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Chapter - 9
eCommerce is
buying, selling, marketing & servicing
of products, services and information
over a variety of computer networks.
• e-Commerce is changing the shape of competition,
speed of action and streamlining of interactions,
products and payments from customers to
companies and companies to suppliers
• e-Commerce encompasses the entire online process of
developing, marketing, selling, delivering, servicing and
paying for goods and services transacted on the
internetworked, global marketplace of customers, with
the support of a worldwide network of business partners
Disappearing geophysical barriers
e-Commerce
• eCommerce supports every step of commercial process
– Advertising, Sales and Customer support on the web
– Internet Security for safe transaction & payment
– Assurance of delivery completion from dispatcher to
delivery
• Interactive marketing, ordering and payments
• eCommercealso includes eBusinessprocessessuch as
– Extranet access to inventory database by customers
– Intranet access to CRM by sales & customer service reps
– Customer collaboration in product development for
marketing & discovery via email exchanges and internal
newsgroups
e-Commerce
A range of business processes to support the electronic
buying and selling of goods and services
E-Commerce
Technologies
Hardware
Software
Data
Networking
Categories of e-Commerce
• Business-to-Consumer
– Business must develop attractive electronic
marketplace to sell to consumers
– Virtual storefronts, multimedia catalogs, interactive
order processing, electronic payment, online
customer support
– form of interactive media/electronic marketing that
allows customers to view and order merchandise
online
– customers can read about the history of the product,
browse through product offerings, and place orders,
all through a device
• Business-to-Business
– a commerce transaction between businesses
– E-business marketplaces and direct market links
between businesses
– Internet and Extranet e-commerce catalog
websites for business customers and suppliers
– E-commerce web portal for
auction
– EDI
– Fastenal, Office Max, Staples
Categories of e-Commerce
• Consumer-to-Consumer
– One consumer selling to another consumer online
– Usually facilitated by a third-party site that helps
take care of the details of the transaction
– Online auctions, posting to newspaper sites,
personal websites, e-commerce portals
– Free classified advertisement, auctions, forums,
and individual pages for start-up entrepreneurs
– eBay, Craigslist, Amazon, OLX, kaymu
Categories of e-Commerce
e-Commerce Process Architecture
Access Control and Security
• E-commerce processes must establish mutual trust
and secure access between parties by
– Authenticating users by using User names and Passwords
– Authorizing access
– Enforcing security & Encryption key
– Digital certificates and signatures
• Restricted access areas
– Other people’s accounts
– Restricted company data
– Webmaster administration areas
• Security processes protect the e-commerce
resources from threats and failures
Profiling and Personalizing
• ‘Electronic Profiling’ gathers data on you and your
website behavior and choices
– User registration
– Cookie files and tracking software
– User feedback
• Profiling is used for
– Personalized (one-to-one) marketing
– Authenticating identity
– Customer relationship management
– Marketing planning
– Website management
Search Management
• Search processes help customers find the
specific product or service they want
– E-commerce software packages often include
a website search engine
– A customized search engine may be acquired from
companies like Google or Requisite Technology
– Searches are often on content or by parameters
Content and Catalog Management
• Content Management Software
– Helps develop, generate, deliver, update, and archive
text and multimedia information at e-commerce
websites
• Catalog Management Software
– Helps generate and manage catalog content
– Ex. Grainger.com, industrial part distributer uses
CenterStage catalog management software suite
• Catalog and content management software works
with profiling tools to personalize content
– Includes product configuration and
mass customization
Workflow Management
• Manages and automates the business processes in
e-commerce applications with the help of workflow
software engine
• Workflow models express predefined
• Ensures proper transactions and work activities are
performed
