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Ecommerce (1)

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  • 1. e-commerce:From online stores to social networks Michael McDonnell Winterstorm Solutions michael@winterstorm.ca http://syntheticlibrarian.com/ 2007-10-30
  • 2. My Background E-Commerce Experience•TELUS Charitable Giving System ($X,000,000+)•Skibanff.com ($X00,000)•Bernard Callebaut Chocolate e-store ($X0,000)•E-commerce infrastructure at TELUS ($X0,000)•Mortgage Application for many Credit Unions e-commerce - Michael McDonnell
  • 3. B2C E-Commerce: Overview1 Online Stores2 Advertising Networks3 Social Networks e-commerce - Michael McDonnell
  • 4. Online Stores: Components & Processes CatalogueCustomer a Catalogue 1 • List of Products • Descriptions • Prices • Options, size, etc. b • Pictures Shopping Cart Shopping Cart 2 • A temporary list of item to be purchased c d CheckoutPaymentCollection Checkout 3 • Billing Info • Shipping Address • Shipping Cost • Record Order • Process Payment e-commerce - Michael McDonnell
  • 5. Online Store Example: Bubblehut.ca http://www.bubblehut.ca  Site sells soaps and candles  The website is just a catalogue  No database at all  Just “flat” files stored on the web server  All “e-commerce” is handled by the 3rd party  Shopping cart  Checkout  Payment processing  Paypal never tells bubblehut your CC info e-commerce - Michael McDonnell
  • 6. Online Store Example: Chapters.ca http://chapters.ca/  Site sells books  The website has an extensive catalogue  BIG Database  Probably uses software called “endeca” (very popular for high-end retail and large university libraries)  All “e-commerce” is handled “on-site”  Shopping cart  Checkout  Payment processing (with the exception of payment clearing) e-commerce - Michael McDonnell
  • 7. Payment Process: Internet Merchant Account a Store Customer Website b d c Charge Payment Pay the Credit Card Gateway MerchantExample: http://www.beanstream.com/ e-commerce - Michael McDonnell
  • 8. Payment Process: PayPal AccountCustomer a PayPal b c Charge Pay theCredit Card Merchant e-commerce - Michael McDonnell
  • 9. Payment Security:Virtual Accounts at Citi Bank e-commerce - Michael McDonnell
  • 10. Payment Secutiy: Visa Chip Cards A typical plastic card with an embedded computer chip and microcomputer.  Enables encryption of confidential information and personalization of usage limits. A card reader reads the encrypted data, and password authentication is used to verify users. e-commerce - Michael McDonnell
  • 11. Payment Security:Mastercard SecureCode e-commerce - Michael McDonnell
  • 12. Online Purchase Behaviour Most Purchased Least Purchased 1. Computers & Software 1. Food 2. Travel 2. Cars & Car Parts 3. Gift Cards 3. Pet Supplies 4. Toys 4. Appliances and tools 5. Videogames 5. Health & Beauty Products == “Commodity” Items == “High Touch” Items Digital Products – Ideal for Online Sale 1. Commodity-like Examples: 2. Mass-customizable • Tickets (travel, events) 3. Delivered by download • Music, Images, Video 4. No need for intermediary • Books, News, other info. 5. Global in reach • SoftwareSource: Shop.org; Forrester Research e-commerce - Michael McDonnell
  • 13. Advertising Networks Online stores are now common  Internet used to increase sales  not just to facilitate sales Advertising is now big business  US$7.9 BILLION in 1st Q 2006  37% higher than 1st Q 2005 Web Analytics is growing  Analyze web data to convert visitors into buyers e-commerce - Michael McDonnell
  • 14. Example: Google AdWords• Pay-per-click • Targeted by keyword – Price set by bid – Select keywords – Pay when user clicks – Set maximum price for add to appear with that• Ads appear on keyword – Search results – Related Website • Ad Position – Other places – Determine by competition based on bids http://adwords.google.com/ e-commerce - Michael McDonnell
  • 15. Example: Google AdSense• Display Ads • Targeted by keyword – Get paid! – Ad keywords match content of your• Pay-per-click webpage – Paid when user clicks – Ad are relevant to your audience• Pay-per-impression – Paid when is displayed • Ad Appearance 1000 times – You determine size, and appearance of adshttp://www.google.com/adsense/ e-commerce - Michael McDonnell
