New book lays out rules for effective Internet retailing

NASHVILLE, Tenn. – Managers who use the Internet to sell products and services and to provide customers information can now take advantage of the latest academic research on online retailing.

Beyond the Basics: Research-Based Rules for Internet Retailing Advantage, published by the Sloan Center for Internet Retailing at Vanderbilt University, offers a clear set of operating instructions for making the most of online marketing.

The book is edited by the Sloan Center’s co-directors, Donna L. Hoffman and Thomas P. Novak, two of the world’s most recognized scholars in electronic commerce and Internet marketing. Both are marketing professors at the Owen Graduate School of Management at Vanderbilt.

Beyond the Basics comprises chapters researched and written by MBA and Ph.D. students in the school’s “Managing the Customer Chain” course. The authors compared the conventional wisdom amassed over more than a decade of Internet retailing history to findings from the academic literature, applying their findings to five areas: customer experience, online marketing strategy, multi-channel retailing, product recommendations and innovation.

They found a wide gap between the ways a manager might expect a product or application to work and the ways it actually does, and this formed the basis for this highly informative and practical book.

No other book directed at the wide array of Internet retailers lays out rules grounded in research. According to best-selling author and information technology consultant Larry Downes, “The authors, applying the tools of qualitative and quantitative research, expose much of the conventional wisdom of Internet retailing as myth and lay the groundwork for serious, reasoned study of the behavior of consumers in this exciting new channel.”

The book includes discussions of technologies useful to “Mom and Pop” stores, lists of methods businesses can use to lock in customers, emerging technologies marketers can use to communicate more effectively with consumers, use of recommendation agents by web sites and what to do when customers are given bad recommendations, and the role of the Internet in encouraging customers to use self-service kiosks, such as those in retail stores and at airline counters.

In the chapter devoted to achieving customer lock-in, the authors offer 10 rules, advising Internet site managers to require from customers an initial investment of time or money so they’ll be more vested in the site; provide a history of each customer’s past purchases and wish lists; add value, such as free shipping, for return visits to the site; and both to borrow from successful sites that customers frequent and to “clone” the designs with which customers are familiar to newer parts of the web site, so they can transfer the skills they’ve learned.

Hoffman said she believes the research conducted by the Sloan Center since its inception two years ago will prove to be extremely useful to any organization with an Internet presence, and she notes that the book was conceived as a handbook for managers. “We have learned a lot through our research about managers’ problems, and we wanted to provide access to what we’ve learned.

“Online retailers don’t make a lot of mistakes; by now, with more than 10 years of collective experience in Internet retailing, we all have a basic understanding of how to build a web site. What is needed, however, is fundamental understanding of online consumer behavior because the medium presents unique differences. A competitive advantage can be gained only from serious and deep insight into this consumer behavior.”

In 1994 Hoffman and Novak co-founded eLab, a pioneering research center that The New York Times has called one of the “premier research centers in the world for the study of electronic commerce.” In 2003, they were awarded a grant by the Alfred P. Sloan Foundation to establish the Sloan Center for Internet Retailing at Vanderbilt University. The Sloan Center conducts research that improves business effectiveness and advances best practices in Internet retailing by focusing on the customer chain, including all functions that impact the consumer experience. It leverages eLab’s unique virtual lab research infrastructure to pursue much of its research.

In 1999, Hoffman and Novak were voted the top two Internet scientists in the world in an international survey of more than 600 U.S. and European scientists and marketing managers.

The Owen Graduate School of Management at Vanderbilt University is ranked as a top institution by Business Week, The Wall Street Journal, U.S. News & World Report, Financial Times and Forbes. For more news about Owen, visit

Media contact: Susanne Hicks, (615) 322-NEWS

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