• Ensures correct data and documents are routed to
the right employees, customers, suppliers and others
• Sets of business rules • Roles of stakeholders
• Authorization requirements • Routing alternative
• Databases used • Task sequences
Example of Workflow Management
Event Notification
• Most e-commerce applications are event
driven that responds to multitude of events
– Responds to such things as customer’s first
website visit and payments & delivery
– Monitors all e-commerce processes
– Records allrelevant events, also problem situations
– Notifies all involved stakeholders
– Works in conjunction with user-profiling software
and workflow management software
Collaboration and Trading
• Processes that support vital collaboration
arrangements and trading services
– Needed by customers, suppliers, and other
stakeholders
• Online communities of interest
– E-mail, chat, discussion groups
– Enhances customer service
– Builds loyalty
Electronic Payment Processes
• Complex processes
– Nearly anonymous electronic transactions
– Many security issues
– Wide variety of debit and credit alternatives
– Financial institutions may be part of the process
• Web Payment Processes
– Shopping cart process
– Credit card payment process
– Debit and other more complex processes
• Electronic Funds Transfer (EFT)
– Major payment system in banking, retail
– Variety of information technologies capture
and process money and credit card transfers
– Most point-of-sale terminals in retail stores
are networked to bank EFT systems
Electronic Payment Processes
Secure
electronic
payment
system
Securing Electronic Payments
• Network sniffers easily recognize credit card
formats
– Encrypt data between customer and merchant
– Encrypt data between customer and financial
institution
– Take sensitive information off-line
E-Commerce Application Trends
E-Commerce Success Factors
• On the internet, the barriers of time, distance and form
are broken down, and businesses are able to transact the
sale of goods and service 24 hours a day, 7 days a week,
365 days a year with customers all over the world
• It’s even possible to convert a physical goods like CDs,
packaged software, a newspaper to a virtual goods like
MP3 audio, downloadable software, information in HTML
format
• No site is close to its web customers and competitors are
one click away
– It’s vital to build customer satisfaction, loyalty and
relationships so they keep coming back to the web store
E-Commerce Success Factors
Selection and value
• Offer a good selection of attractive products and
services
• Competitive price
– Higher quality, satisfaction guarantee, top
customer support, top after sale service, buy-
back guarantee
– REI.com -> How to Choose & money-back
guarantee
E-Commerce Success Factors
Performance and service
– Fast and easy navigation while browsing, selecting
and paying in web store
– Efficient design for ease of access, shopping & buying
• Efficient server power and network capacity to
support web site traffic
– Friendly, helpful, quick and easy web shopping
experience and customer service
– Availability of goods in inventory
– Prompt Shipping
E-Commerce Success Factors
Look and Feel
– Attractive web storefront, shopping area and
multimedia product catalog
– Exciting shopping experience through
• Audio, Video and Animation & Graphics
• Simple and Comfortable look and feel
• Virtual Storefront experience
Browse
product
Section
Select
Products
Drop into
Virtual
Shopping
Cart
Go to
Virtual
Checkout
Station
Pay for the
Order
Advertising
• Traditional Media
• Targeted& personalizedBannerads& Webpage
• Email promotions
and Incentives
• Coupons, discounts, special offers
• vouchers for other web services and other e-tailers
• Being part of web banner advertising exchange
programs with thousands of other web retailers
E-Commerce Success Factors
Personal Attention
• E-Commerce software records details of site visits
and builds user profiles
• Website encourage or mandates to register
• Sites requires to fill out a personal interest profile
• Personalized shopping experience
– Welcomed by name
– Greeted with special offers
– Guided to parts of the sites of visitor’s interest profile
• One-to-One Marketing & Relationship Building
E-Commerce Success Factors
Community Relationships
• Giving like-minded online customers a feeling of
belongingness via website relationship & affinity
marketing programs
– Build & Promote Virtual community of customers
– Web-based collaboration tools
