Deck 9: Online Retailing and Services

Question 1

All of the following statements about the MOTO sector are true except:

A) compared to general merchandisers, the transition to e-commerce was easier for MOTO firms.
B) the MOTO sector is also referred to as the specialty store sector.
C) MOTO was the last technological retailing revolution that preceded e-commerce.
D) distribution of catalogs is one of MOTO retailers' biggest expenses.

Answer 1

B

Question 2

Apart from Amazon,the top online retail firms in terms of online sales are all primarily ______ firms.

A) manufacturer-direct
B) omni-channel
C) web-only
D) catalog merchant

Answer 2

B

Question 3

Which of the following is not one of the methods used by traditional retailers to develop omni-channel integration?

A) online catalog
B) online order, in-store pickup
C) online supply-push
D) online promotions for offline purchases

Answer 3

C

Question 4

Which of the following is not one of the central challenges facing the online retail industry?

A) lack of physical store presence
B) consumer concerns about the privacy of personal information
C) inconvenience in returning goods
D) delivery delays

Question 5

Which of the following is not a major trend in online retail for 2018-2019?

A) Buying online has become a normal, mainstream, everyday experience.
B) The average annual purchase of online buyers continues to increase.
C) Specialty retail sites show rapid growth in online retail.
D) The number of online buyers begins to plateau.

Question 6

Online retail constitutes about 20% of the total retail market today.

Question 7

In 2018,the number of online buyers in the United States was over 190 million.

Question 8

Personal consumption of retail goods and services accounts for over 80% of total gross domestic product (GDP).

Question 9

Contrary to predictions of analysts made during the early days of e-commerce,the Internet has led to both disintermediation and hypermediation on a widespread basis.

Question 10

Which of the following is not one of the seven major segments of the retail industry?

A) electronics and computers
B) specialty stores
C) gasoline and fuel
D) food and beverage

Question 11

In 2018,approximately what percentage of Internet users over the age of 14 made a purchase at an online retail store?

A) almost 40%
B) almost 60%
C) almost 70%
D) almost 80%

Question 12

The MOTO sector of the retail industry is most similar to the ________ sector.

A) specialty stores
B) general merchandise
C) online retail sales
D) consumer durables

Question 13

All of the following have introduced their own versions of Buy buttons except:

A) Facebook.
B) Pinterest.
C) Instagram.
D) Tumblr.

Question 14

Which of the following categories generates the highest percentage of online retail revenue?

A) computers and electronics
B) apparel and accessories
C) books/music/video
D) automobile and automobile parts and accessories

Question 15

All of the following are advantages of online retail except:

A) lower supply chain costs.
B) lower cost of distribution.
C) ability to change prices.
D) faster delivery of goods.

Question 16

Which of the following statements is not true about the automobile,and automobile parts and accessories,online retail category?

A) Most of the revenue in this category is generated from the sales of automobiles.
B) Automobile manufacturers use the Internet to deliver branding advertising.
C) U.S. franchising law prohibits automobile manufacturers from selling cars directly to consumers.
D) Automobile retailing is dominated by dealership networks.

Question 17

All of the following were parts of the vision during the early days of e-commerce except the belief that:

A) new, "first-mover" middlemen, with expertise in e-commerce, would force traditional intermediaries out of business.
B) online consumers were rational and cost-driven.
C) entry costs to the online retail market would be much less than those needed to establish a physical storefront.
D) the cost of acquiring customers would be much lower.

Question 18

Which of the following is not a digitally native vertical brand?

A) Warby Parker
B) Wayfair
C) Everlane
D) Caspar

Question 19

In 2018,over 90% of online buyers were expected to make a purchase using a mobile device.

Question 20

All of the following were factors that precipitated the growth of MOTO except:

A) the national toll-free call system.
B) the growth of the cellular phone industry.
C) falling long distance telecommunications prices.
D) the growth of the credit card industry.

Question 21

Describe the vision of online retailing during the early days of e-commerce.Did these predictions and assumptions turn out to be true?

Question 22

Describe the state of the online retail sector today.

Question 23

Consumers are primarily price-driven when shopping on the Internet.

Question 24

Barkbox is an example of a subscription-based retail revenue model.

Question 25

Which of the following measures the percentage of sales revenue a firm can retain after all expenses are deducted from gross revenues?

A) gross profit
B) net margin
C) operating margin
D) working capital

Question 26

What is another name for pro forma earnings?

