Introduction to e-Commerce
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The document provides an overview of e-commerce, including: - Defining e-commerce as commercial transactions of products/services between individuals and organizations that occur digitally over the internet. - Discussing unique features of e-commerce like ubiquity, global reach, interactivity, and personalization. - Outlining different business models for e-commerce, including internet-only businesses, offline businesses that transitioned online, and offline-only businesses. - Comparing "clicks" online commerce with "bricks" physical commerce and the advantages of each. - Describing different types of e-commerce like B2C (business to consumer), B2B (business to business
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Introduction to e-Commerce
- 1. E-COMMERCE Mauricio Gomez
- 2. CONTENTS • Definition of e-commerce • Unique features of e-commerce • Business models (regarding e-commerce) • Clicks VS Bricks • Types of e-commerce • Building online commerce
- 3. DEFINITION OF E-COMMERCE Adapted from Laudon & Traver, 2011
- 4. DEFINITION OF E-COMMERCE • Commercial transactions • Products and services • Individuals and organisations Adapted from Laudon & Traver, 2011
- 5. DEFINITION OF E-COMMERCE • Commercial transactions • Products and services • Individuals and organisations ...wait, isn’t that just commerce? Adapted from Laudon & Traver, 2011
- 6. DEFINITION OF E-COMMERCE • Commercial transactions • Products and services • Individuals and organisations ...wait, isn’t that just commerce? • Digitally enabled • Occur over the internet and the web Adapted from Laudon & Traver, 2011
- 7. WHY IS E-COMMERCE IMPORTANT? • By 2014: • Consumers will spend USD$358 billion • Business will spend USD$5.2 trillion • In 2020 is expected that e-commerce will be the 20% of ALL retail sales
- 8. 8 UNIQUE FEATURES OF E-COMMERCE Adapted from Laudon & Traver, 2011
- 9. 1. UBIQUITY • Internet technology is everywhere • PCs, laptops, mobile devices, slates, cars, fridges • Is your company ready to handle orders placed in Dec 25th at 11:00PM?
- 10. 2. GLOBAL REACH • Everywhere • Bills, invoices, deliveries, taxes... • Is your supply chain ready to handle international deliveries? At what cost?
- 11. 3. UNIVERSAL STANDARDS • One set of standards • Can be conveyed to all screens • Truth or fiction?
- 12. 4. RICHNESS • Video, audio, text messages... • Tools to deliver more information to consumers • Decreases search costs • Increases sales promotion expenditures?
- 13. 5. INTERACTIVITY • Technology works through interaction with the user • Two-way communication • Do you have CUSTOMER SERVICE?
- 14. 6. INFORMATION DENSITY • Reduced information costs • Prices and costs become more transparent • Updated and accurate information • Can you afford a price war?
- 15. 7. PERSONALIZATION/ CUSTOMIZATION • Personalization of messages • Customization of orders/products • Is your supply chain ready?
- 16. 8. SOCIAL TECHNOLOGY • User content generation • Peer reviews and ratings • Is your company ready to manage improper messages? • Can your company turn the situation around?
