many other players in all over the world and Steam serves as a hub to connect players, arrange matches and manage players’ levels in game.

The number of Steam’s users reaches 4,777,123 at the beginning of 2013, and is increasing. To attract more users, the platform also provides a forum where users can discuss about gaming related issues, such as malfunction in game, patch and update, tips and tricks, and suggestions for development of the platform. The forum also allows developers to access and answer players’ questions, and receives feedbacks for their games.

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Exhibit.  Steam play’s interface

Service concept

Consumer side: Steam is initially an online retail store where gamers can purchase their favorite game conveniently and quickly. The site allows consumers to pay in most popular forms of online payment, such as credit cards or Paypal. Once the game has been purchased, Steam allows users to download that game to their gaming device and re-download it for unlimited times in other devices, as long as the game is supported in that gaming platform. The site well exploits same-side network effect by enable functions as making friends, achievement and discussion. Making friend function allows users to add other users as friend and follow or invite these friends to join their game, while Achievement function allows users to compare their in-game process and special achievement with other players, by a system of achievements gained and ranking. By these functions, Steam attracts more and more users to their platform since multiplayers gaming requires a lot of users to become more exciting.

Content provider side: From the perspective of third-party developers and publishers, Steam offers a customer base with a huge increasing number of online gamers, exploiting cross-side network effect. Moreover, a service called Steam Greenlight was launched recently, allowing developers and game publishers to pitch their games to the Steam community to examine whether the users will vote for it to be released on the service. This tool not only welcome new developers and publishers to join the platform, but also provide potential customers and game fans an opportunity to connect directly to the latest offerings.

Opportunities and challenges of the network

WTA propensity

None of Valve’s sales figures of Steam service has been released to public, instead the company only shares the data to companies whose games are on Steam, which cannot be released without permission due to a non-disclosure agreement with Valve. However, Stardock, the former owner of Impulse, which is a competing platform of Steam, estimated that Steam has a 70% share of the digital distribution market for video games in 2009. It was reported by Forbes that Steam sales occupied 50-70% of the $4 billion market for computer games in early 2011.

From the perspective of game developers, Steam contributed a huge source of consumers for their products. It was exposed by the developer of “The Witcher 2: Assassins of Kings” that 200,000 to 250,000 versions, which is approximately 80%, of their total online sales of the game came from Steam. It is so obvious that Steam is currently the market leader in the market of digital gaming distribution.

Pricing strategy

Gamers prefer purchasing game from Steam because the site often offers a lot of promotions and sales, when users can purchase their game with very cheap price comparing with normal price offered by third-parties. There has been debate over whether these promotions are favored by game developers. It has been argued that games could be devalued by major discounts, affecting the industry in the long-term. However, according to a number of developers that participate in Steam Summer Sale, the promotions not only attract more sales, but also generate more revenue and revive games of old time.

Threat of envelopment

Although Steam provides lot of benefits to users, many disadvantages are also recognized, including:

  • When the program is started, it automatically update to a new version. This process may require a lot of time regardless users’ network speed; confusing users are in the mood for playing.
  • Downloading games in large size may be an endless process if users’ network connection is not fast. Moreover, players cannot start playing until all of the content is downloaded, requiring from them a huge amount of waiting time, comparing with purchasing a disk from a game store.
  • It is complicated for users if they wish to play their game in offline mode. They have to log in using their Steam account and enable the function “I am going offline”, which prevents unexpected loss of connectivity.
  • Although Valve has launched their Steam version for Mac, most of the games offered are available only for Windows, preventing Apple fans to enjoy gaming.

Another threat for Steam has been proven to come from hackers. On November 6 of 2011, Steam temporarily closed the community forum, mentioning potential hacking terrorizations to the service. Afterward, on November 10, Valve informed that the hack involved a compromise of one of their customer databases, possibly allowing the perpetrators to access customer database including encoded password and credit card information.

Currently I am writing my thesis on gamer behavior on purchasing games from Steam vs. downloading cracked games. I would love to discuss with someone who find some interest on studying this platform-mediated network from other perspectives.

