MANAGEMENT OF E-COMMERCE
Electronic commerce has revolutionized the entire process of business operation and the exchange itself in the everyday business. The development of e-business is basically with the technological advancements and the innovative methods of sales and leading exchanges over the Internet. Alongside, the increase in the competition and the ceaseless globalization of the business associations with the presence of conglomerates both at the national and international markets has created the need for electronic commerce as an alternative to leverage development in business and generated revenue.
The retail sector in the UK represents a significant segment of the country’s yearly income. The increase in customer demand for new items and additionally the flexibility for shopping online, the electronic commerce has made a tremendous effect on the particular retailing itself. Fresh and Go Ltd is not an exemption and will undoubtedly receive such measure for it to compete in the online market.
Justification for the case study analysis for Fresh & Go LTD
The increase in the competition and the globalization with the presence of enormous players like the Wal-Mart, Marks, and Spencer, etc., the competitors in the retail sector are increasingly leveraging the internet for the web-presence as well as primarily to generate revenue. The way that the supermarket chains in the UK are confronting substantial competition and Fresh and Go Ltd being the leader in the UK supermarket segment of the retail sector has deployed the electronic commerce to reach a larger segment of customers in the UK. The research means to toss light on the way that the electronic commerce model of business is viable on account of Supermarket chains where the items are predominantly consumable and easily perishable as opposed to other segments of the retail sector like apparel and footwear.
Why adopt E-commerce?
Electronic commerce Overview
Efraim Turban et al. (2004) say, “Electronic commerce has revolutionized the conventional business process of purchasing and deploying so as to sell to the high street shops the Internet and technology to reach an incomprehensible customer base.” The increased use of Internet by the open and the development of data technology items to bolster efficient and service exchange over the Internet have apparently fuelled the development of electronic commerce. This statement makes it clear that the electronic commerce has achieved a critical position in the business process of an association. The essential elements that contribute the development of e-business are identified by Hudgins-Bonafield and Christy (2003) as takes after:
Development of Internet: The Internet has seen a tremendous development in the previous five years making it a potential place for imparting to numerous customers both efficiently and also cost effectively. The process of e-marketing by which a client over the Internet reached through electronic sends or another type of adverts in the websites that draw the attention of the target customers eventually directing a potential sale. The way that the Internet can communicate to a mass segment of people irrespective of age, cast, shading or sex makes it a possible apparatus to promote the items and services offered by n association. The underlying perception of web-presence as identified by Efraim Turban et al. (2004) replaced by the initiative to lead business exchanges over the Internet itself.
Security and Data Protection: The presence of strict laws enforcing the information protection and protection of data alongside the legal restrictions and guidance to direct exchanges over the Internet in a secured style is the major accelerating force for the development of electronic commerce especially by giving the customers the confidence and determination of severe activity against any fraudulent activities or misuse of personal/money related data. This initiative of the government as encouraged the customers as well as especially the business associations competing in the market to identify new customers and reach a wider demography with their items.
Development in Technology: The development of Internet was basically due to the tremendous growth and advancement in Information Technology elements that enable secure and quick exchange over the Internet. The development of close correspondence systems like Integrated Services Digital Network (ISDN) and security systems like Asynchronous Transfer Mode (ATM) etc., has immensely contributed to the excellent development of Internet and Internet based business initiatives over the globe. Furthermore, the presence of sophisticated IT architectures like.Net Framework, etc., has further eased the process of developing applications and software packages that enable secure correspondence and exchange over the Internet in this manner furnishing the customers with the ‘Peace of Mind’ about the security of their data.
Convenience Factor: Emma Janson and Robin Mansell (1998) say that the customers choose electronic exchanges more due to the convenience associated with the process of shopping itself in this way reducing the tangle of driving to the high street stores and eliminating congestion in busy places like London. Alongside, the creator’s further stress that the convenience is the physical rest as well as basically the time component whereby a customer can put the order on an item over the Internet at anytime he/she thinks that it’s convenient accordingly eliminating the significant issue of timekeeping and scheduling an essential activity efficiently. This convenience component likewise justified by numerous creators including Efraim Turban et al. (2004). This explains the electronic commerce and the in particular development of commercial exchanges have become tremendously through appealing to the continence variable of the customers.
Advancement in Business and Competition: The development of data technology has additionally opened the entryways for innovative methods of information mining and Customer Relationship Marketing whereby an association can identify potential clients and tailor its items based on the client needs purely by means of the client data held in their databases has apparently increased the competition to high as can be levels in every sphere of business both inside of the UK and additionally over the globe. The companies competing in the market have in this manner started deploying the Internet as a potential source of revenue through the extensive implementation of the electronic commerce technologies.