- 17. 8 UNIQUE FEATURES 1. Ubiquity 2. Global reach 3. Universal standards 4. Richness 5. Interactivity 6. Information density 7. Personalization/Customization 8. Social technology
- 19. 1. INTERNET ONLY BUSINESSES
- 20. 1. INTERNET ONLY BUSINESSES
- 23. 3. BUSINESSES THAT MADE THE TRANSITION
- 24. 3. BUSINESSES THAT MADE THE TRANSITION
- 25. 4. OFFLINE ONLY BUSINESSES
- 26. 4. OFFLINE ONLY BUSINESSES
- 27. BUSINESS MODELS 1.Internet only businesses 2.Non present transaction businesses 3.Businesses that made the transition 4.Offline only businesses
- 28. CLICKS VS BRICKS
- 29. COMPATIBILITY OF PRODUCTS WITH ONLINE MARKETING Category Books Shoes Toothpaste DVD Player Flowers Food items Acceptance 0.904 0.769 0.886 0.787 0.792 0.784 Adapted from Kacen, J., Hess, J., Chiang, W.K., 2002
- 30. COMPATIBILITY OF PRODUCTS WITH ONLINE MARKETING Category Books Shoes Toothpaste DVD Player Flowers Food items Acceptance 0.904 0.769 0.886 0.787 0.792 0.784 Adapted from Kacen, J., Hess, J., Chiang, W.K., 2002
- 31. COMPATIBILITY OF PRODUCTS WITH ONLINE MARKETING Category Books Shoes Toothpaste DVD Player Flowers Food items Acceptance 0.904 0.769 0.886 0.787 0.792 0.784 Adapted from Kacen, J., Hess, J., Chiang, W.K., 2002
- 32. COMPATIBILITY OF PRODUCTS WITH ONLINE MARKETING Category Books Shoes Toothpaste DVD Player Flowers Food items Acceptance 0.904 0.769 0.886 0.787 0.792 0.784 Adapted from Kacen, J., Hess, J., Chiang, W.K., 2002
- 33. COMPATIBILITY OF PRODUCTS WITH ONLINE MARKETING Category Books Shoes Toothpaste DVD Player Flowers Food items Acceptance 0.904 0.769 0.886 0.787 0.792 0.784 Adapted from Kacen, J., Hess, J., Chiang, W.K., 2002
- 34. COMPATIBILITY OF PRODUCTS WITH ONLINE MARKETING Category Books Shoes Toothpaste DVD Player Flowers Food items Acceptance 0.904 0.769 0.886 0.787 0.792 0.784 Adapted from Kacen, J., Hess, J., Chiang, W.K., 2002
- 35. COMPATIBILITY OF PRODUCTS WITH ONLINE MARKETING Category Books Shoes Toothpaste DVD Player Flowers Food items Acceptance 0.904 0.769 0.886 0.787 0.792 0.784 Adapted from Kacen, J., Hess, J., Chiang, W.K., 2002
- 36. ADVANTAGES OF DIGITAL • Rich product information • Price comparison and special deals • Broadest selection • Social engagement and two-way dialogue • Customer reviews and tips • Convenience of anything, anytime, • Convenient and fast checkout anywhere access • Editorial content advice • CLICKS Source: Darrell, R. (2011) HBR
- 37. ADVANTAGES OF DIGITAL • Rich product information • Price comparison and special deals • Broadest selection • Social engagement and two-way dialogue • Customer reviews and tips • Convenience of anything, anytime, • Convenient and fast checkout anywhere access • Editorial content advice • CLICKS Source: Darrell, R. (2011) HBR
- 38. ADVANTAGES OF PHYSICAL • Edited assortment • Ability to test, try on, or experience products • Convenient returns • Help with initial setup or ongoing repairs • Shopping as an event and an experience • Personal help from caring associates • Instant access to products • Instant gratification of all senses BRICKS Source: Darrell, R. (2011) HBR
- 39. ADVANTAGES OF PHYSICAL • Edited assortment • Ability to test, try on, or experience products • Convenient returns • Help with initial setup or ongoing repairs • Shopping as an event and an experience • Personal help from caring associates • Instant access to products • Instant gratification of all senses BRICKS Source: Darrell, R. (2011) HBR
- 40. OMNICHANNEL
- 43. 1. PORTAL • Content and social network services • Search engines • Seeks to be a user’s home base REVENUE MODEL: Advertising Subscription fees Transaction fees Adapted from Laudon & Traver, 2011
- 44. 2. E-TAILER • Distribution channel • Web version of a mail catalog • Complement to physical stores REVENUE MODEL: Sales of goods Adapted from Laudon & Traver, 2011
