Global differences in B2C E-commerce options

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Pricing, payment and shipment options worldwide

By

E.H.M.H. van den Akker Paterswoldseweg 556

9728 BE Groningen

Email: E.H.M.H.van.den.akker@student.rug.nl Student number: S1681214

Supervisor: Prof. dr. I.F.A. Vis Second assessor: Dr. M. Broekhuis

Date: 16-07-2012

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Abstract

Purpose – The purpose of this study is to provide an exploratory investigation into E-commerce and worldwide available pricing, payment and shipment options for internet sales. The differences between pricing, payment and shipment options are compared worldwide and relationships between these factors are examined to discover how pricing, payment and shipment options are organized worldwide.

Design/methodology/approach – The first part of the thesis contains a literature study to give insight into the logistical processes behind E-commerce and to build a theoretical framework. The second part is a case study with DVDs, based on six countries with ten web stores per country. Countries investigated are: The Netherlands, Germany, United Kingdom, United States, China and Australia. These results are analyzed in a comparison between countries and a meta-analysis.

Findings – The country comparison shows that pricing, payment and shipment options are very diverse per country. The meta-analysis tests six hypotheses. Of these six only the relationship between type of web store and purchase price was proven. The other hypotheses were found to be false.

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Preface

This thesis is the final step to obtaining my Master’s degree in Business Administration with a specialty in Operation & Supply Chains. In my journey towards this end-result I learned a lot about myself and about others.

I would like to take this opportunity to thank my supervisor, Iris Vis, and my second assessor, Manda Broekhuis. Thank you for your support, guidance and feedback during my journey. On a personal note, I would like to thank my family for their enduring love and support. I would like to thank all my fellow students, who assisted me with my thesis and also for their companionship during the course of my studies. Lastly, in particular I would like to thank Harmen Meijer for his perseverance in supporting me to reach the end.

Thank you.

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1. Problem statement

1.1 Introduction

E-commerce, the process of buying products on the internet, is growing rapidly. Nowadays the internet is used extensively for shopping purposes. In fact, it’s expected that not so far into the future online retail sales will be higher than normal sales. In the Netherlands, online sales rose with 11% in 2010, which is over 8.2 milliard Euros. In the first half of 2011, web shops have succeeded in raising turnover with 10 percent, (www.thuiswinkel.org). A number of studies have been done into the E-commerce phenomenon, most especially for marketing purposes. Logistically seen, a number of opportunities and challenges have arisen due to the increasing popularity of internet shopping. For example the rapid growth of E-commerce has led to a large amount of single orders with a large diversity of categories and also often irregular items. (Hu and Chang, 2009) Also the internet makes ordering and importing products from different countries possible, increasing the number of orders and the distances an order has to travel significantly. E-commerce has an influence on the supply chain; suppliers can shorten the value chain by bypassing traditional retailers and sell directly to the customer. (Hovelaque et al, 2007) Eventually all these examples lead to the ‘middle man’ disappearing and that the customer comes closer in the supply chain. This leads to a whole new challenge in the supply chain: Attracting and satisfying the customer, by offering the best solution to supply chain issues regarding E-commerce. Options that need to be solved include payment options, shipment options and prices. By optimizing these options, the ‘best’ internet store arises.

For the purpose of this study I wish to discover how challenges and opportunities have evolved in different countries. For example in an investigative research into factors affecting E-commerce adoptions, Rodriguez-Ardura and Meseguer-Artola (2010) categorized all factors in three groups:

1. Environment or institutional context; such as legislations, competitive pressure and cultural forces.

2. Technological and innovational perspective; and

3. The organizational perspective; meaning firm size, organizational competences, etc. (Rodriguez-Ardura and Meseguer-Artola, 2010).

Another study says that E-commerce growth is dependent on a number of factors, such as computer and telecommunication infrastructure, social and cultural infrastructure, commercial infrastructure and the legal infrastructure. (Javalgi and Ramsey, 2000) Therefore E-commerce developed in different ways under these different factors will deviate in each country.

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and how different countries have adapted these options to fit their E-commerce logistics. The reasons for choosing these three factors is explained more thoroughly in chapter 2.

1.2 Practical and scientific relevance

The reason why differences in logistics between E-commerce in different countries should be investigated is because there are lessons to be learned from seeing how different countries have set up the logistics of E-commerce. Every country has a one-way best practice for dealing with challenges and opportunities in their own country: culturally, geographically and historically. The trick is trying to standardize and see whether there is a one-best way to practice E-commerce.

This study was started for the Dinalog Research Project ‘Cross-chain order fulfillment coordination for internet sales’. (http://www.dinalog.nl/institute/projects/research-development-projects/cross-chain-order-fulfillment-coordination-for-internet-sales/269) The end result of this project is to design a new approach to internet shopping by combining multiple supply chains into one ‘shopping cart’ and thus one delivery. Logistically seen this would greatly improve shipping options, as the current shipment of one package at a time is costly, time-consuming and consumes a lot of resources. This report adds value by exploring worldwide available shipping strategies for internet sales and to discover which options are available in web stores and which options are therefore interesting and necessary to implement in the project.

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However Gibss et al. (2003) do not specifically look into these specific logistics per country. In fact, in all these articles no mention is made of differences in logistics per country. In different countries E-commerce options can differ from each other. But no studies were found that directly relate all factors and different options offered and compare these world-wide. Without this data it is impossible to even begin to consider a ‘one-right way’ to organize E-commerce logistics, thus saving costs and time.

1.3 Research objectives and methodology

The goal of this paper is to identify differences in E-commerce in different countries. This research only focuses on B2C E-commerce and explores the back office of web stores and limits the scope of products to physical products. Travels and other services are not considered. As said in section 1.2 there is little to no research done into E-commerce options per country. This is important to know, because knowing which options are available gives us insight into how to optimize shipment, payment and pricing options per web store. Therefore the research question of the study is:

How are pricing, payment and shipment options organized worldwide?

