Chapter 9 E-Commerce

8/13/2019 Chapter 9 E-Commerce

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E-Commerce and theEntrepreneur


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Copyright 2008 Prentice Hall Publishing 2Chapter 9: E-Commerce

The Internet: Changing the Face

of Business

The most successful companies embrace the

Internet as a mechanism for transforming their

companies and for changing everythingabout theway they do business.

Business basics still apply online just as much as

they do in brick-and-mortar businesses.

In the world of e-commerce, size matters less than

speed and flexibility.


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The Internet: Changing the Face

of Business

Nearly 10 percent of the worlds population 627

million peoplehas shopped online at least once.

Items purchased most often online: books, music,DVDs, travel services, clothing, tickets for

entertainment events, electronics, and toys.

In the U.S., 12 percent of total retail sales will occuronline in 2010.

Study: by 2010, the Internet will influence one-half

of all retail sales.


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Benefits of Selling on the Web

Opportunity to increase revenues and profits

Study: 72 percent of small online companies report

increased sales, and 65 percent report higher profits.

Ability to expand into global markets

Ability to remain open 24 hours a day, seven

days a week

Capacity to use the Webs interactive nature toenhance customer service

Power to educate and inform


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Benefits of Selling on the Web

Ability to lower the cost of doing business

Study: 73 percent of online small companiesexperienced savings because of lower

administrative costs.Ability to spot new business opportunities

and capitalize on them

Ability to grow faster Power to track sales results

Conversion ratethe percentage of customersto a Web site who actually make a purchase.


7/32Copyright 2008 Prentice Hall Publishing 7Chapter 9: E-Commerce

E-Commerce

70 percent of small businesses in the U.S. have aWeb presence.

Of those small business owners who do not

have Web sites: 77 percent say their products and services are not

suitable for selling online.

37 percent say they do not see any benefits of sellingonline.

Barriers:

Not knowing how or where to start

Cost and time concerns



Factors to Consider Before

Launching into E-Commerce

How a company exploits the Webs

interconnectivity and the opportunities it creates to

transform relationships with suppliers, customers,and others is crucial to its success.

Web success requires a company to develop a plan

for integrating the Web into its overall strategy.



Factors to Consider Before

Launching into E-Commerce

Developing a deep, lasting relationship withcustomers takes on even greater importance on the

Web.

Creating a meaningful presence on the Webrequires an ongoing investment of resourcestime, money, energy, and talent.

Measuring the success of a Web-based sales effortis essential to remaining relevant to customerswhose tastes, needs, and preferences constantlychange.



Assessing Your Companys

Online Potential

1. Does your product have broad appeal tocustomers everywhere?

2. Do you want to sell your product to customers

outside of your immediate geographic area?3. Can the product you sell be delivered

conveniently and economically?

4. Can your company realize significant costadvantages by going online?

5. Can you draw customers to your companys Website with a reasonable investment?



12 Myths of E-Commerce

Myth 1: Setting up a business on the Web is

easy and inexpensive.



Follow-up Investments

Setting up a Web site is only the first investment:

Redesign Web site

Buy more computer hardware

Automate or expand warehouse to meetcustomer demand

Integrate Web site into inventory control system

Increase customer call-center capacityLesson: Focus on your companys core

competencies and outsource all other aspects ofdoing business online.




Myth 1: Setting up a business on the Web is

easy and inexpensive.

Myth 2: If I launch a site, customers willflock to it.



Promotion Is the Key!

Print URL on everything related to yourbusiness

Web-based newsletters

Write articles that link to your companysWeb site

Host a customer chat room

Sponsor online contests

Establish a blog




Myth 1: Setting up a business on the Web iseasy and inexpensive.

Myth 2: If I launch a site, customers will flockto it.

Myth 3: Making money on the Web is easy.

Study: Web retailers invest 65 percent of revenue in

marketing and advertising, compared to just 4 percent fortheir off-line counterparts.

Myth 4: Privacy is not an important issue on

the Web.



Privacy Online

Study: 80 percent of Internet users say that

privacy of their personal information is

either important or very important. Estimate: If online companies were able to

alleviate customers online privacy and

security issues, online retail sales would be

24 percent higher!




Myth 5: The most important part of any e-commerce effort is technology.

Myth 6: Strategy? I dont need a strategy to

sell on the Web! Just give me a Web site andthe rest will take care of itself.

Myth 7: On the Web, customer service is not

as important as it is in a traditional retailstore.



The Importance of Service

on the Web Study: 57 percent of Web shoppers who fill their

online shopping carts become frustrated and leave

the site before checking out.

Result: For every $1 they spend online, customersleave behind $4.51 in abandoned shopping carts.

Reasons:

Shipping and handling charges too high

Delivery times too long

Checkout process too lengthy

Insufficient product information available


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Strategies for E-Success

Focus on a market niche.

Develop a community.

Attract visitors by giving away freebies. Make creative use of e-mail, but avoid

becoming a spammer.


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14.7%

3.5%

14.3%

2.7%

20.8%

3.7%

19.5%

3.6%

20.0%

3.7%

21.0%

4.0%

13.0%

2.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Rate

Sunday Monday Tuesday Wednesday Thursday Friday Saturday

Day

E-Mail Read and Click-Through Rates by Day of the Week

% Opened

% Read

For businesses,

Friday is the best

day to send e-mails.



Strategies for E-Success

Make sure your Web site says credibility.

Consider forming strategic alliances.

Make the most of the Webs global reach. Promote your site online and offline.

Develop an effective search engine

optimization strategy.


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Search Engine Strategies

Natural (organic) listingsarise as a resultof spiders, powerful programs searchengines use to crawl around the Web.

Paid (sponsored) listingsshort text adswith links to the sponsoring companys Website.

Paid inclusionwhen a company pays asearch engine for the right to submit eitherselected pages or its entire Web site contentfor listing.


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Designing a Killer Web Site

Understand your target customer.

Give customers what they want.

Select a domain name that is consistent with

the image you want to create for yourcompany and register it.

Short

Memorable Indicative of a companys business

Easy to spell


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Designing a Killer Web Site

Include an e-mail option an atelephone number in your site.

Give shoppers the ability to

track their orders online. Offer Web shoppers a special all

their own.

Follow a simple design. Create a fast, simple checkout

process.


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Tracking Web Results

Web analyticstools that measure a Websites ability to attract customers, generatesales, and keep customers coming back.

Only 40 percent of e-businesses use Webanalytics strategically to refashion theirWeb sites.

Commerce metrics

Visitor segmentation measurements

Content reports

Process measurements


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Tracking Web Results

Counter Log-analysis

software

Click-streamanalysis

Clustering Collaborative

filtering

Profiling systems

Artificial intelligence

Performance Indicators:


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Ensuring Web Privacy

Take an inventory of the customer data

collected.

Develop a company policy for the

information you collect.

Post your companys privacy policy

prominently on your Web site and follow it.


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Ensuring Web Security

Virus detection software

Intrusion detection software

Firewall

Documents

Chapter 9 E-Commerce