chapter 13: e-commercecopyright ©2012 pearson education, inc. publishing as prentice hall13-1...

Chapter 13: E-Commerce Copyright ©2012 Pearson Education, Inc. publishing as Copyright ©2012 Pearson Education, Inc. publishing as Prentice HallPrentice Hall

13-13-11

E-Commerce andEntrepreneurship

Chapter 13: E-CommerceChapter 13: E-Commerce Copyright ©2012 Pearson Education, Inc. publishing as Prentice Copyright ©2012 Pearson Education, Inc. publishing as Prentice HallHall

13-13-22

The Internet: Changing The Internet: Changing the Face of Business the Face of Business The most successful companies The most successful companies

embrace the Internet as a mechanism embrace the Internet as a mechanism for transforming their companies and for transforming their companies and for changing for changing everythingeverything about the way about the way they do businessthey do business

E-commerce has launched a E-commerce has launched a revolution, a new industrial orderrevolution, a new industrial order


13-13-33

The Internet: Changing The Internet: Changing the Face of Business the Face of Business In the world of e-commerce, In the world of e-commerce, speedspeed and and flexibilityflexibility matter much more than size matter much more than size

High-volume, low-margin, commodity High-volume, low-margin, commodity products are best suited for selling on products are best suited for selling on the Web the Web

0

10

20

30

40

50

60

70

80

90

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

EastWestNorth

Time Spent Online by Country (Hours per Week)

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Chapter 13: E-Commerce

13-4

U.S. Online and Web-Influenced Retail Sales 2009-2014

0

10

20

30

40

50

60

70

80

90


EastWestNorth

Copyright ©2012 Pearson Education, Inc. publishing as Prentice HallChapter 13: E-Commerce 13-5


13-13-66

Benefits of SellingBenefits of Sellingon the Webon the Web

Small business owners whose Small business owners whose companies have Web sites report that companies have Web sites report that their businesses benefit by having a sitetheir businesses benefit by having a site

Opportunity to increase revenues and attract Opportunity to increase revenues and attract new customersnew customers

Ability of brick-and-mortar retailers to drive Ability of brick-and-mortar retailers to drive online customers to their stores and increase online customers to their stores and increase sales theresales there

Ability to expand into global marketsAbility to expand into global markets Ability to remain open 24 hours a day, seven Ability to remain open 24 hours a day, seven

days a weekdays a week


13-13-77

Benefits of SellingBenefits of Sellingon the Webon the Web Capacity to use the Web’s interactive nature Capacity to use the Web’s interactive nature

to enhance customer serviceto enhance customer service Power to educate and informPower to educate and inform Ability to lower the cost of doing businessAbility to lower the cost of doing business Capacity to improve efficiency of purchasing Capacity to improve efficiency of purchasing

and inventory control processesand inventory control processes Ability to spot new business opportunities Ability to spot new business opportunities

and capitalize on themand capitalize on them Power to track sales resultsPower to track sales results Opportunity to build credibility and brand Opportunity to build credibility and brand

identity among customersidentity among customers


13-13-88

E-CommerceE-Commerce

Ad-ology study: Just 60% of small Ad-ology study: Just 60% of small companies have Web sitescompanies have Web sites

Discover Small Business Watch Discover Small Business Watch survey: 46% of small business survey: 46% of small business owners think that not every owners think that not every company needs a Web sitecompany needs a Web site

Why?Why?


13-13-99

Factors to Consider Factors to Consider Before Launching into E-Before Launching into E-CommerceCommerce How a company exploits the Web’s How a company exploits the Web’s

interconnectivity and the opportunities interconnectivity and the opportunities it creates to transform relationships it creates to transform relationships with suppliers, customers, and others with suppliers, customers, and others is crucial to its successis crucial to its success

Web success requires a company to Web success requires a company to develop a plan for integrating the Web develop a plan for integrating the Web into its overall strategyinto its overall strategy


13-13-1010

Factors to Consider Factors to Consider Before Launching into E-Before Launching into E-CommerceCommerce Developing a deep, lasting relationship with Developing a deep, lasting relationship with

customers takes on even greater customers takes on even greater importance on the Webimportance on the Web

Creating a meaningful presence on the Web Creating a meaningful presence on the Web requires an ongoing investment of requires an ongoing investment of resources – time, money, energy, and talentresources – time, money, energy, and talent

Measuring the success of a Web-based Measuring the success of a Web-based sales effort is essential to remaining sales effort is essential to remaining relevant to customers whose tastes, needs, relevant to customers whose tastes, needs, and preferences constantly change and preferences constantly change


13-13-1111

10 Myths of E-10 Myths of E-CommerceCommerce

Myth 1: If I launch a site, Myth 1: If I launch a site, customers will flock to itcustomers will flock to it

