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E-commerce Web site design: strategies and models



                                 H. Joseph Wen
                                 New Jersey Institute of Technology, Newark, New Jersey, USA
                                 Houn-Gee Chen
                                 National Chung-Cheng University, Chia-Yi, Taiwan
                                 Hsin-Ginn Hwang
                                 National Chung-Cheng University, Chia-Yi, Taiwan


Keywords                                                                                  ways of doing business that no company can
Business strategy, E-commerce,     Introduction                                           afford to ignore. The basis for moving to an
World Wide Web, Marketing,
Model, Design                       The Web is one of the most revolutionary              electronic commerce is a belief that
                                    technologies that changes the business                electronic markets have the potential to be
Abstract                            environment and has a dramatic impact on              more efficient in developing new
The rapid adoption of the Web as a
                                    the future of electronic commerce (EC). The           information-based goods and services,
commercial medium has caused
firms to experimen t with           future of EC will accelerate the shift of the         finding global customers and trading
innovativ e ways of doing business. power toward the consumer, which will lead            partners to conduct business. Electronic
Those firms that effectivel y       to fundamental changes in the way                     commerce via the Internet or the next
market themselves on the Web
                                    companies relate to their customers and               generation Internet Protocol, IPv6, will
have a distinct advantage. This
paper presents two e-commerce       compete with one another (Slywotzky, 2000).           change business institutions, operations and
Web site design strategies and 12 The immense popularity of the Internet in               products/services as we know today, just as
e-commerce models for gaining       recent years has been fueled largely by the           the telephone, TV, fax, and e-mail changed
that advantage.
                                    prospect of performing business on-line.              the way businesses and consumers
                                    More and more companies set up their own              communicate. Electronic commerce has
                                    corporate LANs by Intranet, apply Extranet            become very popular because of the benefits
                                    and Internet to work collaboratively with             and the convenience it brings along. As
                                    their customers, suppliers, and partners.             shown in Table I, the benefits include
                                    The Internet can bring down physical
                                                                                          product promotion, cost saving, timely
                                    barriers to commerce, almost immediately
                                                                                          information, shortened remittance time,
                                    giving even the smallest business access to
                                                                                          information consistency, better customer
                                    untapped markets around the world. At the
                                                                                          service, better customer relationship,
                                    same time, consumers can conduct business
                                                                                          customization of products, competitive
                                    and make purchases from companies
                                                                                          advantages, and convenience of doing
                                    previously unavailable to them.
                                                                                          business.
                                    Furthermore, companies are able to place
                                                                                            Electronic commerce is no longer an
                                    marketing material on Internet servers
                                                                                          alternative, it is an imperative. The only
                                    ranging from simple advertising to
                                                                                          choice open is whether to start quickly or
                                    comprehensive virtual brochures. In today’s
                                    global marketplace, fast reliable information         slowly. Many companies are still struggling
                                    is a necessity for most companies to attain           with the most basic problem: what is the best
                                    some kind of competitive advantage. For               EC model? Unfortunately, there is no simple
                                    instance, companies can create a virtual              answer for this question. Even companies in
                                    marketplace in which to sell their products.          the same industry, of the same size, or with
                                    This virtual market is untapped and could             similar cultures are finding that one EC
                                    reach millions of users on the Internet 24            model does not fit all. Companies are
                                    hours a day.                                          required to review their EC models and
                                       Electronic commerce is defined as buying           rethink strategy in order to capitalize on the
                                    and selling of product, services or                   changing dynamics of the marketplace. The
                                    information via computer networks, mainly             purpose of this article is to examine the
                                    the Internet. As the fastest growing facet of         currently available EC models and help
                                    the Internet and other information                    readers to figure out the best way to make
Information Management &            technologies, EC offers functionality and new         money in the EC era.
Computer Security
9/1 [2001 ] 5±12
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# MCB University Press
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                                                                                                                                                           [5]
H. Joseph Wen,                Table I
Houn-Gee Chen and             The benefits of electronic commerce
Hsin-Ginn Hwang
E-commerce Web site design:   Benefit                    Description
strategies and models
Information Management &      Product promotion         Through a direct, information-rich and interactive contact with customers, EC
Computer Security                                       enhances the promotion of products. Electronic medium also allows interactivity and
9/1 [2001] 5±12                                         customization for advertising content, based on the customer profile or input. EC
                                                        thus offers an opportunity for new promotion strategies, enhancing the branding of
                                                        products
                              Cost saving               By using a public shared infrastructure such as the Internet and digitally
                                                        transmitting and reusing information, EC systems lower the cost of delivering
                                                        information to customers, including personnel, phone, postage, and printing costs
                              Timely information        Due to their instantaneous nature, EC systems allow a reduction of the cycle time
                                                        required to produce and deliver information and services.
                              Shortened remittance time With electronic funds transfer (EFT), customers send their remittances electronically
                                                        to the company’s bank. This arrangement eliminates the time delay associated with
                                                        the remittance in the mail system
                              Information consistency   EC ensures the consistency and accuracy of information through sharing of
                                                        information and use of electronic forms for doing business
                              Better customer service   The ability to provide on-line answers to problems through resolution guides,
                                                        archives of commonly encountered problems and electronic mail interaction 24
                                                        hours a day, 365 days a year, builds customer confidence and retention
                              Better customer           EC enables the learning about customers due to its ability to record every event in
                              relationship              which a customer asks for information about a product, buys one, requests customer
                                                        service, etc. Through these interactions, the needs of the customer are identified
                                                        and will feed future marketing efforts
                              Customization of products The information-based nature of the EC processes allows for new products to be
                                                        created or existing products to be customized based on customers’ exact needs.
                              Competitive advantages    EC enables a company to achieve competitive advantages of: cost saving based on
                                                        reduced advertising/promotion costs; product differentiation by customizing
                                                        products and timely response to market; customer focus through better customer
                                                        relationships and better customer services
                              Convenience of doing      There is no limit on time and location to conduct a business with related parties.
                              business                  The information delivered to manufacturers, suppliers and warehouses is almost real
                                                        time

                                                                                       Myerscough (1996) identified five different
                               Background                                              ways that a ``for-profit’’ company may use the
                              Hoffman et al. (1995) proposed a structural              Web for:
                              framework for examining the explosion in                 1 market awareness;
                              commercial activity on the Web. The study                2 customer support;
                              leads to a new classification of current                 3 sales;
                              commercial Web site designs as:                          4 advertising; and
                              .  online storefront;                                    5 electronic information services.
                              .  Internet presence;                                    Liu et al. (1997) examined Web sites of US
                              .  content;                                              Fortune 500 companies to provide a status
                              .  mall;                                                 report of Web usage by these companies.
                              .  incentive site; and
                                                                                       They concluded that about 93 per cent of the
                              .  search agent.
