Lise VALMORI

210AIB094

Case Study 3: Ebay

1/ The concept of e-commerce, its growth, and its impact on traditional retail.

To begin, here is a definition of e-commerce. E-commerce is the process of buying and selling
products through electronic means such as mobile applications and the Internet. E-commerce
refers to both retail and online purchases as well as electronic transactions. E-commerce
allows you to buy and sell products on a global scale, twenty-four hours a day without
incurring the same overhead as if you were running a brick-and-mortar store. For the best
marketing mix and conversion rate, an e-commerce business should also have a physical
presence. There are several types of e-commerce models such as: business to consumer,
business to business, consumer to consumer, consumer to business. We can also say that e-
commerce has many advantages such as: no location limitation, the website is always open
and accessible, e-commerce companies have much lower operating costs than physical stores,
automated inventory management or targeted marketing.
To continue, let's look at the evolution of e-commerce from a global perspective. After 25
years, the turnover of the world e-commerce does not cease and now exceeds 2000 billion
dollars. The 5 biggest e-commerce companies in the world are Amazon, JD.com, Alibaba,
Ebay and Rakuten. The American market is predominant and has been for many years,
however the Chinese market is growing. Thanks to the graphs below, here is the evolution of
e-commerce. The turnover has been multiplied by 12 between 2005 and 2018 and continues to
grow.

E-commerce revenues from 2005 to 2018 in France

Retail e-commerce sales worldwide from 2014 to 2024

Thanks to this graph we can see that since 2014 e-commerce is only growing in the world.
Here, online sales are multiplying year after year and more and more households are using the
internet which is in favor of e-commerce. We can also see that the Covid-19 crisis in 2020 has
had a positive impact on e-commerce. People who can no longer leave their homes have
turned to this practice and sales have increased by almost 1 billion dollars.
To finish this first introductory question, let's talk about the impact of e-commerce on
traditional trade. First, large retailers are forced to sell online to avoid sinking under the
competition. This has an advantage for them because their bottom line increases. On the other
hand, many chain stores are seeing their sales decline. This is because Amazon is becoming
the source for consumers for products traditionally purchased in department stores. But the e-
commerce causes many disadvantages for the traditional trade. This sector of activity
generates the destruction of many jobs related to the traditional trade. By comparing these two
actors, the online sale uses less staff. Indeed, the tasks related to this field require specific
qualifications. This is related to the robotization of the work tools in the warehouses. As a
result, less qualified people miss out on this opportunity. But traditional commerce and e-
commerce go hand in hand. For some consumers, their complementarity is essential. Indeed,
many consumers make a list of different items they want to buy. Once they have made their
list, they go to the store. For the purchase of clothes or shoes, this step of identification and
purchase in traditional stores is essential for some people. They save time by making their
lists and then, when they go to the store, they can see, touch, and try the products. E-
commerce therefore generates activity for traditional commerce. However, before you can
become a recognized and appreciated online retailer, you need to have a good e-reputation.
Facing the important place of social networks in our daily life, it is very important for
companies to keep a good e-reputation when they set up online sales, through their personal
website. To conclude, online sales will continue to grow in the years to come, impacting
traditional businesses. Nevertheless, consumers are not yet ready to buy all their products and
services on the web. However, in a few years, it is very likely that a certain number of
businesses that are considered today as indispensable by consumers will disappear in favor of
the digital era.

2/ Describe the logistics and supply chain management of retail and e-commerce businesses.

The e-commerce logistics represents the logistics of sales on the Internet. This activity implies
to set up specific processes to answer a particular management of flows. We can find the
order preparers, the transport service, the delivery or the after-sales service. Just like logistics
and transport in general, the e-commerce supply chain must be controlled and optimized from
start to finish. Often, outsourcing can be an effective solution. There are some points to take
into account: - the price for the company but also for the consumer, - the speed of preparation,
shipment and delivery of order even more when the company offers a service of same day
delivery as eBay, - the management of returns which is a specific flow that must be controlled
by the logistics provider, - the environmental approach.
Concerning the supply chain, here is an explanatory diagram.
 Source: supply chain management, Shipocket

Regarding eBay, here is the supply chain: customers order on eBay or on the application that
allows access to this service, retailers take care of the inventory, the product is sent through
transport, and it arrives to the final consumer.
In more detail, let's talk about supply chain management in general. This world of commerce
requires real-time visibility across the entire value chain in order to meet consumer
expectations and improve their experience. This is achieved by ensuring the fluidity of
materials throughout the chain, gaining complete visibility into the supply chain. It is
important for retailers to combine online and offline data and implement data-driven retail
supply chain processes to understand what products to stock, how much to stock and how to
distribute them through different channels.
To continue, we can say that retail supply chain management is retail supply chain
management, and that retail supply chain management represents all stages of the
organizations' supply chain.
This retail supply chain management can help retailers optimize every step of the process,
from obtaining raw materials to manufacturing the product and delivering it to the consumer.
Here an example of the supply chain management in retail industry:

Source: https://www.google.com/url?sa=i&url=https%3A%2F%2Fprezi.com%2Fz34kvcp20dz9%2Fsupply-chain-
management-in-retail-industry
%2F&psig=AOvVaw0Z89t4SjAJlh4MYiXNg2qO&ust=1636118605871000&source=images&cd=vfe&ved=0CAsQjRxqFwo
TCKDdpfnm_vMCFQAAAAAdAAAAABAD

3/ Describe eBay’s e-commerce strategies and its same-day delivery service.

First of all, we can recall that eBay has become a major player thanks to the vast portfolio of
products it offers on its online portal. Since the beginning, studies on the company show that
it has focused on the needs of people who are overloaded and stuck to their desks and prefer
to save time by consuming online. However, this attitude of consumption has changed, and
low and competitive prices are one of the reasons why consumers buy online. eBay's
operation is based on consumer attitudes. For example, the company began by selling
electronics, household goods and DIY products online. It then became the most used online
platform for buying electronic items. In just a few years the eBay product portfolio has grown,
and the company has become a one-stop shop for all types of purchases.
We can now talk about the strategies that eBay has adopted in e-commerce. Ebay is the king
of "push" marketing. Push marketing is a strategy that consists in pushing the product to the
consumer in a direct way or through the distribution. Everyone knows the push marketing
actions without necessarily knowing it. For example, we can talk about the distribution of free
samples or promotional operations.
We can now talk about the strategies that eBay has adopted in e-commerce. Ebay is the king
of "push" marketing. Push marketing is a strategy that consists in pushing the product to the
consumer in a direct way or through the distribution. Everyone knows the push marketing
actions without necessarily knowing it. For example, we can talk about the distribution of free
samples or promotional operations. For this strategy, eBay uses emailing, which consists of
sending a sequence of messages using persuasive techniques to push people to buy. Ebay also
promotes paid services in stores for example.
Thanks to an article, I learned that in order to use the platform in the best way, eBay is
educational and has set up training tools. For example, in the United States, the company has
opened a Learning Center, an information portal to help the community. Then, eBay is a very
big advertiser. Banner ads are electronic versions of the poster stuck on a billboard in the
street. These banners attract the eye of the Internet user to make him click and buy.
There is another method the company uses: installable applications. For example: you have
just bought a digital device and you are about to install the driver. If you are not careful when
installing your software, you end up with a shortcut on your desktop that also leads to eBay.
We can also talk about eBay's distribution strategy which is one of its great strengths. The
company uses channels and locations to distribute its products to the market and conducts
transactions with targeted customers. Ebay manages distribution through a strategy that
includes various technologies that allow the seller and the buyer to easily access the
company's services and products. The relevant places and channels are therefore the official
websites, mobile applications and an application programming interface.
From now on, we will discuss eBay's same day delivery service. Ebay started by bringing
together individual retailers and chain stores to offer them a platform to sell their goods with
the advantage of same-day delivery. To compete, eBay used a non-media advertising strategy
by inviting select San Francisco customers to test the service. In addition, the company used a
loyalty strategy by waiving delivery fees for the first three purchases. With the geographic
advantage, eBay was able to compete because the company did not need to maintain
warehouses and retailers were naturally located close to customers.
In my personal opinion, it is a very good loyalty strategy that pushes buyers to consume on
this e-commerce site because the consumption habits respond to this model.

4/ Analyze the pros and cons of same-day delivery VS regular delivery.

