E-commerce (also written as e-Commerce, eCommerce or similar variants), short for
electronic commerce, is trading in products or services using computer networks, such
as the Internet. Electronic commerce draws on technologies such as mobile commerce,
electronic funds transfer, supply chain management, Internet marketing, online
transaction processing, electronic data interchange (EDI), inventory management
systems, and automated data collection systems. Modern electronic commerce
typically uses the World Wide Web for at least one part of the transaction's life cycle,
although it may also use other technologies such as e-mail.
2. Introduction
E-commerce (also written as e-Commerce, eCommerce or similar variants), short for
electronic commerce, is trading in products or services using computer networks, such
as the Internet. Electronic commerce draws on technologies such as mobile commerce,
electronic funds transfer, supply chain management, Internet marketing, online
transaction processing, electronic data interchange (EDI), inventory management
systems, and automated data collection systems. Modern electronic commerce
typically uses the World Wide Web for at least one part of the transaction's life cycle,
although it may also use other technologies such as e-mail.
E-commerce businesses may employ some or all of the following
Online shopping web sites for retail sales direct to consumers
Providing or participating in online marketplaces, which process third-party
business-to-consumer or consumer-to-consumer sales
Business-to-business buying and selling
Gathering and using demographic data through web contacts and social media
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3. Business-to-business electronic data interchange
Marketing to prospective and established customers by e-mail or fax (for example,
with newsletters)
Engaging in pretail for launching new products and services
Introduction
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4. Types of Licensing Models
On-premise E-commerce
On-premise E-commerce software usually requires initial one time purchase investment
in terms of licensing fees. Also, it implies extra costs related to hardware and installation
services as well as data migration and on-going maintenance fees that are usually
charged on a yearly basis for software updates and support. Some examples of typical on
premise E-commerce platforms are Hybris (company), Intershop Communications, Sana
Commerce., Oorjit. and IBM WebSphere.
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Advantages
Easily customizable
Data security
High performance
Disadvantages
Large initial investment
Self-maintenance
Technical knowledge
5. Software as a service (SaaS) E-commerce
Software as a Service (SaaS)- is a cloud based delivery model in which applications are
hosted and managed in a service provider's datacenter, paid for on a subscription basis
and accessed via a browser over an internet connection. Two examples of typical SaaS
E-commerce solutions are Shopify and Demandware. But there are much more of such
examples.
Advantages
Affordable low-cost solution
Hosted/upgraded by E-commerce
provider
Easily scalable
Disadvantages
Limited integration with back-end
systems
Lack of data security
Limited control over the system
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Types of Licensing Models
6. Open source E-commerce
Open source E-commerce is a free of charge platform that doesn’t imply licenses fee.
Furthermore, open source users are also responsible for installing, maintaining, securing
and configuring the software on their own servers.
In order to set up an open source platform, basic technical expertise is required in the
areas of web design and development. Software products that are distributed as open
source are generally free, and users can access and modify the source code. Several
examples of typical open source E-commerce platforms are PayCart, PrestaShop,
osCommerce and Magento.
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Types of Licensing Models
7. Categories of E-Commerce
As with traditional commerce, there are four principal categories of E-commerce: B2B,
B2C, C2B and C2C.
B2B (Business to Business) — This involves companies doing business with each
other. One example is manufacturers selling to distributors and wholesalers selling
to retailers.
B2C (Business to Consumer) — B2C consists of businesses selling to the general
public through shopping cart software, without needing any human interaction.
This is what most people think of when they hear "E-commerce." An example of
this would be Amazon.
C2B (Consumer to Business) — In C2B E-commerce, consumers post a project
with a set budget online, and companies bid on the project. The consumer reviews
the bids and selects the company. Elance is an example of this.
C2C (Consumer to Consumer) — This takes place within online classified ads,
forums or marketplaces where individuals can buy and sell their goods. Examples
of this include Craigslist, eBay and Etsy.
