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Online Services. Chapter 9. Learning Objectives. Describe the major features of the online service sector Discuss current trends in the following online industries: financial services travel services career services legal services. The Service Sector.

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learning objectives
Learning Objectives
  • Describe the major features of the online service sector
  • Discuss current trends in the following online industries:
    • financial services
    • travel services
    • career services
    • legal services
the service sector
The Service Sector
  • Largest and most rapidly expanding part of the economies in advanced industrial nations
  • In the US, the service sector (broadly defined) employs about four out of every five workers and accounts for about 75% of all economic activity
  • E-commerce in the service sector offers extraordinary opportunities to deliver information, knowledge, and transaction efficiencies
what are services
What are Services?
  • Service occupations are “concerned with performing tasks”
  • Two service categories include:
    • Transaction brokers
    • “hands-on” services
  • Transaction brokering involves acting as an intermediary to facilitate a transaction
  • In hands-on services the service provider and client need to interact directly
  • Which of the categories has been most impacted by e-commerce?
service industry groups
Service Industry Groups
  • The major service industry groups are:
    • Finance, insurance, real estate
    • Travel
    • Legal and accounting, and business services
    • Health services
    • Educational services
  • In this chapter we will focus on characteristics and trends in the three of the largest, and most successful, online transaction brokering industries
    • Online financial services
    • Online travel services
    • Online career services
online financial services
Online Financial Services
  • The online financial services sector is a shining example of an e-commerce success store, but one with many twists and turns
  • Innovative, pure-online firms such as E*Trade have transformed the brokerage industry
  • Impacts on large, powerful banking, insurance, and real estate firms have been delayed by consumer resistance and lack of industry innovation
  • For instance, online-only banks have not displaced or transformed traditional banks
online financial consumer behavior
Online Financial Consumer Behavior
  • Surveys show that consumers are attracted to financial sites because of their desire to save time and access information
  • Most online consumers use financial services sites for mundane financial management, such as checking balances on existing accounts
  • Once accustomed, consumers move on to more sophisticated capabilities such as using personal financial management tools, making loan payments, and considering offers from online institutions
  • The number of people using mobile devices for financial service needs is also surging
financial portals and account aggregators
Financial Portals and Account Aggregators
  • Online financial services also enable some new services that would be more difficult to perform offline
  • Financial portals provide consumers with comparison shopping services, independent financial advice, and financial planning
  • Account aggregators pull together all of a customer’s financial (and even nonfinancial) data at a single personalized Web site
online travel services
Online Travel Services
  • Online travel is one of the most successful B2C e-commerce segments
  • Today, more travel is booked online than offline
  • Online travel services revenues are expected to grow to almost $170 billion in 2017
  • Travel services appear to be an ideal service for the Internet
    • It is information intensive and requires significant consumer research
    • Travel requirements can be accomplished online
    • Travel service sites do not require any “inventory”
    • Suppliers are highly fragmented and often have excess capacity
  • Major sectors include airline tickets, hotel reservations, car rentals, and travel packages
online travel industry dynamics
Online Travel Industry Dynamics
  • Because much of what travel agency sites offer is a commodity, and thus they face the same costs, competition among online providers is intense
  • Price competition is difficult because shoppers, as well as online site managers, can comparison shop easily
  • Therefore, competition among sites tends to focus on scope of offerings, ease of use, payment options, and personalization
  • Some industry trends include:
    • Consolidation to build stronger multi-channel sites
    • Impacted by meta-search engines that scour the Web for the best prices on travel and lodging
    • Use of mobile devices and apps is increasing
online career services
Online Career Services
  • Next to travel services, one of the Internet’s most successful online services has been job services
  • Online job market is dominated by two large players – CareerBuilder and Monster
  • The top sites generate more than $1 billion annually in revenue from employers’ fees and consumer fees
  • A 2013 survey found that around 70% of US Internet users had looked for jobs online
  • LinkedIn is also becoming an increasingly important player in this market
  • Recruitment market segments (Table 9.7)
    • General recruitment sites
    • Executive search sites
    • Niche job sites
online career services trends
Online Career Services Trends
  • Trends for 2013-2014 in the online recruitment services industry include the following:
    • Consolidation – industry dominated by two sites
    • Diversification – explosion of specialty niche sites
    • Localization
    • Job search engines/aggregators
    • Social networking
    • Mobile