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?