To start answering this research question first we need examine existing theory. There are a number of questions which can be asked to answer the research question. This thesis is divided into two parts. Part 1 is the literature review and consist of chapter 2 and 3. Part 2 is the case-study and consist of chapters 4, 5 and 6. (See figure 1.2)

First we need to know more about how B2C E-commerce is organized; how E-commerce came to be, what web shops and customers focus on and what is necessary for a web store or distributor to run a successful web store. This is answered in chapter 2 with the following sub-question:

1. How are the distribution processes of an E-commerce store organized?

Secondly we need to know what kind of payment and shipment options exists and what customers can choose from when making an online purchase. This gives insight into the factors we need to examine in different countries. This question is answered in chapter 3, with the following sub question:

2. What are the requirements a web shop needs to enable a customer to make an online purchase?

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This thesis describes an in-depth analysis of the decision made in an individual event, namely an online purchase. According to Yin (2003), the type of research one should use is dependent on three conditions:

1. The type of research question;

2. The extent of control an investigator has over actual behavioral events;

3. The degree of focus on contemporary as opposed to historical events. (See figure 1.1)

Figure 1.1: Explanation of when to use research methods. (Yin, 2003)

A case-study is best used for answering descriptive questions (what) or explanatory questions. (how/why), when there is no control over events and when the events are contemporary. This is all true for the research in this thesis. Chapter 4 contains the methodology and further discusses the case-study.

Chapter 5 contains a comparison of the results across countries. The following question is answered.

3. Are the pricing, payment and shipment options similar across countries?

The last chapter is a meta-analysis of all the countries. The data from the countries are combined in order to test the model presented in chapter 3. The following question is answered.

4. Is there a relationship between on one-hand the organization of a web-shop and on the other hand the available pricing, payment and shipment options?

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Figure 1.2 Outline thesis Part 1: Literature review Comparison per country (Ch 5) Methodology case-study (Ch 4) E-commerce distribution (Ch 2)

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2. Distribution processes of a web store

The first part of this thesis introduces the topic of E-commerce for E-commerce stores and for customers. To discuss how web stores came to organize their distribution process, one must first look into how B2C E-commerce came to be. E-commerce is defined as ‘the sharing of business information maintaining business relationships and conducting business transactions by means of telecommunication networks’. (Javalgi and Ramsey, 2000) This definition refers to the use of telecommunication as irreplaceable. E-commerce was first made possible by technology advancement in 1993. However technology advancement was not the only catalyst for E-commerce. The history of B2C E-commerce starts in 1995, with the establishment of the first web store: amazon.com. Amazon.com jumped onto the rapid growth of internet and started an online book store. Rightly assuming that for a product that does not require handling before buying the customers threshold is low, the company went on to become the first and largest online book store in the world. The development of Amazon.com model for E-commerce became the role model for other companies. (Kim and Galliers, 2004)

2.1 Retail distribution

To discover how distribution behind E-commerce is set up, let’s first look at how ‘normal’ distribution takes place. Naturally since the beginning of the ‘store’ as a concept, people have been thinking about how to most efficiently plan their distribution. Therefore entire libraries are filled with insights into the distribution process. To keep it simple: ‘distribution refers to all the activities necessary to get the final product to the customer’. (Skott-Larsen et al, 2007) Distribution is the last stage in supply chain management, as it directly concerns making the final product available to the final customer. This makes distribution automatically very sensitive to the customer wants and needs. Distribution is made of two important processes: sales and physical distribution. (Skott-Larsen et al, 2007) Sales identifies the demand and supply for products and therefore has the closest relationship with the customer. Physical distribution involves the design of the physical distribution process, the order processing and finally the delivery. How the distribution process is designed depends on product requirements, preferences and fluctuations.

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unnecessary stock, because this can be expensive and risky. Therefore products need to be delivered in a timely manner. Also the purchase price is dependent on location. Price and location are important factors in the decision making process of customers. If there are a number of stores centralized in one location, the purchase prices are lower than when there is only one store. As concluded above, one of the mayor important point in retailing is location. However this is not the case for web store retailing.

2.2 Web store distribution

The next section explains the logistics behind E-commerce and how the web store fulfills orders. Skott-Larsen et al. (2007) mentions four different models for E-commerce fulfillment systems:

1. Home delivery model; A simple model, the customer orders at the website, who passes them on to the manufacturer or distribution center, who delivers the product to the customer directly.

2. Amazon model; based on the original bookstore concept of Amazon. The customer orders at the website, manufacturers and distribution centers deliver to Amazon, who delivers them to the customer.

3. Brick and mortar model; This model has multiple sales channels. Customers can order from the website, but can also drop by the regular store. This model is based on a regular store which integrated E-commerce to their physical distribution for competitive advantage and is also known as Click and mortar.

4. Inventory pooling model; Competitors draw from a common inventory pool controlled by one web-coordinator. Mostly used in the airline industry. (See figure 2.1)

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Choosing E-commerce naturally leads to developing an internal ICT architecture which supports internet technology needed in commercial transaction and logistics activities. The entire company needs to re-structure and change based on how the organization considers information flows and processes. (Maruntelu, 2008) To enable internet sales one typically need a website combined with a fulfillment system. (Skott-Larsen et al, 2007) Fulfillment is about communication with the customer, transporting the product and the payment of the product. After a customer places an order at a web store, a number of things will happen. The order is accepted by the store; depending on the type of store this order either goes to a distribution center, production center or e-fulfillment center. The product may then take a number of routes before finally ending up at the customer. However the story does not end here. The customer has to pay for the order, meaning that the web store needs to have some way, and preferable a number of ways, for the customer to pay. The web store also needs to co-ordinate delivery time and delivery costs with the way of shipment.

According to de Koster (2003) the distribution strategy of E-commerce can be split into three constructs; the distribution channel, the delivery area and the degree of outsourcing. Distributing for online stores can take a number of shapes. Distribution can happen from existing stores, from existing distribution centers, from specific internet-only distribution centers and from hybrid structures. Naturally all these options have a number of advantages and disadvantages. By distributing from a local store there are fast response times and initial investments are low. However there is also the possibility that the costs become greater as these stores are not designed for e-tailing, resulting in low efficiency and high operational costs. Distribution from a normal distribution centre has much of the same advantages as a local store; it’s easy to set up, with low investments. Also a distribution center can supply a larger area than a local store. However a normal distribution center is not efficient for small orders, as most products are delivered in pallets. The specific internet-only distribution centers are most adapted for E-commerce use. However this does result in high investments costs. The delivery area can differ from regionally and nationally to internationally. Naturally the farther away the location is, the more difficult and more expensive to deliver to. Also the further the location, the less likely that transportation is done in-house. Leading to the final construct; outsourcing. For E-commerce the products storage, order fulfillment processes and the transportation can be outsourced to third-party logistics service providers. An outsourcing is made based on costs. If the costs of performing order-fulfillment, warehousing or transportation far exceeds the costs for a third-party logistics, outsourcing is the more logical choice. Koster (2003) found that internet-only companies mainly use warehouses that ship directly to customers, while online retailers who expanded to the internet mostly make use of existing infrastructure.

