Internet Market Research: P&G

Procter and Gamble (P&G) and Colgate-Palmolive have been competitors for decades. Before it used to take 5 years to launch a product after the concept was developed. Companies used to send out product photos and descriptions to potential consumers to ask them their opinions about the product and whether they would buy it or not. If the comments were negative, the products would be ameliorated and the previous process would be conducted again. Once consumers found the products satisfactory, they would be given some samples to try out with some questionnaires to fill out. When the customers' feedback was positive enough, the the company would start conducting mass advertisement on T.V.


However, when P&G started using the Internet to do its market research, its research time was reduced to 3 years and a half. This was the case for the Whitestrips, the teeth whitening product. It was very fast for P&G to get the sales of the Whitestrips to reach $200 million a year. This happened a lot faster than for other products.


P&G achieved this because in September 2000, thew out the old marketing research method and decided to launch the Whitestrips on the Internet on its P&G website. The company spent a few months analyzing the website's traffic and looking at the responses collected from questionnaires.This was a lot faster than the old mail-out method. The data collected from the Internet, revealed that teenage girls, brides-to-be, and young Hispanic Americans were vey interested in the Whitestrips. Consequently, the company decided to target these segments. The Internet created a brand awareness of 35% even before the product was available in stores. The buzz online created a large demand before the product hit shelves. The Internet changed the way that market research and market segmentation is done.

Turban, Efraim, and David King.Introduction to e-commerce. Upper Saddle River, N.J.: Prentice Hall, 2003. Print.

Google’s Smart Phone Glasses

According to the New York Times, Google will launch its digital glasses by the end of this year. The glasses will be like a smartphone and the technology will be based on the technology of the Android phones but will have augmented reality features. For example, it can tell you how far you are from an object or remind you who the person is and where you know that person from.

The price range for the Google glasses will be between $250 and $600, which is in the price range of actual smart phones. The glasses will be licensed to other mobile phone companies like every other cell phone in the market to be able to have access to 3G and 4G networks.

Reports about this new technology say that the Google glasses are not meant to be everyday gadgets. Some critics claim that the glasses will change the way we use smartphones but others say that this technology will be very strange and dangerous. For example, Google will be able to know everything you do at all times. It will know your location, your most common interactions, your closest friends through its facial recognition technology and your daily habits such as your eating and shopping habits. 

The Google glasses could be a new opportunity for marketers to get consumers attention at all times. For example, every time you walk close to a McDonald’s, the Google coupons application could pop an image of a coupon on the glasses.  This would help marketers understand consumers’ daily habits almost instantly because Google would be following consumers through out their typical day. However, for consumers this is bad news and would generate privacy issues.

Google’s glasses seem to be a great technological advance, however it seems that many consumers would not be willing to adopt this technology so quickly due to privacy issues. 


http://www.pcworld.com/article/250507/google_glasses_are_a_prescription_for_disaster.html

Godiva.com: Selling Chocolate Online

Godiva chocolatier is a well-known international company based in New York. The company had been looking for ways to increase its sales and after rejecting a CD-ROM catalog in the 90s, it took the courage to try online sales in 1994. Godiva was a pioneering click-and-mortar e-business that took the opportunity of online sales before its competitors.

Godiva chocolatier teamed up with Fry multimedia to create the division of Godiva. The objective of the new division was to sell to both consumers and other businesses. Godiva.com encountered many problems when it was first launched when it tested many technologies, but it maintained its commitment to its online division and Godiva.com became the most successful division of Godiva. Just like other e-business pioneers, Godiva had to build its website from scratch without any EC-building tools. Godiva tried to use games and puzzles to attract consumers but this strategy failed because consumers were coming to godiva.com to learn about chocolate not to play games. Godiva also tried to make its website look like one of its retail stores. However, Godiva realized that different channels should have different looks.

Godiva.com sells both to consumers and businesses. For corporations, incentive programs are set in place. This includes a list of the employees or customers to whom the chocolate is to be delivered. This is an example of their B2B2C EC model.

Godiva.com is a good example that shows how a traditional brick-and-mortar can turn into a click-and mortar to grow its customer base and obtain a competitive advantage while a new technology is non imitable. 

Nike’s Supply Chain: Failure and Eventual Success

During the 1970’s retailers would make their orders with Nike 9 months in advance before their delivery date. The orders were then sent to Nike’s manufacturers all over the world. At the beginning this process worked well and allowed Nike to deliver its orders on time. However, during the 1980s and 1990s Nike’s business grew dramatically and customers became more demanding about style, comfort and variety leading Nike’s forecasting, manufacturing and distribution to become very complex.

In 1999, profits dropped by 50 percent due to supply chain factors. The situation led to the adoption of Nike’s supply chain project called NSC. The project attempted to improve the failing forecasting and order activities in Nike. However this didn’t work well for Nike, so it acquired and implemented i2 technologies’ demand forecasting system at a cost of $40 million. The objectives of this project were to forecast over 1 million stock keeping units (SKUs). Algorithms were used to generate Nike’s forecasts for manufacturing. However, later in 2000, the forecasts were found to be faulty, causing Nike to over manufacture some products while struggling to meet the demand for other products. It took Nike between 6 and 9 months to overcome its manufacturing problems and more than 2 years to makeup for its financial loss.

