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Lesson 4 Historical market flow: The distribution channel
Objective Understand where e-Business begins to deviate from business as usual.

Historical Market Flow

Historically, producers interacted with distributors and generic information about the product was a core component of the relationship.

Producer generates a physical product which is sent to a Distributor

There are six key items that move within the historic distribution channel:
  1. Physical product
  2. Product information
  3. Generic information
  4. Transaction information (order, information about the order, payment process, and all the information around the transaction)
  5. Needs information (information on consumer demand)
  6. Location information
In the historical market flow, everything about the distribution channel was optimized for the distribution of physical goods.

A recent report by DistributedNetworks titled "Seeking customer loyalty using ecommerce business models", looked at how consumer and retail businesses are transforming to adapt to the shift from traditional shop-centric business models to a new world where the customer is increasingly at the center of a perpetual shopping experience. In this "customer-centric" online experience, retailers need to be exceptionally sensitive and responsive to when and where their potential customers are making purchase decisions (both consciously and subconsciously) throughout their online experience at ebay or Amazon.

Determining what the consumer is thinking

The burning question is, how can consumer and retail companies achieve this nirvana of consumer mindreading? How can they identify and keep pace with the behaviors and preferences of customers today and tomorrow? How can they ensure their online strategy is acutely tailored to attract and win the diverse and dynamic customer segments they serve?
As you will learn in the next lessons, this flow changed with the advent of the WWW and e-Commerce.