Myth 2: Online customers are easy Myth 2: Online customers are easy to pleaseto please

Myth 3: Making money on the Web Myth 3: Making money on the Web is easyis easy

Myth 4: Privacy is not an important Myth 4: Privacy is not an important issue on the Web issue on the Web


13-13-1212

Privacy and the WebPrivacy and the Web

Privacy on the Web Privacy on the Web doesdoes matter! matter! PayPal and comScore survey: 21% of PayPal and comScore survey: 21% of

online shoppers say that security and online shoppers say that security and privacy concerns have affected their privacy concerns have affected their Internet purchasing behaviorInternet purchasing behavior

Tips:Tips: Post a privacy policy and stick to itPost a privacy policy and stick to it Safeguard information your company Safeguard information your company

collects from customerscollects from customers


13-13-1313


Myth 5: Strategy? I don’t need a Myth 5: Strategy? I don’t need a strategy to sell on the Web! Just strategy to sell on the Web! Just give me a Web site and the rest give me a Web site and the rest will take care of itselfwill take care of itself

Myth 6: The most important part of Myth 6: The most important part of any e-commerce effort is any e-commerce effort is technology technology


13-13-1414


Myth 7: On the Web, customer Myth 7: On the Web, customer service is not as important as it is service is not as important as it is in a traditional retail store in a traditional retail store


13-13-1515

The Importance of The Importance of ServiceServiceon the Webon the Web Study: 79% of shoppers who had Study: 79% of shoppers who had

experienced a frustrating online experienced a frustrating online shopping experience reported shopping experience reported that they were not likely to return that they were not likely to return to the online store, and…to the online store, and…

27% said that they were less 27% said that they were less likely to shop at the retailer’s likely to shop at the retailer’s physical store physical store


13-13-1616

The Importance of The Importance of ServiceServiceon the Webon the Web Average conversion rate for e-Average conversion rate for e-

commerce sites is 3.2commerce sites is 3.2 Cost: Billions of dollars in lost Cost: Billions of dollars in lost

sales, much of it because of poor sales, much of it because of poor customer service customer service


13-13-1717

The Importance of The Importance of ServiceServiceon the Webon the Web Study: 45% of Web shoppers who fill Study: 45% of Web shoppers who fill

their online shopping carts become their online shopping carts become frustrated and abandon them before frustrated and abandon them before checking outchecking out

Reasons:Reasons: Shipping charges too highShipping charges too high Customer was comparison shoppingCustomer was comparison shopping Total cost was higher than Total cost was higher than anticipatedanticipated Customer wanted to find a Customer wanted to find a coupon or buy off-linecoupon or buy off-line


13-13-1818

Tips for Reducing Tips for Reducing Shopping Cart Shopping Cart Abandonment RateAbandonment Rate Offer multiple shipping methods and Offer multiple shipping methods and

provide free shipping if a customer’s provide free shipping if a customer’s purchase exceeds a minimum amountpurchase exceeds a minimum amount

Streamline the steps in the checkout Streamline the steps in the checkout processprocess

Include a progress indicator on each Include a progress indicator on each checkout pagecheckout page

Provide a link back to the items in the Provide a link back to the items in the shopping cartshopping cart

Allow customers to see whether an Allow customers to see whether an item is in stockitem is in stock


13-13-1919

Tips for Reducing Tips for Reducing Shopping Cart Shopping Cart Abandonment RateAbandonment Rate Include product photos in the shopping Include product photos in the shopping

cartcart Make it easy for customers to change Make it easy for customers to change

the contents of their cartsthe contents of their carts Give customers the option of calling to Give customers the option of calling to

resolve problems they encounter during resolve problems they encounter during checkoutcheckout

Make it easy for customers to pay for Make it easy for customers to pay for their online purchasestheir online purchases

Include a short survey of customers Include a short survey of customers who abandon their carts who abandon their carts


13-13-2020


Myth 8: Flash makes a Web site Myth 8: Flash makes a Web site betterbetter

Myth 9: It’s what’s up front that Myth 9: It’s what’s up front that counts counts Virtual order fulfillmentVirtual order fulfillment

Myth 10: It’s too late to get on the Myth 10: It’s too late to get on the WebWeb


13-13-2121

Strategies for E-Strategies for E-SuccessSuccess Focus on a market nicheFocus on a market niche Develop a communityDevelop a community Attract visitors by giving away Attract visitors by giving away

“freebies” “freebies” Make creative use of e-mail, but Make creative use of e-mail, but

avoid becoming a “spammer” avoid becoming a “spammer”