                                                                                       Fortune 500 companies display their
                              The authors examined the Web site designs                products and services on their Web sites,
                              in the context of integrated marketing and               and about 26 per cent of them provide for
                              facilitated greater understanding of the Web             some type of online business with their
                              as a commercial medium. This study, as well              customers through their Web sites. A study
                              as those by Ju-Pak (1999) and Griffith and               of 250 US Fortune 500 Web sites, conducted
                              Krampf (1998) essentially perform Web site               by Palmer and Griffith (1998), illustrate the
                              content analysis from an Internet marketing              powerful impact that the Web has made on
                              point of view.                                           marketing practices. The authors argued
                                Kalakota and Whinston (1996) classified                that Web-based marketing activities and its
                              advertising, sales, and customer service as              site design are driven by the interaction
                              the main consumer-oriented electronic                    among the firm’s market offering,
                              commerce activities. In addition, Cappel and             marketing activities and technical
[6]
H. Joseph Wen,                characteristics. The marketing activities         customer relationships are being
Houn-Gee Chen and             used in the study to examine corporate Web        incorporated into commercial Web site
Hsin-Ginn Hwang               sites are:                                        design. There are two generic Web site
E-commerce Web site design:
strategies and models         .  promotional activities;                        design strategies:
Information Management &
                              .  sales;                                         1 informational/communicational strategy;
Computer Security             .  service; and                                      and
9/1 [2001] 5±12               .  support.                                       2 on-line/transactional strategy,
                                                                                   summarised in Table II.
                              From the seller’s perspective, Angehrn (1997)
                              proposed the ICDT model for analyzing and
                                                                                Informational/communicational strategy
                              classifying EC strategies. The model
                                                                                In the informational/communicational
                              describes four virtual business spaces,
                                                                                strategy, the Web is used to support but not to
                              namely:
                                                                                replace a company’s main business activities.
                              1 virtual information space;
                                                                                Companies do not limit themselves to just
                              2 virtual communication space;
                                                                                marketing on the Web. As a matter of fact, they
                              3 virtual distribution space; and
                                                                                look at other traditional media of advertising
                              4 virtual transaction space.
                                                                                and marketing study in order to meet their
                              Based on the model, the authors suggest four      business goals and marketing objectives.
                              EC strategies that are further refined by the     Looking at Web marketing as another tool in
                              level of sophistication and customization of      the company’s marketing arsenal (Clark, 1997),
                              the Web site design.                              the informational/communicational design is
                                 Watson et al. (1998) coined the concept of     the most common use of Web marketing today.
                              ``attractors.’’ An attractor is a Web site with   Liu et al. (1997) report that 93 per cent of
                              the potential to attract and interact with a      Fortune 500 companies have publicly
                              relatively large number of visitors in a          accessible sites, but fewer than
                              target stakeholder group. Authors visited         26 per cent of those sites support transactions.
                              many Web sites and use metaphors to label         On the other hand, there is no doubt that
                              and group sites into eight potential              informational/ communicational design on the
                              attactors:                                        Web can also produce significant sales in other
                              1 the entertainment park;                         areas of business. For example, Insight Direct,
                              2 the archive;                                    a discount computer cataloger selling mostly to
                              3 exclusive sponsorship;                          business, generates only 10 per cent of its sales
                              4 the town hall;                                  from its on-line catalog, but more than 75 per
                              5 the club;                                       cent of its new customers come from the site.
                              6 the gift shop;
                              7 the freeway intersection; and                   On-line/transactional strategy
                              8 the customer service center.                    The on-line/transactional strategy
                                                                                invariably provides an electronic catalog of
                              They argued that the strategic use of hard-to-
                                                                                products for sale. Visitors can browse
                              imitate attractors is a key factor in on-line
                                                                                through the catalog and order products on-
                              marketing and creating an attractor will
                                                                                line. Although the informational/
                              become a key component of the strategy of
                                                                                communicational design often provides an
                              some companies.
                                                                                electronic catalog as well as ordering
                                The EC models for commercial Web site
                                                                                information (e.g. by phone, fax, or e-mail), it
                              design to be examined in this article are
                                                                                does not support on-line transaction. Without
                              similar to some of the models in the previous
                                                                                on-line ordering Web database capability, it
                              studies. However, we introduce a wider
                                                                                hardly exploits the potential of the Web as an
                              range of available models, extracted from the
                                                                                interactive medium.
                              current commercial Web sites, than any
                                                                                   The on-line/transactional strategy is what
                              previous studies. In addition, all models are
                                                                                most proponents of marketing on the Web
                              discussed based on two different Web site
                              design strategies, informational/                 expect. Griffith and Krampf (1998) indicated
                                                                                that the ability to enhance a company’s overall
                              communicational strategy and on-line/
                              transactional strategy.                           sales was a significant decision factor to
                                                                                establish a Web site. Although there are still
                                                                                some hidden obstacles (e.g. transaction
                                                                                security), it seems that most companies are
                               Web site design strategy                         likely to benefit directly from marketing on
                              Web design has evolved from static hypertext      the Web, especially for small and medium-
                              publishing in the early days to dynamic           sized enterprises. In fact, there have been a lot
                              multimedia, Web database application              of successful on-line/transactional designs,
                              servers. More importantly, new business           such as Amazon.com and Virtual Vineyards.
                              models that bring savings, revenues, and          The number of successful enterprises is
                                                                                                                             [7]
H. Joseph Wen,                   growing. There are reasons to believe that the            After visiting many Web sites, a total of 12
Houn-Gee Chen and                Web will become a significant money-making                Web site design models for EC were found,
Hsin-Ginn Hwang                  vehicle for electronic commerce. International            shown in Figure 1. The first four models that
E-commerce Web site design:
strategies and models            Data Corp. forecasts that Internet purchase               related to the informational/communicational
Information Management &         volume will jump from $12.4 billion in 1997 to            design are:
Computer Security                $425.7 billion by 2002. The US share is                   1 brand awareness and image building model;
9/1 [2001] 5±12                                                                            2 cost saving model;
                                 projected to be $268.8 billion, the European
                                 Union $55.5 billion, Japan $21.4 billion, and             3 promotion model; and
                                 Asia $15.6 billion.                                       4 info-mediary model.
                                   In the following section, available Web
                                 design models are grouped and discussed                   Brand awareness and image building
                                 based on the two design strategies. However,              model
                                 the models in each strategy group are not                 Web sites that apply this model provide
                                 mutually exclusive. For instance, a company               detailed, rational information about the firm
                                 may build brand awareness on the Web (the                 and its offerings. They may also serve as a
                                 informational/communicational design                      signal to current and prospective customers
                                 strategy) and may do on-line retailing (the               and competitors that the firm is on the cutting
                                 on-line/transactional design strategy) at the             edge. The model reaches motivated customers
                                 same time.                                                with an information/image-rich
                                                                                           communications message. Because the entry
                                                                                           barriers are so low, smaller firms can set up
                                                                                           this kind of site as well or in some cases even
                                   E-commerce Web site design models
                                                                                           better than larger firms. Examples of the brand
                                 There is no doubt that many Web design                    awareness and image building model include:
                                 models exist on the Internet and new models               .  Ford (www.ford.com) not only lists all the
                                 are increasing expeditiously. EC is not just                 models of its seven famous automotive
                                 about doing business over the Internet, it is                brands, but also posts its environmental
                                 about changing the way companies do                          policy, cleaner manufacturing,
                                 business. It is about creating new business                  community involvement, and corporate
                                 models while transforming traditional ones.                  citizenship report.