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example companies having a physical store and an online store. Having a physical store increases customer awareness and customer trust. Companies can also outsource their logistics to third-party logistics. Third-party logistics has gained momentum in E-commerce as the main objectives of outsourcing logistics is to save costs, meet demand fluctuations and reduce capital investment. (Gunasekaran et al., 2007) This is especially important in E-commerce where companies have only one distribution channel, as delivering physical products to customers is often the most expensive operation of E-commerce. (Agatz et al., 2008) The logistics provider can provide cheaper service by combining warehousing, combining cargoes of different clients and combining delivery and return services. Furthermore the motor pool usually has a larger amount of vehicles to choose from, from vans to motorbikes, depending on the circumstances. (Visser and Lanzendorf, 2004) By outsourcing warehousing and logistics the company only has to focus on maintaining the web store.

2.3 Advantages and disadvantages of E-commerce

For a company there are two different options when starting with E-commerce. An existing company can decide to start a website while already running a physical store. In this case a distribution network is already set-up, but now has to deal with multiple-channel sales. The distribution network often has to change significantly to be able to process internet sales. (Skott-Larsen et al., 2007) The second option is when a company starts with only an internet store. In this case there is no pre-existing distribution network, which can be an advantage as it can be solely specialized on E-commerce.

In their research in underlying motivations for establishing E-commerce business Karakaya and Shea (2008) identified eight factors separated in short term gains and long term company competitiveness. The short term gains consists of:

1. Inexpensively making the company known;

2. Cost savings through E-commerce operations and decreases in personnel; 3. Improving customer service;

4. Expanding sales to a wider geographic area. The long term company competitiveness consists of:

1. Top management enthusiasm for using high technology; 2. Maintaining company prestige;

3. Keeping up with business trends;

4. Customers’ expectations of E-commerce use.

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Internet sales hold a competitive advantage for a company, if a web store is properly organized.

From the customer’s point of view commerce has advantages and disadvantages. E-commerce allows customers to buy efficiently and often cheaper, as information about desired products can be easily found. A number of websites exist that compare products for customers and forums exist in which products are tested for the customers. This greatly conveniences the decision making process for customers. (Rodriguez-Ardura and Meseguer-Artola, 2010) Naturally there are also a number of drawbacks to using E-commerce. Because the customer is not able to see a product beforehand, the buyer can be either intentionally or unintentionally misled by the seller. Online E-commerce is an easy place for consumer deception, as the internet is a digital environment, which makes it easier for frauds to change and manipulate information content. Furthermore the internet lowers the resources needed to setup an online storefront, lowers entry barriers and the physical distance between buyer and seller makes it difficult for customers to assess the truthfulness of a website and its claims. (Xiao and Benbasat, 2011)

The ability of an organization to attract and retain customers is important to its success. Customers make purchase decisions based on trust, which is enhanced by the quality of a website and the options it offers. Website quality has an important impact on a customer’s initial purchase and customer retention. (Kuan et al., 2008) Since in E-commerce there is no physical store, a website represents the company. If the website is of poor quality customers will not trust the company and shop elsewhere. Simply said E-commerce success is based on the satisfaction and benefits for the user. (Schaupp et al., 2009) Fuentes-Blasco et al. (2010) define e-service quality as ‘the customer’s evaluation or overall judgment regarding the excellence and quality of the electronic service provided by online markets’.

Website quality is often mentioned in articles, by summarizing these contents website quality is often determined with three quality dimensions. These factors are all equally important to customers, and they will not buy at an E-commerce store with a website quality below par:

1. System quality, meaning ease of use, ease of navigation, consistency of layout, fast checkout, effectiveness of search engine, etc;

2. Information quality, related to the relevance, accuracy, timeliness, understandability, etc. of the content of the website;

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2.4 Competitive advantage through E-commerce

The logistics of an online retailer has a number of differences compared to normal retailers. The main difference between online retailers and normal retailers lies in the delivery policy. Normal retailers do not deliver at home; therefore a whole infrastructure must be set up to realize home-delivery. Retailers must carefully balance quality and costs with delivery conditions, delivery time windows and delivery lead times. (De Koster, 2003) In normal retailing, the location of the store is very important. In e-tailing it is not anymore, as location is less important for customers. Instead shipment cost and time become the most important factors for customers. Instead of a customer coming to the store, the order is shipped to the customer. With no physical store to speak of, the competitive advantage of location has been eliminated. Esper et al. (2003) argue that to retain a competitive advantage e-retailers need to adopt either:

1. Distribution efficiency;

2. An assortment of complementary merchandise; 3. Utilization of customer information;

4. Presentation of information through website; 5. Unique merchandise.

The ability of an organization to attract and retain customers is important to its success. The factors that are important to retain customers are convenience, availability of the product, delivery, and return policy. These are all related to the logistics performance of the company. (Ramanathan, 2009) Many E-commerce companies go bankrupt due to failing to fulfill promises made about their online activities. These activities go hand in hand with an adequate logistics network. Therefore companies starting E-commerce activities need to plan carefully how they deal with delivery speed, reliability, responsiveness, communication, order-handling, payments and distribution. Furthermore logistics performance and customer loyalty was found to be related. (Ramanathan, 2009)

Compared with normal distribution, E-commerce has a number of characteristics that change the normal distribution and all have an influence on either the payment options or the shipment options a web store offers:

1. A larger number of small orders and packages addressed directly to the customer, instead of larger orders directed to an intermediary. (influencing shipment options) 2. A large number of online customers, which are unknown to the sellers. (influencing

payment options)

3. Demand for shipment is unpredictable and unstable, due to a larger customer base. (influencing shipment options)

4. Origins and destinations of shipments are far dispersed. (influencing shipment options) 5. Customers have high expectations for fast delivery and quality of services.

(influencing shipment options and payment options)

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7. Customers want more information on whereabouts of order and package. (influencing shipment options)

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2.5 E-commerce process

Above sections have explained the theory behind E-commerce. The following three diagrams below summarize these findings. These three diagrams show the most important processes involved with E-commerce, from the web-shop (figure 2.2) and customers (figure 2.3) point of view. Figure 2.4 puts these together in an actor activity diagram. Finally the conclusion in figure 2.5, which shows the trade-offs necessary per process.

The first diagram (figure 2.2) shows the process of the E-commerce store. The E-commerce store has the challenge to make E-commerce attractive for the customer. As stated above, there are a number of trade-offs a company must make, such as what type of payment options or shipping options to offer customers. Eventually the goal is to attract the customer. This diagram shows the logistic processes, but also the administrative actions necessary to facilitate logistics.