0

10

20

30

40

50

60

70

80

90


EastWestNorth

E-Mail Open and Click Through Rates


Chapter 13: E-Commerce 13-22


13-13-2323

Strategies for E-Strategies for E-SuccessSuccess Make sure your Web site says Make sure your Web site says

“credibility”“credibility” Consider forming strategic alliancesConsider forming strategic alliances

Affiliate marketing programsAffiliate marketing programs Make the most of the Web’s global Make the most of the Web’s global

reachreach Promote your site online and offline Promote your site online and offline


13-13-2424

Strategies for E-Strategies for E-SuccessSuccess

Use Web 2.0 tools to attract and retain Use Web 2.0 tools to attract and retain customerscustomers MashupsMashups Really Simple Syndication (RSS)Really Simple Syndication (RSS) Social networkingSocial networking WikisWikis WidgetsWidgets

Nielson study: 70% of online shoppers Nielson study: 70% of online shoppers trust customer reviews posted onlinetrust customer reviews posted online


13-13-2525

Search Engine Search Engine Optimization (SEO)Optimization (SEO) Goal: Get your site listed at or Goal: Get your site listed at or

near the top of search results near the top of search results listing listing

62% of search engine users 62% of search engine users click on a link to a site that click on a link to a site that appears on the first page of appears on the first page of the search results the search results


13-13-2626

A Search Marketing A Search Marketing StrategyStrategy Natural (organic) listingsNatural (organic) listings - the result of - the result of

“spiders,” powerful programs that crawl “spiders,” powerful programs that crawl the Web, looking at key words, links, and the Web, looking at key words, links, and other dataother data

Paid (sponsored) listingsPaid (sponsored) listings – short text ads – short text ads with links to the sponsoring company’s with links to the sponsoring company’s Web site that appear on the results page Web site that appear on the results page of a search engine of a search engine


13-13-2727

Paid ListingsPaid Listings

Use paid listings to accomplish what Use paid listings to accomplish what natural listings cannotnatural listings cannot

Five search engines – Google, Five search engines – Google, Yahoo!, MS Live Search, Ask.com, Yahoo!, MS Live Search, Ask.com, and AOL – account for 99% of all and AOL – account for 99% of all searches in the U.S.searches in the U.S.

Average cost of a keyword has risen Average cost of a keyword has risen from 39from 39¢¢ in 2004 to 52 in 2004 to 52¢¢ today today

Beware of click fraud! Beware of click fraud! Estimate: Pay-per-click fraud rate=15-Estimate: Pay-per-click fraud rate=15-

17.5% 17.5%


13-13-2828

Designing a Killer Web Designing a Killer Web SiteSite Decide how to bring your site to Decide how to bring your site to

lifelife Start with your target customerStart with your target customer

0

10

20

30

40

50

60

70

80

90


EastWestNorth

Percentage of Adult Internet Users


Chapter 13: E-Commerce 13-29

Online Activities by Generation

0

10

20

30

40

50

60

70

80

90


EastWestNorth



13-13-3131

Designing a Killer Web Designing a Killer Web SiteSite Decide how to bring your site to Decide how to bring your site to

lifelife Start with your target customerStart with your target customer Give customers what they wantGive customers what they want

Features U.S. Shoppers Want

0

10

20

30

40

50

60

70

80

90


EastWestNorth



13-13-3333

Designing a Killer Web Designing a Killer Web SiteSite Select a domain name that is Select a domain name that is

consistent with the image you consistent with the image you want to create for your want to create for your company and register itcompany and register it ShortShort MemorableMemorable Indicative of a company’s businessIndicative of a company’s business Easy to spellEasy to spell


13-13-3434

Designing a Killer Web Designing a Killer Web SiteSite Make your Web site easy to navigateMake your Web site easy to navigate Create a gift idea centerCreate a gift idea center Build loyalty by giving online Build loyalty by giving online

customers a reason to returncustomers a reason to return Establish hyperlinks with other Establish hyperlinks with other

businesses, especially those selling businesses, especially those selling products that complement yours products that complement yours


13-13-3535

Designing a Killer Web Designing a Killer Web SiteSite Include an e-mail option and a Include an e-mail option and a

telephone # on your site telephone # on your site Offer shoppers online trackingOffer shoppers online tracking Offer Web specialsOffer Web specials Look for ways to cross-sell Look for ways to cross-sell Use the power of social mediaUse the power of social media Use customer testimonials Use customer testimonials Follow a simple designFollow a simple design


