e-Commerce Systems

Chapter9

McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

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• 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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• 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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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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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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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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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