Figure 2.2E-commerce process of store

(Create website)

•A website is neccesary to receive orders. •The website needs to be of sufficient

quality to attract customers. •Website needs to offer at least one

payment and shipment option. More options raise the probability of orders.

Receive order

•Receive order through the E-commerce site.

•Confirm order

(Receive payment)

•Depending on payment method payment can also be received during or after delivery.

•Confirm payment

Process order

•The exact process can differ depending on the back office, order can be fulfilled by distribution center, fullfillment center, retailer, or directly from manufacturer.

Send order

•Depending on shipment method this can be done by own company, but more likely outsourced to national postal service or private company

(Receive returned product)

•If product is not accepted by customer, the company is obliged to accept it back. •Returns are done either by post, or by

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The second diagram (figure 2.3) shows the process a customer goes through when making a purchase online. The process of a store is based on logic and trade-offs, each ‘extra’option costs money, whether this is the up-keeping of a good-looking and practical site, which might attract customers and inspire customers trust, or the offering of numerous payment options, which might decrease the barrier for customers to make a purchase.

Figure 2.3: E-commerce process of customer

Search for websites

•Enter product name/number/etc in search engine (e.g. google)

•Use price comparing sites. •Referral by family/friends/etc. •Other means of finding websites.

Choose website

•Based on what website offers: Product price, shipment cost, quality website, availability of payment methods, availability of shipment methods, etc. •Based on company reputation, hearsay,

reviews by previous customers.

Order product

•Choose payment method: Creditcards, manual payment, bank transfer, etc. •Choose shipment method: Normal, fast,

shipment to locker, type of shipper.

(Pay for product)

• Payment can also take place during or after delivery depending on payment method

Receive product

•Receive order, depending on shipment method either home-delivery, or delivery to locker or retail store.

•Check quality of product

(Return product)

•If not satisfied with product

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Finally, the last diagram (figure 2.4) shows which steps are taken by which actor during a product purchase on the internet. The first two diagrams showed which considerations a customer and the store must make. This diagram shows little of the decision process both actors go through; instead it shows how the customer and store interact with each other to make a purchase.

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2.6 Conclusion

Suffice to say there are many different challenges and trade-offs regarding web store distribution compared to normal retail distribution. Figure 2.5 gives overview of these trade-offs. During the case study I expand on a number of these issues and see how they have been organized in different countries. This chapter answers the questions of how a web store organizes its distribution to allow for a purchase to reach the customer. E-commerce was made possible due to technological advancement, but this was not the sole reason of its growth. Success came from the ease of use for customers and company alike. The difference of logistics for normal commerce and E-commerce lies in the loss of physical distribution. A web store needs to make a number of decisions to make it run smoothly. Firstly it must be decided how to model the web store to fulfill orders and which roles are played by the web store, the distribution center, the manufacturer and the customer. The second decision is to balance costs versus customer wants and needs. In this chapter I introduced the concepts of shipment options and payment options. In the next chapter I discuss these further.

Trade-offs Creating

website/choosing website

 Customers are difficult to attract and retain due to transparency of market.

 Customers initially decide on which web store to buy from based on purchase price, web site quality and store reputation. These need to be comparable or better than the competition.

 Website quality consists of: system quality, information quality and service quality.

Payment process  Depending on country of origin, customers want different payment methods.

 More options attract and satisfy more customers, but offering them is expensive.

 Customers prefer payment after delivery, because they can inspect the order before paying. This increases customer trust. However administration cost for the company will increase as they need to check payments. Furthermore customers may not pay on time, which further raises costs.

Shipment Process  Delivery time and cost needs to be comparable to other web stores to attract customers.

 Shipper type is not of interest to customers, the web store should select the cheapest method, both for the company as the customer.

 A fast and good delivery raises customer loyalty.

 Shipper is dependent on type of product. Product that are small, common or with a low risk and cost are often outsourced. Products that are rare, large or with a high risk and cost are often done by own company.

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3. Web store options

The previous chapter discussed the logistics behind E-commerce, advantages and disadvantages of E-commerce and started to discuss what an internet store requires to attract and retain customers. Payment options and shipment options were shortly introduced. This chapter goes further in-depth into these necessary options of a web store. For the customer the website is the visible part of a web store. The number of options, size and advertising methods are, therefore, very important as it can influence the decision making process. (Hangjung and Ramamurthy, 2009) For a customer, website service quality is a big decision factor. Good service quality means offering alternatives for payment options and shipping options. (Hangjung and Ramamurthy, 2009) A web shop requires a few basic options to work:

1. A way for customers to select a product. (Assortment and purchase price) 2. A way for customers to pay. (Payment options)

3. A way to ship the products. (Shipment options)

For these reasons I first examine four concepts of internet sales: 1. Type of store;

2. Purchase costs; 3. Payment options; 4. Shipment options.

3.1 Types of stores

The type of web store can be sorted on how the store uses its distribution channel and the assortment it offers.

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Secondly a difference can be made in type of web stores on basis of assortment and size of the store. Often large domestic firms are first and largest in adopting E-commerce. (Gibbs et al., 2003) An online store can manage a larger diversity of products than physical stores. (Agatz, 2007) If a store has a large assortment it is usually better known and better used. For example a store can either sell one particular type of products, for example clothing OR books OR DVDs. By only selling one type of product they can specialize and have more variety. However a web store can also sell different types of products, such as clothing AND books AND DVDs. By selling more different types of products they reach a larger customer segment and the opportunity for customers to buy more grows.

3.2 Purchase costs

Purchase costs are the price of a product for a consumer. With the higher level of transparency of online shopping compared to normal shopping, purchasing cost is a large factor for customers to base their purchase decision on.

In the section ‘type of web store’ I stated the following: A larger store will lead to economies of scale in normal retailing. The case-study examines the influence of the type of web store on the height of the purchase price in E-commerce.

H1a The type of web store has an influence on purchase costs.

3.3 Payment options

According to Gibbs et al (2003) the availability of immediate online payment methods is an enabler for E-commerce. The use of different payment methods differ globally. Credit cards are available practically everywhere, and especially popular in the USA. In Europe debit cards and online bank transfer are more used, but Asia prefers value-cards, wireless payment, cash on delivery and picking up orders and paying directly. Payment options can be sorted by three times of payment:

1. Payment is before delivery; 2. Payment coincides with delivery; 3. Payment is after delivery.

Type of web

store

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These three types of payment are discussed below.

