The Internet and the revolution in distribution: A cross-industry examination

Abstract

Distributors and channels of distribution have existed since time immemorial. Channels of distribution have existed to get products to consumers cheaper, faster, and more effectively. Distribution encompasses various types of activities, depending on the type of and point in the supply chain where value is added. A supply chain constitutes a set of activities ranging from production and manufacturing, to logistics, warehousing, transportation, and final delivery of goods to the customer (Handfield RB, Nichols EL. Introduction to supply chain management. Upper Saddle River, NJ: Prentice-Hall, 1999). Through their interactions with suppliers, manufacturers, and end customers, distributors thus perform an important intermediary role in matching supply with demand. In this paper, the impact of the Internet on the value chain is discussed. In order to explore issues pertaining to this transformation in greater detail, three industries that have been either radically altered by the Internet, or that are facing tremendous challenges as they head into the future, are considered. They are (a) the retailing industry, (b) banking, brokerage and financial services, and (c) the music industry. The objective is to elicit the underlying managerial implications and imperatives through this cross-industry examination.