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E-Commerce #3 use of the internet Chapter 11 What Is E-Commerce? Commerce: E-commerce: Act of doing business transactions over the Internet or similar technology the exchange of goods or services Isn’t new - has existed for years via private networks (electronic funds transfers, etc.) M-commerce: E-commerce carried out via phones and other mobile devices 2 What Is E-Commerce? Brick-and-mortar store: A conventional store with a physical presence. Click store (Dot-com store): An internet-only store with no physical presence 3 Advantages/Disadvantages for Business Advantages for businesses Reduced costs Dot-coms are less expensive than brick-and-mortar stores because there is no physical storefront to maintain Increased customer satisfaction Disadvantages for businesses If shopping experience is convenient (open all the time, no driving, etc.) Can send customers personalized information Broader customer base (less geographical restrictions) Potentially higher sales Pressure to be always open, site always working 4 Today and Tomorrow, 13th Edition Understanding Computers: Solid, well designed sites and hosting Lost business due to some customer hesitation to shop online Risk of fraudulent credit card transactions Ease of entry for competitors Advantages/Disadvantages for Customer Advantages for customers Convenience Easier comparison shopping Higher number of merchants to choose from Geographical location is not an issue Shopping bots and other comparison shopping tools are available Higher degree of selection Potential cost savings Customized products Disadvantages for customers Potential for fraud and other potential security problems Not being able to see or touch the goods 5 Today and Tomorrow, 13th Edition Understanding Computers: Buyer protection programs and using credit card protection can help 3D online stores may help Possible expense of returning merchandise Some brick and mortar stores allow returns to local stores n Types of E-Commerce Web Sites Manufacturer and e-tailer Web sites: Sell products and services directly to the end user Subscription site: Physical goods Electronic goods Sells access to its online content Brokerage sites: Auctions Financial Trade securities Travel Bring buyers and sellers together Charge a commission on sales Find resources Negotiate deals Market and commodity exchange sites: Matches organizations with goods or services to sell with potential buyers, but does not get involved in the details of the sale Might charge for the transactions; might have to join to participate 6 Implementing Web-Based E-Commerce Step 1: Select appropriate business models and types of Web sites Nature and selling process of goods and services Models include Business-to-consumer (B2C): An e-commerce model in which a business provides goods or services to consumers Business-to-business (B2B): An e-commerce model in which a business provides goods or services to other businesses Manufacturer to wholesaler or wholesaler to retailer Consumer-to-consumer (C2C): An e-commerce model in which a consumer provides goods or services to other consumers Wholesaler/manufacturer to end user End users sell to end users Business-to-government (B2G): An e-commerce mode n which a business provides goods and services to government organizations 7 Implementing Web-Based E-Commerce Step 2: Select the desired e-commerce applications Determine electronic customer relationship management Basic features vs. value added Email Confirmation of order Tracking numbers Order lookup Online chat using chatterbot Determine which other business systems the Web site will be linked to UPS or FedEx Pay Pal 8 Implementing Web-Based E-Commerce Step 3: Develop procedures for handling electronic financial transactions Which types of payments will be accepted Credit cards Digital gift certificates Gift cards Coupons Digital wallet 9n Implementing Web-Based E-Commerce Step 4: Design the store front Sites need to be carefully designed, developed, and tested Ensure order forms and checkout pages are located on a secure Web server Use https:// Continually evaluate security and collected data E-commerce features can be created using: Storefront software: Facilitates the creation of an online store (either packaged or Web-based) etsy.com Shopping cart software: Designed to add only ordering capabilities to an existing Web site miva 10 Implementing Web-Based E-Commerce Step 5: Implement appropriate sales and marketing strategies Use an appropriate domain name and URL URL should be easy to remember and type www.buyMyJunk.com Include adequate customer service features Collect taxes from customers if required by law Advertise Keep the customers coming 11 Implementing Web-Based E-Commerce Optimize the site (SEO) Web pages can have special tags for search engines (description, keywords) <meta> Submit the website to search engines Consider sponsored listings 12 Issues Security Privacy Trust Attracting Customers and keeping them Understanding Computers: Today and Tomorrow, 13th Edition Security Issues SECURITY, PRIVACY, & TRUST Display a privacy policy and security statement Security is essential for e-commerce Web sites People need to trust the process Some guidelines for e-commerce sites: Secure transactions (use a secure Web server) Address bar uses https:// instead of http:// Secure sensitive documents and files (use encryption) Authenticate online business partners use digital certificates and digital signatures 14 Implementing Web-Based E-Commerce ATTRACTING CUSTOMERS/PROMOTE THE SITE Advertise the site on business cards, ads, etc. Consider using banner ads Use of rich media ads is growing Can display sponsor banner ads on site Use of behavioral (targeted) ads is growing Update the site regularly Consider adding incentives for return visits (contests, coupons, etc.) Use e-mail marketing techniques (free shipping offers, new product notifications, etc.) 15