- 45. 3. CONTENT PROVIDER • Specialised content • Special interest • News/Sports/Economics/Business information REVENUE MODEL: Advertising Subscription fees Affiliate referral fees Adapted from Laudon & Traver, 2011
- 46. 4. TRANSACTION BROKER • Processors of online sales transaction • Brokers and travel agents (middlemen) • Aim to increase customers’ productivity REVENUE MODEL: Transaction fees Adapted from Laudon & Traver, 2011
- 47. 5. MARKET CREATOR • Bring buyers and sellers together • Creation of markets REVENUE MODEL: Transaction fees Adapted from Laudon & Traver, 2011
- 48. 6. SERVICE PROVIDER • Sales of services • Cloud computing, sharing services, Saas REVENUE MODEL: Sales of services Adapted from Laudon & Traver, 2011
- 49. B2B BUSINESS-TO-BUSINESS • E-distributor • Sales of goods • E-procurement • Sellers and buyers meet • Industry consortium • Industry-owned vertical digital market for select suppliers • Private Industrial Network • Supply chain coordination
- 50. OTHER BUSINESS MODELS • Consumer-to-consumer • Helps consumers to connect with other consumers • Peer-to-peer • Share files, services and content via web • No use of a common server • M-commerce • Through mobile devices • Sandboxed commerce • Within platforms • AppStores, Facebook pages
- 51. TYPES OF E-COMMERCE 2. B2B 1. E-distributor 1. B2C 2. E-procurement 1. Portal 3. Industry consortium 2. E-tailer 4. Private industrial network 3. Content provider 3. Other business model 4. Transaction broker 1. Consumer to consumer 5. Market creator 2. Peer to peer 6. Service provider 3. M-commerce 4. Sandboxed commerce
- 52. BUILDING ONLINE COMMERCE
- 53. HOW TO BUILD A WEB SHOP Online Payment Order Website Checkout catalog systems tracking
- 54. PAYMENT SYSTEMS Credit Cards Debit Online Stored Value Offline payment Money transfer Invoice Cash on delivery
- 55. TRAFFIC SOURCES Marketing Communications Plan Offline advertising Online advertising Onlin Website catalo Social Media Referrals
- 56. TRAFFIC SOURCES Marketing Communications Plan Offline advertising Online advertising Onlin Website catalo Social Media Referrals How to crack it? CONVERSIONS
- 57. CONVERSIONS $1.000 campaign budget Payment Mktg Landing Product Shopping confirmat Comms Page Selection Cart ion
- 58. CONVERSIONS $1.000 campaign budget 1.000 $1 Payment Mktg Landing Product Shopping confirmat Comms Page Selection Cart 100% ion
- 59. CONVERSIONS $1.000 campaign budget 1.000 200 $1 $1 Payment Mktg Landing Product Shopping 20% confirmat Comms Page Selection Cart 100% ion $5 20%
- 60. CONVERSIONS $1.000 campaign budget 1.000 200 50 $1 $1 $1 Payment Mktg Landing Product Shopping 20% 25% confirmat Comms Page Selection Cart 100% ion $5 $20 20% 0.5%
- 61. CONVERSIONS $1.000 campaign budget 1.000 200 50 10 $1 $1 $1 $1 Payment Mktg Landing Product Shopping 20% 25% 20% confirmat Comms Page Selection Cart 100% ion $5 $20 $100 20% 0.5% 0.1%
- 62. CONVERSIONS $1.000 campaign budget 1.000 200 50 10 5 $1 $1 $1 $1 $1 Payment Mktg Landing Product Shopping 20% 25% 20% confirmat 50% Comms Page Selection Cart 100% ion $5 $20 $100 $200 20% 0.5% 0.1% 0.05%
- 63. CONVERSIONS $1.000 campaign budget 1.000 200 50 10 5 $1 $1 $1 $1 $1 Payment Mktg Landing Product Shopping 20% 25% 20% confirmat 50% Comms Page Selection Cart 100% ion $5 $20 $100 $200 20% 0.5% 0.1% 0.05% $200 each sale?
- 64. CONVERSIONS $1.000 campaign budget 1.000 500 125 25 12.5 $1 $1 $1 $1 $1 Payment Mktg Landing Product Shopping 50% 25% 20% confirmat 50% Comms Page Selection Cart 100% ion $2 $8 $40 $80 20% 12.5% 0.25% 0.12% $80 each sale?
- 65. WRAPPING UP...
- 66. • Having a web-shop is not “different” to having a physical shop • E-commerce has different metrics than physical retail • In e-commerce everything can be measured and tracked. Thus, there is no excuse for not having on-going improvement • E-commerce implies challenges in logistics, customer service, accounting, marketing...
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