Chapter 1 Introduction to digital business and e‑commerce Part 1 Introduction Chapter 1 Introduction to digital business and e‑commerce 1

Learning outcomes Define the meaning and scope of digital business and e-commerce and their different elements Summarise the main reasons for adoption of digital business and barriers that may restrict adoption Outline the ongoing business challenges of managing digital business in an organisation, paticularly online start-up businesses 2

Management issues How do we explain the scope and implications of digital business to staff? What is the full range of benefits of introducing digital business and what are the risks? How do we evaluate our current digital business capabilities? 3

Replace with a more recent Google screenshot Figure 1.1 Google circa 1998 Source: Wayback machine archive: http://web.archive.org/web/19981111183552/google.stanford.edu . Google and the Google logo are registered trademarks of Google Inc., used with permission. 4

Digital business innovation and opportunity Since Google was launched in 1998 which online start-ups have transformed the way we work, live and play? How has Google innovated in search and its business model? See Table 1.1 for some of the major innovators. 5

The impact of electronic communications on traditional businesses The impact and time to react varies by sector… Andy Grove, Chairman of Intel, one of the early adopters of e-commerce, has made a meteorological analogy with the Internet. He says: ‘The Internet is a typhoon force, a ten times force, or is it a bit of wind? Or is it a force that fundamentally alters our business?’ (Grove, 1996) 6

New communications approaches and consumer behaviour Inbound marketing The consumer is proactive in actively seeking out information for their needs, and interactions with brands are attracted through content, search and social media marketing. Zero Moment of Truth (ZMOT, Figure 1.2) A summary of today’s multichannel consumer decision-making for product purchase where they search, review ratings, styles, prices and comments on social media before visiting a retailer.

New communications approaches and consumer behaviour (Continued) Content marketing The management of text, rich media, audio and video content aimed at engaging customers and prospects to meet business goals, published through print and digital media including web and mobile platforms, which is repurposed and syndicated to different forms of web presence such as publisher sites, blogs, social media and comparison sites.

Figure 1.2 Zero Moment of Truth Source: Google, Lecinski (2012).

Figure 1. 3 Social media marketing radar Source: Smart Insights (www Figure 1.3 Social media marketing radar Source: Smart Insights (www.smartinsights.com). With permission.

What is the difference between digital business and e-commerce? Figure 1.4 The distinction between buy-​side and sell-​side e‑commerce

What is e-commerce and digital business? You are attending a role in the e-business team of a global bank You anticipate you may be asked the distinction between e-commerce and Digital Business Write down a definition for each: E-Commerce: Digital Business: 12

Definitions Electronic commerce All electronically mediated information exchanges between an organisation and its external stakeholders. Digital business How businesses apply digital technology and media to improve the competitiveness of their organisation through optimising internal processes with online and traditional channels to market and supply.

Figure 1.5 The relationship between intranets, extranets and the Internet

Understanding different types of online presence (Activity 1.3) Transactional e‐commerce site. Services‐oriented relationship‐building website. Brand‐building site. Portal or media site. Social network. These aren’t mutually exclusive, but there is usually a focus of each website. Examples of each?

Digital marketing definition Digital marketing involves: Applying these technologies which form online channels to market: Web, email, databases, plus mobile/wireless and digital TV. To achieve these objectives: Support marketing activities aimed at achieving profitable acquisition and retention of customers . . . within a multichannel buying process and customer lifecycle. Through using these marketing tactics: Recognising the strategic importance of digital technologies and developing a planned approach to reach and migrate customers to online services through e-communications and traditional communications. Retention is achieved through improving our customer knowledge (of their profiles, behaviour, value and loyalty drivers), then delivering integrated, targeted communications and online services that match their individual needs.

Figure 1.7 The three main options for online media investment

Figure 1.8 Digital and offline communications techniques

Figure 1.10 Evolution of web technologies Source: Adapted from Spivack (2009).

Figure 1.11 Summary and examples of transaction alternatives between businesses, consumers and governmental organisations

Figure 1. 12 Betfair mobile proposition and activation (www. betfair Figure 1.12 Betfair mobile proposition and activation (www.betfair.com)

Figure 1.13 A simple stage model for buy-​side and sell-​side e‑commerce

Digital business opportunities Reach Over 1 billion users globally Connect to millions of products Richness Detailed product information on 20 billion+ pages indexed by Google. Blogs, videos, feeds… Personalised messages for users Affiliation Partnerships are key in the networked economy. 23

Internet risks – what can go wrong with a transactional site? Potential answers: Site downtime affecting whole site or some processes Security attack, e.g. denial of service, content hijacked Wrong content presented for site visitor This slide left deliberately blank for student Q&A interaction. Potential answers:   Site downtime affecting whole site or some processes Security attack, e.g. denial of service, content hijacked Wrong content presented for site visitor 24

Cost/efficiency and competitiveness drivers Cost/efficiency drivers Increasing speed with which supplies can be obtained Increasing speed with which goods can be dispatched Reduced sales and purchasing costs Reduced operating costs. Competitiveness drivers Customer demand Improving the range and quality of services offered Avoid losing market share to businesses already using e-commerce. 25

Additional activity – drivers and barriers to adoption You are in a team of advisers at a local business link (a local government agency encouraging adoption of e-commerce). List: Drivers to adoption of sell-side e-commerce by business and how you can reinforce these by marketing benefits Barriers to adoption of sell-side e-commerce by business and how you can reinforce these by stressing benefits. 26

Drivers of consumer adoption Marketing approach 1 2 3 4 5 6 27

Barriers to consumer adoption Marketing approach 1 2 3 4 5 6 28