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e-Commerce Systems
Chapter9
McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
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9-2
• Identify the major categories and trends of e-commerce applications
• Identify the essential processes of an e-commerce system, and give examples of how they are implemented in e-commerce applications
• Identify and give examples of several key factors and Web store requirements need to succeed in e-commerce
Learning Objectives
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9-3
• Identify and explain the business value of several types of e-commerce marketplaces
• Discuss the benefits and trade-offs of several e-commerce clicks and bricks alternatives
Learning Objectives
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Introduction to e-Commerce
• Electronic commerce encompasses the entire online process of– Developing
– Marketing
– Selling
– Delivering
– Servicing
– Paying for products and services
• Relies on Internet and information technologies
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9-5
RWC 1: Mobile Shopping
• Mobile shopping increasing• Social networking
– Web sites and e-mail too many steps– Sales pitches on social networks increasing
• Birthday prompts ad for 1-800-Flowers
– Impulsive buyers
• Cell phones– Starbucks Mobile Card App
• Preloaded spending money
• Scannable bar code
– Last minute game tickets
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Scope of e-Commerce
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E-Commerce Technologies
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Essential e-Commerce Architecture
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Access Control and Security
• E-commerce requires mutual trust and secure access
– User names and passwords
– Encryption key
– Digital certificates and signatures
• Restricted access areas
– Other people’s accounts
– Restricted company data
– Webmaster administration areas
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9-10
Profiling and Personalizing
• Profiling captures behavior and choices– User registration
– Cookie files and tracking software
– User feedback
• Profiling is used for– Personalized (one-to-one) marketing
– Authenticating identity
– Customer relationship management
– Marketing planning
– Website management
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Search Management
• Find specific product or service
– Website search engine
• Google or Requisite Technology
– Search on content or by parameters
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Content and Catalog Management
• Content Management Software– Maintain text and multimedia for e-commerce
• Catalog Management Software– Maintain catalog content
• Catalog and content management software– Works with profiling tools to personalize content– Product configuration and mass customization
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Example of Workflow Management
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Event Notification
• Monitors e-commerce processes• Records relevant events
– First website– Payments– Problem situations
• Notifies involved stakeholders• Works with user-profiling software
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Collaboration and Trading
• Processes needed by customers, suppliers, and other stakeholders
• Online communities of interest
– E-mail, chat, discussion groups
– Enhances customer service– Builds loyalty
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Electronic Payment Example
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Securing Electronic Payments
• Sniffers easily recognize credit card formats• Protection
– Encrypt data • Between customer and merchant
• Between customer and financial institution
– Take sensitive information off-line
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RWC 2: Driving the “Buzz” on the Web
• Companies attempt to identify “influentials” that create online “word of mouth”– Increase sales– Influence opinions
• Differing opinion– Sales data don’t match “influentials”– Influentials go with the flow, not effect change
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E-Commerce Application Trends
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9-20
E-Commerce Success Factors
• Selection and value
• Performance and service
• Look and feel
• Advertising and incentives
• Personal attention (one-to-one marketing)
• Community relationships
• Security and reliability
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Differences in Marketing
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Web Store Requirements
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Developing a Web Store
• Build a website– Choose or set up web hosting
– Use simple design tools and templates
– Include a shopping cart and payment support
• Market the website– Include Web page and e-mail advertising
and promotions
– Exchange advertising with other Web stores
– Register with search engines and directories
– Sign up for affiliate programs
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Getting Customers to Find You
• Submit your site to a search engine
• Improve the quality and number of visitors– Search Engine Optimization (SEO)
• Link Farms
• Keyword stuffing
• Organic Search
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9-25
Serving Your Customers
• Convert visitors into loyal customers
– Develop one-to-one relationship with customers
– Create incentives to encourage registration
– Use Web cookies to identify visitors
– Use tracking services to record and analyze website behavior and customer preferences
– Create an attractive, friendly, efficient store
– Offer fast order processing and payment
– Notify when orders are processed and shipped
– Provide links to related websites
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Managing a Web Store
• Manage both the business and the website– Record and analyze traffic, inventory, sales
– Use CRM features to help retain customers
– Link sales, inventory data to accounting systems
• Operate 24 hours a day, seven day a week
• Protect transactions and customer records– Use security monitors and firewalls
– Use redundant systems and power sources
– Employ passwords and encryption
– Offer 24-hour tech support
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B2B E-Commerce
• Wholesale and supply side– Businesses with other businesses
• Relies on multiple technologies– Catalog systems– Trading systems– Data interchange– Electronic funds transfers
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E-Commerce Marketplaces
• One to Many– Sell-side marketplaces
– One supplier dictates product offerings and prices
• Many to One– Buy-side marketplaces
– Many suppliers bid for the business of a buyer
• Some to Many– Distribution marketplaces
– Unites suppliers who combine their product catalogs to attract a larger audience
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E-Commerce Marketplaces
• Many to Some– Procurement marketplaces– Unites major buyers who combine catalogs– More competition– Lower prices
• Many to Many– Auction marketplaces– Dynamically optimizes prices
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B2B Commerce Web Portals
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Clicks and Bricks
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E-Commerce Integration
• Move traditional strategies to e-commerce
• Integrate e-commerce into traditional business
– Sharing of established brands
– Sharing of key business information
– Joint buying power and distribution efficiencies
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E-Commerce trade-offs
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Other Clicks and Bricks Strategies
• Partial e-commerce integration– Joint ventures and strategic partnerships
• Complete separation– Spin-off of an independent e-commerce company
• Barnes and Noble’s experience– Spun off independent e-commerce company
– Gained venture capital, entrepreneurial culture, and flexibility
– Attracted quality management
– Accelerated decision making
– Failed to gain market share
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E-Commerce Channel Choices
• An e-commerce channel is the marketing or sales channel created by a company for its e-commerce activities– No universal strategy or e-commerce channel
choice– Both e-commerce integration and separation
have major business benefits and shortcomings– Most businesses are implementing some
measure of clicks and bricks integration
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E-Commerce Strategy Checklist
• Questions to ask and answer– What audiences are we attempting to reach?
– What action do we want those audiences to take?
– Who owns the e-commerce channel within the organization?
– Is the e-commerce channel planned alongside other channels?
– Is there a process for generating, approving, releasing, and withdrawing content?
– Will our brand translate to the new channel?
– How will we market the channel itself?
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RWC 3: Success for Second Movers
• Entellium is a successful second mover– Same approach– Better products and services– Lower cost.
• Another strategy– Combine successful business models
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RWC 4: Brands Go On-Line
• Companies must protect brand names, logos and trademarks– BrandProtect, MarkMonitor, and NameProtect
offer help
• Challenge has grown exponentially• Another type of violation is using logos
without permission