Electronic consumer interaction, technology-enabled encroachment, and channel power: the changing balance between manufacturers electronic distribution and established retailers

It is concluded that consumer packaged goods retailers may for a variety of reasons find it difficult to disintermediate major retailers; alternative competitive strategies for retailers are examined through simulation models.

Abstract

In a wide range of industries alternative electronic distribution channels may permit disintermediation of wholesalers and of retailers. In some cases manufacturers or primary service deliverers may be able to deal directly with their customers, while in other industries existing intermediaries may be able to withstand attempts to bypass them. Two illustrated industries, consumer packaged goods and air travel, are compared. We conclude that consumer packaged goods retailers may for a variety of reasons find it difficult to disintermediate major retailers; alternative competitive strategies for retailers are examined through simulation models.