Distribution channels experience the disintermediation and the reintermediation due to the new environment with Internet. In particular, eTailers and comparison shopping agents(CSAs) need to be examined since eTailers are the alternatives of traditional off-line retailers, and CSAs provide the information of these eTailers.
In this thesis, the relationship between eTailer and CSA is examined through the analytical models. As a result, I suggest some managerial implications for eTailers and CSAs for their competitive strategies.
First, in the new environment of retailing that CSAs provide consumers with the price and the non-price information of eTailers, eTailers need to make more efforts to improve their non-price aspects. With the Internet, consumers get the relative price information with the low search cost. So they become more sensitive to the price, then eTailers are forced to decrease their prices. Therefore, eTailers should differentiate themselves through their non-price aspects.
Second, it is important for CSAs to improve their bargaining power against eTailers. It is very difficult for CSAs to receive commissions from consumers directly, since consumers tend to avoid micro-payments for using information services. In this context, our models suggest that CSAs by being a market leader receive commissions from consumers indirectly through eTailers and increase their own profits. It is one important guideline to Informediaries where their profit models are not clear in today’s Internet business.
Furthermore, by providing price and non-price information to consumers, our models show that CSAs decrease the industry average price and increase the industry total quantity sold. That is, CSAs improve the consumer surplus.
