08 - E and M Commerce Flashcards
Electronic Commerce
Conducting business activities electronically over computer networks.
Distribution Buying Selling Marketing Servicing products or services
B2B, B2C or C2C
Key differences on pg 360
B2B
All participants are organizations
Buy-side and sell-side support the organization's value chain and help the organization provide: Lower prices Better service Higher quality Uniqueness of product and service
Cut resupply times and costs.
2009 census
B2B $3.8 trillion or 13x B2C revenue
B2C $292 billion
Grainger:
MRO selling nearly 1mil items online
25% to become 40% online.
Buy-side
Purchase good and services Identify suppliers and products Negotiating prices and terms Ordering and tracking Steering buyers to preferred suppliers and products
Sell-side
Enabling online purchase
Provide information to elevate goods
Encourage sales and generate leads from potential customers
Providing a portal of interest for customers.
Enabling interaction among a community of customers
B2C
Customers deal directly an organization and avoid intermediaries
Global
2015 sales growth estimated to $700-$950 billion
US 2011 $48.2 billion for Q3
About 4.6% of retail sales
Disintermediation
The elimination of intermediate organizations between the producer and the consumer.
B2C sites
eBay Shopping.com Google Froogle Shopzilla Price-Grabber Yahoo! Shopping Excite
Social Commerce
Offering a section on a Web site were potential customers can see only those items bought and reviewed by others.
Walmart Shopycat
Monitors your friend’s FB content to provide you gift buying ideas.
Web-Influenced sales
When research is done online prior to purchase in a brick and mortar location.
Globally exceeds 1 trillion annually
Growing at billions per year in US
Page 359 largest B2C retailers in US 2010
Amazon started in 1995
Tax avoidance
1992 Supreme Court ruling
Retailers not required to collect sales tax in states where they lack a physical location.
Customers are supposed to report but rarely do.
$23 billion in lost tax revenue annually.
C2C
Electronic transfers between consumers using a third party to facilitate the process.
eBay founded 1995
Bidzcom, Craigslist, eBid, ePier
Ividfree, Kijiji, Ubid and Tradus
Hurt newspapers but created opportunities for people to make a living in Internet auction sales.
e-Government
The use of information and communications technology to simplify the sharing of information, speed formerly paper based processes and improve the relationship between citizens and government.
Includes:
G2C
G2B
G2G
G2C
GSA auction sites offer old or overstock goods and equipment.
Service of submitting tax or license renewal
Purchase postage and apply for student loans
G2B
Help businesses identify and bid on reverse auctions for govt contracts.
Business.gov provides information about laws and regulations
Buyers.gov helps gov agencies buy IS products through reverse auction process.
FedBizOpps.gov where gov posts procurement opportunities for businesses to bid on.
G2G
Support transactions for example between fed and state.
Government to Government Services online - s Web site to report population changes and criminal activity and amount of aid received to Social Security Administration.
State and Local Government on the Net
www.statelocalgov.net
Provides a directory of thousands of state and local agencies.
m-commerce
The volume of mobile commerce in the U.S. By 2016 is expected to amount to roughly 7% of total U.S. B2C e-commerce.
Relies on the use of mobile, wireless devices such as cell/smart phones to place orders and conduct business.
Handset mfg - Ericson, Motorola, Nokia and Qualcom
Carriers - AT&T, Cingular, Sprint/Nextel and Verizon
Work together to dev. and provide tech
ICANN
Internet Corporation for Assigned Names and Numbers
Created .mobi domain to attract mobile used to the Web
.mobi domain administered by
mTLD Top Level Domain Ltd.
Dublin, Ireland
To ensure speed, efficiency and effectiveness for handset users.
m-commerce development
Much slower in NA than EU & JP
- Fragmented infrastructure
- CC payments rather than bank trans
- Many Americans with mobile data services
2016 forecast US e-commerce to reach $31 bil but that is only 7% of global B2C sales.
Still expect broader Web-Influenced sales as Americans embrace technology.
m-commerce Web sites
Because of clumsiness of mobile browsing on standard format sites and security concerns, some retailers are creating specialized sites for mobile users.
Highly rated m-commerce sites pg 363
Send shopping question to @IMshopping Twitter and receive tweet with URL with options gathered by live expert.
e and m commerce advantages
Reduced cost of business
Speed the flow of goods and information
Increase the accuracy of order processing and order fulfillment
Improve level of customer service
Speed and Flow of
Goods and Information
Since connections are already established, info can flow easily, directly and rapidly.
Bypass Lane app allows spectators to order concessions to be delivered to their seat or picked up at window. Teams pay a trans fee but sales increase 30-40%
Cost Reduction Impact
Removing labor and steps speeds order process allowing more transactions to take place with more accuracy.
Equa-Ship aggregates small business shipments to get volume freight discounts at slightly slower delivery.
Increased Accuracy
Since customers enter their order directly, supplier clerical errors are eliminated from process.
Improved customer service
Providing near realtime logistics status improves experience and loyalty.
