Reference no: EM132188906

E-commerce firms must now compete aggressively for customers, both against on-line rivals and brick & mortar competitors. Map the stocks and flows of on-line customers for an e-commerce firm. To make it concrete, consider Amazon.com. Market research shows that awareness and adoption follow several stages: First, people must acquire a computer and internet service (yes, there are still people who are not yet on-line). Once online, people usually do not immediately dive into e-commerce. Instead, they become “browsers” who may visit e-commerce websites such as Amazon, but typically don’t make any purchases. After a while, some of these browsers begin to make purchases from on-line sources. People can become loyal shoppers (make all their purchases in a given category such as books from Amazon, or from one of its competitors), or independent shoppers (who purchase from multiple sites based on prices and other conditions at the moment). Loyal shoppers can defect (if, e.g., prices are high or service is poor). Those defecting become independent shoppers as they try other providers. If these independent shoppers remain unsatisfied, they may abandon e-commerce altogether, becoming former e-shoppers who return to brick and mortar sources, using online vendors only to browse for information (e.g., using Amazon.com for reviews or to find books). Over time, some independent shoppers may become loyal to a particular vendor, either one of Amazon’s competitors or Amazon itself.