McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter 9

e-Commerce Systems

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Learning Objectives

❖Identify the major categories and trends of e-commerce applications.

❖Identify the essential processes of an e-commerce system, and give examples of how it is implemented in e-commerce applications.

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Learning Objectives

❖Identify and give examples of several key factors and Web store requirements needed to succeed in e-commerce.

❖Identify and explain the business value of several types of e-commerce marketplaces.

❖Discuss the benefits and trade0ffs of several e-commerce clicks-and-bricks alternatives.

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Section 1

E-Commerce Fundamentals

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I. Introduction to e-Commerce

❖Electronic Commerce – the entire online process of developing, marketing, selling, delivering, servicing, and paying for products and services transacted on networked global marketplaces; more than just buying and selling online

❖e-Commerce – the online exchange of value; more than just buying and selling on the Internet

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II. The Scope of e-Commerce

❖Includes marketing, discovery, transaction processing, product and customer service process, intranet and extranet access, and customer collaboration

❖e-Commerce Technologies – involves most information and Internet technologies

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II. The Scope of e-Commerce

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II. The Scope of e-Commerce

❖Categories of e-Commerce

❖Business-To-Consumer (B2C) e-Commerce – still small when compared with all online commerce

❖Consumer-To-Consumer (C2C) e-Commerce –online auctions, online advertising of personal products and services

❖Business-To-Business e-Commerce – most of e-Commerce is here

❖Business-To-Government (B2G) e-Commerce

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Forrester: Web 2.0 Has a Bright Future

❖What is Web 2.0?

❖What is Web 2.0 not?

❖What does Web 2.0 provide?

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III. Essential e-Commerce Processes

❖Access Control and Security – secure access between parties to assure trust

❖Profiling and Personalizing – processes that gather data on you and your behavior to provide personalized service; this may raise ethical issues

❖Search Management – effective and efficient search processes are required for a good Web site; there are more than 30 different search engines on the Internet

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III. Essential e-Commerce Processes

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III. Essential e-Commerce Processes

❖Content and Catalog Management❖helps e-commerce firms develop, generate, deliver,

and archive text and multimedia data

❖works with profiling tools

❖may include product configuration to support customer self-service and mass customization

❖Workflow Management – ensure proper transactions, decisions, and work activities are performed, and documents distributed correctly

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III. Essential e-Commerce Processes

❖Event Notification – monitor all e-commerce processes and record all relevant events; most e-commerce applications are event-driven and respond to things that happen (events)

❖Collaboration and Trading – a major category of e-commerce; processes consist of collaboration and trading services needed by various stakeholders

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e-Commerce Tools to Close the Deal

❖What is “an abandoned cart”?

❖Why might a customer fail to complete a purchase?

❖What tools encourage a customer to complete the transaction?

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Innvo Labs: Automated e-Commerce Processes

❖What was the weakness in the original Website?

❖How did the new Website improve that?

❖What other benefits did the new Website provide?

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IV. Electronic Payment Processes

❖Very complex due to the anonymous nature of electronic transactions

❖Web Payment Processes – most rely on credit card payment processes

❖Electronic Funds Transfer (EFT) – a variety of information technologies to capture and process money/credit transfers between banks, businesses, and customers

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IV. Electronic Payment Processes

❖Secure Electronic Payments – measures taken to ensure security of information in electronic payments

❖Encrypt data between customer and merchant

❖Encrypt data between customer and firm authorizing credit cards

❖Take sensitive information offline

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IV. Electronic Payment Processes

A Secure Electronic Payment System

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Section 2

e-Commerce Applications and Issues

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I. Introduction

❖e-commerce has changed how firms do business and is now defining how firms do business

❖e-Commerce Trends

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II. Business-To-Consumer (B2C) e-Commerce

❖Attract potential customers, transact goods and services, build customer loyalty

❖e-Commerce Success Factors

❖Selection and Value – attractive products, competitive prices

❖Performance and Service – easy navigation and purchasing, prompt shipping and delivery

❖Look and Feel – attractive Website, multimedia catalog

❖Advertising and Incentives – targeted Webpage advertising, email promotions, discounts, special offers

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II. Business-To-Consumer (B2C) e-Commerce

❖Personal Attention – personalized Web pages and product recommendations, email notices, interactive support

❖Community Relationships – virtual communities and links to related Web sites

❖Security and Reliability – security of customer information and transactions, trustworthy product information, reliable order fulfillment

❖Great Customer Communications – easy-to-find contact information, online order status, product support

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II. Business-To-Consumer (B2C) e-Commerce

Traditional Vs. Web Market

Communications

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Amazon.com: Partnering and Leveraging Infrastructure

❖What service does Amazon provide through Facebook?

❖Why might this be a popular service?

❖What security issues could be a problem here?

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Stork Craft Manufacturing Helps Wal-Mart Canada

❖What industry is Stork Craft in?

❖What partnership did they enter?

❖How do they market their products?

❖What benefits did this give them?

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III. Web Store Requirements

❖Most B2C e-commerce ventures are retail businesses on the Web; primary focus is to develop, operate, and manage the Website to attract and maintain customers for repeat sales❖Getting Customers to Find You – customers must

find you on the Web

❖Search Engine Optimization (SEO) – focus on improving the number/quality of visitors to a Web site

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III. Web Store Requirements

❖Serving Your Customers – a Web site should help serve customers personally and efficiently so they become loyal customers❖Web Cookie File – a file stored on the

customer’s computer with details about their visit to your Web site

❖Managing a Web Store – a Web store must be managed as both a Web site and a retail store

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Luxury Goes Digital: Fashion House Embraces Online Shopping

❖What was the historical issue of luxury items?

❖What was the Net-a-Porter solution?

❖What issue was lost online and how did they address this?

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IV. Business-To-Business (B2B) e-Commerce

❖The wholesale/supply side of e-Commerce

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Avnet Tears Up the B2B e-Commerce Playbook

❖What business is Avnet in?

❖What was the problem they faced?

❖What was the solution?

❖How has that solution worked out?

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V. e-Commerce Marketplaces

❖One-to-Many – sell-side marketplace – one major supplier dictates products and prices

❖Many-to-One – buy-side marketplace –many suppliers attempt to sell to one buyer

❖Some-to-Many – distribution marketplace –many suppliers combine catalogs to attract a larger audience of buyers

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V. e-Commerce Marketplaces

❖Many-to-Some – procurement marketplace – buyers combine purchasing power to gain lower prices from suppliers

❖Many-to-Many – auction marketplace –used by many buyers and sellers

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V. e-Commerce Marketplaces

A Sample B2B e-Commerce Web Portal

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SpecEx.com: B2B Trading of Wireless Spectrum

❖What business is Spectrum Bridge in?

❖How do they make money in this industry?

❖What is the problem with this business and how are they trying to get around that problem?

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VI. Clicks and Bricks in e-Commerce

❖Should virtual electronic business be combined with physical operations or kept separate?❖e-Commerce Integration – the Internet is just

another channel that gets plugged onto the business architecture

❖Other Clicks and Bricks Strategies – partial integration of e-commerce into the physical business operations, or complete separation of the two

❖e-Commerce Channel Choices – a marketing/sales channel created to conduct/manage e-commerce activities

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VI. Clicks and Bricks in e-Commerce

An Integrated Vs. Separate e-Commerce

Business

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IT Lessons from the Demise of Borders

❖What are the lessons to be learned from the demise of Borders?

❖Discuss each lesson and what could have been done differently.

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REI: Scaling e-Commerce Mountain

❖What did REI do with their Website?

❖Why?

❖Did it work? If so, how well?

❖What was the tricky part of making it all work?