Reduced Operating Costs: Emma Johnston (2002) says, “The fees involved with the operating of the stores in the high-streets and expenses associated with the work are substantially reduced by the one-time investment in the electronic commerce technology to deploy a hearty and secure system in their organization websites for leading commercial exchanges. The way that the expenses associated with the maintenance of the IT system so deployed are comparatively small to the expenditure related to the establishing and management of stores/offices at numerous geographical areas. Alongside, the expenses related to the storage and transportation of the items to the stores are likewise eliminated in the electronic version of the business where the organization holds the elements in a central area in the majority of the cases with the manufacturer itself. This clearly reduces the money related overhead for an association in this manner enabling it to invest in more productive areas for business development.
The components mentioned above make it clear that the electronic commerce is increasingly replacing the trifling method of business exchange itself in this way revolutionizing the entire business process itself.
E-business is comprehensively classified into two significant areas as identified by Efraim Turban et al. (2004). They are
Business-to-Business (B2B) Electronic Commerce: This is the type of electronic commerce that enables exchange between two business associations over the Internet. This trade mostly conducted between companies and the keeps money with which they operate their finance and commercial exchanges. Alongside, the business exchanges between associations increase the speed and. Also, the security of the transfer in this manner enabling fast response to an ideal circumstance in the enterprise as identified by Glenn J. McLoughlin (2002). Since this report focused on the examination of the retail business where the exchange is with the consumers involving the general open, a detailed investigation of B2B electronic commerce is out of the scope of this report.
Business-to-Consumer (B2C) Electronic Commerce: This is the process of e-commerce where the commercial exchange is conducted between the consumers in the general open with the organization selling the items and services. The exchange in essentially through the flexible payment (i.e.) payment through credit/debit cards or electronic money transfer. It is evident that e-business achieved just when the exchange is conducted online over the Internet. The B2C model of commerce is the one that deployed in the retail sector business associations which discussed in the next section.
The B2C model of e-business is a very sensitive issue for the companies involved because of the reason that the entire process of ordering and payment exchange is not face-to-face and hence the need to develop the confidence among the customers to rely upon the Internet services to use their credit/debit cards or another plastic payment alternative to direct the exchange over the Internet. Efraim Turban et al. (2004) argues that the B2C mode of electronic commerce must address the customer demand as well as develop the reliability of the entire process through efficient management and secure processing of payments. This makes it clear that the B2C mode of electronic commerce must address security and flexibility issues to increase sustainable competitive advantage in the market.
Furthermore, in this manner of e-commerce, a negative impression created by one customer is enough to demolish the entire system itself because of the way that the consumers constant demand 100% reliability on the payment and exchange issues both in the conventional face-to-face shopping and also over the Internet.
Retail Sector Electronic Commerce
Retail Sector, as mentioned before structures a unique segment of the aggregate UK revenue furthermore drives the economic development of UK. The Keynote Market Review (2003) on the retail sector in the UK has further justified that the retail sector contributes to 30% of the aggregate employment in the UK alone in this way making it a competitive and innovative area of business. The retail sector additionally goes about as the connection between the consumer and the manufacturer even, however, the methods of direct marketing and wholesaling increasingly well known inside of the UK. This makes it clear that the retail sector business is an evergreen business as well as the one, which is ever changing in nature to meet the solid competition and development through globalization.
Alongside, it is additionally clear that the customer demand is the real main thrust for the retail sector business as identified by Philip Kotler (1988). The way that the customers demand quality items at competitive prices has apparently given rise to the development of supermarket chains like Fresh and Go Ltd, ADSA Plc, etc. who specialize in selling quality items at exceedingly competitive prices.
Electronic commerce, in general, has tremendously developed in the retail sector segments like the dress and non-perishable items like books, footwear, etc. The development of the Amazon the US-based online book retailer in the UK that has led to the fall in sales at the traditional booksellers like Water stones Plc and WH Smith in the UK reveal that the electronic commerce has indeed tremendously developed in the retail sector. The concept of e-retailing has become chiefly due to the elements discussed in the previous section. The increase in the charges associated with the shop-floor maintenance, work, and other expenses through the presence of stores in the high street, the companies are increasingly leveraging so as to reduce the cost overhead the e-retailing on their websites. Alongside, the increase in the competition in the retail sector ha apparently created the need to identify a new method of leading business that can reduce the expenses and, besides, reach the customer more conveniently. This requirement was satisfied by the B2C electronic commerce over the Internet.