After analyzing its i2Technologies, Nike learned that it needed a more adequate training of users, more comprehensive testing for the application and a more careful integration of the application with other information systems. The review of the project found that there was too much reliance on forecasts generated by algorithms without using any judgment to evaluate the forecasts.

By 2004, Nike had an integrated and efficient supply chain with 12 technologies’ forecasting system, SAP’s ERP system, and Siebel’s CRM systems. Nike spent 6 years and $800 million on the project.

Turban, Efraim, and David King.Introduction to e-commerce. Upper Saddle River, N.J.: Prentice Hall, 2003. Print.

Styku: 3D Virtual Fitting Room

Styku is an online fitting room for apparel sold through eCommerce vendors. The 3-D technology allows consumers to vitually try on the clothing they want to buy on a website by creating their own avatar. They can virtually try on clothes from home or from their mobile devices. This application has the potential to dramatically increase sales, reduce returns and provide confidence for consumers that are hesitant about purchasing their clothes online.

Offline apparel sales decreased considerably due to the recession but online retail sales continued to grow by 8% annually. Only 9% of clothing sales in the United States are made online and this is because consumers are skeptical about the clothes not fitting properly and the costs of having to return an item that does not fit. Online consumers return around 30% of the clothes that they buy online and this causes large losses for the online retailers because the items become obsolete. Online retailers have been looking for ways to strengthen the online shopping experience by investing in e-commerce technology. But the main problem stopping online sales from growing is the lack of an online fitting room or a technology that will reassure consumers about their purchases online.  There are new technologies that claim to be virtual fitting rooms however they don’t fulfill the main purpose of a fitting room, which is to make sure that a piece of clothing fits properly on your body. There are technologies where the consumer uses a webcam with their computer and then the flat images of the clothing are placed on top of the image of the consumer. This is similar to looking in the mirror and placing the clothing on top of your body. This allows you to see how the clothing matches your hair and your skin tone but it does not show you how the clothing will look on you when you put it on.  I previously mentioned an example of this called UPCload.  I also mentioned meemee.com which the virtual models start to become 3D but are not fully 3D like an avatar. It also does not take into consideration all the measurement of your body to create the virtual model.

The Styku virtual fitting room application asks you for all of your measurements except height. Online retailers can offer the application on their website. The video below shows how the process works.

http://events.nrf.com/summit11/public/Booth.aspx?IndexInList=&Upgrade=&FromPage=&BoothID=122518&Task=PressReleaseDetails&PRID=887

styku.com

Example of a Virtual Fitting Room: meemee.me

meemee.me is a an online retailer that is changing the way we shop for clothes online. Usually when we purchase clothes on a website, we do not know how they will fit us until we try them on and usually that involves sending the items back to the company, and exchanging them for a different size like I mentioned previously in my other posts. This involves a lot of effort and it certainly discourages many customers to buy online.

The online retail market could grow at a faster rate if this was not an issue. Meemee.me is a website that has recently launched its virtual room where customers can enter their hip, waist and shoulder measurements to create an avatar and be able to try on clothes. This also allows customers to mix and match different items and put an outfit together. This is difficult to do with conventional e-retailers that do not offer virtual fitting rooms. This also time consuming and exhausting in a brick-and-mortar retailer. It is difficult to find the items customers are looking for because they have to physically walk around the store to find the items.

In a website like meemee.me customers can find clothing depending on the size and color they are looking for under a smaller period of time. Suggestions of items are also made depending on the customers’ body shape. Another advantage of virtual rooms is that customers save time when trying on the clothes on the avatar. At the physical store, customers usually have to wait in long lines before trying the clothes on.

One of the main disadvantages of the fitting room at meemee.me is that the software does not ask customers for their height. Also the avatar only comes in one shape. This is large limitation because customers cannot see how the clothes look on their specific body shape. In my opinion, the virtual fitting room is only useful to get an idea of how the clothes will look on you and also the main advantage is that you have the opportunity to create an entire outfit with the clothing offered in the website. This is something that can be difficult to achieve in a regular website.

Information Assurance

Information assurance (IA) is the protection of information systems against unauthorized access to or modification of information that is stored, processed, or being sent over a network.  For e-commerce to be secure, the information assurance should ensure the confidentiality, integrity and availability of information. Confidentiality means that private information should be encrypted so that the person who it is intended for can only read it. Integrity means that the information should be kept accurate without being altered. Lastly, availability means that the data, website of other EC information should be timely, reliable and restricted to authorized users.

For the EC data to b able to have confidentiality, integrity and be available, the data should also depend on authentication. Which is the process of verifying the real identity of an entity like a person, computer or website. Authentication verifies that the entity is who it claims to be. After the entity is authenticated, the entity also needs to be authorized. The process of authorization is the process in which it is determined what the authenticated entity is allowed to access and what operations he is allowed to perform. There is also nonrepudiation, which is the process that assures that online customers or teading partners cannot falsely deny their purchase or transaction.

Authentication and nonrepudiation are defenses against phishing and identity theft. To ensure trust in EC transactions, digital signatures or digital certificates are used to validate the sender and time stamp of the transaction so that later it cannot be claimed that the transaction was unauthorized or invalid.