E-CommerceHow the pieces fit together

Topics

• The Marketing Acquisition Process

• What is E-Commerce?

• Acquiring Prospects– Search engines

– Affiliates

– Comparison Shopping Engines

• How a Web Site Works– Layers of the web site

– How a web page works

– Key Performance Indicators (KPIs)

2

The Marketing Acquisition Process

3

Awareness Consideration Conversion Loyalty

Members of the targetedaudience (for example,dress shoppers) becomeaware of the company orbrand• Advertising• Word-of-Mouth• Public Relations

Individuals engage with thebrand and begins to considertransacting• Store or web site visits

Individuals “convert” frombrowsers to buyers bytransacting with the brand inthe store or web site• Product purchases• Signups for service or

information

Customers repurchase and/orbecome brand advocates• Purchase additional

products• Referrals

Traditional “Offline” Acquisition—Target

4

Awareness Consideration Conversion

TV Advertising

Print Advertising

Word-of-Mouth

Store Visit

Shopping/browsing

Purchase

What is E-Commerce?

• E-Commerce is selling via the Internet through a web store,commonly known as a web site or e-commerce site

• The store’s “www” (or URL) is simply the unique address at which thestore can be found on the Internet

• Shoppers use their Internet/Web browsers to reach the URL– Most common are Internet Explorer (IE), Firefox, Safari, and Chrome

– The browser pulls together images, text, and code, telling the browser how toassemble and display each

– What you see is known as the “front end” of the web site (the “back end” will beexplained later)

5

Online Acquisition—Ashford

6

Awareness Consideration Conversion

Social Media &Word-of-Mouth

Store Visit + Shopping/browsing Purchase

Search Engines

Affiliate Programs

Comparison Shopping Engines

Thank You for Purchasingfrom Ashford.com!

Search Engines

• Search engines collect and organize content and data from across theInternet– The most popular are Google, Yahoo!, and Bing

• Search results are based on keywords or search phrases and drivetraffic to the web site. There are two results categories1. Paid Search. Also known as “Pay-per-Click” or “PPC,” the rank of these results is

based on what companies have bid for placement1. Different terms command different prices

2. The actual text or “ad” displayed is based on the term being searched upon

3. Companies look at which words (also known as keywords or search terms) are most likely togenerate sales, set a budget, and bid accordingly. The number of keywords can range from a few toseveral hundred thousand

2. Natural Search. Results are based on what the search engines determine throughtheir algorithms (a method for calculating the weight of variables in producingresults) those results that will provide the greatest value to the person searching.1. The search engines “crawl” most of the Internet’s web sites, finds content, and applies the

algorithm to determine what to display

2. Companies employ SEO (Search Engine Optimization) to make its site more search-engine friendly;this includes incorporating content and descriptions in the site that make Ashford.com appearhighly relevant to people searching for watches

7

Google Search Results

8

Keyword / search phrase

Affiliate Programs

• Affiliate programs are a means for rewarding other sites for referringtraffic and sales to a company’s web site– In CJ, a retailer is an “Advertiser” that pays a commission other sites (“Publishers”)

for including links and banners that drive shoppers to Ashford.com and lead to asale

– Commission Junction is a leading “Affiliate Network,” serving the role ofconnecting advertisers to publishers and handling payments for referrals (inexchange for a small fee)

• For a company’s best affiliates it can establish a direct connection to their site andmanagers

9

Offer

Banner or text offer displayedon affiliate/publisher site

Shopper visits siteand purchases item

Company sends purchaseinfo to CJ

Company sends promotionaloffer to CJ, which makes it

available to affiliates

CJ sends commission payment to affiliate

Comparison Shopping Engines (CSEs)

• CSEs are sites that list products in a wide variety of categories,allowing shoppers to compare products of interest and their pricesfrom a multitude of retailers– Top CSEs include Google Product Search, NexTag, PriceGrabber, and Shopzilla

• To have its products displayed, a retailer sends a product feedcontaining robust product data to the CSEs– For most CSEs, products are listed for free but pay a Cost-per-Click* amount to the

CSE; this typically involves bidding for placement

10

*Cost-per-Click is a fee the retailer pays every time one of its product listings is clicked on. The amount paid per clickranges from a few cents to a few dollars depending on the popularity and other bids for related products.