Aside from the variable of convenience, the development of e-retailing was for the most part because of the online advancements and exclusive offers for online orders promoted by the retailers as identified by Joanne Banks (2004). The way that the customers are increasingly attracted towards bundle offers and settle on items that give more value for their money were harnessed by retailers to enhance their e-retailing strategy that reduces the cost overhead as well as leverages revenue at a comparatively lower operating expense. This justifies the development of the electronic commerce in the retail sector.
The variables as mentioned above further elucidate the suspicion about the customer interest in the e-retailing. This is evident from the success of the Amazon, Virgin and other electronic retailers who pioneer in the B2C category of e-commerce. Alongside, even however the potential for high-street retailing eliminated, the number of online shoppers is increasing in number, which is evident from the market survey conducted by Keynote (2005).
The above arguments have revealed that the electronic commerce model of exchange has been successful in the retail sector where the items and services sold are non-perishable items. In any case, the sales of perishable items like nourishment articles and other items is a challenging issue because of the way that the organization selling the item should be aware that the items being ordered by the customer delivered as fast as would be prudent with a view to fulfilling their needs and also keep up the item quality.
The supermarket chains in the UK contribute to a significant segment of the revenue generated in the retail sector business. The BMRB survey conducted on the supermarket chains in the UK (2004) reveals that more than 45% of the aggregate revenue generated in the retail sector created by the supermarket chains in the UK. Alongside, Joanne Banks (2004) has further argued that the competition in the supermarket chains in the UK is intense due to the way that they compete on the grounds of price as well as basically on quality and service offered to the target customers. The increasing demand of the customers to have easy access and fast service at the shops has apparently forced the supermarket chains to establish the electronic retailing choice on their websites. ASDA Plc, at first, introduced the online service after it was taken over by Wal-Mart; the supermarket Goliath from the United States of America.
The central point that hinders the development of B2C electronic commerce in the supermarket chains as identified by Alex Hughes and Suzanne Reimer (2004) are;
- Short Life Time of the items
- Time requirements for the delivery of the items
- Issues associated with the storage and circulation of the items
- The need to spontaneously process the electronic payment to process the order
- Active charging and management of the online orders in the supermarket
The issues as mentioned earlier faced by all the supermarket chains that sell perishable nourishment items as a core segment of their range of topics. This further makes it clear that the supermarket chains ought to enable the electronic exchange system as well as essentially to process the payment accurately in the primary instance itself to facilitate the speedy processing and delivery of the orders placed on the Internet.
The accompanying examination on Fresh and Go Ltd and its use of the electronic commerce technology means to toss light on these issues.
Website design Structure
Efraim Turban et al. (2004) argue that a customer shopping online won’t just demand security and protection, however, for the most part, the natural route of the websites with generous help and backing to perform the online shopping itself. The way that customer service is the key to a successful business exchange and, in addition, picking up the client’s dependability makes it clear that the a successful e-commerce venture not just demands a hearty system to respond effectively to the customer’s request yet predominantly provide an easy to navigate website for performing the process of shopping itself.
In the light of the above argument, an understanding into the FRESH and GO LTD website reveals the accompanying results.
- The organization has an exceptionally neat site that has classified its items efficiently based on the departments and after that provided a two stage categorisation for identifying the genuine item itself. The two phases of classification achieved by the giving a short rundown of hyperlinks under a selected category to enable the customer to view the items.
- The website additionally provides an interactive help system that efficiently guides a new user to get rapidly accustomed to the online shopping process to encourage the customers to shop online.
- Apart from the easy to navigate the system and the help provided online, the organization has additionally established a dedicated call centre service primarily to attend to the queries of the online shoppers including support for completing an order and besides serving the customer questions on existing orders and deliveries.
- Alongside, the feature of reserving a delivery schedule before beginning the shopping process itself makes it further easier for the client to decide on the items to prioritize on the order placed. This provides an extra benefit of increasing customer fulfilment and additionally a second to none service in the online shopping system to the customers.
The statements as mentioned earlier further legitimize that the Fresh and Go Ltd has apparently gained the competitive advantage in the electronic commerce model of retailing in the supermarket chain segment of the retail sector in the UK. Alongside, the organization has not just established the online exchange system for the sale of its retail items yet for cross-selling off its other services including DVD rental, finance, and other services. This entire existence of the organization over the Internet has apparently proved successful in increasing competitive advantage in the market.
