Chapter 9 e-Commerce Systems

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 it is implemented in e-commerce applications.

Learning Objectives Identify and give examples of several key factors and Web store requirements needed to succeed in e-commerce. Identify and explain the business value of several types of e-commerce marketplaces. Discuss the benefits and trade0ffs of several e-commerce clicks-and-bricks alternatives.

Section 1 E-Commerce Fundamentals

I. Introduction to e-Commerce Electronic Commerce – the entire online process of developing, marketing, selling, delivering, servicing, and paying for products and services transacted on networked global marketplaces; more than just buying and selling online e-Commerce – the online exchange of value; more than just buying and selling on the Internet

II. The Scope of e-Commerce Includes marketing, discovery, transaction processing, product and customer service process, intranet and extranet access, and customer collaboration e-Commerce Technologies – involves most information and Internet technologies

II. The Scope of e-Commerce

II. The Scope of e-Commerce Categories of e-Commerce Business-To-Consumer (B2C) e-Commerce – still small when compared with all online commerce Consumer-To-Consumer (C2C) e-Commerce – online auctions, online advertising of personal products and services Business-To-Business e-Commerce – most of e-Commerce is here Business-To-Government (B2G) e-Commerce

Forrester: Web 2.0 Has a Bright Future What is Web 2.0? What is Web 2.0 not? What does Web 2.0 provide?

III. Essential e-Commerce Processes Access Control and Security – secure access between parties to assure trust Profiling and Personalizing – processes that gather data on you and your behavior to provide personalized service; this may raise ethical issues Search Management – effective and efficient search processes are required for a good Web site; there are more than 30 different search engines on the Internet

III. Essential e-Commerce Processes

III. Essential e-Commerce Processes Content and Catalog Management helps e-commerce firms develop, generate, deliver, and archive text and multimedia data works with profiling tools may include product configuration to support customer self-service and mass customization Workflow Management – ensure proper transactions, decisions, and work activities are performed, and documents distributed correctly

III. Essential e-Commerce Processes Event Notification – monitor all e-commerce processes and record all relevant events; most e-commerce applications are event-driven and respond to things that happen (events) Collaboration and Trading – a major category of e-commerce; processes consist of collaboration and trading services needed by various stakeholders

e-Commerce Tools to Close the Deal What is “an abandoned cart”? Why might a customer fail to complete a purchase? What tools encourage a customer to complete the transaction?

Innvo Labs: Automated e-Commerce Processes What was the weakness in the original Website? How did the new Website improve that? What other benefits did the new Website provide?

IV. Electronic Payment Processes Very complex due to the anonymous nature of electronic transactions Web Payment Processes – most rely on credit card payment processes Electronic Funds Transfer (EFT) – a variety of information technologies to capture and process money/credit transfers between banks, businesses, and customers

IV. Electronic Payment Processes Secure Electronic Payments – measures taken to ensure security of information in electronic payments Encrypt data between customer and merchant Encrypt data between customer and firm authorizing credit cards Take sensitive information offline

IV. Electronic Payment Processes A Secure Electronic Payment System

Section 2 e-Commerce Applications and Issues

I. Introduction e-commerce has changed how firms do business and is now defining how firms do business e-Commerce Trends

II. Business-To-Consumer (B2C) e-Commerce Attract potential customers, transact goods and services, build customer loyalty e-Commerce Success Factors Selection and Value – attractive products, competitive prices Performance and Service – easy navigation and purchasing, prompt shipping and delivery Look and Feel – attractive Website, multimedia catalog Advertising and Incentives – targeted Webpage advertising, email promotions, discounts, special offers

II. Business-To-Consumer (B2C) e-Commerce Personal Attention – personalized Web pages and product recommendations, email notices, interactive support Community Relationships – virtual communities and links to related Web sites Security and Reliability – security of customer information and transactions, trustworthy product information, reliable order fulfillment Great Customer Communications – easy-to-find contact information, online order status, product support

II. Business-To-Consumer (B2C) e-Commerce Traditional Vs. Web Market Communications

Amazon.com: Partnering and Leveraging Infrastructure What service does Amazon provide through Facebook? Why might this be a popular service? What security issues could be a problem here?

Stork Craft Manufacturing Helps Wal-Mart Canada What industry is Stork Craft in? What partnership did they enter? How do they market their products? What benefits did this give them?

III. Web Store Requirements Most B2C e-commerce ventures are retail businesses on the Web; primary focus is to develop, operate, and manage the Website to attract and maintain customers for repeat sales Getting Customers to Find You – customers must find you on the Web Search Engine Optimization (SEO) – focus on improving the number/quality of visitors to a Web site

III. Web Store Requirements Serving Your Customers – a Web site should help serve customers personally and efficiently so they become loyal customers Web Cookie File – a file stored on the customer’s computer with details about their visit to your Web site Managing a Web Store – a Web store must be managed as both a Web site and a retail store

Luxury Goes Digital: Fashion House Embraces Online Shopping What was the historical issue of luxury items? What was the Net-a-Porter solution? What issue was lost online and how did they address this?

IV. Business-To-Business (B2B) e-Commerce The wholesale/supply side of e-Commerce

Avnet Tears Up the B2B e-Commerce Playbook What business is Avnet in? What was the problem they faced? What was the solution? How has that solution worked out?

V. e-Commerce Marketplaces One-to-Many – sell-side marketplace – one major supplier dictates products and prices Many-to-One – buy-side marketplace – many suppliers attempt to sell to one buyer Some-to-Many – distribution marketplace – many suppliers combine catalogs to attract a larger audience of buyers

V. e-Commerce Marketplaces Many-to-Some – procurement marketplace – buyers combine purchasing power to gain lower prices from suppliers Many-to-Many – auction marketplace – used by many buyers and sellers

V. e-Commerce Marketplaces A Sample B2B e-Commerce Web Portal

SpecEx.com: B2B Trading of Wireless Spectrum What business is Spectrum Bridge in? How do they make money in this industry? What is the problem with this business and how are they trying to get around that problem?

VI. Clicks and Bricks in e-Commerce Should virtual electronic business be combined with physical operations or kept separate? e-Commerce Integration – the Internet is just another channel that gets plugged onto the business architecture Other Clicks and Bricks Strategies – partial integration of e-commerce into the physical business operations, or complete separation of the two e-Commerce Channel Choices – a marketing/sales channel created to conduct/manage e-commerce activities

VI. Clicks and Bricks in e-Commerce An Integrated Vs. Separate e-Commerce Business

IT Lessons from the Demise of Borders What are the lessons to be learned from the demise of Borders? Discuss each lesson and what could have been done differently.

REI: Scaling e-Commerce Mountain What did REI do with their Website? Why? Did it work? If so, how well? What was the tricky part of making it all work?