E-Commerce and Entrepreneurship Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

The Internet: Changing the Face of Business The most successful companies embrace the Internet as a mechanism for transforming their companies and for changing everything about the way they do business E-commerce has launched a revolution, a new industrial order Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

The Internet: Changing the Face of Business In the world of e-commerce, speed and flexibility matter much more than size High-volume, low-margin, commodity products are best suited for selling on the Web Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Time Spent Online by Country (Hours per Week) Chapter 13: E-Commerce Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 13-4

U.S. Online and Web-Influenced Retail Sales 2009-2014 Chapter 13: E-Commerce Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 13-5

Benefits of Selling on the Web Small business owners whose companies have Web sites report that their businesses benefit by having a site Opportunity to increase revenues and attract new customers Ability of brick-and-mortar retailers to drive online customers to their stores and increase sales there Ability to expand into global markets Ability to remain open 24 hours a day, seven days a week Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Benefits of Selling on the Web Capacity to use the Web’s interactive nature to enhance customer service Power to educate and inform Ability to lower the cost of doing business Capacity to improve efficiency of purchasing and inventory control processes Ability to spot new business opportunities and capitalize on them Power to track sales results Opportunity to build credibility and brand identity among customers Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall E-Commerce Ad-ology study: Just 60% of small companies have Web sites Discover Small Business Watch survey: 46% of small business owners think that not every company needs a Web site Why? Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Factors to Consider Before Launching into E-Commerce How a company exploits the Web’s 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 Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Factors to Consider Before Launching into E-Commerce Developing a deep, lasting relationship with customers takes on even greater importance on the Web Creating a meaningful presence on the Web requires an ongoing investment of resources – time, money, energy, and talent Measuring the success of a Web-based sales effort is essential to remaining relevant to customers whose tastes, needs, and preferences constantly change Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 10 Myths of E-Commerce Myth 1: If I launch a site, customers will flock to it Myth 2: Online customers are easy to please Myth 3: Making money on the Web is easy Myth 4: Privacy is not an important issue on the Web Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Privacy and the Web Privacy on the Web does matter! PayPal and comScore survey: 21% of online shoppers say that security and privacy concerns have affected their Internet purchasing behavior Tips: Post a privacy policy and stick to it Safeguard information your company collects from customers Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 10 Myths of E-Commerce Myth 5: Strategy? I don’t need a strategy to sell on the Web! Just give me a Web site and the rest will take care of itself Myth 6: The most important part of any e-commerce effort is technology Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 10 Myths of E-Commerce Myth 7: On the Web, customer service is not as important as it is in a traditional retail store Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

The Importance of Service on the Web Study: 79% of shoppers who had experienced a frustrating online shopping experience reported that they were not likely to return to the online store, and… 27% said that they were less likely to shop at the retailer’s physical store Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

The Importance of Service on the Web Average conversion rate for e-commerce sites is 3.2 Cost: Billions of dollars in lost sales, much of it because of poor customer service Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

The Importance of Service on the Web Study: 45% of Web shoppers who fill their online shopping carts become frustrated and abandon them before checking out Reasons: Shipping charges too high Customer was comparison shopping Total cost was higher than anticipated Customer wanted to find a coupon or buy off-line Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Tips for Reducing Shopping Cart Abandonment Rate Offer multiple shipping methods and provide free shipping if a customer’s purchase exceeds a minimum amount Streamline the steps in the checkout process Include a progress indicator on each checkout page Provide a link back to the items in the shopping cart Allow customers to see whether an item is in stock Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Tips for Reducing Shopping Cart Abandonment Rate Include product photos in the shopping cart Make it easy for customers to change the contents of their carts Give customers the option of calling to resolve problems they encounter during checkout Make it easy for customers to pay for their online purchases Include a short survey of customers who abandon their carts Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 10 Myths of E-Commerce Myth 8: Flash makes a Web site better Myth 9: It’s what’s up front that counts Virtual order fulfillment Myth 10: It’s too late to get on the Web Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

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

E-Mail Open and Click Through Rates Chapter 13: E-Commerce Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 13-22