Multistage Model
for
e-commerce
A successful solution must address all customer experience stages in the sales life cycle.
Search and Identification Selection and Negotiation Purchase Delivery After Sales Service
Search and Identification
Search by keyword or supplier SKU
Compare costs among component options
Calculate discounts based on qty and account contract tier pricing
Estimate freight cost/speed trade off options
Provide live-chat online purchase support
Selection and Negotiation
Many sites are take-it-or-leave-it oriented.
Buyers can ask for formal quote RFQ to tie to a formal OO or submit for internal approval.
Purchasing
Buyer releasing the order.
Seller automatically billing customer on pre-established terms.
One-off buys typically involve entering payment and delivery information. Some retailers require setting up an account to capture customer information to be used for targeted marketing. Can use CC or electronic cash.
Delivery
Some product and services can be delivered over the net.
Some logistics co’s have developed solutions to off-load management and tracking from retailer. Some logistics providers have absorbed DC responsibility from retailers. FedEx stocks HP printers and fulfills their orders.
Logistics provider notifies customer of status and retailer of stock status.
Returns are also streamlined.
After Sales Service
Captured sales info avail for CSR to help customer later.
Customer can repeat order or use account to order more efficiently the next time.
Product information access tailored to former buys makes troubleshooting easier.
Purchase histories facilitate repeat buys and future budgeting and tax reporting.
e-commerce challenges
Customer Privacy Concerns
Lack of customer trust
Global issues
Customer Privacy
About 1/3 of all adult Internet users refuse to buy online. Breaches: Sony Playstation 100m users Zappos 24m users Citigroup 2m SEGA Pass 1.3m
From 05’ to 11’ the # of sensitive customer records breached was over 543 mil.
Retailers must make a significant investment:
Pay for best security implementation
Pay for customer credit monitoring and identity theft insurance
Pay legal fees to settle class action suits after a loss.
Employ highly trained security specialists
McAfee Secure
Service and confirmation that site meets all guidelines set forth by the payment card industry and is secure from hackers or malicious software.
Presence of McAfee approval increases customer visitor-to-sales conversion rate.
Lack of Trust
Leading reason users avoid online purchase.
Retailers must create specific trust building strategies.
Long term relationship interest Show long history of firm Show elevated investment in site Provide brand endorsements Show participation in programs and industry Show BBB Inline or TRUSTe accreditation Have a clear and complete privacy policy Have clear and efficient return policy Only ask for essential personal info Ensure https security on order entry pages
Global Issues
Cultural - appealing, easy to use and non-offensive
Language -
Time and Distance - 24/7/365 cust sup
Infrastructure - must be accessible by a wide variety of devices.
Currency - price conversion and processing
Laws - brand asset protection and regulatory compliance regarding the capture of private data. Also the compliance of collecting and reporting taxes.
PayPal
enables any person or business with an e-mail address to securely, easily and quickly send and receive payments online.
Smart Cards
Can be used for a variety of purposes, including storing a user’s financial facts, health insurance data, credit card numbers and network identification codes and passwords. They can also store monetary values for spending.
Wireless Application Protocol standard
A set of specifications for Internet applications that run on handheld, wireless devices that effectively serves as a Web browser for such devices.
Payment Card Industry Srandard
Spells out measures and security procedures to safeguard the card issuer, the cardholder and merchant including such things as installing firewalls, avoiding vendor default passwords and restricting access to sensitive data on a need-to-know basis.
Electronic retailing e-tailing
The direct sale of products or services by businesses to consumers through electronic storefronts, typically designed around the familiar electronic catalog and shopping cart model.
Cybermall
A single Web site offering many products and services at one Internet location.
MRO purchases
Often approach 40% of an mfg’s total revenues.
A key sector of wholesale e-commerce spending.
Maldron Holding Company
www.mrocenter.com
18,000 mfg’s from 62 countries
Electronic Exchange
Issues Distrust among rivals Drive down of prices Joining multiple exchanges incr. costs Incr. anti trust scrutiny.
An electronic forum where manufacturers, suppliers and competitors buy and sell goods, trade market information and run back-office operations such as inventory control.
Hastened material movement
Reduced inventory level
Greater competition
Three types of electronic exchanges
Private exchange
Owned and operated by single owner or company used to trade exclusively with trusted partners.
Walmart’s Retail Link
7000 global suppliers
Consortium operated exchanges
Run by a group of traditionally competing firms with common procurement needs.
Covisint used by big 3 auto makers.
Independent exchanges
Open to any buyers and sellers in a given market.
Usually charge a fee to firms but buyers are frequently use freely.
Market Segmentation
Divides the pool of potential customers into subgroups usually defined in terms of demographic characteristics.
Nielsen offers Business-Facts Database providing potential sales estimates and rankings for over 12 million firms
Advertising techniques
Ad impressions typically bought by cost per thousand, or per clic or cost per action. The customer must click through and BUY something.
Measures of success
- Number of users reached
Click through rate (CTR)
- number actions such as downloads.