  • 16. E-commerce 2.0 Participation == Value  For the customer  For the business Examples  YouTube  Amazon  E-bay  “Professional” Bloggers e-commerce - Michael McDonnell
  • 17. Example: YouTubeCustomersParticipate bydistributing the ads http://www.youtube.com/watch?v=zBu5dL4QCnY e-commerce - Michael McDonnell
  • 18. Example: Amazon user generated content  Reviews  Ratings  Buying Patterns  “People who bought this book also bought…” Online Bookstore or Online Community? More participation = More value e-commerce - Michael McDonnell
  • 19. Example: E-bay Customer-to-Customer (C2C) Sales Customer Participation IS the business  Reputation Ratings  Payment Processing More participation = More value e-commerce - Michael McDonnell
  • 20. Example: Professional Bloggers FREE Content PAID for Advertisements Goal: attract an ATTENTION Goal: find an AUDIENCE Audience Participation  Builds COMMUNITY More participation = More value (to community) e-commerce - Michael McDonnell
  • 21. Light Reading• Fiction • Blogs – Rainbow’s End by Verner – Seth Godin Vinge – Micropersuasion – Pattern Recognition by – Charlene Li (Forrester William Gibson Research)• Non-fiction – Many-to-many – The Tipping Point by – Apophenia (Web 2.0 Malcolm Gladwell section) – The Long Tail by Chris Anderson • Articles• Makin’ Money! – Viral Marketing (Jurvetson – AdWords (Pay for Ads) 1997) – AdSense (Get Paid for Ads) – What is Web 2.0 (O’Reilly 2005) e-commerce - Michael McDonnell
  • 22. Questions? michael@winterstorm.ca http://syntheticlibrarian.com/I would be happy to answer your questions you have now, or by email later. e-commerce - Michael McDonnell
  • 23. OLD SLIDES All slides after this one are old slides deleted from the presentation but preserved for reference. e-commerce - Michael McDonnell
  • 24. Online Stores Customers BanksSuppliers •Products Payment •Prices Your Website Processor •Descriptions •Accounts Database Web Hosting Company e-commerce - Michael McDonnell
  • 25. Online Stores: Hardware InfrastructureWeb Server Database Catalogue ServerSoftware Programs1. Catalogue Data 1. Product Info2. Shopping Cart3. Checkout Shopping 2. Shopping Cart Contents Cart4. Payment 3. Orders Processing 4. Customer5. Static Data Account Info • Images • Web Pages Checkout e-commerce - Michael McDonnell
  • 26. Early e-commerce: Online Stores Internet used to conduct retail sales (B2C) A bit of history:  Problem: No Security = No Sales  Solution: Encryption and Digital Signatures  SSL : Secure Socket Layer  HTTPS = HTTP + SSL (Security) e-commerce - Michael McDonnell
  • 27. Why SSL? Encryption Encryption Browser Router Router Router Hackers “sniff” and capture data Encrypted Router Router Hacker Router data can be captured, but not decrypted Sniffer Server e-commerce - Michael McDonnell
  • 28. Why SSL? Digital Signatures Authentication Browser Router Router Router Hackers reroute connections Server “key” Router Router Hacker Router cannot be faked Fake server cannot pretend Server FAKE Server to be real one e-commerce - Michael McDonnell
  • 29. 3rd Party Hosted Shopping and Payment 1Customer Catalogue 2 Online Store Shopping Payment Cart Processing 3 Company 4 Payment Checkout Collection e-commerce - Michael McDonnell
  • 30. 3rd Party Payment Only 1 OnlineCustomer Catalogue Store Website 2 Shopping Payment Cart Processing Company 3 4 Payment Checkout Collection e-commerce - Michael McDonnell
  • 31. Payment Processing Hidden From User 1Customer Catalogue Online 2 Store Website Shopping Payment Cart Processing Company 3 4 Payment 5 Payment Checkout Collection Gateway e-commerce - Michael McDonnell
  • 32. B2C Marketing: Spawn.com Video http://highered.mcgraw- hill.com/sites/007305223x/instructor_view0/vi deos.htm# e-commerce - Michael McDonnell
  • 33. Future e-commerce: Web 2.0 Collaboration and Participation Read+WRITE vs Read-ONLY Examples  Flickr  http://flickr.com/  Del.ico.us  http://del.ico.us/  AskMetaFilter  http://ask.metafilter.com e-commerce - Michael McDonnell
  • 34. Example: My Space & Facebook “Social Networks” PAID for Advertisements PAID for Customer Profile Information?? Goal: develop a NETWORK Audience Participation  Reveals IDENTITY  Builds COMMUNITY More participation = More value (to business) e-commerce - Michael McDonnell

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