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fundamentals:business_models:online_malls
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Online Malls

Online Malls - also known as virtual Shopping Malls - are the internet based counterpart of physically existing Shopping Malls. They can be defined as a collection of multiple Online Shops within the same website.1) The different shops are listed in a directory or index.2)

Some Online Malls function as a form of Web Hosting.3) That means that the individual online shop operators transfer their shop files to the Mall's webpage in order to present their offer online. Furthermore they pay a monthly fee to the Online Mall authoring utilities for using one of the Mall's Web Server. Other Online Malls give the online shop operators the possibility to state a hyperlink of their own shop website, even if they are actually hosted by another server.

Example: Shopping24.de

Shopping24.de is a virtual Shopping Mall that was founded in 1997 as one of the first companies that operated in the E-Commerce sector.4) It combines the product offer of more than 500 retailers (in the internet jargon they are called e-tailers) and service providers within one common website. The customers have the possibility to either visit one of the online shops directly (e.g. Otto) or to search for a certain product within the entire Mall's product offer. To facilitate this search, the various products are classified into different categories such as fashion, multimedia, household & living, sports & leisure, babies & children and beauty & healthcare.

Advantages

For retailers the participation in an Online Mall increases the awareness level of their products due to the integration in a big website.5) They benefit from corporate Marketing activities that target to gain new customers by sending out coupons or Newsletters. Furthermore all vendors can make use of bundled services regarding delivery or payment. The Online Mall providers earn money by charging the retailers for using the Mall's Web server as well as through commissions that they receive for sold products.6) The main advantage for customers is the reduction of time needed to search for various goods on multiple websites or in physical Shopping Malls. The Online Mall is accessible from any computer in the world, 24 hours a day, 7 days a week.

Disadvantages/Problems

Participating in an Online Mall means that retailers have less control of their brand image and their customer satisfaction. They are dependent on the performance and image of the Online Mall providers.7) The main problem for the Mall providers is to ensure a high quality of the Search Engine. This is of crucial importance for the customers to minimize complexity and to find the articles they are searching for in a quick and easy way.8) (For details on search engine optimization see the SEO Wiki http://en.seowiki.info).

Conclusion

Today many Online Malls are afflicted with a quite negative image due to its complex operability.9) A successful countermeasure to avoid high complexity is to limit the Mall's offer to certain product groups (e.g. wine) or to clearly defined regions. In general, Online Malls are a good solution especially for small retailers with little financial resources that would like to start an online business and increase their degree of popularity.

1) , 8) , 9) Walgenbach, Gertrud. Die Vorteilssituation von Innovatoren auf elektronischen Märkten. Wiesbaden: Gabler, 2007. Google books. Web. 30 Dec. 2011, p. 35-36.
2) , 3) Holden, Greg. Starting an online business for dummies. 6th edition. Hoboken: Wiley, 2010. Google books. Web. 30 Dec. 2011.
5) , 7) Nölling, Christa. Online Shop in einer Shopping Mall. Web. 30 Dec. 2011. http://onlineshop2start.de/konzept/shopping-mall.
6) Seiler, Wolfgang. Verbraucherschutz auf elektronischen Märkten. Tübingen: Mohr Siebeck, 2006. Google books. Web. 30 Dec. 2011, p. 213.
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fundamentals/business_models/online_malls.txt · Last modified: 2012/05/07 21:52 (external edit)