1. E-Commerce Hai Hoang 4/25/2005

2. Outline ► Definition ► Why use E-commerce? ► Current State of E-Commerce ► Barriers in Adopting E-Commerce ► Motivations for CBR ► Using CBR to Provide Intelligent Support ► Why database search is not good enough? ► Phases of Sales in E-commerce ► Demo ► Conclusion

3. Definition ► E-Commerce typically refers to the exchange of:  1) information  2) goods  3) and services ► Through electronic networks

4. Why use E-commerce? ► Can be summarized as providing “incentives” ► Incentives:  Browse catalogs without leaving house or office (convenience)  Shop anytime, anywhere  Compare prices from different vendors (variety)  Cheaper prices  Direct from supplier without 3 rd parties  No Tax if store is out of state  Oops, all from the customer’s perspective, - sellers also benefit from e-commerce too

5. Why use E-Commerce? ► Seller:  World-wide customers  No need for a physical store  Cheaper to setup a store  Maintenance cost?  (packaging cost? Example software)  Hire less workers ► And a lot more – depending on the business

6. Current State of E-Commerce ► Online sales represent 5.4% of all retail sales in 2004 ► By 2008, it has been estimated to only reach about 10%. ► With all the incentives listed on the previous two slides:  Why is it only a small percentage of all retail sales?

7. Barriers in Adopting E-Commerce ► What kind of barriers? ► Tannenbaum summarizes into 3 words:  Confidence – security, privacy, liability  Convenience – easy of access, use, purchase, and get support  Content – variety of products and services ► Which one can CBR help to overcome?  Make the it more convenient

8. Motivations for CBR “On the Internet, companies only have computers to represent them. They better be intelligent computers.” Chuck William, CEO Brightware The answer CBR???

9. Motivations for CBR (cont.) ► Dell: I want a gaming computer that could support the latest game, ie Half-Life 2 ► Preferred System Configuration 2.4 GHz Processor 512MB RAM DirectX 9 capable graphics card 256mb Windows 2000/XP/ME/98 Internet Connection ► Example: Dell fails to provide the sale support (show example at dell.com)

10. Using CBR to Provide Intelligent Support ► How can we use CBR?  search, select, and support. ► Refine searching capabilities  Traditional database queries is not powerful enough ► Reduce required domain knowledge ► Therefore, reduce customer support staff

11. Why database search is not good enough? ► What’s wrong with a huge database with a search database search engine on top of it?  Too many results ► Provided that the search engine is good. It could narrow down the search for you very well. What else could be wrong?  It fails to provide sales support (tailored recommendations) ► Remember the Dell example???

12. Phases of Sales in E-commerce ► 3 phases of sales  Pre-sales  Sales  After-sales ► All 3 could use CBR to provide support

13. Pre-sales ► Customer has an idea of what he wants to buy ► Customer attains information about products and services ► Traditional way is electronic catalogs and databases

14. Pre-sales: presenting products ► Index & Ontologies  Amazon.com ► Requirements based  Expedia.com

15. Pre-sales: Misses ► With index & onthologies  Too many results  Specific speaker might be listed in a different category ► With requirements based  Typos  What if there is a date close by the one specified?  What about close by airports?  Special deal for the specific destination?

16. Pre-sales: Misses example ► Example at expedia.com  (Flight search)  (Last minute packages)

17. Pre-sales: CBR example ► Analog Devices ► Travel Agency  Last Minute Deals (no implementation yet)  (DietoRecs)  (Nut King)

18. Analog Devices Example ► Analog Devices makes electronic parts ► Most of the calls to their support number is because they can’t find the desired parts by looking in the catalog. ► Solution: create an online store that allows engineers to find desired parts based on functionality using CBR

19. Analog Devices Example ► A case is represented with 40 parameters (String, integer, symbols)  Type, input/output voltage, size ► Parameters are divided into a few categories ► System creates a query based on these parameters, using a few or all ► www.analog.com for example of UI www.analog.com ► (Note the priority checkbox)

