E-CommerceChapter 11 – Social Media

Information SystemsSections Q1-Q4Skip Section Q5

Define e-commerce and important types of e-commerce.

Know the benefits of e-commerce and how e-commerce is different from traditional business transactions.

Understand the implications of the Long Tail Theory.

Objectives

What is E-Commerce?

Merchant ◦ Business-to-Consumer (B2C)◦ Business-to-Business (B2B)◦ Business-to-Government (B2G)

Nonmerchant◦ Consumer-to-Consumer (C2C)

What Types of E-Commerce Exist?

Interactive Marketing

Storefront

Web Store

Portal

What Types of B2C Exist?

B2C Interactive Marketing Example

B2C Interactive Marketing Example

B2C Storefront Example

B2C Web Store Example

B2C Portal Example

How is E-Commerce Similar to Traditional Commerce?

What is Up-Selling?

What is Cross-Selling?

global reach

24/7 service

disintermediation

mass customization

value-added services

What are the Benefits of E-Commerce?

Mass Customization Example

Value-Added Service Example

Value Added Service Example

Knowing status of transaction

Finding the product

Buying a product examined only virtually

Trusting a seller known only virtually

Contact between buyer and seller between transactions

What’s more complicated about an Ecommerce Transaction?

How Can an E-tailer Lower Customer Search Costs?

How Can an E-tailer Increase Customer Confidence in a Product?

How Can an E-tailer Increase Customer Confidence in a Product?

Simulate in-store experience

◦ Second Life

◦ Fashionistahttp://www.youtube.com/watch?v=ZnBcqV9POkY&feature=player_embedded#

How Can an E-tailer Increase Customer Confidence in a Product?

Second LifeAdidas American Apparel

How Can a E-seller Build Trust?

Virtual Communities

Blogs

Social Networking Sites (UGC)◦ Facebook◦ Twitter◦ Flickr◦ YouTube

How Can an E-tailer Maintain Customer Contact Between Sales?

Virtual Community Example

Blog Example

Social Networking Example

What is Web 2.0?

Update regularly

Let customers contribute

Avoid direct advertising

How Do Businesses Use Web 2.0 Effectively?

Standards for common business documents

Electronic Data Interchange (EDI)

Paper Purchase Order Example

000327Chicago Office Supply 1411 E. Michigan Chicago IL606061978 Michigan Ave. Chicago IL6061212132009 Your Truck0054126Laser printer toner cartridge46.500085433Rewritable CDs – box of 1012.500104733Copier paper – box19.50

String of Data Example

<PO>000327<VName>Chicago Office Supply <Vaddress>1411 E. Michigan <Vcity>Chicago <Vstate>IL<Vzip>60606<ShipAddress>1978 Michigan Ave. <ShipCity>Chicago <ShipState>IL<ShipZip>60612<PODate>12132009<ShipDate> <Via>Your Truck<Qty>005<ProductNo>4126<Desc>Laser printer toner cartridge<Price>46.50<Qty>0085<ProductNo>5433<Desc>Rewritable CDs – box of 10<Price>12.50<Qty>010<ProductNo>4733<Desc>Copier paper – box<Price>19.50

EDI Example

<PO>000327<VName>Chicago Office Supply <Vaddress>1411 E. Michigan <Vcity>Chicago <Vstate>IL<Vzip>60606<ShipAddress>1978 Michigan Ave. <ShipCity>Chicago <ShipState>IL<ShipZip>60612<PODate>12132009<ShipDate> <Via>Your Truck

<Qty>005<ProductNo>4126<Desc>Laser printer toner cartridge<Price>46.50<Qty>0085<ProductNo>5433<Desc>Rewritable CDs – box of 10<Price>12.50<Qty>010<ProductNo>4733<Desc>Copier paper – box<Price>19.50

Formatted EDI Example

1. Purchase Order

2. Item & Invoice

3. PaymentAuthorization

4. Payment

5. PaymentNotification

6. DepositNotification

Seller's Bank

BuyerSeller

Buyer's Bank

EDI Process

Chris Anderson, Wired’s Editor in Chief

What is The Long Tail Theory?

Inventory Items

Tota

l $

Sale

s o

f each

it

em

Amazon - "We sold more books today that didn't sell at all yesterday, than we sold today of all the books that did sell yesterday.“

Netflix – “In aggregate, unpopular movies are rented more than popular movies.”

iTunes – “A miss is just another sale with the same margins as a hit.”

Long Tail Examples

Internet allows businesses to tap into the Long Tail market.

Lowering search costs could create a longer tail by increasing sales of hard to find products

The Internet allows both lower prices and increased product variety.

How Does the Internet Affect the Long Tail?

Larger market overall

Improved customer service

Greater cultural diversity

What are the Implications of the Long Tail?