E-COMMERCE: DIGITAL MARKETS, DIGITAL GOODS Part-II

E-commerce opportunities Communication and community Social networking sites: Link people through their mutual business or personal connections Have become powerful marketing tools for businesses Social shopping: Online meeting places where people swap shopping ideas Social Shopping allows users to stay updated with trends, celebrity looks and deals all in one place, powered by magazines, celebrities, bloggers, and its users. Based on their interests and location, Shopcade users benefit from personalised deal alerts. Shopcade also offers a click-through purchasing functionality and its own e-commerce platform.

E-commerce opportunities Digital content, Entertainment, and Services Internet has created new alternatives to traditional print, broadcast media Online versions of newspapers, online games, radio, TV, music downloads Podcasting: Publishing audio broadcasts via Internet; inspired by Apple’s iTunes service and iPod Enables independent producers New distribution method

E-commerce opportunities Achieving customer intimacy Interactive marketing and personalization Enabled by gathering customer data from Web site registrations or activities Clickstream tracking tools Web pages can be tailored to customer preferences or interests Collaborative filtering Compares user information to data about other customers to make recommendations based on assumed interests

Web Site Visitor Tracking E-commerce opportunities Web Site Visitor Tracking Figure 10-3 E-commerce Web sites have tools to track a shopper’s every step through an online store. Close examination of customer behavior at a Web site selling women’s clothing shows what the store might learn at each step and what actions it could take to increase sales.

E-commerce opportunities Achieving customer intimacy Corporate blogs: Used as new channel for reaching customers, maintaining existing customers Provide personal and conversational way for businesses to present information to the public and prospective customers about new products and services

E-commerce opportunities Achieving customer intimacy Customer self service: Web sites and e-mail used to answer customer questions or to provide customers with product information, reducing need for human customer-support experts New software products can integrate Web with customer call centers E.g. by directing representative to phone user regarding query

E-commerce and Business Models Pure-play business models Based purely on Internet Do not have bricks-and-mortar portion of business E.g. Amazon.com, eBay.com, YouTube.com Clicks-and-mortar models Internet presence is extension of bricks-and-mortar businesses E.g. L.L.Bean, Office Depot, Wall Street Journal

E-commerce and Business Models Three major e-commerce categories Business-to-consumer (B2C) E.g. Amazon.com Business-to-business (B2B) E.g. ChemConnect.com Consumer-to-consumer (C2C) E.g. eBay.com M-commerce Use of handheld wireless devices for purchasing goods and services from any location

Business-to-business e-commerce Electronic data interchange (EDI) Computer-to-computer exchange of standard transactions such as invoices, purchase orders Major industries have EDI standards that define structure and information fields of electronic documents for that industry More companies increasingly moving away from private networks to Internet for linking to other firms E.g. Procurement: Businesses can now use Internet to locate most low-cost supplier, search online catalogs of supplier products, negotiate with suppliers, place orders, etc.

Electronic Data Interchange (EDI) Business-to-business e-commerce Electronic Data Interchange (EDI) Companies use EDI to automate transactions for B2B e-commerce and continuous inventory replenishment. Suppliers can automatically send data about shipments to purchasing firms. The purchasing firms can use EDI to provide production and inventory requirements and payment data to suppliers. Figure 10-5

Business-to-business e-commerce Private industrial networks (private exchanges) Large firm using extranet to link to its suppliers, distributors and other key business partners Owned by buyer Permits sharing of: Product design and development Marketing Production scheduling and inventory management Unstructured communication (graphics and e-mail) Example: VWGroupSupply.com

A Private Industrial Network Business-to-business e-commerce A Private Industrial Network A private industrial network, also known as a private exchange, links a firm to its suppliers, distributors, and other key business partners for efficient supply chain management and other collaborative commerce activities. Figure 10-6

Business-to-business e-commerce Net marketplaces (e-hubs) Internet-based marketplace for buyers and sellers Industry-owned or independent intermediary May establish prices through online negotiations, auctions, requests for quotations or use fixed prices Generate revenue from transactions and other services May focus on direct goods or indirect goods May serve vertical or horizontal markets Example: Exostar

Business-to-business e-commerce A Net Marketplace Figure 10-7 Net marketplaces are online marketplaces where multiple buyers can purchase from multiple sellers.

Business-to-business e-commerce Exchanges Independently owned third-party Net marketplaces Connect thousands of suppliers and buyers for spot purchases Many provide vertical markets for single industry Primarily deal with direct goods Proliferated during early years of e-commerce, but many have failed Exchanges encourage competitive bidding, driving prices down, and do not offer long-term relationships Example: FoodTrader.com

M-Commerce M-Commerce services and applications Popular for services that are time-critical, that appeal to people on the move, or that accomplish task more efficiently than other methods Especially popular in Europe, Japan, South Korea Content and location-based services Example: checking train schedules, searching for local businesses, Banking and financial services Wireless advertising and retailing Games and entertainment Banking and financial services

Global M-Commerce Revenue, 2000-2009 M-commerce sales represent a small fraction of total e-commerce sales, but that percentage is steadily growing. (Totals for 2006–2009 are estimated.) Figure 10-8

M-Commerce Challenges and Opportunities Keyboards and screens tiny and awkward to use Data transfer speeds (2G networks) slow compared to Internet connections for PCs Time-based connection fees Limited memory and power supplies M-commerce will benefit from: 3G networks and other broadband services Standardized mobile payment systems

Types of Electronic Payment Systems Digital credit card payment systems Extend functionality of credit cards for online shopping payments Provide mechanisms for authentication and transferring money from bank to seller Digital wallets Software stores credit card and other information to facilitate form completion and payment for goods on Web. Example: Google Wallet

Types of Electronic Payment Systems Micropayment systems: For purchases of less than $10, such as downloads of individual articles or music clips Accumulated balance digital payment systems: Accumulate debit balance that users pay periodically on credit card or telephone bills Stored value payment systems: Allow instant online payments based on value stored in digital account (e.g. checking, credit card accounts May require use of digital wallet Example: Smart cards and devices like EZ Pass

Types of Electronic Payment Systems Digital cash: “Currency” represented in electronic form that moves outside normal network of money. Client software allows exchange of money with other e-cash user over Internet or with retailer accepting e-cash Peer-to-peer payment systems: Serve people who want to send money to vendors or individuals who are not set up to accept credit card payments Digital checking payment systems: Electronic check with secure digital signature Electronic billing presentment and payment systems: Used for paying routine monthly bills from bank or credit card accounts

Digital payment systems for m-commerce Utilize any form of e-commerce payment systems Many payments are small purchases (soft drinks, mobile games, sports scores) requiring micropayment systems In Europe/Asia, mobile payments often added and presented on single bill such as mobile phone bill

Thank You End of Part-II