20. AD: Similarities (discrete) ► similarities are calculated by applying local similarity measures. ► Note: table is asymmetric

21. AD: Similarities (continuous) ► Represented as a function instead of a table ► Anything greater than query, 1, otherwise, it’s from 0 to.5

22. Travel Agency ► Interactive  Expedia, Orbitz, Hotwire  Nut King, DieToRecs (CBR) ► Interactive Last Minute Deals  Somewhat available at those sites mentioned above  CBR to recommend close matches

23. Travel Agency (cont.) ► Last minute deals are sold as-is ► Used to be distributed with flyers ► Up to 200,000 deals sold in peak season ► could be represents as cases ► When user search for a destination, recommend similar deals

24. Travel Agency (CBR impl.) ► Treat deals as cases with attributes ► Recommend deals with intelligence using CBR Search: 1.) January 2.) Blue Mountain 3.) Skiing, Hotel 4.) 1 day 5.) $50 - $100 No match at Blue Mountain Suggest closest case Response: 1.) January 2.) Bear’s Creek 3.) Skiing, Hotel 4.) 1 day 5.) $89

25. Sales Phase

26. Sales (CBR Cycle) Might have to go through the cycle a few times before user accepts the proposed product. Each time user’s evaluation refines the demand Retain phase must not take place because a successful sale does not lead to a new product in the product base

27. Negotiation During Sales ► During the negotiation process, the buyer and seller refine the problem description and the product description to solve the customer’s problem ► The seller should help the customer to make a decision not tell them when their requirements are fullfilled

28. CBR in Negotiation ► Active or Passive Sales Agent  Active – suggest a particular modification of a demand to the user  Passive – Offer possible modifications to the user, the user pick what to modify ► Modification of the Demands vs the Products  Ex free gifts or configurable products

29. Sales ► Over or Under specification of customer’s demands  Need to relax the demands  Can see this at Nut King and DieToRecs

30. After the Sales ► Support ► CBR in online help systems  HP, Gateway, Dell, and 3com have been using CBR in their online support system ► The reason? Call-avoidance

31. Demo ► DieToRecs  http://eu-project.hgb.tiscover.at/dialogservlet ► Nut King  http://itr.itc.it:8080/dev/jsp/language.do?action =english http://itr.itc.it:8080/dev/jsp/language.do?action =english http://itr.itc.it:8080/dev/jsp/language.do?action =english

32. Conclusions ► E-Commerce is still only a small portion of the retail market – there is a lot of potential for growth ► CBR can be used with all 3 phases of the sales. ► Help to narrow down the search result ► Make intelligent suggestions ► Make online system behave more like human sales agents ► Provide intelligent support

33. References ► Intelligent Sales Support with CBR. Wolfgang Wilke, Mario Lenz, Stefan Wess ► Experience Management for Electronic Ecommerce. ► Francesco Ricci http://ectrl.itc.it/home/home_people/ricci/ (last visited: April 20, 2005) http://ectrl.itc.it/home/home_people/ricci/ ► (online e-commerce stat) http://retailindustry.about.com/od/seg_internet/a/bl_nrf052504.htm http://retailindustry.about.com/od/seg_internet/a/bl_nrf052504.htm ► (online shopping benefits) http://wiki.media-culture.org.au/index.php/Online_Shopping_- _Benefits_for_Buyers http://wiki.media-culture.org.au/index.php/Online_Shopping_- _Benefits_for_Buyers ► (half-life 2 spec) http://www.ultimate-gamer.com/halflife2/hl2.htm ► (DieToRecs) http://eu-project.hgb.tiscover.at/dialogservlet ► (Nut King) http://itr.itc.it:8080/dev/jsp/language.do?action=english http://itr.itc.it:8080/dev/jsp/language.do?action=english