1. Payment before delivery

Payment by credit cards is the dominant payment system in E-commerce. This has its origin in a number of distinguished advantages. The infrastructure is mature, resulting in a well-established network combined with a wide user-base and credit cards are used internationally, which makes international payments possible. However credit cards also have a large disadvantage. Most important is the security of the transactions. The authentication is quite easily circumstanced and the detail of financial information is large; making fraud easy. Still, credit card payment remains the largest form of online-payment in the world.

Debit cards and online banking are payment options that occur more regularly in Europe. A debit card is similar to a credit card, but debits the holder’s account immediately. Online banking provides an immediate payment option in which the customer is re-directed to the bank’s website and payment is done using online transfer.

An alternative to regular credit card service, or direct bank transfer, are mediating services, of which PayPal is by far the largest and most international. Instead of a direct line between customer and web store, a mediator is used for extra security. For example, the customer makes an account with PayPal and charges the account with money. This can be done with credit cards, but also with bank transfers. When the customer buys something online the money is written off the PayPal account without the seller getting any additional information about the customer. (Paunov and Vickery, 2004)

Direct payment methods are under debate, often called inefficient and susceptible to fraud. The US has the most matured credit card payment system, yet nearly three out of four US consumers do not use credit card payments online. (Paunov and Vickery, 2004) Other payment options also have their advantages and disadvantages, making it interesting to see how other countries organize the payment options of their E-commerce. In the Netherlands intermediate payment services are rising. PayPal reports an increase of 47 percent for the first half of 2011. Ideal reports an increase of 40 percent. (twinklemagazine.nl) A report done by the Nederlandsche Bank in January 2011 states that customers find that data protection, immediate payment confirmation and the possibility to pay via e-banking application are most important when making an online purchase. However, also the ability to pay after reception and no surcharge of the payment method are considered important. According to customers the perfect payment method is safe, cheap and based on online banking.

2. Payment coincides with delivery

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3. Payment is after delivery

After delivery the customer gets a check from the web store. Often this check is already included in the package. The customer is required to pay before a certain time. (usually two weeks)

For a web store, having several payment options can improve business. Customer trust increases if there are multiple options to choose from, also because some payment options might not be possible for certain customers: not everyone has a credit card. Naturally payment at the door, or payment afterwards show the greatest trust towards customers, however this also results in higher shipping and/or administration costs. Offering different payment options carry costs with them. Stores need to pay the owner of the payment method to set this up. For example, to allow customers to pay with just one type of credit card, the web store needs to pay a certain amount of money to set this up and extra costs every time this payment method is used. The same can be said for every other credit card type and also other payment methods.

To conclude, payment methods are an important decision point for web store owners. Too little options can hurt customer trust and form a barrier for customers if they are not able to pay in the required manner. Too much options are pricy, complicated and are often unnecessary. Offering more payment options can complicate information flows, which complicates logistics. Also, each payment method has its own advantages and disadvantages. In the section ‘type of web store’ I stated the following: A broader assortment leads to a larger customer segment. Different types of customers desire different types of payment methods. The case-study examines the influence of the type of web store on the different and number of payment options.

H1b The type of web store has an influence on the payment options.

3.4 Shipment options

The rapid growth of B2C E-commerce has created new challenges regarding the distribution of products. These challenges were discussed in chapter 2. One of these challenges is the increasing demand for logistics service of small shipments to global customers. Existing logistics companies such as UPS, TNT and DHL and postal companies already have the

Type of web

store

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necessary infrastructure in place. (Skott-Larsen et al, 2007) Several factors are involved with shipping options:

1. The delivery point; 2. The delivery time; 3. The type of shipper; 4. The shipment costs.

These four points are discussed below.

1. Delivery point:

Two types of delivery options are most common. Home delivery and customer pick-up. Home delivery is by far the most used option. (Visser and Lanzendorf, 2003) The order is shipped to the home address of the customer. This can bring large costs, not only in shipping price, but mostly in costs for failed deliveries. When a customer is not at home, the delivery has to return another day. (Weltevreden, 2008) Delivery failures are high in B2C E-commerce, since customers depend on sellers to deliver the right product in the right way on the right time. Delivery often requires several attempts in case of attended home delivery, as customers might not be at home. (Visser and Lanzendorf, 2003) Attended home delivery occurs when a package must be signed for, paid for at the door, may only be delivered under certain restrictions, or when the package simply does not fit in the mail box.

The second option is customers picking up their orders from a distribution point. An example of a distribution point is a locker, a drop box or a well-known shop in the area, such as a gas station. Customers can pick up their order at their own convenience. However most customers prefer home-delivery when shopping online, resulting in distribution points that are mainly used for reverse logistics. (Weltevreden, 2008) According to a report from the ABN AMRO, 90 percent of all customers prefer to receive their packages at home. (Cross channel retail, 2011) Therefore the case-study focuses on home delivery.

2. Type of shipper

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Return options are a part of reverse logistics. If a product is defect or not what the customers expected, the product will be returned. This can be done by shipping it back, bringing the product to a distribution point or if a physical store exists it can be returned there. A necessary condition of E-commerce is return options. Goods are returned far more often compared to regular retailing, as customers cannot inspect the product beforehand. (Visser and Lanzendorf, 2003) Ramanathan (2011) found that handling return products plays an important role in customer loyalty in E-commerce. If this is made too difficult for the customer, the customer will likely not shop here again, as he cannot be certain whether he can send the product back. In conclusion, the shipment type a web store offers has an influence on how the distribution of a web store is organized. The options for a web shop are to deliver orders to the customer by themselves. However this can become quite costly. Another option is to outsource to another shipper. The case-study examines the influence of the type of web store on the type of shipper.

H1c The type of web store has an influence on the shipper type.

3. Delivery time

A study of Gibbs et al. (2003) shows that the density of a country can influence shipping options. Densely populated nations usually have a developed infrastructure; however countries with a low population density do not, resulting in distribution and delivery problems. In most of West-Europe delivery time of an online order is between 1 and 3 days. Often no type of fast shipment exists. In the USA and Asia, nations are more sparsely populated. Normal delivery time can take up to a month. Usually some type of option for fast shipment exist, for some countries this can reduce the delivery time to 24 hour delivery, however the more rural an environment the longer a delivery can take. This can also differ between different shippers. The case-study examines the influence of shipper type on the shipment time.

H2a: The shipper type have an influence on the shipment time.

Type of web

store

Shipper type

Shipment

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4. Shipment costs

The shipping costs consist of the price for shipping the package from the distributor to the customer. These costs can be dependent on a number of factors:

1. The size of the package or the rarity of the content. If the package does not fit through the mailbox, there is need for an attended delivery, which makes it more expensive; 2. The number of products: related to the size, but also the number of packages. Some

web shops send the package as a whole, other web shops send each product separately; 3. The delivery time: if there is need for a faster delivery time by sending the package

with fast express mail this ismore expensive;

4. Lastly the location: if the delivery address is far away, in a rural area, or in a different country, this will make it more expensive to send.