Same-day delivery is the shipping method that guarantees your order gets delivered on the
same day it was placed. The common thing is to set a time limit to place orders. For example,
if you want to get your order on the same day, you must make the purchase before 2pm.
Here are the various benefits of same-day delivery:
- Abandoned cart rate is reduced. They are one of the concerns of every e-commerce owner.
We can say that one of the reasons why many users abandon their shopping carts is because
just before finalizing the purchase, they learn that the delivery time is too high. So, the
consumer doesn't want to wait but with same day delivery, the customer is satisfied and
moves on to purchase.
- Same day delivery improves user experience and loyalty. Today's consumer habits are based
on: "have it all right now" and eBay understands this. The faster the customer receives their
purchase, the more satisfied they will be with the buying experience. This promotes
satisfaction and loyalty.
- Ebay stands out from the competition: the delivery time can be a decisive factor for a user to
decide to buy from you.
- Use impulse buying to your advantage: with the time limit to receive the package the same
day, consumers have a sense of urgency and act on it.
But same-day delivery has its drawbacks for businesses:
- The logistics operator must be efficient. To be able to offer this service, you need to find a
courier service that can handle same-day delivery and still provide good service. And as the
given text says: "operating a same day delivery service has many risks and challenges and
could turn into a logistical nightmare for eBay".
- The company must have the necessary inventory. For eBay the challenge is not here because
the company works with retailers.
- The shipping costs are higher: a fast shipping implies paying higher costs. This directly
affects the user, and many are not willing to pay for this extra expense.
Thus, we can say that compared to the normal delivery, the same day delivery brings an
additional service. But normal delivery poses fewer logistical problems, and the costs are
often lower. In my opinion, the best thing is to be able to order on an e-commerce site
offering both services.

5/ Identify the challenges faced by eBay in operating its same-day delivery service and
explore ways in which it can make it a success.

There are many challenges for eBay regarding same day delivery. First, competition is a big
challenge. The big e-commerce companies have all adopted the same-day delivery strategy,
so eBay must rise to the challenge to keep its customers happy and loyal. For same-day
delivery to be competitive, only price is different and becomes the deciding factor for
consumers.
Logistics is also a challenge for the company. E-logistics needs to be flawless, and eBay has
experienced difficulties with large-scale operations, high costs for the company, the need to
employ people or the totally consumer-dependent service.
Here are the different challenges regarding same day delivery that eBay may face and that we
will try to turn into strength:
- Delivery costs: it's easy to understand why customers are willing to pay a premium for fast
delivery. The question is more about why and when they are. A person who needs to find a
birthday gift quickly will thus be more willing to spend more so as not to be left empty-
handed on the day of the event. Thus, the strength becomes efficiency: to keep shipping costs
down, efficiency is important. In other words, the challenge is to get packages from point A to
point B as efficiently as possible, with the least amount of physical labor and routes that fit
together perfectly.
- Speed of delivery: the reduction in delivery time is largely due to the "economies of scale"
of shipping: the more packages sent, the more often and efficiently they can be delivered.
- Sustainability and delivery: Eco-responsibility is an issue of growing concern to consumers
and businesses. Transportation is considered one of the most polluting sectors, especially
because of e-commerce. Packages usually travel long distances and almost all are delivered to
a different address.
Nowadays, same day delivery often means unnecessary extra kilometers.
In terms of sustainability, the distance the vehicles have to travel is the main obstacle.
Delivery in urban areas is cheaper and more sustainable, as it is done with a fully loaded van
that travels a shorter distance.
To answer some of these we can consider multiple shipping options, a pleasant tracking and
tracing experience and a smooth shipping process ensure higher conversion rates and more
loyal customers for eBay.
 References

1° Shopify, “What is Ecommerce?”, 2015

https://www.shopify.com/encyclopedia/what-is-ecommerce

2° Very Digital, “Story of the e-commerce”, 2020

https://verydigital.fr/definition-e-commerce/

3° Statista, “Retail e-commerce sales worldwide from 2014 to 2024”, 2021

https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/

4° Meilleur taux pro, “Pros and cons of e-commerce »

https://www.meilleurtauxpro.com/fond-de-commerce/actualites/2018-avril/les-impacts-des-
ventes-en-ligne-dans-le-developpement-du-commerce.html

5° Etudes et analyses, “Marketing mix – Ebay », 2017

https://www.etudes-et-analyses.com/gestion-strategie/e-commerce/etude-de-cas/marketing-
mix-ebay-628935.html

6° Comexplorer, « What is a push marketing strategy?”

https://blog.comexplorer.com/strategie-push-marketing

7° Etudes et analyses, “Differents strategies – Ebay »

https://www.etudes-et-analyses.com/gestion-strategie/strategie/etude-de-cas/differentes-
strategies-entreprise-ebay-322499.html

8° Doofinder, « Ecommerce trends », 2016

https://www.doofinder.com/en/blog/same-day-delivery

9° CLog, « E-commerce or e-logistic ? », 2019

https://www.clog.fr/definition-logistique-e-commerce-ou-e-logistique/

10° SendCloud, “The future for the same-day delivery”, 2020

https://www.sendcloud.fr/quel-avenir-pour-la-livraison-le-jour-meme/

11° ThroughPut, “Understanding retail supply chain management”, 2021

https://throughput.world/blog/industry/a-comprehensive-guide-to-retail-supply-chain-
management/