Table II
Web site design strategy
Web site design        Definition/characteristic            Promotion measures/ways                      Merits
Informational/        This approach is for companies to    1. Putting companies’ catalog on-line         1. Providing large quantities of
communicational       use the Web as a supplement to       2. Building broad awareness and image            information to customers
design                traditional marketing, delivering    3. Using the Web as a cost-effective way to 2. Giving a company an instant global
                      additional benefits to customers and    augment their core products with related      presence and attracting people to
                      building relationships with them        information and service function              one’s ad, some of them are not the
                                                           4. Obtaining cost savings from automating        company’s target market, but
                                                              routine customer services                     potentially will be
                                                                                                         3. Opening a new communication
                                                                                                            channel allowing a company to
                                                                                                            develop further relationships with
                                                                                                            customers
                                                                                                         4. All at a reasonable cost
On-line/transactional This approach is for companies to    1. Creating a retail presence larger than     1. Providing a larger or more specialized
design                use the Web to construct ``virtual      any physical store could                      selection of products than
                      business’’ ± independent, profitable 2. Creating a virtual business providing         competitors can offer
                      ventures that exist only on the         extra information in a form competitors 2. Providing higher quality and higher
                      Internet                                cannot imitate                                quantity information, more economic
                                                           3. Creating a virtual business that takes a      benefits, and more convenience than
                                                              specialty product or collectible and sells    competitors can offer
                                                              it worldwide                               3. Providing a sense of community for
                                                           4. Creating a virtual business that uses the     customers
                                                               Internet to produce superior economic
                                                               benefits to customers that competitors
                                                               can not imitate
                                                           5. Creating a virtual business providing
                                                               convenience to customers that
                                                               competitors cannot match

[8]
H. Joseph Wen,
                              .   Reebok (www.reebok.com) lets visitors       Promotion model
Houn-Gee Chen and                 read about sports and fitness, hear from    The promotion model represents a unique
Hsin-Ginn Hwang
E-commerce Web site design:       Reebok-sponsored athletes, and learn        form of advertising that attracts a potential
strategies and models             about Reebok’s human-rights activities,     customer to a site. The objective is to attract
Information Management &          among other things.                         the user to the commercial site behind it. In
Computer Security                                                             many cases, Web sites provide free gifts to get
9/1 [2001] 5±12
                              Cost saving model                               users’ attention. The gifts typically include
                              Saving from commercial activity on the Web      digitized material such as software,
                              includes cost-effective savings and             photographs, music, and consumer reports.
                              productivity savings. By directly meeting       Examples of the promotion model include:
                              information needs, a Web site can be highly
                                                                              .  Auto-By-Tel (www.autobytel.com) offers a
                              cost-effective. Many companies now use their       comprehensive consumer report for all
                              Web site to support the ownership phase of         major manufacturers. It attracts
                              the customer service life cycle. Productivity      consumers to visit the site to read the
                              savings arise from reduction in order and          report and compare the price. The Web
                                                                                 site produces significant sales for local car
                              processing costs and more efficient inventory
                                                                                 dealers.
                              management. Cost savings result through         .  Kodak (www.kodak.com) provides
                              reduced brochure printing and distribution
                                                                                 technical help and tutorials for its digital
                              costs and reductions in order-taking as
                                                                                 cameras and offers a library of colorful,
                              customers use fill-out forms to prepare their      high-quality digital images that are
                              own orders. As control is effectively              downloadable.
                              transferred to the customer, customer
                              satisfaction might actually be increased.       Info-mediary model
                              Examples of the cost saving model include:      An info-mediary may offer users free Internet
                              .  Microsoft (www.microsoft.com) provides       access or free hardware in exchange for
                                 voluminous support material, live audio      detailed information about their surfing and
                                 broadcasts of Microsoft conferences,         purchasing habits. This is more likely to
                                 product user groups, and free download of    succeed than the pure promotion model. Data
                                 the patch and supplemental programs.         about consumers and their buying habits are
                              .  FedEx (www.fedex.com) has a Web-based        extremely valuable. Especially when that
                                 parcel tracking service. The Web site        information is carefully analyzed and used to
                                 saves at least 100,000 shipment tracking     target marketing campaigns. Some firms are
                                 requests a day. The savings from reducing    able to function as info-mediaries by
                                 the number of employees in answering         collecting and selling information to other
                                 standard customer inquiries are              businesses. The model can also work in the
                                 tremendous.                                  other direction: providing consumers with
                                                                              useful information about the Web sites in a
Figure 1                                                                      market segment that compete for their dollar.
Emerging models of e-commerce Web site design                                 Examples of the info-mediary model include:
                                                                              .  Audio Review (www.AudioReview.com) is
                                                                                 a site that allows users to exchange
                                                                                 information with each other about the
                                                                                 quality of products and services ± or the
                                                                                 sellers with whom they have had a good/
                                                                                 bad purchase experience. Other sites take
                                                                                 the concept a step further by integrating
                                                                                 an intelligent agent into a Web browser.
                                                                                 Such agents monitor a user’s habits,
                                                                                 thereby increasing the relevance of its
                                                                                 recommendations to the user’s needs ±
                                                                                 and the value of the data to the collector.
                                                                              .  New York Times (www.NYTimes.com), a
                                                                                 content-based site, is free to view but
                                                                                 requires users simply to register (other
                                                                                 information may or may not be collected).
                                                                                 Registration allows inter-session tracking
                                                                                 of users’ site usage patterns and thereby
                                                                                 generates data of greater potential value
                                                                                 in targeted advertising campaigns. This is
                                                                                 the most basic form of info-mediary
                                                                                 model.
                                                                                                                          [9]
H. Joseph Wen,                The following eight models that are based on       Mall model
Houn-Gee Chen and             the on-line/transactional design strategy          An e-mall hosts many on-line merchants. The
Hsin-Ginn Hwang               include:
E-commerce Web site design:                                                      mall typically charges setup, monthly listing,
strategies and models         1 brokerage model;                                 and/or per transaction fees. The virtual mall
Information Management &      2 retail model;                                    model may be most effectively realized when
Computer Security             3 mall model;                                      combined with a generalized portal. Also,
9/1 [2001] 5±12               4 advertising model;                               more sophisticated malls will provide
                              5 subscription model;                              automated transaction services and
                              6 community model;                                 relationship marketing opportunities.
                              7 manufacturer model; and                          Examples of the mall model include:
                              8 customization model.                             .  Yahoo! Shopping (Shopping.Yahoo.com) is
                                                                                    a cyber shopping mall. It allows customers
                              These are popular models that provide
                                                                                    to visit just one site for all their shopping
                              on-line transaction services for companies to
                                                                                    needs. Since it is an attractive and well-
                              make profits on the Web.
                                                                                    promoted site, it attracts many more
                                                                                    visitors than any individual store could.
                              Brokerage model                                    .  zShops (zShops.com) is a virtual mall, but
                              Brokers are match-makers. They bring
                                                                                    one that will process the transaction,
                              buyers and sellers together and facilitate
                                                                                    track orders, and provide billing and
                              transactions. Those can be business-to-
                                                                                    collection services. It brings buyers and
                              business (B2B), business-to-consumer (B2C),
                                                                                    on-line merchants to the mall and
                              or consumer-to-consumer (C2C) markets. A
                                                                                    provides transaction services such as
                              broker makes its money by charging a fee for
                                                                                    financial settlement and quality
                              each transaction it enables. Examples of the
                                                                                    assurance. zShops protects consumers by
                              brokerage model include:
                                                                                    assuring satisfaction with merchants.