Product Listing

Social Media & Word-of-Mouth

• Social media refers primarily to a set of sites and tools where groups ofpeople can connect around shared interests. Most social media content isgenerated by its users rather than by companies– Examples of social media sites: Facebook, MySpace, LinkedIn, Twitter, various blogs

– The intent varies:• Facebook focuses primarily on connecting individuals with a network of friends and sharing

activity updates (though it is becoming more of a commerce hub)

• LinkedIn focuses on business networking

• Blogs (much like an Internet-based journal) are generally focused on individuals sharing theirthoughts on a topic of interest

• Flickr is a photo-sharing site, YouTube is a video-sharing site

• Businesses use social media as a means for connecting with customers andfacilitating their discussions around the brand. Social media is a way ofenabling “Word-of-Mouth” marketing in which the company’s customerschampion the brand– For example, many clothing brands have a Facebook page on which they post sales or

information on new products; in turn, customers “Like” the brand and become part ofthe network; many company page members share thoughts with other fans of thebrand

11

Email

• Email is a means of alerting both customers (thosewho have purchased) and prospects (those whosigned up for emails but haven’t purchased) ofpromotional offers

– Many companies send a mix of general sales anddiscounts on specific watches

– Effective emailers send different versions of emails todifferent groups (segments) with offers that will be ofthe most interest to them based on their purchase, website, and other behavior

• Companies use an email service provider (ESP) tosend emails, for example, Bronto

– Bronto is the “control deck” for sending emails, helpingdeploy, track, and report on various email campaigns

12

Visual Presentation

Page Code & Behavior

Commerce Platform

Systems

Description: Page appearance, including graphics and text• Typically developed in a graphics package• Reflects page layout, navigational elements, images, shading, and separators• Designers can create a variety of visual displays but they need to be connected

to the site through the appropriate code and functionality

Description: The code that determines how the page components will bedisplayed• HTML and CSS (cascading style sheets) display imagery and text in a templated,

replicable manner (Note: This is where Omniture tags live)

Description: Programs and mechanisms that deliver content and graphics to ourpages• ATG, for example, serves as the e-commerce engine that works with the “front

end” of the site” (visual, page code)

Description: The physical servers and mechanisms that store and serve data andcontent• When the site needs pure horsepower the tech team can add servers as

necessary

• Each layer plays a different role, “snapping on” to other layers in a modular fashion• Ashford.com makes use of ATG’s templates as a starting point, but has customized them to suit our needs

Layers of the Web Site

How a Web Page Works

14

1. Shopper opens computer andclicks on browser

2. Types URL into browser or clicks onlink of interest (from search engine or

affiliate banner/link)

3. Web browser contacts retailer’sweb servers

4. Web server contactsthe databases to pull in

product data andproduct/site images

6. Web browser uses design templatecode to assemble and display web page

5. Web server pushes data andpage code (HTML, CSS) to web

browser

7. Shopper sees completed page loaded in browser; becausebrowsers differ in their software they can display the same

page in different ways, leading to issues

Key Performance Indicators

• Visits: The number of times the site was visited

• Unique visitors: The number of individuals viewing the site; a uniquevisitor may have a single or multiple visits

• Conversion: Converting a visit or visitor into a purchase (order)– Visit conversion = orders/visits

– Visitor conversion = orders/unique visitors

– Generally, only a small percentage of visits results in a purchase

• Order: A purchase consisting of one or more items/products

• Average Order Value (AOV): The average amount spent on all of theorders over a given time period

• Bounce rate: A visit that is limited to visiting a single page beforeexiting the web site– Retailers want shoppers to click on multiple pages—a requirement for buying a

product—so we work toward lowering our bounce rate

15

What Can You Do?

• For those working with or parallel to e-commerce functions, there’splenty of opportunity to support the online business…

16

Understand which ads andvehicles produce the mostsales—and do so mostcost effectively• Help those working with

affiliates, CSEs, andemail understand theproducts and ensurethey’re informed aboutnew products anddevelopments

Ensure that your company hasall eligible products ready onthe web site, with accurateinformation and prices• Use data to drive your

decisions, and others’, as towhich products are mostlikely to engage site visitors

Help create product contentand display rules that will bethe most compelling to sitevisitors and will outperformcompetitors’ efforts

Provide customers a fantasticend-to-end experience,encouraging them to returnfor future purchases and torefer others to your retailer

Awareness Consideration Conversion Loyalty

Terms You Should (Now) Know• Acquisition• Awareness• Consideration• URL• Web browser• E-Commerce• Search engines

– Paid Search, PPC– Natural Search, SEO

• Affiliate programs– Affiliate network, Advertisers, Publishers, Commission Junction

• Comparison Shopping Engine (CSE)– CPC

• Social Media• Keywords / Search Phrase• Email• Direct Traffic• Visits• Visitors• AOV• Bounce Rate

17