– Discussion forums, Newsgroups, Chat rooms
– Message board systems
– Facebook & Tweeter
– Github & Stackoverflow
– Amazon Grapevine & Amazon Giver
E-Commerce Success Factors
Security
• Customer must feel confident that credit card
transaction, personal information are secure
• Customer must feel the business, website and
products can be trusted as advertised
and Reliability
• Reliable service of shipping as soon as order is filled,
in the time frame promised
• Reliable customer support
E-Commerce Success Factors
Great Customer Communication
• The need for constant and informative
communicative channels
• Despite conveniences, customers still have questions
that needs to be answered by a human being
• ‘Old fashion’ way of handling customer query about
product information, order status or order
modification
E-Commerce Success Factors
Web store Requirements
Types of e-commerce marketplace
• One to Many
– Sell-side marketplaces
– One supplier dictates product offerings and prices
– Dell.com, Walmart.com
• Many to One
– Buy-side marketplaces
– Many suppliers bid for the business of a buyer
• Some to Many
– Distribution marketplaces
– Unites suppliers who combine their product catalogs
to attract a larger audience
Types of e-commerce marketplace
• Many to Some
– Procurement marketplaces
– Unites major buyers who combine purchasing
catalogs
– Attracts more competition and thus lower prices
– Auto industry
• Many to Many
– Auction marketplaces
– Dynamically optimizes prices
– eBay and Craiglists
Clicks And Bricks in e-Commerce
Clicks-and-bricks strategy
• Should the company integrate its e-commerce virtual
business operations with our traditional physical
business operations or keep them separate?
• Success will go to those who can integrate Internet
initiatives with traditional operations
– Merging operations has trade-offs
Clicks and Bricks Strategy
E-Commerce Integration
• The business case for merging e-commerce
with traditional business operations
– Move strategic capabilities in traditional
operations to the e-commerce business
– Integrate e-commerce into the traditional
business
• Sharing of established brands
• Sharing of key business information
• Joint buying power and distribution efficiencies
Other Clicks and Bricks Strategies
• Partial e-commerce integration
– Joint ventures and strategic partnerships
• Complete separation
– Spin-off of an independent e-commerce company
• Barnes and Noble’s experience
– Spun off independent e-commerce company
– Gained venture capital, entrepreneurial culture, and
flexibility
– Attracted quality management
– Accelerated decision making
– Failed to gain market share

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Chapter 9 e-commerce systems

  • 2. eCommerce is buying, selling, marketing & servicing of products, services and information over a variety of computer networks.
  • 3. • e-Commerce is changing the shape of competition, speed of action and streamlining of interactions, products and payments from customers to companies and companies to suppliers • e-Commerce encompasses the entire online process of developing, marketing, selling, delivering, servicing and paying for goods and services transacted on the internetworked, global marketplace of customers, with the support of a worldwide network of business partners Disappearing geophysical barriers e-Commerce
  • 4. • eCommerce supports every step of commercial process – Advertising, Sales and Customer support on the web – Internet Security for safe transaction & payment – Assurance of delivery completion from dispatcher to delivery • Interactive marketing, ordering and payments • eCommercealso includes eBusinessprocessessuch as – Extranet access to inventory database by customers – Intranet access to CRM by sales & customer service reps – Customer collaboration in product development for marketing & discovery via email exchanges and internal newsgroups e-Commerce
  • 5. A range of business processes to support the electronic buying and selling of goods and services
  • 7. Categories of e-Commerce • Business-to-Consumer – Business must develop attractive electronic marketplace to sell to consumers – Virtual storefronts, multimedia catalogs, interactive order processing, electronic payment, online customer support – form of interactive media/electronic marketing that allows customers to view and order merchandise online – customers can read about the history of the product, browse through product offerings, and place orders, all through a device