                              .  eTrade (www.eTrade.com) is an on-line
                                 financial brokerage, where customers
                                                                                 Advertising model
                                 place buy and sell orders for transacting
                                                                                 The Web-advertising model is an extension of
                                 financial instruments. Also, travel agents      the traditional media-broadcasting model.
                                 fit into this category. In this model, the      The broadcaster, in this case, a Web site,
                                 broker charges the buyer and/or seller a        provides content (usually, but not
                                 transaction fee. Some models work on            necessarily, for free) and services (like e-
                                 volume and low overhead to deliver the          mail, chat, or forums) mixed with advertising
                                 best-negotiated prices.                         messages in the form of banner ads. The
                              .  World Chemical Exchange                         banner ads may be the major or sole source of
                                 (www.ChemConnect.com) is an                     revenue for the broadcaster. The broadcaster
                                 increasingly common model in B2B                may be a content creator or a distributor of
                                 markets. In this model, the broker              content created elsewhere. The advertising
                                 typically charges the seller a transaction      model only works when the volume of viewer
                                 fee based on the value of the sale. The         traffic is large or highly specialized.
                                 pricing mechanism can be a simple               Examples of the advertising model include:
                                 offer/buy, offer/negotiated buy, or an          .  Yahoo! (Yahoo.com) is a high-volume
                                 auction offer/bid approach.                        traffic ± typically tens of millions of visits
                                                                                    per month ± driven by generic or
                              Retail model                                          diversified content or services. The high
                              E-tailers are an Internet version of classic          volume makes advertising profitable and
                              wholesalers and retailers of goods and services.      permits further diversification of site
                              Sales may be made based on list prices or             services. Competition for volume has led
                              through auction. In some cases, the goods and         to the packaging of free content and
                              services may be unique to the Web and not have        services, such as e-mail, stock portfolio,
                              a traditional ``brick-and-mortar’’ storefront.        message boards, chat, news, and local
                              Examples of the retail model include:                 information.
                              .   eToys (eToys.com) is a toy business that       .  Free Merchant (FreeMerchant.com) gives
                                  operates only over the Web. The method of         users free Web services, site hosting, and
                                  selling may be list price or auction.             Internet access. Freebies create a high
                              .   Lands’ End (www.Landsend.com), a                  volume site for advertising opportunities.
                                  traditional catalog company, has now
                                  migrated from mail order to a Web-based        Subscription model
                                  order business. There is the potential for     Users pay for access to the site. High value-
                                  channel conflict. Catalog marketing can        added content is essential. Generic news
                                  prove to be an asset if cleverly integrated    content, viable on the newsstand, has proven
                                  into Web operations.                           less successful as a subscription model on the
[ 10 ]
H. Joseph Wen,                Web. A 1999 survey by Jupiter                     savings that may or may not be passed on to
Houn-Gee Chen and             Communications found that 46 per cent of          consumers), improved customer service, and
Hsin-Ginn Hwang               Internet users would not pay to view content      a better understanding of customer
E-commerce Web site design:
strategies and models         on the Web. Some businesses have combined         preferences. The model has the potential for
Information Management &      free content (to drive volume and ad revenue)     channel conflict with a manufacturer’s
Computer Security             with premium content or services for              established supply chain. Examples of the
9/1 [2001] 5±12               subscribers only. Examples of the                 manufacturer model include:
                              subscription model include:                       .  Micron (www.micron.com), a computer
                              .  Quote.com (www.Quote.com) is an                   manufacturer, sells its computer directly
                                 example of a site profitably selling              to customers on the Web. Since there is no
                                 investment information. It creates a              intermediary the distribution costs or
                                 unique and ``must have’’ content that             cost-of-sales shrink to zero.
                                 draws investors to pay a subscription fee      .  Flowerbud (www.Flowerbud.com) sells
                                 for the information.                              fresh flowers directly to customers on the
                              .  ESPN SportsZone (espnnet.sportszone.com)          Web. Perishable products that benefit
                                 attracts more than 250,000 visitors a day         from fast distribution, like fresh flowers,
                                 with free, frequently updated sports              may prove advantageous by eliminating
                                 information, while 50,000 subscribers pay $5      middlemen.
                                 per month to access detailed background
                                 information, columns, reports, and more.       Customization model
                                                                                This model provides customers with content
                              Community model                                   that is customized to meet their preferences.
                              The viability of the community model is           By completely customizing information
                              based on user loyalty (as opposed to high         needs, a Web site can be highly attractive to
                              traffic volume). Users have a high investment     visitors. While this model represents a novel
                              in both time and emotion in the site. In some     use of e-commerce technology, it is unclear
                              cases, users are regular contributors of          how large a paying market exists for this
                              content and/or money. Having users who            kind of information. Examples of the
                              visit continually offers advertising,             customization model include:
                              info-mediary or specialized portal                .  My.Netscape (My.Netscape.com) is a
                              opportunities. The community model may               personalized portal. The generic nature of
                              also run on a subscription fee for premium           a generalized portal undermines user
                              services. Examples of the community model            loyalty. The personalized portals allow
                              include:                                             customization of the interface and
                              .  Family Radio (FamilyRadio.com) is a               content. This increases loyalty through
                                 Christian radio station site. It is               the user’s own time investment in
                                 predicated on the creation of a community         personalizing the site. The profitability of
                                 of users who support the site through             this portal in based on volume and
                                 voluntary donations. Not-for-profit               possibly the value of information derived
                                 organizations may also seek funding from          from user choices.
                                 charitable foundations to support the          .  Intelligent Agents (BargainFinder.com)
                                 organization’s mission.                           are programs that answer to user
                              .  Guru (Guru.com) provides a source of              problems with navigation in the chaos of
                                 information based on professional                 the Internet. BargainFinder not only helps
                                 expertise and the experience of other             users find a good price but also learns
                                 users. It is typically run like a forum           from past user behavior to help optimize
                                 where persons seeking information can             searches.
                                 pose questions and receive answers from
                                 (presumably) someone knowledgeable
                                 about the subject. The experts may be
                                                                                 Summary
                                 employed staff, a regular cadre of
                                 volunteers, or in some cases, simply           This paper studies the emerging models of
                                 anyone on the Web who wishes to                e-commerce Web site design. The models are
                                 respond.                                       categorized based on different Web design
                                                                                site strategies. We identify two major Web
                              Manufacturer model                                site design strategies: ``informational/
                              This model is predicated on the power of the      communicational design strategy’’ and
                              Web to allow manufacturers to reach buyers        ``on-line/transactional design strategy.’’ The
                              directly and thereby compress the                 models for informational/communicational
                              distribution channel (i.e. eliminate              design strategy include brand awareness and
                              wholesalers and retailers). The manufacturer      image building, cost saving, promotion, and
                              model can be based on efficiency (cost            info-mediary. The models for on-line/
                                                                                                                         [ 11 ]
H. Joseph Wen,                transactional design strategy include               Griffith, D.A. and Krampf, R.F. (1998), ``An
Houn-Gee Chen and             brokerage, retail, mall, advertising,                   examination of the Web-based strategies of
Hsin-Ginn Hwang               subscription, community, manufacturer, and              the top 100 US retailers’’, Journal of
E-commerce Web site design:
strategies and models         customization.                                          Marketing: Theory and Practice, Summer,
Information Management &        Although a large number of companies use              pp. 12-22.