A) net margin
B) operating income
C) earnings before income taxes, depreciation, and amortization (EBITDA)
D) generally accepted accounting principles (GAAP) earnings

Question 27

Online retailing provides an example of the powerful role that intermediaries continue to play in retail trade.

Question 28

The existence of substitute products is a key industry strategic factor.

Question 29

Operating margin is defined as:

A) operating income or loss divided by net sales revenues.
B) operating income or loss divided by total operating expenses.
C) net sales revenues divided by net income or loss.
D) net assets divided by net liabilities.

Question 30

All of the following are strategic factors that pertain specifically to a firm and its related businesses except:

A) core competencies.
B) synergies.
C) technology.
D) power of customers.

Question 31

For a quick check of a firm's short-term financial health,examine its:

A) working capital.
B) gross margin.
C) long-term debt.
D) cost of sales.

Question 32

Current liabilities are debts of the firm that will be due within:

A) three months.
B) six months.
C) one year.
D) two years.

Question 33

Which of the following is not categorized as an operating expense?

A) the cost of products being sold
B) marketing costs
C) administrative overhead
D) amortization of goodwill

Question 34

What are the challenges faced by automobile manufacturers in selling online?

Question 35

Big data plays an important role in predictive marketing.

Question 36

Gross margin is defined as gross profit:

A) minus total operating expenses.
B) divided by net sales revenues.
C) divided by cost of sales.
D) minus net income.

Question 37

The lower the ________ compared to revenue,the higher the gross profit.

A) assets
B) cost of sales
C) gross margin
D) operating expenses

Question 38

Which of the following provides a financial snapshot of a company's assets and liabilities (debts)on a given date?

A) working capital
B) operating margin
C) balance sheet
D) gross margin

Question 39

Which of the following is not considered a current asset?

A) long-term investments
B) cash
C) accounts receivable
D) marketable securities

Question 40

Which of the following is not a key industry strategic factor?

A) synergies
B) barriers to entry
C) industry value chain
D) existence of substitute products

Question 41

In the United States,the service sector accounts for approximately ________ % of the United States GDP.

A) 70
B) 75
C) 80
D) 85

Question 42

Virtual merchants face potentially large costs for all of the following except:

A) building and maintaining a website.
B) building and maintaining physical stores.
C) building an order fulfillment infrastructure.
D) developing a brand name.

Question 43

Omni-channel merchants are also referred to as:

A) virtual merchants.
B) bricks-and-clicks companies.
C) catalog merchants.
D) manufacturer-direct firms.

Question 44

All of the following are examples of the challenges that traditional manufacturers experience when using the Internet to sell directly to the consumer except:

A) moving to a demand-pull model.
B) high cost structures.
C) developing a fast-response online order and fulfillment system.
D) channel conflict.

Question 45

________ is a subscription-based retailer using predictive marketing and Big Data?

A) Macy's
B) Stitch Fix
C) Dell
D) Lands' End

Question 46

All of the following are challenges for catalog merchants except:

A) high costs of printing and mailing.
B) building a credible website.
C) the need to bring staff in or manage new technology.
D) building sophisticated order entry and fulfillment systems.

Question 47

Which of the following occurs when retailers of products must compete on price and currency of inventory directly against the manufacturer?

A) disintermediation
B) localization
C) channel conflict
D) hypermediation

Question 48

The term supply-push refers to:

A) making products prior to orders being received based on estimated demand.
B) waiting for orders to be received before building a product.
C) channel conflict.
D) multi-channel manufacturers who sell directly online to consumers.

Question 49

All of the following are challenges faced by bricks-and-clicks firms except:

A) coordinating prices across channels.
B) handling returns of online purchases at retail outlets.
C) building a credible website.
D) building a brand name.

Question 50

Which of the following is not an example of a virtual merchant?

A) Overstock
B) Wayfair
C) Newegg
D) Dell

Question 51

Approximately ________ % of the United States labor force is involved in providing services.

A) 50
B) 60
C) 70
D) 80

Question 52

Discuss Amazon's future prospects.Do you think Amazon will ever be consistently profitable?

Question 53

Describe the virtual merchant business model and its unique challenges in becoming financially viable.

Question 54

Define the term economic viability and explain the factors involved in assessing a firm's economic viability.

Question 55

Why have so many online retailers had difficulty in achieving profits? How had this changed by 2018?

Question 56

Which of the following is not an example of a transaction broker?

A) a stockbroker
B) a real estate agent
C) an accountant
D) an employment agency

Question 57

Which of the following has the highest share of online retail sales?

A) omni-channel merchants
B) virtual merchants
C) catalog merchants
D) manufacturer-direct

Question 58

Which of the following has the second-highest share of online retail sales?

