1. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 13-1

2. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall 13-2 Chapter 13

3. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  The most successful companies embrace the Internet as a mechanism for transforming their companies and for changing everything about the way they do business  E-commerce has launched a revolution, a new industrial order  Showrooming 13-3

4. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  In the world of e-commerce, speed and flexibility matter much more than size  High-volume, low-margin, commodity products are best suited for selling on the Web  Globally, people spend 35 billion hours online per month 13-4

5. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 13-5 How People Spend Their Time Online

6. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 13-6 Global B 2 C E-Commerce Sales by Region: Percentage of Global Total

7. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 13-7 U.S. Online and Web Influenced Retail Sales, 2011-2016 ( in Billions of $ )

8. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Ad-ology study shows that 82% of small companies have Web sites, but many do not engage in e- commerce because their web sites cannot accept payments  Roadblocks:  Lack of knowledge  Cost  Uncertainty about the value of a web site  Online security issues 13-8

9. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Before launching an e-commerce effort, consider:  Success requires a company to develop a plan for integrating the Web into its overall strategy  How a company exploits the Web’s interconnectivity and the opportunities it creates to transform relationships with suppliers, customers, and others is crucial to its success 13-9

10. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Developing a deep, lasting relationship with customers takes on even greater importance on the Web  Creating a meaningful presence on the Web requires an ongoing investment of resources – time, money, energy, and talent  Measuring the success of a Web-based sales effort is essential to remaining relevant to customers whose tastes, needs, and preferences constantly change 13-10

11. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  The following are essential to e-commerce success:  Acquiring customers  Optimizing customers  Maximizing Web site performance  Ensuring a positive user experience  Retaining customers  Use Web analytics as part of a cycle of continuous improvement 13-11

12. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. Myth 1: If I launch a site, customers will flock to it Myth 2: Online customers are easy to please Myth 3: Making money on the Web is easy Myth 4: Privacy is not an important issue on the Web 13-12

13. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Privacy on the Web does matter!  The TRUSTe Privacy Index reports that 90% of adults in the U.S. worry about privacy online  Tips:  Post a privacy policy and stick to it  Safeguard information your company collects from customers 13-13

14. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. Myth 1: If I launch a site, customers will flock to it Myth 2: Online customers are easy to please Myth 3: Making money on the Web is easy Myth 4: Privacy is not an important issue on the Web Myth 5: Strategy? I don’t need a strategy to sell on the Web! Just give me a Web site and the rest will take care of itself Myth 6: The most important part of any e-commerce effort is Technology Myth 7: On the Web, customer service is not as important as it is in a traditional retail store 13-14

15. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Average conversion rate for e-commerce sites is 2.1%  The most common reasons for not purchasing include:  Unexpected shipping and handling charges (70%)  Insufficient product information (56%)  Lack of trust or security concerns about the site (50%)  Difficulty navigating the Web site to find the right product (46%)  Companies can win back sales by sending a prompt follow-up e-mail 13-15

16. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. Myth 8: Flash makes a Web site better  A site that performs efficiently and loads quickly is a far better selling tool than one that is filled with “cornea gumbo,” slow to download, and confusing to shoppers  Akamai study: 47% of shoppers expect a Web page to load within 2 seconds and 40% of shoppers will abandon a site that takes more than 3 seconds to load Myth 9: It’s what’s up front that counts  Virtual order fulfillment Myth 10: My business doesn’t need a Web site 13-16

17. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 13-17 Average Time Americans Spend Online and Shopping Online Per Month

18. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Focus on a Niche in the Market  Develop a Community  Attract Visitors by Giving Away “Freebies”  Make Creative Use of E-mail, but Avoid Becoming a “Spammer”  Open rate  Click-through rate  Triggered e-mails  Sell the Experience  Make Sure Your Web Site Says “Credibility”  Make the Most of the Internet’s Global Reach 13-18

19. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 13-19 Markets with the Highest Online Sales Potential

20. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Focus on a Niche in the Market  Develop a Community  Attract Visitors by Giving Away “Freebies”  Make Creative Use of E-mail, but Avoid Becoming a “Spammer”  Open rate  Click-through rate  Triggered e-mails  Sell the Experience  Make Sure Your Web Site Says “Credibility”  Make the Most of the Internet’s Global Reach  Go Mobile 13-20

21. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 13-21 U.S. Mobile Commerce Sales

22. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Go Mobile  Promote Your Web Site Online and Offline  Use Social Media Tools to Attract and Retain Customers  Mashup  Really Simple Syndication (RSS)  Social Media  Wikis  Widgets  Capture Local Traffic  Develop an Effective Search Optimization Strategy 13-22

23. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Search engine optimization (SEO) strategies: essential to online companies’ success  The most common tool that people use to find the products and services they want  89% of shoppers say they use search engines to find information about products and services  Search engines drive more traffic to e-commerce sites (32.0 percent) than either e-mail (4.3 percent) or social media (1.9 percent) and generate higher average order values ($90.40) than either e-mail ($82.72) or social media ($64.19) 13-23

24. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Natural (organic) listings: the result of “spiders,” powerful programs that crawl the Web, looking at key words, links, and other data  Paid (sponsored) listings: short text ads with links to the sponsoring company’s Web site that appear on the results page of a search engine 13-24

25. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Use paid listings to accomplish what natural listings cannot  Google, Microsoft Bing, Yahoo!, and AOL – account for 98% of all searches in the U.S.  Average cost of a keyword has risen from 39¢ in 2004 to 53¢ today  Beware of click fraud!  Estimate: Pay-per-click fraud rate is 19% 13-25

26. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Go Mobile  Promote Your Web Site Online and Offline  Use Social Media Tools to Attract and Retain Customers  Mashup  Really Simple Syndication (RSS)  Social Media  Wikis  Widgets  Capture Local Traffic  Develop an Effective Search Optimization Strategy  Designing a Killer Web Site 13-26

27. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Designing a Killer Web Site  Decide How to Bring Your Site to Life  Start With Your Target Customer 13-27

28. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 13-28 Online Activities by Generation

29. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Designing a Killer Web Site  Decide How to Bring Your Site to Life  Start With Your Target Customer  Give Customers What They Want  Boston Consulting Group: improvements to customers’ online shopping experience that would motivate them to shop more online are:  Free shipping (74 percent), lower prices (56 percent), free returns (35 percent), more secure Web sites (25 percent), and better views of virtual products (25 percent  Select an Intuitive Domain Name 13-29

30. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Select an Intuitive Domain Name  Select a domain name that is consistent with the image you want to create for your company and register it  Short  Memorable  Indicative of a company’s business  Easy to spell 13-30

31. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Designing a Killer Web Site  Decide How to Bring Your Site to Life  Start With Your Target Customer  Give Customers What They Want  Select an Intuitive Domain Name  Make Your Web Site Easy To Navigate  Landing pages  Bounce rate  Provide Customer Ratings and Reviews  Offer Suggestions for Related Products  Add Wish List Capability  Create a Gift Idea Center 13-31

32. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Establish the Appropriate Call to Action on Each Page  Build Loyalty By Giving Online Customers A Reason To Return  Establish Hyperlinks With Other Businesses, Preferably Those Selling Products or Services That Complement Yours  Include An E-mail Option and a Telephone # On Your Site  Offer Shoppers Online Tracking  Offer Web Specials  Use the Power of Social Media  Use Customer Testimonials  Follow a Simple Design 13-32

33. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Follow a Simple Design  Avoid clutter  Use less text on the home page  Avoid huge graphics  Include a menu bar at the top of the page  Include navigation buttons  Minimize the number of clicks required to a page  Incorporate meaningful content into the site  Include an “FAQ” section  Include privacy and return policies  Avoid fancy typefaces and small fonts  Watch for “typos” and misspelled words  Avoid small fonts on “busy” backgrounds 13-33

34. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Use contrasting colors for text and graphics  Be careful with frames  Test the site on different browsers and different size monitors  Collect information from visitors, but don’t put them through a tedious registration process  Include a search function and company contact information  Avoid automated music  Make sure the page looks appealing  Remember: Simpler is better 13-34

35. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Follow a Simple Design  Assure Customers That Their Online Transactions Are Secure  Post Shipping and Handling Charges Up Front  Create a Fast, Simple Checkout Process  Confirm Transactions  Keep Your Site Fresh  Rely on Analytics to Improve Your site  Test Your Site Often  Consider Hiring A Professional To Designer 13-35

36. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Software Solutions  Web analytics: tools that measure a Web site’s ability to attract customers, generate sales, and keep customers coming back  Commerce metrics  Visitor segmentation measurements  Content reports  Process measurements 13-36

37. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Other measures of Web site performance include:  Click-through rate (CTR): the proportion of people who see a company’s online ad and actually click on it to reach the company’s Web site  Conversion to browse-to-buy rate: the proportion of visitors to a site who actually make a purchase  Cost per acquisition (CPA): the cost a company incurs to generate each purchase (or customer registration) 13-37

38. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Privacy  Take an inventory of the customer data collected  Develop a company policy for the information you collect  Privacy policy  Post your company’s privacy policy prominently on your Web site and follow it 13-38

39. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall.  Security  Cybercrime affects 1.5 million victims each day  Most cybercriminals target customer records  To minimize cybercrime, use tools including:  Virus detection software  Intrusion detection software  Firewall  Secure sockets layer (SSL) technology 13-39

40. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 13-40 Losses to Online Fraud

41. Copyright © 2015 Pearson Education, Inc. publishing as Prentice Hall. 13-41