References

Martin M., 2010, StackExchange. Retrieved from: http://apple.stackexchange.com/questions/4304/what-is-the-steam-gaming-platform

Oliver C., 2011, Forbes. Retrieved from: http://www.forbes.com/sites/oliverchiang/2011/02/15/valve-and-steam-worth-billions/

Steam Store. Retrieved from: http://store.steampowered.com/

Stephanie M., 2012, PCMag. Retrieved from: http://www.pcmag.com/article2/0,2817,2409173,00.asp

Tom C., 2012, Gamasutra. Retrieved from: http://www.gamasutra.com/view/news/174587/Steam_sales_How_deep_discounts_really_affect_your_games.php#.UTOjdzBRDK0

Wikipedia, 2013. Retrieved from: http://en.wikipedia.org/wiki/Steam_(software)

Wikipedia, 2013. Retrieved from: http://en.wikipedia.org/wiki/Valve_Corporation

 

:: 4G spectrum auction ::

Paul Prins – 4min. read

31st of october 2012, the auction for the ‘4G spectrum’ started in The Netherlands and finished 1,5 month later at the 13th of december 2013. This auction took longer and raised more money than expected. Both the Dutch market leaders, KPN and Vodafone, bided each about €1,3 billion, T-Mobile €911 million and Tele2 – a fairly new player in the market – €161 million. KPN paid (relatively) so much that the dividend payments for 2012 and 2013 were actually cancelled.

 Why did it take so long? And why is there so much money involved – almost 4 times more than was expected?

To put it shortly, all of these companies were aiming at getting access to chunks in (mainly) both the 800MHZ and 900MHz spectrum (more about these frequency bands later). The licenses for these spectrum bands are valid until 2030 in order to provide faster mobile data [LTE] services all over the Netherlands. The roll-out was, by then, planned to start in Q2 2013 until – expected – the end of 2014.

Shortly after the auction, the real rivalry between the companies took off. KPN was the first player that actually ‘launched’ it’s mobile 4G connection for her customers. But this was only for their premium data plans and they also didn’t foresee that some early adopters started to pick on KPN that their 4G was not compatible with the – just released – iPhone 5. On the contrary, Vodafone has recently fired a marketing campaign as a reaction to KPN, claiming that they are the first provider in The Netherlands offering a 4G connection for the iPhone 5 – truth to be told: just for now, only in the 4 main rural cities Amsterdam, Rotterdam, Utrecht and Den Haag.

 But what’s the fuzz all about? – Why emphasis on the iPhone 5?…let’s clear things up.

First of all – and without getting in too much details yet – the iPhone 5 is one of the most popular high-end mobile devices that, as it turned out, doesn’t support the initial 4G-rollout  frequency (800MHz) from KPN, whereas the Samsung Galaxy S4, HTC One and Nokia Lumia 920 do. Why? Because the iPhone 5 for the Dutch market doesn’t support 800MHZ, but only 1800MHZ. A great opportunity for the marketing departments of Vodafone to make public to their customers that they have already started rolling out their LTE services in the 1800MHZ band – for the record: KPN will also start to roll-out the 1800MHz band in 2014 as well.

 But what about these frequency bands?

Back in the days, when you went to a country abroad you needed a separate mobile device in order to connect to a local network – or you were one of the lucky fews, owning your own satellite phone – since all countries had their own ‘rules’. Luckily for us, things changed and international standards for the mobile spectrum have been adopted. Just like any international agreement, the real results of these standards are visible many years later. For example, in The Netherlands the 800MHz band was exclusively used for analog television. Therefore, this bandwidth was not available for telecommunications, otherwise nobody was able to watch television back in the days.

But for this new digital age, 800MHz is not exclusive for analog TV anymore. Why? The first reason is that probably nobody watches analog TV anymore, but more importantly because 800MHz main characteristic is that it can can cover a wide distance, whereas bands in the higher frequencies cannot. For the same reason the GSM network is provided through the 900MHz band.

So what does it mean for Telecommunications in the Netherlands?
The final results of the Dutch 4G auctions give a pretty clear overview:

At this point is not specifically known which provider will use what specific band, but a rough expectation shows the following:
2G / GSM: 900MHz
3G / UMTS: 2100 MHz
4G / LTE: 800, 1800, 2600 MHz

Back to the iPhone:
As mentioned before, the initial roll-out is focused on the 800MHz frequency, hence the fuzz about the iPhone 5 that ‘only’ supports the 1800MHz band. The good news is though, that the new iPhone models (5S and 5C) will support all three LTE bands

And that is exactly what it’s all about for LTE: device and mobile carrier support:
Band 20 (800MHz) – Vodafone, KPN, Tele2
Band 3 (1800MHz) – Vodafone, KPN, T-Mobile
Band 7 (2600MHz) – Vodafone, KPN, T-Mobile, Tele2, Zum (Ziggo)

Thus, the bottom line is: if you want to know wether you will see that new beloved 4G icon in the top of your screen, not only check if your provider supports LTE access (and you are actually paying for it) but also if your phone supports it.