Computer Security             the Web as an advertising tool to build             Hoffman, D.L., Novak, T.P. and Chatterjee, P.
9/1 [2001] 5±12               awareness or provide information rather                 (1995), ``Commercial scenarios for the Web:
                              than relying on the Web to do online                    opportunities and challenges’’, Journal of
                              transactions, we present eight e-commerce               Computer-Mediated Communication, Vol. 1
                              models that companies are using to make                 No. 3, pp. 1-20.
                              profits on the Internet. In fact, companies         Ju-Pak, K.H. (1999), ``Content dimension of Web
                              usually use more than one model to                      advertising: a cross-national comparison’’,
                              accomplish their e-commerce objectives.                 International Journal of Advertising, Vol. 18,
                              Although new models are beginning and are               pp. 207-31.
                              continuing to appear on the Web, no one             Kalakota, R. and Whinston, A.B. (1996), Frontiers
                              knows which, if any, of these models will               of Electronic Commerce, Addison-Wesley,
                              finally succeed.                                        Reading, MA.
                                                                                  Liu, C., Arnett, K., Capella, L. and Beatty, R.
                                                                                      (1997), ``Web sites of the Fortune 500
                              References and further reading
                              Angehrn, A. (1997), ``Designing mature Internet         companies: facing customers through home
                                  business strategies: the ICDT model’’,              pages’’, Information & Management, Vol. 31,
                                  European Management Journal, Vol. 15 No. 4,         pp. 335-45.
                                  pp. 361-9.                                      Palmer, J.W. and Griffith, D.A. (1998), ``An
                              Cappel, J.J. and Myerscough, M.A. (1996), ``World       emerging model of Web site design for
                                  Wide Web uses for electronic commerce:              marketing’’, Communications of the ACM,
                                  toward a classification scheme’’, http://           Vol. 41 No. 3, pp. 44-51.
                                  hsb.baylor.edu/ramsower/ais.ac.96/papers/       Slywotzky, A.J. (2000), ``The future of commerce’’,
                                  aisor1-3.htm.                                       Harvard Business Review, January-February,
                              Clark, B. (1997), ``Welcome to my parlor . . .’’,       p. 39.
                                  Marketing Management, Chicago, Vol. 5 No. 4,    Watson, R.T., Akselsen, S. and Pitt, L.F. (1998),
                                  pp. 10-25.                                          ``Attractors: building mountains in the flat
                              Duffy, J. (2000), ``Point of no return’’, CMA           landscape of the World Wide Web’’, California
                                  Management, March, pp. 32-7.                        Management Review, Vol. 40 No. 2, pp. 36-56.




[ 12 ]

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E commerce website design

  • 1. E-commerce Web site design: strategies and models H. Joseph Wen New Jersey Institute of Technology, Newark, New Jersey, USA Houn-Gee Chen National Chung-Cheng University, Chia-Yi, Taiwan Hsin-Ginn Hwang National Chung-Cheng University, Chia-Yi, Taiwan Keywords ways of doing business that no company can Business strategy, E-commerce, Introduction afford to ignore. The basis for moving to an World Wide Web, Marketing, Model, Design The Web is one of the most revolutionary electronic commerce is a belief that technologies that changes the business electronic markets have the potential to be Abstract environment and has a dramatic impact on more efficient in developing new The rapid adoption of the Web as a the future of electronic commerce (EC). The information-based goods and services, commercial medium has caused firms to experimen t with future of EC will accelerate the shift of the finding global customers and trading innovativ e ways of doing business. power toward the consumer, which will lead partners to conduct business. Electronic Those firms that effectivel y to fundamental changes in the way commerce via the Internet or the next market themselves on the Web companies relate to their customers and generation Internet Protocol, IPv6, will have a distinct advantage. This paper presents two e-commerce compete with one another (Slywotzky, 2000). change business institutions, operations and Web site design strategies and 12 The immense popularity of the Internet in products/services as we know today, just as e-commerce models for gaining recent years has been fueled largely by the the telephone, TV, fax, and e-mail changed that advantage. prospect of performing business on-line. the way businesses and consumers More and more companies set up their own communicate. Electronic commerce has corporate LANs by Intranet, apply Extranet become very popular because of the benefits and Internet to work collaboratively with and the convenience it brings along. As their customers, suppliers, and partners. shown in Table I, the benefits include The Internet can bring down physical product promotion, cost saving, timely barriers to commerce, almost immediately information, shortened remittance time, giving even the smallest business access to information consistency, better customer untapped markets around the world. At the service, better customer relationship, same time, consumers can conduct business customization of products, competitive and make purchases from companies advantages, and convenience of doing previously unavailable to them. business. Furthermore, companies are able to place Electronic commerce is no longer an marketing material on Internet servers alternative, it is an imperative. The only ranging from simple advertising to choice open is whether to start quickly or comprehensive virtual brochures. In today’s global marketplace, fast reliable information slowly. Many companies are still struggling is a necessity for most companies to attain with the most basic problem: what is the best some kind of competitive advantage. For EC model? Unfortunately, there is no simple instance, companies can create a virtual answer for this question. Even companies in marketplace in which to sell their products. the same industry, of the same size, or with This virtual market is untapped and could similar cultures are finding that one EC reach millions of users on the Internet 24 model does not fit all. Companies are hours a day. required to review their EC models and Electronic commerce is defined as buying rethink strategy in order to capitalize on the and selling of product, services or changing dynamics of the marketplace. The information via computer networks, mainly purpose of this article is to examine the the Internet. As the fastest growing facet of currently available EC models and help the Internet and other information readers to figure out the best way to make Information Management & technologies, EC offers functionality and new money in the EC era. Computer Security 9/1 [2001 ] 5±12 The research register for this journal is available at The current issue and full text archive of this journal is available at # MCB University Press [ISSN 0968-5227] http://www.mcbup.com/research_registers http://www.emerald-library.com/ft [5]