  • 8. • Business-to-Business – a commerce transaction between businesses – E-business marketplaces and direct market links between businesses – Internet and Extranet e-commerce catalog websites for business customers and suppliers – E-commerce web portal for auction – EDI – Fastenal, Office Max, Staples Categories of e-Commerce
  • 9. • Consumer-to-Consumer – One consumer selling to another consumer online – Usually facilitated by a third-party site that helps take care of the details of the transaction – Online auctions, posting to newspaper sites, personal websites, e-commerce portals – Free classified advertisement, auctions, forums, and individual pages for start-up entrepreneurs – eBay, Craigslist, Amazon, OLX, kaymu Categories of e-Commerce
  • 11. Access Control and Security • E-commerce processes must establish mutual trust and secure access between parties by – Authenticating users by using User names and Passwords – Authorizing access – Enforcing security & Encryption key – Digital certificates and signatures • Restricted access areas – Other people’s accounts – Restricted company data – Webmaster administration areas • Security processes protect the e-commerce resources from threats and failures
  • 12. Profiling and Personalizing • ‘Electronic Profiling’ gathers data on you and your website behavior and choices – User registration – Cookie files and tracking software – User feedback • Profiling is used for – Personalized (one-to-one) marketing – Authenticating identity – Customer relationship management – Marketing planning – Website management
  • 13. Search Management • Search processes help customers find the specific product or service they want – E-commerce software packages often include a website search engine – A customized search engine may be acquired from companies like Google or Requisite Technology – Searches are often on content or by parameters
  • 14. Content and Catalog Management • Content Management Software – Helps develop, generate, deliver, update, and archive text and multimedia information at e-commerce websites • Catalog Management Software – Helps generate and manage catalog content – Ex. Grainger.com, industrial part distributer uses CenterStage catalog management software suite • Catalog and content management software works with profiling tools to personalize content – Includes product configuration and mass customization
  • 15. Workflow Management • Manages and automates the business processes in e-commerce applications with the help of workflow software engine • Workflow models express predefined • Ensures proper transactions and work activities are performed • Ensures correct data and documents are routed to the right employees, customers, suppliers and others • Sets of business rules • Roles of stakeholders • Authorization requirements • Routing alternative • Databases used • Task sequences
  • 16. Example of Workflow Management
  • 17. Event Notification • Most e-commerce applications are event driven that responds to multitude of events – Responds to such things as customer’s first website visit and payments & delivery – Monitors all e-commerce processes – Records allrelevant events, also problem situations – Notifies all involved stakeholders – Works in conjunction with user-profiling software and workflow management software
  • 18. Collaboration and Trading • Processes that support vital collaboration arrangements and trading services – Needed by customers, suppliers, and other stakeholders • Online communities of interest – E-mail, chat, discussion groups – Enhances customer service – Builds loyalty
  • 19. Electronic Payment Processes • Complex processes – Nearly anonymous electronic transactions – Many security issues – Wide variety of debit and credit alternatives – Financial institutions may be part of the process
  • 20. • Web Payment Processes – Shopping cart process – Credit card payment process – Debit and other more complex processes • Electronic Funds Transfer (EFT) – Major payment system in banking, retail – Variety of information technologies capture and process money and credit card transfers – Most point-of-sale terminals in retail stores are networked to bank EFT systems Electronic Payment Processes
  • 22. Securing Electronic Payments • Network sniffers easily recognize credit card formats – Encrypt data between customer and merchant – Encrypt data between customer and financial institution – Take sensitive information off-line
  • 24.
  • 25.
