Technology of the week – Platform Mediated Networks (Picnic & Thuisbezorgd)

7

October

2016

5/5 (1)

Platform mediated networks are (online) platforms which mediate interaction between two groups of users. Picnic and Thuisbezorgd are platform providers that have revolutionized the food industry by changing the way we obtain our food.

Picnic

Picnic is a mediating platform for suppliers (such as Unilever) and consumers. There is a positive cross-side effect on this platform. When the number of suppliers increase, the customer will be provided with more value since they have more assortment to choose from. All customers are required to register and provide their personal information in order to use the platform. The application shows the number of registrations and this popularity information encourages more customers to register on the platform. Picnic is thus an open platform with network effects.

What differentiates Picnic from online and brick-mortar supermarkets is that the groceries delivery is free above €25. Orders are processed in the morning and delivered during the afternoon while the products are still fresh. The system prevents obsolete inventory. These advantages make Picnic a strong market player. However, their lack of procurement power compared to large companies such as Albert Heijn make them miss out on the benefits of economics of scale.

Thuisbezorgd.nl

Thuisbezorgd is a mediating two-sided network platform that connects distinct user groups (restaurant and customers) whose respective members consistently plays a single role in the transactions. There are no restrictions placed on participation so it is an open platform. Thuisbezorgd is currently market leader in the online food ordering industry in the Netherlands and in Belgium. Thuisbezorgd is able to differentiate itself from its competitors by having a wide range of popular restaurants connected to their website, which encourages more users to participate on the platform. The platform is thus able to benefit from cross-side network effects. The revenue model of Thuisbezorgd consist of six percent fee of the meals that are ordered by the customers.

Thuisbezorgd needs to implement the ‘Find a bigger brother strategy’ where partnerships are formed to provide more value to the customer. This strategy results in a decrease in envelopment, which assists Thuisbezorgd to maintain their market leader position.

What is expected from the future?
E-commerce is growing rapidly and we expect online grocery and food ordering industry to become more competitive and mainstream in the near future. Picnic and Thuisbezorgd have to maintain their dominance in the market by working on continuous innovations, such as ‘Real-time driver tracking’ (the customer could check the accurate location of the food delivery).

References:

Eisenmann, T., Parker, G., & Van Alstyne M.W. (2009). “Opening platforms: how, when and why?.” Gawer, A. (ed.), Northampton, MA: Edward Elgar,  (2009): 131-162.

Eisenmann, T., Parker, G., & Van Alstyne, M. W. (2006). Strategies for two-sided markets. Harvard business review, 84(10), 92-101.

Li, T., and Pavlou, P. 2016. What Drives Users’ Website Registration? The Network Externalities versus Information Privacy Dilemma. (Working Paper).

  •  https://en.wikipedia.org/wiki/Takeaway.com
  •  https://www.cleverism.com/company/takeaway-com/
  • http://www.volkskrant.nl/archief/online-warme-hap-bestellen-is-logistiek-en-technisch-huzarenstuk~a1017320/
  • https://www.nrc.nl/nieuws/2016/09/20/takeawaycom-gaat-het-nog-zwaar-krijgen-in-duitsland-4371110-a1522402
  • https://corporate.takeaway.com/about-us/centralised-model/
  • http://nos.nl/artikel/2050450-online-supermarkt-picnic-bezorgt-boodschappen-gratis.html
  •  https://askwonder.com/q/list-5-new-trends-expected-in-2016-in-food-online-ordering-569fb020e2820c1a00088257
  • http://www.bnr.nl/nieuws/ondernemen/10002335/vult-picnic-het-gat-in-online-boodschappenmarkt

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How to thrive in E-commerce?

5

October

2016

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Maintaining a successful E-commerce site is a vital part of a thriving business model these day. E-commerce benefits companies by increasing the sale efficiency because order processing is done with less time. E-commerce also facilitate international expansion with 24/7 available web stores, which result in increased revenue for the company. However, the benefits of E-commerce extend beyond the scope of the company, as the customer is also affected by this phenomenal. E-commerce provides customers with a convenience shopping experience. The customer can now place orders outside office hours at their suppliers for example. In order to benefit from these advantages of E-commerce, the E-commerce strategy has to be properly defined. But which strategic components are the key to success in E-commerce?