Mobile ad networks
3 types
Blind $.01/ CPC
Premium Blind. $20/M CPM
Premium $40/M CPM
Pg 373
Bartering
A means of gaining goods and services in exchange for unneeded resources.
Tax-reporting, accounting and other record/keeping responsibilities exist.
Bartering Tax Center hosted by the IRS provides info.
Retargeting
Over 95% of visitors leave a site without purchase.
A tech to recapture these shoppers by using targeted and personalized ads to direct shoppers back to the site.
Price Comparison
Amazon Price Check
Google Shopper
Enable shoppers to do a quick online price comp of an item by scanning a UPC or QR barcode or uploading a picture.
Couponing
Mfgs send e-pons to users devices but cashiers can’t read without special software. Users print out to take to store.
P&G and Mobeam, Inc. Working to make a mobile coupons scannable with standard scanners.
300b distributed in NA at value over $485b
Redemption 1.1%
or $5.34b claimed
Juniper Research estimates regular mobile users will grow to > 600m globally and redemption rate increase to 8% by 2016. So 8x redemption compared to paper and valued at $43b globally.
Investment and Finance
Industry had greatest potential for improvement.
Brokerage was fastest to adopt to mobile trading. Fast research and low commission trades.
Banking
Perform standard banking functions without paperwork like checks. No envelopes or stamps - good for environment.
Electronic banking customers tend to have higher balances, stay with the bank and use more services. Some banks have eliminated online trans fees.
E-Boutique
Shoppers fill out a detailed profile and are given suggestions on items of interest selected by a personal shopping assistant.
Effective Web Site Development
Must be
Easy to use Accomplishes goals Safe Secure Affordable to setup and maintain
Defining an Effective E-Commerce Model and Strategy
A successful e-commerce model is based on what 3 components??
The FIRST step!
Community - message boards and chat rooms can build enthusiastic following.
Content - useful, accurate and timely to encourage return visits
Commerce - secure and efficient exchanges.
Defining the Web Site Functions
What tasks must the site accomplish?
Most agree that effective sites are attractive and meets needs of visitors.
Firms should look to adapt and expand objectives as online shoppers become more sophisticated.
Obtain info about org, ability to invest and position on issues.
Learn about products and services offered.
Buying - commerce exchange Product use maximization Order status Product or social issues complaints Testimonial or reviews posting Warranty, service or repair Contact information
Establishing a Web Site
Website co’s such as HostWay and BroadSpire make it possible to set up a site and conduct commerce in a matter of days at minimal cost.
Must have a bank merchant account.
Can use templates or redesign former sites or develop in house.
Can establish a storefront
Storefront Broker
A company that acts as an intermediary between your Web site and online merchants who have the products and retail expertise.
Analogous to a distributor in classical brick and mortar models. No goods are handled by the broker - only data.
ProStores helps clients setup storefronts.
Building Traffic
Hundreds of thousands of sites competing for attention.
It takes work!
Register a specific domain name!
Make site search engine friendly
Include a meta tag
Use web traffic analysis SW to learn from traffic. Where did it come from and what keywords were most productive.
Provide keyword rich content
Update content
Get high quality sites to link to you.
Meta Tag
An HTML code, not visible on the displayed Web Page, that contains keywords representing your site’s content, which search engines use to build indexes pointing to your Web site.
iDTV
Integrated Digital Televisions
More popular in Europe, offer higher resolutions. Users have more space and expect more ambitious graphics.
Explicit personalization technique
An approach used to capture user provided data such as information from warranties and user regulations.
Personalization
The process of tailoring Web pages to specifically target individual consumers.
Websites that greet returning visitors by name.
Since personalization depends on gathering and using personal user info, privacy is a major concern.
Implicit personalization technique
Capturing data from actual customer Web sessions - primarily based on which pages were viewed and which were not.
iGoDigital
Recommends items based on browsing and cart adds on all sites the customer may visit that uses the system.
Used by Amazon, Best Buy, Dell and Walmart
Key infrastructure components
The amount of storage and power depend on the required software and number of transactions.
Key measures:
Response time
Transaction success rate
System availability
Web server software
Services include: Security Identification Send an retrieve web pages Site tracking Site and page development
Two most used packages are
Apache HTTP Server
Microsoft Internet Information Services
E-Commerce Software
Supports five main tasks
Catalog management
Product configuration to help customers select purchase options.
Shopping cart facilities
E-commerce transaction processing
Web traffic data analysis
WAP
Wireless Application Protocol
A standard set of speculations for Internet applications to run on handheld devices.
WAP. Serves as a web browser for such devices
Digital certificate
Creates a trust chain verifying both purchaser and supplier identity.
Certificate Authority CA
An attachment to an e-mail message or data embodied in a web site that verifies the identity of a sender or web site.
A trusted third-party organization or company that issues digital certificates
Payment Card Industry PCI
Security Standard
Spells out measures and security procedures to safeguard the card issuer, cardholder and merchant.