According to a recent study done in the Netherlands done by the ING (Fysieke distributie en E-commerce, 2011) high shipment costs are disliked most when internet shopping. Therefore shipment costs are investigated, not only to see how high costs are in the Netherlands in comparison from other countries, but also whether the type of shipper has an influence on the shipment costs.

H2b: The shipper type has an influence on the shipment costs.

The last hypothesis is the influence of shipment time on shipment costs. As said above shipment costs increase for faster shipping options and a difficult location takes longer and thus the costs are higher. The case-study examines whether this is true.

H2c The shipment time has an influence on the shipment costs.

Shipper type

Shipment

costs

Shipment time

Shipment

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3.5 Theoretical framework

By taking all the hypotheses together we come to the following theoretical framework:

Figure 3.1 Theoretical framework

The text in this chapter has introduced the concepts further. The first factor is an independent factor: the ‘type of web store’. This factor influences ‘purchase costs’, ‘payment options’ and ‘shipper type’. The shipment options were too large to fit under one factor. Therefore this has been split into three factors: ‘Shipper type’, ‘Shipment time’ and ‘Shipment costs’. These factors also interact with each other.

3.6 Conclusion

This literature study explored four options necessary for internet sales. Without these options it’s not possible to perform B2C E-commerce. The first factor is the type of web store. This can be divided by the variety of the assortment and whether the web store uses multiple sale channels. The second factor consists of the purchase costs; the price a customer has to pay for a product. Thirdly are the payment options, which can be divided by time of payment; before, after and during delivery, and the way payment is made; by credit card, cash, direct and indirect bank transfer. Lastly are the shipment options. These are categorized in shipper type,

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4. Case-study Methodology

The previous two chapters contained a literature review. This section gives a description of the case-study. The next two chapters gives the results of the case study.

4.1 Procedure of the case study

The first phase consists of data gathering. Six researchers gathered data to analyze shipping and pricing strategies for DVD sales via ten web stores in different countries. Each research examines one country. Germany, England, USA, China, Australia and the Netherlands. (Schnabel, Nau and Deselaers, 2011) (Lan and Pan, 2011)

According to Internet World Stats, which collects internet statistics, internet penetrations rates are highest in North America, Australia and Europe. The penetration rate in Asia is relatively low, however when compared with the statistics of millions of internet users Asia has by far the greatest amount of internet users. Penetrations in other continents such as Africa or South-America are not sufficient to be considered. (http://www.internetworldstats.com/stats.htm) All five chosen countries are representative for their continents. In Asia, China is by far the country with the greatest amount internet users. The same can be said for Australia. In Europe the amount of users is highest in Germany, Russia and the United Kingdom. Since this project is centered in the Netherlands, Germany and the United Kingdom were chosen as they have more in common with the Netherlands. (http://www.internetworldstats.com/stats4.htm) Furthermore, according to the report ‘Internetverkopen, 2010’ Germany, the Netherlands and England have the highest growth of home-shopping tested from 1990-2008.

For every country 10 acceptable web stores were found. (See appendix 1 for list websites) The chosen web stores were based on the amount of traffic for each and the availability of the chosen DVDs. The web stores are split up in three different categories according to their assortment. The categories are: broad assortment, DVDs and books, and DVDs and games. (See table 4.1) An effort to find different type of web stores was made, but not always successful. However at least every country has one of each type. The amount of traffic is checked by using ALEXA.com, a website which monitors internet traffic. The traffic measure used is: ‘Percent of global Internet users who visited the site (3 month average)’.

NL GE UK US CH AU

Broad assortment 4 5 6 5 7 4

DVDs + books 3 3 2 2 2 1

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Total number of web stores 10 10 10 10 10 10

Table 4.1. Type of web stores.

Then ten DVDs available worldwide were chosen. The reason for choosing DVDs is because they are relatively homogeneous across countries, available in all countries and a common and mature product for E-commerce, resulting in a well-developed infrastructure. Furthermore DVDs are amongst the most popular products bought online. (Lasgaa, 2010) The ten DVDs have been chosen by examining the top 10 DVDs list sold worldwide in 2010. This list also holds the abbreviations as used in further tables. (See table 4.2)

Table 4.2: 10 DVDs chosen

It was not possible to only find web stores in which all the selected DVDs were available. For example in the Netherlands, only 9 out of 10 web stores carried Avatar. (See table 4.3) Especially in China there are great gaps, as three DVDs were not offered at all in any of the web stores. The Twilight saga eclipse was the only DVD found in all 60 web stores. This information is important when comparing the purchase price. There are three DVDs which are available in at least 9 out of 10 web stores. Therefore to subvert this issue I look at the mean for the three most available DVDs; Avatar, Twilight saga: New Moon and Twilight saga: Eclipse. For the other DVDs I look at the median, as this gives a better picture, considering the missing DVDs.

NL UK GE US CN AU

Avatar 9/10 10/10 10/10 10/10 9/10 10/10

Toy Story 3 10/10 9/10 6/10 10/10 9/10 10/10

The Twilight saga: New Moon 9/10 10/10 9/10 10/10 9/10 10/10

Blind Side 10/10 10/10 10/10 10/10 6/10 9/10

The Twilight saga: Eclipse 10/10 10/10 10/10 10/10 10/10 10/10 How to train your dragon 10/10 10/10 9/10 10/10 0/10 10/10

Despicable me 10/10 10/10 9/10 10/10 4/10 10/10

Iron man 2 10/10 10/10 6/10 10/10 0/10 10/10

The princess and the Frog 10/10 10/10 6/10 10/10 7/10 9/10 Top DVDs sold 2010 (abbreviation)

Avatar (Av) How to train your dragon (HttyD)

Toy Story 3 (TS_3) Despicable me (Ds)

The Twilight saga: New Moon (Tnm) Iron man 2 (IM2)

Blind Side (BS) The princess and the Frog (PF)

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The Hangover 10/10 9/10 9/10 10/10 0/10 9/10 Table 4.3: DVD availability

4.2 Comparison of key descriptives

The data is gathered in a matrix in Excel. This data includes information about type of web store, purchasing costs, shipping options, payment options and specific costs per shipping option. Table 4.4 describes which variables are gathered in Excel. Chapter 5 gives a comparison of the six countries by using the key descriptives.