A) omni-channel merchants
B) virtual merchants
C) catalog merchants
D) manufacturer-direct

Question 59

Service industry groups are categorized generally into two groups,those that provide transaction brokering and those that involve:

A) retailing goods.
B) personalization.
C) information brokering.
D) providing hands-on services.

Question 60

All of the following statements about Amazon are true except:

A) in 2016, Amazon purchased Jet.com, one of its discount competitors.
B) Amazon Web Services is now a major part of Amazon's business.
C) eBay can be considered a competitor of Amazon's.
D) the rising cost of shipping represents one of the biggest threats to Amazon's long-term profitability.

Question 61

Which of the following statements about online banking is not true?

A) Top mobile banking activities include checking balances and bank statements and viewing recent transactions.
B) Online and mobile banking transactions provide significant costs savings for banks.
C) Millennials are adopting mobile banking at a much higher rate than those who are older.
D) More people use a tablet for mobile banking than a mobile phone.

Question 62

Which of these job recruitment sites is not a job listing aggregator?

A) Indeed
B) SimplyHired
C) Glassdoor
D) CareerBuilder

Question 63

Which of the following best explains why the service sector is a natural avenue for e-commerce?

A) The service sector is less geographically reliant and more globally oriented.
B) The service sector has historically been more technology-reliant.
C) Much of the value in services is based on the collection, storage, and exchange of information.
D) It is not; services are difficult to translate to e-commerce because they rely on face-to-face communication and barter.

Question 64

The online mortgage industry has transformed the process of obtaining a mortgage.

Question 65

All of the following statements about the online insurance industry are true except:

A) the Internet has lowered search costs, increased price comparison, and decreased prices to consumers for all forms of insurance.
B) websites of almost all the major firms provide the ability to obtain an online quote.
C) the wave of interest in fintech companies has not yet reached the insurance industry.
D) the industry has been very successful in attracting visitors searching for information about prices and terms of insurance policies.

Question 66

The term fintech applies only to tech companies that are seeking use technology to unbundle traditional institutional financial services industries and instead deliver targeted solutions.

Question 67

________ has introduced a tool known as Consumer Alerts to inform readers when a review is likely to be fraudulent?

A) Yelp
B) TripAdvisor
C) Angie's List
D) TripExpert

Question 68

Bookings Holdings owns all of the following except:

A) Priceline.
B) Orbitz.
C) Booking.com
D) Lowestfare.com

Question 69

Almost all recruiting professionals now use social networks in the recruiting process.

Question 70

Discuss the issue of consolidation in the online travel services industry.

Question 71

In 2018,almost 60% of the adult U.S.population was expected to use online banking.

Question 72

Which of the following statements is not true?

A) Price competition among online travel services is difficult as comparison shopping for better prices is easy.
B) The online travel services sector is one of the few in which extensive disintermediation has occurred.
C) The ability of travel products and services to be commoditized is a significant factor in the explosive growth of the online travel services industry.
D) The online travel services industry has gone through a period of consolidation.

Question 73

All of the following services require extensive personalization except:

A) financial services.
B) legal services.
C) medical services.
D) accounting services.

Question 74

Craigslist is most involved in which of the following online services market(s)?

A) real estate services and career services
B) insurance services and brokerage services
C) travel services
D) online accounting services

Question 75

In ________,all of a customer's financial (and even nonfinancial)data are pulled together into a single,personalized website.

A) account aggregation
B) a financial portal
C) integrated financial services
D) EBPP systems

Question 76

The Internet has resulted in lower search costs,increased price comparison,and lower prices to consumers for which insurance product line?

A) term life insurance
B) automobile insurance
C) health insurance
D) property and casualty insurance

Question 77

Which of the following is not a major trend in the online recruitment services industry?

A) disintermediation
B) Millennials and GenX primarily use mobile devices to search for jobs
C) social recruiting
D) use of big data technologies in the hiring process

Question 78

All of the following statements about the online real estate services market are true except:

A) the first step in the home buying process for nearly all ages of home buyers is to look online.
B) the major impact of Internet real estate sites has been in influencing offline decisions.
C) the primary service offered by real estate sites is a listing of houses available.
D) the Internet and e-commerce have created a revolution in the real estate value chain.

Question 79

What is the largest sector of the online travel services market in terms of revenue?

A) hotel reservations
B) car reservations
C) cruise/tour reservations
D) airline reservations

Question 80

Define the term insurtech and give an example of an insurtech company.