13-13-3636

Web Site Design TipsWeb Site Design Tips

Avoid clutterAvoid clutter Avoid huge graphicsAvoid huge graphics Include a menu bar at the top of Include a menu bar at the top of

the pagethe page Include navigation buttonsInclude navigation buttons Minimize the number of clicks Minimize the number of clicks

required to a pagerequired to a page Incorporate meaningful content Incorporate meaningful content

into the siteinto the site


13-13-3737


Include an “FAQ” sectionInclude an “FAQ” section Include privacy and return Include privacy and return

policiespolicies Avoid fancy typefaces and small Avoid fancy typefaces and small

fontsfonts Watch for “typos” and Watch for “typos” and

misspelled wordsmisspelled words Avoid small fonts on “busy” Avoid small fonts on “busy”

backgroundsbackgrounds


13-13-3838


Use contrasting colors for text Use contrasting colors for text and graphicsand graphics

Be careful with framesBe careful with frames Test the site on different Test the site on different

browsers and different size browsers and different size monitorsmonitors

Collect information from visitors, Collect information from visitors, but don’t put them through a but don’t put them through a tedious registration processtedious registration process


13-13-3939


Include a search function and Include a search function and company contact informationcompany contact information

Avoid automated music Avoid automated music Make sure the page looks Make sure the page looks

appealingappealing Remember: Simpler is betterRemember: Simpler is better


13-13-4040

Designing a Killer Web Designing a Killer Web SiteSite Assure customers that their Assure customers that their

online transactions are secureonline transactions are secure Post shipping and handling Post shipping and handling

charges up front charges up front Create a fast, simple checkout Create a fast, simple checkout

process process Confirm transactions with e-mailConfirm transactions with e-mail


13-13-4141

Designing a Killer Web Designing a Killer Web SiteSite Keep your site updatedKeep your site updated Test your site often Test your site often Consider hiring a professional to Consider hiring a professional to

design your site design your site


13-13-4242

Tracking Web ResultsTracking Web Results

Web analytics – tools that Web analytics – tools that measure a Web site’s ability to measure a Web site’s ability to attract customers, generate sales, attract customers, generate sales, and keep customers coming back and keep customers coming back Commerce metricsCommerce metrics Visitor segmentation measurementsVisitor segmentation measurements Content reportsContent reports Process measurements Process measurements


13-13-4343

Measures of Web Site Measures of Web Site PerformancePerformance Click-through rate (CTR)Click-through rate (CTR) - the - the

proportion of people who see a proportion of people who see a company’s online ad and actually company’s online ad and actually click on it to reach the company’s click on it to reach the company’s Web site Web site

CTR = # of clicks CTR = # of clicks ÷ # of ÷ # of impressionsimpressions


13-13-4444

Measures of Web Site Measures of Web Site PerformancePerformance Cost per acquisition (CPA)Cost per acquisition (CPA) – the – the

cost a company incurs to cost a company incurs to generate each purchase (or generate each purchase (or customer registration) customer registration)

CPA = Total cost of acquiring a new CPA = Total cost of acquiring a new customer customer ÷ number of new ÷ number of new customerscustomers


13-13-4545

Return on Investment Return on Investment (ROI)(ROI) Conversion (browse-to-buy) rateConversion (browse-to-buy) rate - -

the proportion of visitors to a site the proportion of visitors to a site who actually make a purchase who actually make a purchase

Conversion rate = number of Conversion rate = number of customers who make a purchase customers who make a purchase ÷ number of visitors to a site÷ number of visitors to a site


13-13-4646

Ensuring Web PrivacyEnsuring Web Privacy

Take an inventory of the Take an inventory of the customer data collectedcustomer data collected

Develop a company policy for the Develop a company policy for the information you collectinformation you collect

Post your company’s privacy Post your company’s privacy policy prominently on your Web policy prominently on your Web site and follow it site and follow it


13-13-4747

Ensuring Web SecurityEnsuring Web Security

Study: 75% of Web sites have Study: 75% of Web sites have vulnerabilities that are rated vulnerabilities that are rated from medium- to high-risk from medium- to high-risk

Virus detection softwareVirus detection software Intrusion detection softwareIntrusion detection software FirewallFirewall Secure sockets layer (SSL) Secure sockets layer (SSL)

technologytechnology


13-13-4848

All rights reserved. No part of this publication may All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, electronic, mechanical, photocopying, recording, or otherwise, without the prior written or otherwise, without the prior written permission of the publisher. Printed in the United permission of the publisher. Printed in the United States of America.States of America.

Copyright ©2012 Pearson Education, Copyright ©2012 Pearson Education, Inc. Publishing as Prentice HallInc. Publishing as Prentice Hall

chapter 13: e-commercecopyright ©2012 pearson education, inc. publishing as prentice hall13-1...

Documents

business ecommerce

business ability

ecommerce copyright

pearson education

web slide

week ability

business capacity

world of ecommerce