The above examination has shown that Fresh and Go Ltd has leveraged competitive advantage through strategically deploying the electronic commerce system in its website and leading exchanges rapidly to provide timely delivery of the items and services. The research conducted so far is based on the secondary data resources and hence to drive on a concrete arrangement, an essential research as the questionnaire is carried out.
The underlying argument that the increased use of the Internet by the users in the twenty-first century that resulted in the tremendous development of the Internet backed by the technological advancement was the fundamental reason for the success of electronic commerce is justified on account of Fresh and Go Ltd where the supermarket mammoth has efficiently implemented the electronic commerce for the sale of non-perishable items as well as for groceries and other sustenance items through the integration of the stores and the logistics fleet of the organization.
The way that every nearby store caters the orders placed on the Internet through the centralized data management system proves that the technological development and innovative business methods assume a crucial role in the electronic commerce implementation by any business association.
The essential research and, besides, the secondary information investigation has proved that the electronic commerce venture of Fresh and Go Ltd was successful fundamentally because of the convenience element associated with the electronic shopping system. The results from the ordinary laborers of the questionnaire have proved this argument which justifies the underlying statement that convenience variable is the essential accelerating element for the development of electronic commerce.
The argument by Efraim Turban et al. (2004) that the electronic commerce venture of an association will be successful just when the data is presented in an easy to understand and also rapidly identifiable in the website. This ease of the route of the site stressed by numerous other creators and the result that Fresh and Go Ltd has presented an easy to navigate website to the online shoppers further strengthens the academic argument by Efraim Turban et al. (2004). Alongside, the argument that the B2C mode of electronic commerce will be a success just when the customers in the general open could access and navigate over the website with no trouble is further justified by the research results analyzed in the previous section.
The way that in B2C electronic commerce venture, the exchange must be accomplished through the Internet explains the implementation of the fast payment processing system utilizing the PeopleSoft database and the integration of the whole system using a the.Net framework as discussed before.
The statement that the electronic commerce leverages a reduced level of operating expenses and increases the efficient use of the shop floor space is evident on account of Fresh and Go Ltd. The organization’s balance sheet for the productive year ending March 31st, 2005 proves that the operating costs involved considerably reduced while the investment in fixed assets has increased to an appreciable level since the organization has grown the number of stores in the UK and increased its market share in the rest of Europe. Alongside, the costs involved with the delivery of the goods is likewise met by the efficient use of the logistics systems and also the acquiesce of the customers shopping online to pay an extra delivery charge for their orders online.
The above evaluation proves that the electronic commerce venture of the Fresh and Go Ltd is successful and that the academic theories established indeed in standard with the functional implementation of the reliable electronic commerce system itself.
Evaluation of Objectives
Objective 1: To analyze the development and effect of electronic commerce in the business society of the UK.
The available literature on the comprehensive perspective of the electronic commerce has proved that the electronic commerce in the UK has seen a tremendous development in the business association due to the increased competition and the technological advancements to address the demand for a secure and speed exchange system. Alongside, it is additionally clear that the electronic commerce venture of a business association is advantageous to both the customer and also the seller due to the way that the company operations consolidated under one rooftop for the organization while the customer can place the order to the advantage of his/her front room. The overview of Business-to-Business and Business-to-Consumer categories or electronic commerce further makes it clear that electronic commerce not just means to ease the shopping experience for a consumer in the general open additionally leverages fast and secure exchanges between business associations itself.
Objective 2: To research the effect of electronic commerce on the retail sector as a whole.
The overview of the electronic commerce in the retail sector has proved that the retail sector business is increasingly competitive, and the need to reach the customers with quality items at competitive prices has apparently fuelled the development of electronic commerce. The reduced operating expenses and the elimination of the storage space have proved that the electronic retailing is convenient for the customers as well as a cost reducing element for competitors in the retail sectors that enables them to concentrate on more productive investment like staff development program, etc. Alongside, the examination of the supermarket chains has proved that the need for an adequate and secure mode of electronic retailing, in particular for groceries in the UK, is increasingly in demand. The low price strategy of the supermarkets in the UK and the increased competition discussed in chapter 2 proves that the need to establish an electronic commerce exchange system is essential to leverage competitive advantage and increase revenue.
Objective 3: To lead a case study examination on Fresh and Go Ltd utilizing secondary information resources.