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8. E-Commerce Strategy
As in any new venture, the first step in succeeding in E-commerce is to set goals. Do
you plan to increase revenue from existing customers? Gain new customers? Increase
the average order value? Sell through new channels? Lower prices? Once you have
figured out your goals, it's time to set a plan.
A SWOT analysis can help you assess the strengths, weaknesses, opportunities and
threats of your company's current environment. What does the market look like? Where
does your business excel, and where does it falter? Review your entire business, not just
segments of it. Evaluate external opportunities, because this is the often the primary
place to invest time and money. Be honest with yourself when analyzing weaknesses
and threats, or else the analysis will not be helpful.
After the SWOT analysis is done, see how it fits into your overall vision. Where do you
see your business in five years? In 10 years? This will help you set business objectives
for the current year, where you set objectives for sales, profits, customers, traffic, new
systems and new staff. After the objectives are set, you can set a strategy into place
yourself, or hire an E-commerce consultant to help you.
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9. Other tools that can help you determine how to best grow your company into a new
segment include PEST (Political, Economic, Social and Technological), MOST (Mission,
Objective, Strategies and Tactics), and Porter's Five Forces analyses.
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E-Commerce Strategy
10. Best Practices
U.S. retail E-commerce sales for the first quarter of 2015 were $80.3 billion, up 3.5%
from the fourth quarter of 2014. E-commerce sales are expected to continue rising
steadily, putting pressure on E-commerce websites to deliver intuitive user experiences,
fast-loading content and simple shopping cart checkouts.
What best practices are being used today on high-performing E-commerce sites? Better
site search, larger product images and responsive site design.
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11. Leveraging Key Facets For Improved Outcomes
Design features
Customer engagement
Design is key to website success and each online store should be tailored to visually
appeal to the customers as well as provide user-friendly functionality that will smooth
the process from browsing through products, to finalizing a transaction. There is no
absolute rule for design; not all features are appropriate for all websites but keeping
up-to-date with the latest options is necessary to keep pace with ever increasing
customer expectations.
How a company chooses to engage with customers is a direct reflection of the company
brand and their values. Engagement can be in both a passive way, by putting online tools
available to them, or actively by seeking participation in voting polls, social media or
feedback contributions. Whichever way a company decides to engage with their
customers it should be a means that can be maintained given the resources available, as
well as fulfilling any sales-related objectives. Once a positive interaction has been
experienced, people will expect that to be equaled second time around, or improved
upon. 10
12. Currency, customs and discounts
The price of an item is always a central consideration to any consumer, and generally
a significant factor in the decision to buy or not. In the same way, it is essential for a
positive customer experience to clarify all customs charges, currency and discounts
information in order to secure the sale.
Unexpected customs duties from a cross-border sale can leave a lasting negative
impression on a customer and affect their future shopping choices, whether to buy
cross-border or not, whether it is from the same retailer or another. The greater number
of retailers that behave responsibly in this area, the increased number of happy
customer there will be, and the E-commerce industry stands to benefit.
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Leveraging Key Facets For Improved Outcomes
13. Delivery options
Feature the search box
Delivery is both the fulfilment of the retailer’s obligation to the customer and a
moment of direct contact; the importance of the delivery experience is because these
two factors are a reflection of the company. The delivery can be frustrating and
disappointing in the worst case, but in the best case, it can leave such a positive
impression that customers want to buy again. By understanding the value of
convenience and performance meeting stated expectations the latter is achievable for
all E-retailers.
Most E-commerce sites treat their site search as an afterthought. Compared with
featured-product slideshows and animated overlays and other "toys," the humble site
search box can seem static and utilitarian. But it doesn't have to be. More than most
other pieces of the online shopping experience, site search allows for direct
communication between the customer and the retailer. It doesn't need to be limited to
that dictionary-like lookup system of the last generation of E-commerce. It can be a
dynamic, intuitive, and interactive tool for directly connecting with the customer. 12
Leveraging Key Facets For Improved Outcomes
14. Instead of hiding the search box in a corner of the site navigation, A/B-test locations to
find where search performs best and where it's most intuitive for your visitors.