Variables

Pricing options Purchase costs

Payment options Number of credit cards Availability bank transfer Availability manual payment

Shipper type Regular shipper type

Fast shipper type Locker shipper type Availability fast shipment Availability locker

Shipment time Regular delivery time Fast delivery time Shipment costs Regular shipment costs

Fast shipment costs Locker shipment costs Table 4.4 Overview variables

This data is inserted in SPSS. Using this program the descriptive of all variables is determined. By looking at these variables the differences between countries are visible.

All prices were converted to euros using an online currency converter at OANDA.com. All conversions were made with the exchange rates of Wednesday 23 march 2011 to guard against price fluctuations. The purchasing costs are excluding taxes, as the countries have different taxation.

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4.3 Meta-analysis

The last step of the data-analysis is the meta-analysis in chapter 6. In a meta-analysis you combine results from multiple studies to discover relationships and patterns between factors. It is not possible to use statistical tests per country, with only a N=10. In this meta-analysis I combine the data from each country into one data-set resulting in n=60, allowing me to use statistical tests. Using this data-set I will prove whether the theoretical framework (See figure 3.1) introduced in Chapter 3 is correct or false. This study combines the data-sets from the different countries into one data set. Usually this would not be possible, as a meta-analysis usually compares results of very different studies. However since in this study the data-collection is standardized, this is possible.

An advantages of a meta-analysis is that it allows for a greater statistical power, thus showing relationships between factors more clearly. Secondly, since the data was set up in the same way, with the only difference the different stores per different country, a meta-analysis allows for a generalization of the population of the studies. Thirdly because it combines the results from different countries the results will be less influenced by the findings from one study, instead it gives a proper view of the overall results. Most disadvantages of a meta-analysis have the origin in the selection of studies that are included in the study. For example, a high possibility of personal bias, because the researcher can pick and choose favorable studies to be included. Or the reliance on published studies, as published studies often focus on one part of the results that show significant results. This is not the case in this thesis, as the study requirements were set beforehand, namely 10 different stores per country and all results are included. A possible weakness of this meta-analysis is that the results were collected by different researchers.

The model consists of six hypotheses:

H1a: The type of web store has an influence on purchase costs. H1b: The type of web store has an influence on the payment options. H1c The type of web store has an influence on the shipper type.

H2a: The shipper type has an influence on the shipment time. H2b: The shipper type has an influence on the shipment costs H2c: The shipment time has an influence on the shipment costs.

To explain how to prove the different hypotheses, first we need to look at the available data. There are 6 factors mentioned in the model:

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In below table each of these factors are presented with the variables that are measured in the case study. Per variable it shows what type of level of measurement the data has. For example: The factor ‘payment option has, among others, the variable ‘bank transfer’. In the case study this is measured in nominal data in which four answers are possible.

Factors Variable Level of measurement (# categories) 1. Type of web store 1.1 Type store (assortment) Nominal (3): 1. Broad assortment; 2. DVDs + books; 3. DVDs +games. 2. Purchase costs 2.1 Average price per

DVD

Scale (price in euros)

3. Payment options

3.1 Credit card Scale (number of unique credit cards) 3.2 Bank transfer Nominal (4):

1. N/A; 2. Ideal; 3. PayPal; 4. Other. 3.3 Manual payment Nominal (4):

1. N/A;

2. Before and after delivery; 3. Only before delivery; 4. Only after delivery. 4. Shipper type 4.1 Type shipper regular

4.2 Type shipper fast 4.3 Type shipper locker

Nominal (4): 1. TNT; 2. DHL;

3. National postal service; 4. Private company. 5. Shipment time 5.1 Delivery time fast

5.2 Delivery time regular

Scale (Time in days) 6. Shipment costs 6.1 Shipment cost regular

6.2 Shipment cost fast 6.3 Shipment costs locker

Scale (price in euros)

Table 4.5. Overview of factors.

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Hypothesis Factors involved Testing method

H1a 1 -> 2 Median

H1b 1 -> 3 ANOVA ( for variable 3.1)

Chi-square (for variable 3.2 and 3.3)

H1c 1 -> 4 Chi-square

H2a 4 -> 5 ANOVA

H2b 4 -> 6 ANOVA

H2c 5 -> 6 Correlation

Table 4.6 Testing method per hypothesis

Median (H1a)

For hypothesis H1a the independent variable is of a nominal data and the dependent variable of scale data. This is also true in hypotheses H1b, H2a and H2b, which uses an ANOVA test, however an ANOVA test compares means and this is not possible in this hypothesis as the sample sizes in the data-sets are not complete. Therefore for this hypothesis I analyze the median by cross-checking the key descriptives of the type of web store with the purchase costs and then comparing the medians.

Chi-square test (H1b and H1c)

The Chi-square test is used for testing nominal and ordinal data. This thesis uses a Pearson’s chi-square test. The chi-square tests by using frequencies and basically summarizes whether the expected number of frequencies and the observed number of frequencies are similar. A chi-square test requires a sample size of at least twenty. The Chi-square test is especially suited for when both independent and dependent factors are nominal data. This is true for factors 1. Type of web store; a part of 3. Payment options; and 4. Shipper type. Nominal data is not suited for a more in-depth test. Therefore hypothesis H1b and H1c are tested by a Chi-square test.

ANOVA test (H1b, H2a and H2b)

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Correlation (H2c)

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5. Country comparison

This chapter gives the first results of the case-study. The three different factors, pricing, payment and shipment options, as mentioned in Chapter 3, are discussed one by one. The data from which the results were gathered can be found in a separate Excel file and is available on demand.

5.1 Purchase price

The first table gives an overview of the purchase price for the different DVDs. The first row gives the different DVDs. (abbreviations found in table 4.2)

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Median 22.00 22.50 24.00 30.50 31.00 21.00 29.00 27.00 32.00 18.00 Minimum 11 18 18 24 27 12 17 12 18 12 Maximum 36 36 32 36 36 36 36 38 36 27 N 10 10 10 10 9 10 10 9 9 9 Total Mean 16.83 19.76 15.04 19.11 15.41 13.45 16.72 15.67 18.88 10.60 Median 17.00 20.50 15.00 17.00 15.00 8.00 15.00 16.00 18.00 9.00 Minimum 6 10 3 8 3 5 6 4 7 4 Maximum 36 36 32 36 36 36 36 38 36 27 N 60 58 57 54 54 49 53 45 52 47

Table 5.1 Descriptive purchase costs * Red is highest and lowest mean **Green is highest and lowest median ***Blue is highest and lowest price