  • 2. H. Joseph Wen, Table I Houn-Gee Chen and The benefits of electronic commerce Hsin-Ginn Hwang E-commerce Web site design: Benefit Description strategies and models Information Management & Product promotion Through a direct, information-rich and interactive contact with customers, EC Computer Security enhances the promotion of products. Electronic medium also allows interactivity and 9/1 [2001] 5±12 customization for advertising content, based on the customer profile or input. EC thus offers an opportunity for new promotion strategies, enhancing the branding of products Cost saving By using a public shared infrastructure such as the Internet and digitally transmitting and reusing information, EC systems lower the cost of delivering information to customers, including personnel, phone, postage, and printing costs Timely information Due to their instantaneous nature, EC systems allow a reduction of the cycle time required to produce and deliver information and services. Shortened remittance time With electronic funds transfer (EFT), customers send their remittances electronically to the company’s bank. This arrangement eliminates the time delay associated with the remittance in the mail system Information consistency EC ensures the consistency and accuracy of information through sharing of information and use of electronic forms for doing business Better customer service The ability to provide on-line answers to problems through resolution guides, archives of commonly encountered problems and electronic mail interaction 24 hours a day, 365 days a year, builds customer confidence and retention Better customer EC enables the learning about customers due to its ability to record every event in relationship which a customer asks for information about a product, buys one, requests customer service, etc. Through these interactions, the needs of the customer are identified and will feed future marketing efforts Customization of products The information-based nature of the EC processes allows for new products to be created or existing products to be customized based on customers’ exact needs. Competitive advantages EC enables a company to achieve competitive advantages of: cost saving based on reduced advertising/promotion costs; product differentiation by customizing products and timely response to market; customer focus through better customer relationships and better customer services Convenience of doing There is no limit on time and location to conduct a business with related parties. business The information delivered to manufacturers, suppliers and warehouses is almost real time Myerscough (1996) identified five different Background ways that a ``for-profit’’ company may use the Hoffman et al. (1995) proposed a structural Web for: framework for examining the explosion in 1 market awareness; commercial activity on the Web. The study 2 customer support; leads to a new classification of current 3 sales; commercial Web site designs as: 4 advertising; and . online storefront; 5 electronic information services. . Internet presence; Liu et al. (1997) examined Web sites of US . content; Fortune 500 companies to provide a status . mall; report of Web usage by these companies. . incentive site; and They concluded that about 93 per cent of the . search agent. Fortune 500 companies display their The authors examined the Web site designs products and services on their Web sites, in the context of integrated marketing and and about 26 per cent of them provide for facilitated greater understanding of the Web some type of online business with their as a commercial medium. This study, as well customers through their Web sites. A study as those by Ju-Pak (1999) and Griffith and of 250 US Fortune 500 Web sites, conducted Krampf (1998) essentially perform Web site by Palmer and Griffith (1998), illustrate the content analysis from an Internet marketing powerful impact that the Web has made on point of view. marketing practices. The authors argued Kalakota and Whinston (1996) classified that Web-based marketing activities and its advertising, sales, and customer service as site design are driven by the interaction the main consumer-oriented electronic among the firm’s market offering, commerce activities. In addition, Cappel and marketing activities and technical [6]
  • 3. H. Joseph Wen, characteristics. The marketing activities customer relationships are being Houn-Gee Chen and used in the study to examine corporate Web incorporated into commercial Web site Hsin-Ginn Hwang sites are: design. There are two generic Web site E-commerce Web site design: strategies and models . promotional activities; design strategies: Information Management & . sales; 1 informational/communicational strategy; Computer Security . service; and and 9/1 [2001] 5±12 . support. 2 on-line/transactional strategy, summarised in Table II. From the seller’s perspective, Angehrn (1997) proposed the ICDT model for analyzing and Informational/communicational strategy classifying EC strategies. The model In the informational/communicational describes four virtual business spaces, strategy, the Web is used to support but not to namely: replace a company’s main business activities. 1 virtual information space; Companies do not limit themselves to just 2 virtual communication space; marketing on the Web. As a matter of fact, they 3 virtual distribution space; and look at other traditional media of advertising 4 virtual transaction space. and marketing study in order to meet their Based on the model, the authors suggest four business goals and marketing objectives. EC strategies that are further refined by the Looking at Web marketing as another tool in level of sophistication and customization of the company’s marketing arsenal (Clark, 1997), the Web site design. the informational/communicational design is Watson et al. (1998) coined the concept of the most common use of Web marketing today. ``attractors.’’ An attractor is a Web site with Liu et al. (1997) report that 93 per cent of the potential to attract and interact with a Fortune 500 companies have publicly relatively large number of visitors in a accessible sites, but fewer than target stakeholder group. Authors visited 26 per cent of those sites support transactions. many Web sites and use metaphors to label On the other hand, there is no doubt that and group sites into eight potential informational/ communicational design on the attactors: Web can also produce significant sales in other 1 the entertainment park; areas of business. For example, Insight Direct, 2 the archive; a discount computer cataloger selling mostly to 3 exclusive sponsorship; business, generates only 10 per cent of its sales 4 the town hall; from its on-line catalog, but more than 75 per 5 the club; cent of its new customers come from the site. 6 the gift shop; 7 the freeway intersection; and On-line/transactional strategy 8 the customer service center. The on-line/transactional strategy invariably provides an electronic catalog of They argued that the strategic use of hard-to- products for sale. Visitors can browse imitate attractors is a key factor in on-line through the catalog and order products on- marketing and creating an attractor will line. Although the informational/ become a key component of the strategy of communicational design often provides an some companies. electronic catalog as well as ordering The EC models for commercial Web site information (e.g. by phone, fax, or e-mail), it design to be examined in this article are does not support on-line transaction. Without similar to some of the models in the previous on-line ordering Web database capability, it studies. However, we introduce a wider hardly exploits the potential of the Web as an range of available models, extracted from the interactive medium. current commercial Web sites, than any The on-line/transactional strategy is what previous studies. In addition, all models are most proponents of marketing on the Web discussed based on two different Web site design strategies, informational/ expect. Griffith and Krampf (1998) indicated that the ability to enhance a company’s overall communicational strategy and on-line/ transactional strategy. sales was a significant decision factor to establish a Web site. Although there are still some hidden obstacles (e.g. transaction security), it seems that most companies are Web site design strategy likely to benefit directly from marketing on Web design has evolved from static hypertext the Web, especially for small and medium- publishing in the early days to dynamic sized enterprises. In fact, there have been a lot multimedia, Web database application of successful on-line/transactional designs, servers. More importantly, new business such as Amazon.com and Virtual Vineyards. models that bring savings, revenues, and The number of successful enterprises is [7]
  • 4. H. Joseph Wen, growing. There are reasons to believe that the After visiting many Web sites, a total of 12 Houn-Gee Chen and Web will become a significant money-making Web site design models for EC were found, Hsin-Ginn Hwang vehicle for electronic commerce. International shown in Figure 1. The first four models that E-commerce Web site design: strategies and models Data Corp. forecasts that Internet purchase related to the informational/communicational Information Management & volume will jump from $12.4 billion in 1997 to design are: Computer Security $425.7 billion by 2002. The US share is 1 brand awareness and image building model; 9/1 [2001] 5±12 2 cost saving model; projected to be $268.8 billion, the European Union $55.5 billion, Japan $21.4 billion, and 3 promotion model; and Asia $15.6 billion. 