Download e-Commerce Systems

Chapter
9
e-Commerce Systems
McGraw-Hill/Irwin
Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
• 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
9-2
Learning Objectives
• 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
9-3
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
9-4
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
9-5
Scope of e-Commerce
9-6
E-Commerce Technologies
9-7
Essential e-Commerce Architecture
9-8
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
9-9
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
9-10
Search Management
• Find specific product or service
– Website search engine
• Google or Requisite Technology
– Search on content or by parameters
9-11
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
9-12
Example of Workflow Management
9-13
Event Notification
• Monitors e-commerce processes
• Records relevant events
– First website
– Payments
– Problem situations
• Notifies involved stakeholders
• Works with user-profiling software
9-14
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
9-15
Electronic Payment Example
9-16
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
9-17
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
9-18
E-Commerce Application Trends
9-19
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
9-20
Differences in Marketing
9-21
Web Store Requirements
9-22
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
9-23
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
9-24
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
9-25
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
9-26
B2B E-Commerce
• Wholesale and supply side
– Businesses with other businesses
• Relies on multiple technologies
–
–
–
–
Catalog systems
Trading systems
Data interchange
Electronic funds transfers
9-27
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
9-28
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
9-29
B2B Commerce Web Portals
9-30
Clicks and Bricks
9-31
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
9-32
E-Commerce trade-offs
9-33
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
9-34
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
9-35
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?
9-36
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
9-37
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
9-38