The investigation on the Fresh and Go Ltd above proves that the organization has established itself as a leader in the supermarket segment of retailers in the UK the deployment of the electronic commerce in the early years of the twenty-first century has further proved that the organization is an increasingly endeavoring to secure competitive advantage by strategically valuing its items and in addition giving efficient customer service. The relocation to.Net framework and the integration of the entire data management system and, in addition, the external elements involved in the payment processing has further justified that Fresh and Go Ltd has deployed the technology actually to leverage an efficient electronic commerce system for leading exchange as well as to present their items quickly to the customers. An effective design of the website and the strategy of giving pre-booked time spaces to delivery before shopping has proved that the organization has deployed the.Net framework to increase competitive advantage in the UK retail sector.
Objective 4: To direct an essential research examination on the electronic retailing methodology of Fresh and Go Ltd.
The questionnaire conducted on the Fresh and Go Ltd ‘s electronic commerce venture especially the developments in delivering groceries and sustenance items have proved that the retailer has strategically deployed the electronic commerce enterprise to increase its sales in the business. The response of the members has established that the retailer has pioneered in the process of e-selling the groceries, nourishment, and other perishable items through the strict adherence to delivery deadlines and quick processing of payments. The questionnaire has additionally proved that Fresh and Go Ltd is increasingly leveraging innovative technologies like Customer Relationship Marketing, which is evident from the response of the members that they can discover all that they need in the FRESH and GO LTD website itself. This further proves the research on Fresh and Go Ltd and its venture into electronic commerce is indeed successful and has given concrete results that analyzed for investigating the effect of e-commerce on Fresh and Go Ltd.
Objective 5: Critically analyzes the impact of the electronic commerce on the entire retail sector.
The information investigation and evaluation have revealed that the Fresh and Go Ltd has increased its revenue through the strategic deployment of the electronic commerce system to sell the groceries and other perishable items alongside the small product offerings like clothes, books, etc. The examination has likewise proved that the essential research has given results that are in tandem with the auxiliary information investigation on the organization which further strengthens the argument that Fresh and Go Ltd had gained competitive advantage and increased its revenue through the strategic deployment of the electronic commerce in its website. Alongside the evaluation of the academic theories against the research results further justifies that the academic theories on the strategic implementation of e-business and business process are indeed applicable in the real-world circumstance. This further explains the electronic commerce has made a positive effect on Fresh and Go Ltd by increasing its customer base and also reaching new market segments through the Internet along these lines leveraging competitive advantage and market share.
Alongside the available literature review and secondary information, the investigation has revealed that the electronic commerce venture of Fresh and Go Ltd; the organization under debate has proved successful through increased revenue and also market share in the UK retail market. The essential research has confirmed that the Fresh and Go Ltd has achieved customer fulfillment and efficient management of the Business-to-Consumer electronic commerce venture through the implementation of state-of-craftsmanship technology to lead the entire business process effectively over the Internet rapidly. Hence to conclude the report, it is evident that Fresh and Go Ltd has gained competitive advantage and market share through strategically deploying the electronic commerce system to sell perishable and besides non-perishable items over the Internet. Along these lines, the electronic commerce venture of Fresh and Go Ltd has made a positive effect on the organization by increasing its market share and revenue in the UK retail market.
The group has likewise achieved sustainable competitive advantage by being the primary starter as well as the best starter in the electronic commerce venture in this manner increasing customer fulfilment and also increasing its market share in the UK retail sector.
Fresh and Go Ltd currently experiences a high volume of calls concerning their electronic commerce payments. Even however a dominant part of the response was positive on the speed in payment processing, the number of customers who were griping that the exchange took a little longer to get authorized are additionally comparatively more in number. After eliminating the issues of cut-off credit points and other security elements associated with every individual credit/debit card, it is still necessary for the organization to direct the checking and acceptances rapidly to speed up the entire exchange process. This achieved through the effective integration of the companies that serve the payments and other details related to a card to rapidly process the payments online.
Fresh and Go Ltd has currently outsourced its software development and IT infrastructure to India. This must be effectively managed because of the way that in spite of the fact that the expenses associated with this outsourcing is less and increases the disposable revenue for further development of business, the efficient management of the personnel and also the consistent upgrading of the systems is essential for supporting the market share achieved by the organization.
The primary research information gathered was analyzed utilizing the MS Excel spreadsheet package, which does not possess the ability to extrapolate the data to develop a broader outline of the research investigation. Likewise, the target gathering of members was limited to 300 due to the impediments of assets and time. Hence, it is also recommended that the research is carried out on a large scale premise and the data gathered to be analyzed with more powerful information mining software like SAP and SPSS to extrapolate the results to increase concrete results.
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