4 info-mediary model. In the following section, available Web design models are grouped and discussed Brand awareness and image building based on the two design strategies. However, model the models in each strategy group are not Web sites that apply this model provide mutually exclusive. For instance, a company detailed, rational information about the firm may build brand awareness on the Web (the and its offerings. They may also serve as a informational/communicational design signal to current and prospective customers strategy) and may do on-line retailing (the and competitors that the firm is on the cutting on-line/transactional design strategy) at the edge. The model reaches motivated customers same time. with an information/image-rich communications message. Because the entry barriers are so low, smaller firms can set up this kind of site as well or in some cases even E-commerce Web site design models better than larger firms. Examples of the brand There is no doubt that many Web design awareness and image building model include: models exist on the Internet and new models . Ford (www.ford.com) not only lists all the are increasing expeditiously. EC is not just models of its seven famous automotive about doing business over the Internet, it is brands, but also posts its environmental about changing the way companies do policy, cleaner manufacturing, business. It is about creating new business community involvement, and corporate models while transforming traditional ones. citizenship report. Table II Web site design strategy Web site design Definition/characteristic Promotion measures/ways Merits Informational/ This approach is for companies to 1. Putting companies’ catalog on-line 1. Providing large quantities of communicational use the Web as a supplement to 2. Building broad awareness and image information to customers design traditional marketing, delivering 3. Using the Web as a cost-effective way to 2. Giving a company an instant global additional benefits to customers and augment their core products with related presence and attracting people to building relationships with them information and service function one’s ad, some of them are not the 4. Obtaining cost savings from automating company’s target market, but routine customer services potentially will be 3. Opening a new communication channel allowing a company to develop further relationships with customers 4. All at a reasonable cost On-line/transactional This approach is for companies to 1. Creating a retail presence larger than 1. Providing a larger or more specialized design use the Web to construct ``virtual any physical store could selection of products than business’’ ± independent, profitable 2. Creating a virtual business providing competitors can offer ventures that exist only on the extra information in a form competitors 2. Providing higher quality and higher Internet cannot imitate quantity information, more economic 3. Creating a virtual business that takes a benefits, and more convenience than specialty product or collectible and sells competitors can offer it worldwide 3. Providing a sense of community for 4. Creating a virtual business that uses the customers Internet to produce superior economic benefits to customers that competitors can not imitate 5. Creating a virtual business providing convenience to customers that competitors cannot match [8]
  • 5. H. Joseph Wen, . Reebok (www.reebok.com) lets visitors Promotion model Houn-Gee Chen and read about sports and fitness, hear from The promotion model represents a unique Hsin-Ginn Hwang E-commerce Web site design: Reebok-sponsored athletes, and learn form of advertising that attracts a potential strategies and models about Reebok’s human-rights activities, customer to a site. The objective is to attract Information Management & among other things. the user to the commercial site behind it. In Computer Security many cases, Web sites provide free gifts to get 9/1 [2001] 5±12 Cost saving model users’ attention. The gifts typically include Saving from commercial activity on the Web digitized material such as software, includes cost-effective savings and photographs, music, and consumer reports. productivity savings. By directly meeting Examples of the promotion model include: information needs, a Web site can be highly . Auto-By-Tel (www.autobytel.com) offers a cost-effective. Many companies now use their comprehensive consumer report for all Web site to support the ownership phase of major manufacturers. It attracts the customer service life cycle. Productivity consumers to visit the site to read the savings arise from reduction in order and report and compare the price. The Web site produces significant sales for local car processing costs and more efficient inventory dealers. management. Cost savings result through . Kodak (www.kodak.com) provides reduced brochure printing and distribution technical help and tutorials for its digital costs and reductions in order-taking as cameras and offers a library of colorful, customers use fill-out forms to prepare their high-quality digital images that are own orders. As control is effectively downloadable. transferred to the customer, customer satisfaction might actually be increased. Info-mediary model Examples of the cost saving model include: An info-mediary may offer users free Internet . Microsoft (www.microsoft.com) provides access or free hardware in exchange for voluminous support material, live audio detailed information about their surfing and broadcasts of Microsoft conferences, purchasing habits. This is more likely to product user groups, and free download of succeed than the pure promotion model. Data the patch and supplemental programs. about consumers and their buying habits are . FedEx (www.fedex.com) has a Web-based extremely valuable. Especially when that parcel tracking service. The Web site information is carefully analyzed and used to saves at least 100,000 shipment tracking target marketing campaigns. Some firms are requests a day. The savings from reducing able to function as info-mediaries by the number of employees in answering collecting and selling information to other standard customer inquiries are businesses. The model can also work in the tremendous. other direction: providing consumers with useful information about the Web sites in a Figure 1 market segment that compete for their dollar. Emerging models of e-commerce Web site design Examples of the info-mediary model include: . Audio Review (www.AudioReview.com) is a site that allows users to exchange information with each other about the quality of products and services ± or the sellers with whom they have had a good/ bad purchase experience. Other sites take the concept a step further by integrating an intelligent agent into a Web browser. Such agents monitor a user’s habits, thereby increasing the relevance of its recommendations to the user’s needs ± and the value of the data to the collector. . New York Times (www.NYTimes.com), a content-based site, is free to view but requires users simply to register (other information may or may not be collected). Registration allows inter-session tracking of users’ site usage patterns and thereby generates data of greater potential value in targeted advertising campaigns. This is the most basic form of info-mediary model. [9]
  • 6. H. Joseph Wen, The following eight models that are based on Mall model Houn-Gee Chen and the on-line/transactional design strategy An e-mall hosts many on-line merchants. The Hsin-Ginn Hwang include: E-commerce Web site design: mall typically charges setup, monthly listing, strategies and models 1 brokerage model; and/or per transaction fees. The virtual mall Information Management & 2 retail model; model may be most effectively realized when Computer Security 3 mall model; combined with a generalized portal. Also, 9/1 [2001] 5±12 4 advertising model; more sophisticated malls will provide 5 subscription model; automated transaction services and 6 community model; relationship marketing opportunities. 7 manufacturer model; and Examples of the mall model include: 8 customization model. . Yahoo! Shopping (Shopping.Yahoo.com) is a cyber shopping mall. It allows customers These are popular models that provide to visit just one site for all their shopping on-line transaction services for companies to needs. Since it is an attractive and well- make profits on the Web. promoted site, it attracts many more visitors than any individual store could. Brokerage model . zShops (zShops.com) is a virtual mall, but Brokers are match-makers. They bring one that will process the transaction, buyers and sellers together and facilitate track orders, and provide billing and transactions. Those can be business-to- collection services. It brings buyers and business (B2B), business-to-consumer (B2C), on-line merchants to the mall and or consumer-to-consumer (C2C) markets. A provides transaction services such as broker makes its money by charging a fee for financial settlement and quality each transaction it enables. Examples of the assurance. zShops protects consumers by brokerage model include: assuring satisfaction with merchants. . eTrade (www.eTrade.com) is an on-line financial brokerage, where customers Advertising model place buy and sell orders for transacting The Web-advertising model is an extension of financial instruments. Also, travel agents the traditional media-broadcasting model. fit into this category. In this model, the The broadcaster, in this case, a Web site, broker charges the buyer and/or seller a provides content (usually, but not transaction fee. Some models work on necessarily, for free) and services (like e- volume and low overhead to deliver the mail, chat, or forums) mixed with advertising best-negotiated prices. messages in the form of banner ads. The . World Chemical Exchange banner ads may be the major or sole source of (www.ChemConnect.com) is an revenue for the broadcaster. The broadcaster increasingly common model in B2B may be a content creator or a distributor of markets. In this model, the broker content created elsewhere. The advertising typically charges the seller a transaction model only works when the volume of viewer fee based on the value of the sale. The traffic is large or highly specialized. pricing mechanism can be a simple Examples of the advertising model include: offer/buy, offer/negotiated buy, or an . Yahoo! (Yahoo.com) is a high-volume auction offer/bid approach. traffic ± typically tens of millions of visits per month ± driven by generic or Retail model diversified content or services. The high E-tailers are an Internet version of classic volume makes advertising profitable and wholesalers and retailers of goods and services. permits further diversification of site Sales may be made based on list prices or services. Competition for volume has led through auction. In some cases, the goods and to the packaging of free content and services may be unique to the Web and not have services, such as e-mail, stock portfolio, a traditional ``brick-and-mortar’’ storefront. message boards, chat, news, and local Examples of the retail model include: information. . eToys (eToys.com) is a toy business that . Free Merchant (FreeMerchant.com) gives operates only over the Web. The method of users free Web services, site hosting, and selling may be list price or auction. Internet access. Freebies create a high . Lands’ End (www.Landsend.com), a volume site for advertising opportunities. traditional catalog company, has now migrated from mail order to a Web-based Subscription model order business. There is the potential for Users pay for access to the site. High value- channel conflict. Catalog marketing can added content is essential. Generic news prove to be an asset if cleverly integrated content, viable on the newsstand, has proven into Web operations. less successful as a subscription model on the [ 10 ]
  • 7. H. Joseph Wen, Web. A 1999 survey by Jupiter savings that may or may not be passed on to Houn-Gee Chen and Communications found that 46 per cent of consumers), improved customer service, and Hsin-Ginn Hwang Internet users would not pay to view content a better understanding of customer E-commerce Web site design: strategies and models on the Web. Some businesses have combined preferences. The model has the potential for Information Management & free content (to drive volume and ad revenue) channel conflict with a manufacturer’s Computer Security with premium content or services for established supply chain. Examples of the 9/1 [2001] 5±12 subscribers only. Examples of the manufacturer model include: subscription model include: . Micron (www.micron.com), a computer . Quote.com (www.Quote.com) is an manufacturer, sells its computer directly example of a site profitably selling to customers on the Web. Since there is no investment information. It creates a intermediary the distribution costs or unique and ``must have’’ content that cost-of-sales shrink to zero. draws investors to pay a subscription fee . Flowerbud (www.Flowerbud.com) sells for the information. fresh flowers directly to customers on the . ESPN SportsZone (espnnet.sportszone.com) Web. Perishable products that benefit attracts more than 250,000 visitors a day from fast distribution, like fresh flowers, with free, frequently updated sports may prove advantageous by eliminating information, while 50,000 subscribers pay $5 middlemen. per month to access detailed background information, columns, reports, and more. Customization model This model provides customers with content Community model that is customized to meet their preferences. The viability of the community model is By completely customizing information based on user loyalty (as opposed to high needs, a Web site can be highly attractive to traffic volume). Users have a high investment visitors. While this model represents a novel in both time and emotion in the site. In some use of e-commerce technology, it is unclear cases, users are regular contributors of how large a paying market exists for this content and/or money. Having users who kind of information. Examples of the visit continually offers advertising, customization model include: info-mediary or specialized portal . My.Netscape (My.Netscape.com) is a opportunities. The community model may personalized portal. The generic nature of also run on a subscription fee for premium a generalized portal undermines user services. Examples of the community model loyalty. The personalized portals allow include: customization of the interface and . Family Radio (FamilyRadio.com) is a content. This increases loyalty through Christian radio station site. It is the user’s own time investment in predicated on the creation of a community personalizing the site. The profitability of of users who support the site through this portal in based on volume and voluntary donations. Not-for-profit possibly the value of information derived organizations may also seek funding from from user choices. charitable foundations to support the . Intelligent Agents (BargainFinder.com) organization’s mission. are programs that answer to user . Guru (Guru.com) provides a source of problems with navigation in the chaos of information based on professional the Internet. BargainFinder not only helps expertise and the experience of other users find a good price but also learns users. It is typically run like a forum from past user behavior to help optimize where persons seeking information can searches. pose questions and receive answers from (presumably) someone knowledgeable about the subject. The experts may be Summary employed staff, a regular cadre of volunteers, or in some cases, simply This paper studies the emerging models of anyone on the Web who wishes to e-commerce Web site design. The models are respond. categorized based on different Web design site strategies. We identify two major Web Manufacturer model site design strategies: ``informational/ This model is predicated on the power of the communicational design strategy’’ and Web to allow manufacturers to reach buyers ``on-line/transactional design strategy.’’ The directly and thereby compress the models for informational/communicational distribution channel (i.e. eliminate design strategy include brand awareness and wholesalers and retailers). The manufacturer image building, cost saving, promotion, and model can be based on efficiency (cost info-mediary. The models for on-line/ [ 11 ]
  • 8. H. Joseph Wen, transactional design strategy include Griffith, D.A. and Krampf, R.F. (1998), ``An Houn-Gee Chen and brokerage, retail, mall, advertising, examination of the Web-based strategies of Hsin-Ginn Hwang subscription, community, manufacturer, and the top 100 US retailers’’, Journal of E-commerce Web site design: strategies and models customization. Marketing: Theory and Practice, Summer, Information Management & Although a large number of companies use pp. 12-22. Computer Security the Web as an advertising tool to build Hoffman, D.L., Novak, T.P. and Chatterjee, P. 9/1 [2001] 5±12 awareness or provide information rather (1995), ``Commercial scenarios for the Web: than relying on the Web to do online opportunities and challenges’’, Journal of transactions, we present eight e-commerce Computer-Mediated Communication, Vol. 1 models that companies are using to make No. 3, pp. 1-20. profits on the Internet. In fact, companies Ju-Pak, K.H. (1999), ``Content dimension of Web usually use more than one model to advertising: a cross-national comparison’’, accomplish their e-commerce objectives. International Journal of Advertising, Vol. 18, Although new models are beginning and are pp. 207-31. continuing to appear on the Web, no one Kalakota, R. and Whinston, A.B. (1996), Frontiers knows which, if any, of these models will of Electronic Commerce, Addison-Wesley, finally succeed. Reading, MA. Liu, C., Arnett, K., Capella, L. and Beatty, R. (1997), ``Web sites of the Fortune 500 References and further reading Angehrn, A. (1997), ``Designing mature Internet companies: facing customers through home business strategies: the ICDT model’’, pages’’, Information & Management, Vol. 31, European Management Journal, Vol. 15 No. 4, pp. 335-45. pp. 361-9. Palmer, J.W. and Griffith, D.A. (1998), ``An Cappel, J.J. and Myerscough, M.A. (1996), ``World emerging model of Web site design for Wide Web uses for electronic commerce: marketing’’, Communications of the ACM, toward a classification scheme’’, http:// Vol. 41 No. 3, pp. 44-51. hsb.baylor.edu/ramsower/ais.ac.96/papers/ Slywotzky, A.J. (2000), ``The future of commerce’’, aisor1-3.htm. Harvard Business Review, January-February, Clark, B. (1997), ``Welcome to my parlor . . .’’, p. 39. Marketing Management, Chicago, Vol. 5 No. 4, Watson, R.T., Akselsen, S. and Pitt, L.F. (1998), pp. 10-25. ``Attractors: building mountains in the flat Duffy, J. (2000), ``Point of no return’’, CMA landscape of the World Wide Web’’, California Management, March, pp. 32-7. Management Review, Vol. 40 No. 2, pp. 36-56. [ 12 ]