B2B E-commerce is a much bigger part of the economy compared to B2C E-commerce and it is expected to grow more in the future. Recent trends in the E-commerce market encompass increased use of mobile technology to order at websites.  In order to anticipate at this trend, the firm should find the right software for the business. The E-commerce software must be scalable, secure and user-friendly. Moreover, the E-commerce site must be compatible with mobile platforms so that the customer shopping experience will be enhanced. Also technology is an important pillar for successful E-commerce companies.

Leadership and competence are also two important key factors for E-commerce success. The leaders of the business shall cultivate a company culture where information sharing is stimulated. Cisco, the worldwide IT market leader, share information among employees, partners and customers. This enhances the transparency of the company and this trust mechanism will result in more growth for the company. The more the customer and the partners trust the company, the more they are likely to do business with the company. Partnerships are especially important for companies as they increase competence. It is critical to have partnerships between emerging net businesses and larger companies with established brands, since they increase knowledge to better serve the customer.

Governance is one of the most important issues to resolve in E-commerce. Without good governance, your organization will waste time, people and money. One way to establish governance is to set and enforce goals and metrics. A successful e-commerce company, Coolblue, is an excellent example of this. The goal customer satisfaction is measured with the Net Promotor Score: ‘’ If you had a company, would you hire this service representative you just talked to?’’ These metrics gives the company better means to target their goals, thus the waste of resources will be less.

Which other ways do you consider to thrive in e-commerce?

Reference:

Hartman, A., Sifonis, J. G., & Kador, J. (2000). Net Ready: Strategies for Success in the E-conomy. New York: McGraw-Hill.

Lecture 4 (2016). Sana Commerce. Information strategy: RSM.

http://www.websitemagazine.com/content/blogs/posts/archive/2011/09/27/four-strategies-to-e-commerce-success.aspx

Some innovating ideas around customer satisfaction and loyalty

B2B e-Commerce

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The new future: customization with technology!

17

September

2016

5/5 (1)

It is often difficult to find the perfect pair of sneakers that goes along with different occasions and different outfits.
We all have experienced the problem where you have found the perfect clothes but you are unable to find the matching shoes. Therefore, clothing retailers are discovering the value of permitting the customer to create their own preference based product. The business trend of personalization/customization is becoming more important nowadays.

Considering Porter’s five forces, the bargaining power of buyers is high on the Internet. This is because the Internet is transparent, making it easier for customers to compare and choose among different products. Customization assists companies to differentiate their products from those of their competitors and therefore it could be distinguished as a source of competitive advantage. This is quite important in the fashion industry since the competition is strong.

Customization also gives companies the opportunity to reach the unpredictable millennial generation shoppers, a group known for their fast-moving preferences. This is often the younger generation. By providing customization options to them, the customers are prone to pay 20% more than they would do on the standard equivalent of the product.

‘ShiftWear’ might be beneficial for the millennial generation shoppers. The application allows customers the complete control of their sneakers since they can add their own design on the sneaker. The customer could browse on the Internet with their phone and download a pleasant design on the ‘ShiftWear’ app. Subsequently the application creates a connection with the ‘ShiftWear’ shoe and the design will then be displayed on the sneakers.

‘ShiftWear’ allows shoppers to have a variety of designs ranging from stunning visuals to animations.  They could therefore express themselves through their unique fashion pieces. In my opinion this customization is also sustainable since the customer would only have to buy one pair of ‘ShiftWear’ sneakers instead of ten sneakers that will suit the different occasions. It is also quite special as technology is used for implementing customization, which provide value to the business.

What are your thoughts on ‘ShiftWear’? Do you consider this as an innovative technology?

References for this article:
http://www.shiftwear.com

https://www.youtube.com/watch?v=t2p2_jaV3ow

http://www.bain.com/publications/articles/making-it-personal-rules-for-success-in-product-customization.aspx

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