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2. Section 3: Launching the Business9
E-Commerce and the Entrepreneur
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9-2

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Learning Objectives
Understand the factors an entrepreneur should consider before launching into e-commerce.
Explain the 10 myths of e-commerce and how to avoid falling victim to them.
Explain the basic strategies entrepreneurs should follow to achieve success in their e-commerce efforts.
Learn the techniques of designing a killer Web site.
Explain how companies track the results from their Web sites.
Describe how e-businesses ensure the privacy and security of the information they collect and store from the Web.
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4. The Internet: Changing the Face of Business
Successful companies embrace the Internet as a mechanism for transforming their companies and for changing everything about the way they do business.
Business basics still apply online.
In the world of e-commerce, company size matters less than speed and flexibility.
There are more than 2.4 billion Internet users worldwide.
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5. The Internet: Changing the Face of Business
(continued)
By 2017, online sales and Internet activity will account for or influence 60% of total retail sales in the United States.
Research shows:
80% of global shoppers research products online.
84% of the world’s online population has used the Internet to make a purchase.
79% of consumers trust online reviews as much as personal recommendations.
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U.S. E-Commerce Sales
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7. Internet Penetration Rate
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8. Factors to Consider Before Launching into E-Commerce
82% of small business owners in the United States have a Web site, but 28% do not engage in ecommerce because their Web sites cannot accept payments.
Reasons for not having a Web site:
It is not necessary (27%).
It is too difficult to create and maintain (19%).
It is too costly to operate (12%).
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9. Factors to Consider Before Launching into E-Commerce
(continued)
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.
Web success requires a company to develop a plan for integrating the Web into its overall strategy.
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10. Factors to Consider Before Launching into E-Commerce
(continued)
Developing deep, lasting relationships with customers takes on even greater importance.
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.
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11. Factors Essential to E-Commerce Success
Acquiring customers
Optimizing conversions
Maximizing Web site performance
Ensuring a positive user experience
Retaining customers
Using Web analytics as part of a cycle of continuous improvement
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12. Ten Myths of E-Commerce
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. Myth 5: I don’t need a strategy to sell online. Myth 6: The most important part of an e-commerce effort is technology. Myth 7: Customer service is not important. Myth 8: Flashy Web sites are better than simple ones. Myth 9: It’s what’s up front that counts. Myth 10: My business doesn’t need a Web site.
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Promotion Is the Key!
Include your URL on everything related to your business
Use social media such as Facebook and YouTube to drive traffic to your site
Network – build relationships with other companies, customers, trade associations, online directories, and other Web sites to interact with customers
Make your site compatible with mobile devices
Use QR codes
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14. Satisfaction Is Important
Experienced online shoppers tend to be unforgiving and quick click to another site if their shopping experience is subpar or they cannot find the products and information they want.
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The Basics Still Apply
Success online requires a sound business strategy that is aimed at the appropriate target audience and that is implemented effectively and efficiently.
The same elements are required for success offline!
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Privacy Matters!
TRUSTe Privacy Index study:
89% of U.S. adults worry about privacy online and avoid doing business with companies they believe do not protect their privacy online.
17% of online shoppers have abandoned their shopping carts because of security concerns.
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Strategy Is Critical
An online strategy is critical to success
Define the target audience
Understand customers’ needs and wants
Create a strategy to set your site apart from others
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18. Business First, Technology Second
Understand the underlying business…then use technology to develop an online business model that provides customer value in a profitable way.
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19. Customer Service Counts
The average conversion rate for e-commerce sites is just 2.55%!
67% of Web shoppers abandon their shopping carts without checking out.
The cart abandonment rate for shoppers using mobile devices is 97%!
57% of customers say that live help is one of the most important features a Web site can offer.
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20. Reasons for Shopping Cart Abandonment
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21. More Is Not Always Better
Simple design, easy navigation, clear calls to action on every page, and consistent color schemes show that a company is putting customers first.
The time to download a Web site is one of the most important determinants of sales effectiveness.
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22. Page Abandonment Rate vs. Page Load Time
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23. Emphasize Order F:ulfillment
Order systems and support are critical.
Virtual order fulfillment:
A fulfillment strategy in which a company forwards customers’ orders to a wholesaler or distributor who then ships the product to the customer with the online merchant’s label on it.
Aka drop shipping
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24. Use Multichannel Selling
A multichannel approach to selling is important.
Meet customers wherever they want to do business with a personalized shopping experience similar to a that of a brick-and- mortar store experience.
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25. Strategies for E-Success
Focus on a market niche.
Develop a community.
Listen to your customers and act on what you hear.
Attract visitors by giving away “freebies.”
Sell the “experience.”
Make creative use of , but avoid becoming a “spammer.”
Make sure your Web site says “credibility.”