Table 5.1 gives the mean, median, minimum and maximum price for the purchase costs per DVD per country. The columns represent the different DVDs. The rows present the different countries. The first three DVDs are the DVDs that are available in most stores (N=9/10) therefore for these it is acceptable to look at the mean for comparing the prices. For all three DVDs the UK has the lowest purchase costs. AU has the highest purchase costs. However the median can be considered to be more useful when looking at these results, as the N is incomplete with most DVDs. As with the mean AU has the most expensive purchase price. Apart from two exceptions, the UK has, according to the median, the lowest purchasing price. Also interesting is the minimum and maximum value. Unsurprisingly the highest price for a DVD (€38,-) can be found in a store in AU and the lowest price for a DVD can be found in the UK. (€3,-) The greatest difference between lowest and highest price is 35 euros. (lowest = 3, highest = 38)

5.2 Payment options

This section describes the payment options, as mentioned in chapter 3. Payment options have been measured in three variables:

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Number of unique credit cards

Country Mean Minimum Maximum

NL 2,40 0 6 UK 5,30 4 7 GE 2,60 0 4 US 4,90 4 6 CN 1,60 0 3 AU 2,00 0 3 Total 3,13 0 7

Table 5.2 Number of credit cards

Table 5.2 gives the mean, minimum and maximum of the number of different credit cards used per country. For example, the ten stores in the Netherlands have an average of 2.4 unique credit cards per store, however there are also stores which have none, or a maximum of six different credit cards. The countries that have most different credit cards are the UK and the US. Credit cards are not popular in China and Australia.

Bank transfer

Banktrsnf

Total Not possible Ideal PayPal Other

Country NL 0 9 1 0 10 UK 7 0 3 0 10 GE 2 0 8 0 10 US 0 1 5 4 10 CN 0 0 10 0 10 AU 0 0 10 0 10 Total 9 10 37 4 60

Table 5.3 Availability of bank transfer

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attempting to become a more international company. As seen in these results this is not going well so far. (Position paper online betalen 2011)

Manual payment ManPay Total Not possible Before and after delivery Only before delivery Only after delivery Country NL 3 1 1 5 10 UK 10 0 0 0 10 GE 4 0 5 1 10 US 10 0 0 0 10 CN 3 5 1 1 10 AU 10 0 0 0 10 Total 40 6 7 7 60

Table 5.4 Options of manual payment

Table 5.4 shows what options are available for manual payment. In total, 40 out of 60 stores, do not offer manual payment. In the UK, the US and Australia manual payment is not possible at all. The Netherlands inclines towards payment after delivery. Germany toward payment before delivery and in a number of stores in China both options are available.

Summary payment options

Country Average nr. of unique credit cards per web store

Bank transfer (number of stores that offer option)

Manual payment (number of stores that offer option)

NL 2.4 Ideal (9) After delivery (5)

UK 5.3 PayPal (3) -

GE 2.6 PayPal (8) Before delivery (4)

US 4.9 PayPal/other (5/4) -

CN 1.6 PayPal (10) Before and after delivery (5)

AU 2 PayPal (10) -

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The payment options per country are very diverse. Each country has its one preferred payment option. PayPal is used internationally, but less in NL and UK. The UK has the highest average of different credit cards; however they barely offer any other types of payment. China has the lowest average of credit cards, but do offer PayPal and both manual payment options.

When examining table 6.4 we can see that the UK has a high usage of credit cards, but bank transfer or manual payment is not possible at all in any of the 10 web stores. Also in Australia payment is mostly done by PayPal, credit cards are not popular. The Netherlands, Germany and China have more diverse payment options. This can be explained in the Netherlands as Dutch law forbids 100% of forward payments. This is unique in Europe. What this means is that if web shops in the Netherlands offer only Ideal or only credit card payment they are acting against the law. However the most common used payment method in the Netherlands is by far Ideal, with 54% of all payments in 2010. (Position paper online betalen, 2011) The test results of Germany are different from results in other published papers. This report state that payment methods in Germany are undergoing some changes. Manual payment used to be most popular, but the credit card and PayPal are on the rise since 2010. Lastly the large number of payment options in China can be explained by China’s fast growth. China is still experimenting with a large number of different payment methods. China has made deals with a number of credit cards companies, banks and other payment companies, which results in very diverse payment options. (Rapport online betalen, 2011) This is supported in UK, AU and US, however external factors play an influence in NL, GE and China. The results of payment options as seen in these reports, conform to the results published in a recently published report. ‘Rapport online betalen, 2011’ states the Netherlands use Ideal and the UK mostly uses credit cards. The results of this thesis do not agree with the report regarding Germany. The rapport states the most popular payment method is the credit card and PayPal. Results in this paper show that credit cards are not very popular at web shops.

5.3 Shipment options

The shipment options were also explained in chapter 3. Shipment options are measured in three variables:

1. Shipper type; 2. Delivery time; 3. Shipment costs.

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Shipper type

Type shipper regular

Total

Type Shipper fast

Total TNT DHL

Postal Private

UPS

Postal Private

service company service company

NL 7 0 3 0 10 NL - - - - UK 0 0 10 0 10 UK 0 1 1 2 GE 0 1 9 0 10 GE 0 4 0 4 US 0 0 4 6 10 US 3 0 7 10 CN 0 0 7 3 10 CN 0 5 4 9 AU 0 0 1 2 3 AU 0 2 2 4 Total 7 1 34 11 53 Total 3 12 14 29

Table 5.6 Shipper type

Out of the 53 stores, 34 stores use the postal service for regular shipments. Private companies are used by 11 stores. TNT is only used in NL. DHL has only one user, which resides in Germany. For the fast shipment again the postal service and private companies are used. UPS has three users, all in the US.

Type shipper locker Shipment costs locker

Type Shipper Locker

Total

Country Mean Minimum Maximum N

DHL Postal Private NL 2.00 2 2 1 service company UK - - - - NL 0 3 0 3 GE 3.11 0 7 9 UK - - - - US 2.86 2 4 7 GE 9 0 0 9 CN 0.00 0 0 2 US 0 8 0 8 AU 2.56 0 5 9 CN 0 0 2 2 Total 2.61 0 7 28 AU 0 9 0 9 Total 9 20 2 31

Type 5.7 Locker options

Global differences in B2C E-commerce options

Pricing, payment and shipment options worldwide

Abstract

Preface

Table of contents

1. Problem statement

2. Distribution processes of a web store

3. Web store options

Type of web

store

Type of web

store

Type of web

store

Shipper type

Shipper type

Shipment

Shipper type

Shipment

costs

Shipment time

Shipment

4. Case-study Methodology

5. Country comparison