Write more copy in your product descriptions
Product descriptions are at the heart of an E-commerce site. Nearly every customer
who converts on a product will do so only after reading the product description.
If your product description is bland, undescriptive, unemotional, boring, or otherwise
uninspiring, it is less likely that a customer will buy your product. What should you
do? Write more copy. Don’t just list the article; describe it. Write about it. Explain how
to use it. Discuss its advantages. Powerful product descriptions will make people want
to buy.
There’s another major advantage in producing longer product descriptions: SEO. More
copy is better for search engines. The more copy you write, the higher your likelihood
of appearing and ranking in search engines.
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Leveraging Key Facets For Improved Outcomes
15. Make your images bigger
Generally speaking, larger product images improve your conversion rates.
Intuitive customer expression and smart search suggestions
Is your site search smart enough to recognize "pants," "slacks," and "trousers" as the
same kind of product? Can it recognize spelling mistakes and auto-suggest alternatives
in real time? Can it dynamically create such connections, rather than rely on constant
manual updates from programmers?
When you make images larger, it helps shoppers gain a closer look and better
experience of the product. Pictures are more effective than words at engaging attention
and capturing users’ interest. When you make your images nice and big, it forces the
user to pay attention and encourages them to convert.
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Leveraging Key Facets For Improved Outcomes
16. The smarter your site search, the more likely it is to result in conversions. People are
pretty good at making connections between similar concepts, overlooking obvious
mistakes, and filtering out obviously irrelevant details and results; unfortunately, those
are also things that most computer programs are terrible at. In other words, your site
search results are only as good as their programming.
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Leveraging Key Facets For Improved Outcomes
17. Personalize results for mobile shoppers
One of the greatest frustrations for mobile shoppers is wading through a site search
system that isn't optimized for the smaller screens and touch-based interfaces of today's
smartphones and tablets. Search results on mobile platforms tend to be excessively long
reels of results, laborious to review and often irrelevant to the shopper's actual interests
or needs.
By making use of intelligent preferences and observations about the shopper, you can
deliver results that are prioritized for their individual interests so that the most relevant
and preferred items are listed first. There is no need for endless swiping and scrolling to
find the right items, because those items are always at the top of the list. Even the
limitations of smaller screens become minimized when the most relevant results are
presented first.
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Leveraging Key Facets For Improved Outcomes
18. Conclusion
While E-commerce is a growing industry from the figures, and the trends we can see
happening around us, there is no guarantee of success that having a website or
becoming an E-retailer will result in sales, or happy customers.
As we have tried to draw attention to in the previous pages, there are numerous and
often simple ways of engaging with customers and building up a reservoir of confidence
that will encourage repeat purchasing.
While not all the ideas mentioned in this publication may be applicable or affordable
for every online retailer, being aware of possible future improvements and making an
effort to remain up-to-date with best practice website developments will be an
important factor when aiming to establish an online business.
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19. E-commerce is an expanding industry, as is the technology it is based on, which means
website best practice is constantly evolving and changing, both increasing the pressure to
have a state-of-the-art website and allow newcomers to the online world to catch up fast
provided they can invest the necessary funds and manpower.
Also, although the internet has opened up competition through accessibility, website
design is one way that helps differentiate brands and allow leaders in retail to stand-out
and capture more of the market. The offline side of E-commerce cannot be overlooked
however, for this is the confirmation of the retailer-customer relationship that has been
initiated online. Fulfilling the online order through delivery of physical goods is vital,
and as we have indicated through examples, it should be as easy as possible for the
consumer, so that their experience is positive and memorably so.
Clarity of obligation and therefore customer expectation must be established in order for
there to be satisfaction with the service received and to avoid unpleasant surprises.
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Conclusion