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26. Building Web Site Credibility
Allow visitors to verify easily the accuracy of the information on your site.
Show that there are real people behind your site.
Emphasize the skills, experience, and knowledge of the people in your company.
Show that honest, trustworthy people stand behind your site.
Make it easy for customers to contact you.
Make sure your site has a professional look.
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27. Building Web Site Credibility
(continued)
Make sure your site is easy to use – and useful.
Update your site regularly.
Prominently display your company’s privacy policy.
Be vigilant for errors of all types.
Post the seals of approval your company has won.
Make sure customers know their online transactions are secure.
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28. Strategies for E-Success
(continued from 9-35)
Go mobile.
Responsive web sites
Social-local –mobile (SoLoMo) strategies
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29. Copyright © 2016 Pearson Education, Inc.
Mobile Commerce Sales
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30. Strategies for E-Success
(continued from 9-40)
Go mobile.
Promote your Web site online and offline.
Use social media tools to attract and retain customers.
Develop an effective search engine optimization (SEO) strategy.
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31. Copyright © 2016 Pearson Education, Inc.
Use Social Components
Add social components to e-commerce strategies:
Mashups
Really simple syndication
Social networking
Wikis
Widgets
Apps
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32. Search Engine Strategies
Natural (organic) listings
Search engine optimization (SEO)
Paid (sponsored) listings
Product listing ads (PLAs)
Click fraud
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Google Search Results
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34. Designing a Killer Web Site
Understand your target customer.
Give customers what they want.
Select an intuitive 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
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35. Designing a Killer Web Site
(continued)
Make your Web site easy to navigate.
Locating products.
Getting product information.
Offer suggestions for related products.
Add wish list capability.
Use online videos.
Create a gift idea center.
Provide customer ratings and reviews.
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36. Designing a Killer Web Site
(continued)
Establish the appropriate call to action on each page.
Build loyalty by giving online customers a reason to return to your Web site.
Establish hyperlinks with other businesses, preferably those selling complementary products.
Include an option and a telephone number on your site.
Give shoppers the ability to track their orders online.
Offer Web shoppers a special all their own.
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37. Designing a Killer Web Site
(continued)
Use the power of social media.
Follow a simple design.
Avoid clutter.
Use less text on your homepage.
Avoid huge graphic headers that must download first.
Include a menu bar at the top of the page.
Include navigation buttons at the bottom of the page.
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38. Designing a Killer Web Site
(continued)
Minimize the number of clicks to get to pages.
Incorporate meaningful content that is consistent with your company’s message.
Connect the Web site to social media pages so that posts on social media sites appear on the Web site.
Include a FAQ section.
Post prominently privacy and return policies.
If your site is heavy on content, include a search tool.
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39. Designing a Killer Web Site
(continued)
Avoid fancy type faces and small fonts.
Be vigilant for errors.
Avoid small fonts on busy backgrounds.
Use contrasting colors of texts and graphics.
Be careful with frames.
Test the site on different browsers.
Use your web site to collect information, but don’t tie up visitors with a tedious registration process.
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40. Designing a Killer Web Site
(continued)
Avoid automated music that plays continuously and can’t be shut off.
Make sure the overall look of the page is appealing.
Remember that simpler is almost always better.
Create a fast, simple checkout process.
Provide customers multiple payment options.
Assure customers that their transactions are secure.
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41. Designing a Killer Web Site
(continued)
Establish reasonable shipping and handling charges and post them upfront.
Confirm transactions.
Keep your site updated.
Test your site often.
Rely on analytics to improve your site.
Consider hiring a professional to design your site.
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42. The Purchase Funnel and Ways to Improve the Shopping Experience
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Tracking Web Results
Web analytics:
Tools that measure a Web site’s ability to attract customers, generate sales, and keep customers coming back.
Only about 25% of small businesses use Web analytics strategically to refashion their Web sites.
Commerce metrics
Visitor segmentation measurements
Content reports
Process measurements
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44. Measuring Online Performance
Cost per Acquisition (CPA):
The amount it costs to generate a purchase (or a customer registration).
Average number of page views per visit:
Measures how much time visitors spend on a site.
Bounce Rate:
The percentage of visitors to a site who view a single page and leave without viewing other pages.
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45. Measuring Online Performance
(continued)
Conversion (browse-to-buy) ratio:
The proportion of visitors to a site who actually make a purchase.
Cart Abandonment Rate (CTR):
The percentage of shoppers who place at least one item in a shopping cart but never complete the transaction.
Search engine ranking:
Shows where a company’s Web site ranks in search engines’ results pages.
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Ensuring Web 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.
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Ensuring Web Security
Virus detection software
Intrusion detection software
Firewall
Secure Sockets Layer (SSL) Technology
Charge backs
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48. Copyright © 2016 Pearson Education, Inc.
Losses to Online Fraud
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