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Advantages of an Online Movie Rental E-Commerce Company
There was a time when e-commerce was buzzword in the business world. It provided speed and efficiency because a brick and mortar store can communicate with customers at the speed of the click of a mouse and the convenience of sending the same communiqué through the Internet. However, times are changing, as expected in an era characterized by digital technology and the World-Wide-Web.
The new concept is called M-Commerce short for mobile e-commerce which is the use of portable devices such cellphones, PDAs, laptops, and iPads.
However, even considering the potential of M-commerce it has to be pointed out that the road towards commercial success will never be paved smooth and the businessman must adapt to changes and have the foresight to tweak the business model and tailor-fit it to customer needs. It is also best to start small and apply these new principles and technology to an easy to manage business such as a movie rental company that is already into e-commerce.
Before pushing forward with this study it is helpful to take a step backwards and come to understand the big picture when it comes to the relationship between the Web, Internet infrastructure, conventional store format and e-commerce. In the past the customer will have to use his or her car or at least walk a considerable distance to visit his or her favourite store where one can purchase needed items, groceries, and other products that are needed in the home, school or office.
But after the World-Wide-Web became popular businessmen adapted a certain aspect of Information Technology to enhance business to customer interaction. Instead of merely relying on traditional channels of marketing and customer relations it became possible to have greater access to customers via the Web.
Store managers and various types of merchants can easily send messages via e-mail to their customers informing them of new products, promos, and other important events regarding their business. On one hand the customer can receive these messages much faster and can have access to more product information in a relatively short period of time.
This will result in the ability to make quick decisions with regards to purchasing a particular product or not. But gone are the days when merchants are merely content with sending e-mail, the lowest form of e-commerce. The next step was to develop a system wherein customers can transact online, have a preview of the said product, make payments and receive their order without having to leave the comfort of their homes.
This is a radical departure from traditional brick and mortar stores where there was a need to have a face-to-face interaction with customers in order to complete the sale.
Those who have tasted success using e-commerce is now ready to go to the next level which is the creation of a system that allow customers make purchases and pay for services online even if they are not at home in front of a computer. This time around they can transact using mobile devices wherever they are and whenever they feel doing business with companies that has embraced M-Commerce.
In this regard it can be said that the e-commerce platform is experiencing another radical upgrade that will in turn result in increase productivity, increase efficiency and overall better customer service (Samuelson & Dholakia, 2002). This is because the aforementioned portable devices are in reality small computers, that can easily become cheap in just a short period of time.
In addition, manufacturers are outdoing themselves to improve the technology of the said devices – and thus, increasing its computing power and the number of features that can be loaded into it. But even with these changes and the supposedly ease of use of mobile devices it ha to be made clear that there is a big difference between using a full-sized computer as compared to a small device that requires a degree of dexterity to push and read a small screen and tiny keypads.
There is also a need to develop software that can immediately improve the usability of mobile devices when it comes to M-Commerce. Nevertheless, this is does not mean that this new system cannot be altered and perfected. It is also of great importance to consider the complexity of the operation. It is therefore a good suggestion to start small. In the proposed transformation of an online movie rental company that employs e-commerce, all these ingredients are in place and could mean a greater chance for success.
This particular company started at the lowest level of e-commerce and it is by collecting e-mail addresses using customer information database created some time ago. This time around there is a need to build a website that the customer can access through their mobile devices aside from mobile phones and this includes laptops and wi-fi enabled gadgets such as iPads. The first step therefore in the process is to create a basic design with an eye towards usability and easy access for the customer.
This means that the company will have to do parallel operations that will allow current and future clients to access the website using their desktop computers at home or in the office while at the same time accessing the same using their mobile devices when they are outside their homes and offices.
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In order to create a business objective that is realistic for the company the design of the website and its features must be based on mobile phones that were manufactured in the year 2010. This means that this mobile phones already contains software that can easily display website at least in the most basic way but at the same time able to perform transactions.
Relatively speaking it can be argued that video rental business is easier to set-up and it is a service that is relatively easy to sell compared to other online stores that sells products such as clothes, shoes, books. The customer can be given a preview or allowed to view a trailer and synopsis of the movie before ordering it. It is not like the purchase of a shirt after it arrives there is a problem with size and colour because of the obvious difference from viewing it on a tiny screen such as a mobile device.
Nevertheless, the transition from an ordinary e-commerce powered system to a full mobile e-commerce platform must be done with the least amount of risk. In this regard the model that will be used is similar to what is being implemented in the online store called “Hollywood Clicks.”
It is a Singapore based M-Commerce store, said to be Singapore’s largest online DVD rental store. But it has to be clarified that this store is like a traditional store that it allows the rental of the actual DVD discs. There is no download. Therefore this model can be considered as a simple evolution of an e-commerce business into M-commerce with a strong emphasis on B2C.
A rough estimate will require more or less US$100,000.00 to implement the strategy and the new shift from e-commerce to M-commerce. Half of the money will be spent on design of the new website together with the technical people who will create the web and start it running online.
In other words they will also be responsible for the software that will manage the whole operation. The other half of the funds will be used to purchase new hardware that will be needed to upgrade the new system. Part of the funds will also be used to hire additional personnel to test the usability of the said website using handheld devices such as mobile phones and other gadgets.
Risks and Rewards
This new business model is not only a shift from e-commerce to M-commerce it is also being designed having in mind B2C or business to consumer principles. The video rental process is indeed an example of B2C because the website will allow the consumer to purchase products and delivered to their home.
There is a big difference between B2B and B2C because a business-to-business mode of doing business concerns two companies doing business together while B2C is only focused on the consumer. There is a clear advantage for those adapting the B2C mode because there is no need for system integration. The video rental store does not need to meet with every potential client, the IT personnel must simply make sure that the website can be accessed.
The challenge therefore with this kind of business model is the dependence of the company on the said website and everything is contingent on its easy access and usability as well as its ability to entice consumers to try out the product. Another challenge is to make the customers feel at ease with the need to divulge their credit card information as seen below:
Fig. 1. Hollywoodclicks requires Credit Card Information
There is also the challenge of using a small screen such as those found in a mobile phone to serve as a means to advertise the product. One is reminded of the saying that it is risky to put everything in one basket but in this case it seems that everything is dependent on the website.
Therefore there are different web pages within that website because these will try to serve different purposes. For example the screenshot below will be the first point of contact with customers and it must immediately convince the said customer that it is worth to try the new service.
Fig. 2 Singapore’s Largest Online DVD Rental Store.
It is therefore important for this company to create other means of advertising for potential clients to know about the business. The company can use traditional methods of advertising to let the word out that there is a new way to enjoy the movies without having to go to the cinema and spend great sums of money. It is also imperative to have a phone number on the website and preferably there must be way to chat with customer care representatives or customer relations department to answer the questions of potential clients.
Without a doubt B2C companies can find their niche and prove successful. The proposed shift from e-commerce to M-commerce with a focus on B2C mode of doing business will work well in a DVD video rental online store because the product is easy to describe, easy to price and easy to ship to the customers.
It is also easy for the customers to send back the DVD when they are finished viewing or ship it back if they are unhappy with the product. If the company can establish a good number of subscription then it will make money because the infrastructure needed, the IT personnel and other miscellaneous applications and hardware are not too expensive to acquire and to maintain.
Even the whole operation is not expensive because the customer will only have to deal with a website that will give him or her access to different categories of movies and videos. The customer will only have to choose and click for him or her to enjoy watching a DVD video. There is only one thing that is needed and it is to spend time and resources in developing a user-friendly website that can easily be accessed using mobile devices.
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