  • 26. E-Commerce Success Factors • On the internet, the barriers of time, distance and form are broken down, and businesses are able to transact the sale of goods and service 24 hours a day, 7 days a week, 365 days a year with customers all over the world • It’s even possible to convert a physical goods like CDs, packaged software, a newspaper to a virtual goods like MP3 audio, downloadable software, information in HTML format • No site is close to its web customers and competitors are one click away – It’s vital to build customer satisfaction, loyalty and relationships so they keep coming back to the web store
  • 27. E-Commerce Success Factors Selection and value • Offer a good selection of attractive products and services • Competitive price – Higher quality, satisfaction guarantee, top customer support, top after sale service, buy- back guarantee – REI.com -> How to Choose & money-back guarantee
  • 28. E-Commerce Success Factors Performance and service – Fast and easy navigation while browsing, selecting and paying in web store – Efficient design for ease of access, shopping & buying • Efficient server power and network capacity to support web site traffic – Friendly, helpful, quick and easy web shopping experience and customer service – Availability of goods in inventory – Prompt Shipping
  • 29. E-Commerce Success Factors Look and Feel – Attractive web storefront, shopping area and multimedia product catalog – Exciting shopping experience through • Audio, Video and Animation & Graphics • Simple and Comfortable look and feel • Virtual Storefront experience Browse product Section Select Products Drop into Virtual Shopping Cart Go to Virtual Checkout Station Pay for the Order
  • 30. Advertising • Traditional Media • Targeted& personalizedBannerads& Webpage • Email promotions and Incentives • Coupons, discounts, special offers • vouchers for other web services and other e-tailers • Being part of web banner advertising exchange programs with thousands of other web retailers E-Commerce Success Factors
  • 31. Personal Attention • E-Commerce software records details of site visits and builds user profiles • Website encourage or mandates to register • Sites requires to fill out a personal interest profile • Personalized shopping experience – Welcomed by name – Greeted with special offers – Guided to parts of the sites of visitor’s interest profile • One-to-One Marketing & Relationship Building E-Commerce Success Factors
  • 32. Community Relationships • Giving like-minded online customers a feeling of belongingness via website relationship & affinity marketing programs – Build & Promote Virtual community of customers – Web-based collaboration tools – Discussion forums, Newsgroups, Chat rooms – Message board systems – Facebook & Tweeter – Github & Stackoverflow – Amazon Grapevine & Amazon Giver E-Commerce Success Factors
  • 33. Security • Customer must feel confident that credit card transaction, personal information are secure • Customer must feel the business, website and products can be trusted as advertised and Reliability • Reliable service of shipping as soon as order is filled, in the time frame promised • Reliable customer support E-Commerce Success Factors
  • 34. Great Customer Communication • The need for constant and informative communicative channels • Despite conveniences, customers still have questions that needs to be answered by a human being • ‘Old fashion’ way of handling customer query about product information, order status or order modification E-Commerce Success Factors
  • 36. Types of e-commerce marketplace • One to Many – Sell-side marketplaces – One supplier dictates product offerings and prices – Dell.com, Walmart.com • Many to One – Buy-side marketplaces – Many suppliers bid for the business of a buyer • Some to Many – Distribution marketplaces – Unites suppliers who combine their product catalogs to attract a larger audience
  • 37. Types of e-commerce marketplace • Many to Some – Procurement marketplaces – Unites major buyers who combine purchasing catalogs – Attracts more competition and thus lower prices – Auto industry • Many to Many – Auction marketplaces – Dynamically optimizes prices – eBay and Craiglists
  • 38. Clicks And Bricks in e-Commerce Clicks-and-bricks strategy • Should the company integrate its e-commerce virtual business operations with our traditional physical business operations or keep them separate? • Success will go to those who can integrate Internet initiatives with traditional operations – Merging operations has trade-offs
  • 39. Clicks and Bricks Strategy
  • 40. E-Commerce Integration • The business case for merging e-commerce with traditional business operations – Move strategic capabilities in traditional operations to the e-commerce business – Integrate e-commerce into the traditional business • Sharing of established brands • Sharing of key business information • Joint buying power and distribution efficiencies
  • 41. Other Clicks and Bricks Strategies • Partial e-commerce integration – Joint ventures and strategic partnerships • Complete separation – Spin-off of an independent e-commerce company • Barnes and Noble’s experience – Spun off independent e-commerce company – Gained venture capital, entrepreneurial culture, and flexibility – Attracted quality management – Accelerated decision making – Failed to gain market share