Strategies for E-Success Make sure your Web site says “credibility” Consider forming strategic alliances Affiliate marketing programs Make the most of the Web’s global reach Promote your site online and offline Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Strategies for E-Success Use Web 2.0 tools to attract and retain customers Mashups Really Simple Syndication (RSS) Social networking Wikis Widgets Nielson study: 70% of online shoppers trust customer reviews posted online Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Search Engine Optimization (SEO) Goal: Get your site listed at or near the top of search results listing 62% of search engine users click on a link to a site that appears on the first page of the search results Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

A Search Marketing Strategy Natural (organic) listings - the result of “spiders,” powerful programs that crawl the Web, looking at key words, links, and other data Paid (sponsored) listings – short text ads with links to the sponsoring company’s Web site that appear on the results page of a search engine Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Paid Listings Use paid listings to accomplish what natural listings cannot Five search engines – Google, Yahoo!, MS Live Search, Ask.com, and AOL – account for 99% of all searches in the U.S. Average cost of a keyword has risen from 39¢ in 2004 to 52¢ today Beware of click fraud! Estimate: Pay-per-click fraud rate=15-17.5% Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Designing a Killer Web Site Decide how to bring your site to life Start with your target customer Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Percentage of Adult Internet Users Chapter 13: E-Commerce Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 13-29

Online Activities by Generation Chapter 13: E-Commerce Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 13-30

Designing a Killer Web Site Decide how to bring your site to life Start with your target customer Give customers what they want Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Features U.S. Shoppers Want Chapter 13: E-Commerce Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall 13-32

Designing a Killer Web Site Select a domain name that is consistent with the image you want to create for your company and register it Short Memorable Indicative of a company’s business Easy to spell Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Designing a Killer Web Site Make your Web site easy to navigate Create a gift idea center Build loyalty by giving online customers a reason to return Establish hyperlinks with other businesses, especially those selling products that complement yours Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Designing a Killer Web Site Include an e-mail option and a telephone # on your site Offer shoppers online tracking Offer Web specials Look for ways to cross-sell Use the power of social media Use customer testimonials Follow a simple design Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Web Site Design Tips Avoid clutter Avoid huge graphics Include a menu bar at the top of the page Include navigation buttons Minimize the number of clicks required to a page Incorporate meaningful content into the site Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Web Site Design Tips Include an “FAQ” section Include privacy and return policies Avoid fancy typefaces and small fonts Watch for “typos” and misspelled words Avoid small fonts on “busy” backgrounds Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Web Site Design Tips Use contrasting colors for text and graphics Be careful with frames Test the site on different browsers and different size monitors Collect information from visitors, but don’t put them through a tedious registration process Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Web Site Design Tips Include a search function and company contact information Avoid automated music Make sure the page looks appealing Remember: Simpler is better Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Designing a Killer Web Site Assure customers that their online transactions are secure Post shipping and handling charges up front Create a fast, simple checkout process Confirm transactions with e-mail Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Designing a Killer Web Site Keep your site updated Test your site often Consider hiring a professional to design your site Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Tracking Web Results Web analytics – tools that measure a Web site’s ability to attract customers, generate sales, and keep customers coming back Commerce metrics Visitor segmentation measurements Content reports Process measurements Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Measures of Web Site Performance Click-through rate (CTR) - the proportion of people who see a company’s online ad and actually click on it to reach the company’s Web site CTR = # of clicks ÷ # of impressions Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Measures of Web Site Performance Cost per acquisition (CPA) – the cost a company incurs to generate each purchase (or customer registration) CPA = Total cost of acquiring a new customer ÷ number of new customers Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Return on Investment (ROI) Conversion (browse-to-buy) rate - the proportion of visitors to a site who actually make a purchase Conversion rate = number of customers who make a purchase ÷ number of visitors to a site Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Ensuring Web Privacy Take an inventory of the customer data collected Develop a company policy for the information you collect Post your company’s privacy policy prominently on your Web site and follow it Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall Ensuring Web Security Study: 75% of Web sites have vulnerabilities that are rated from medium- to high-risk Virus detection software Intrusion detection software Firewall Secure sockets layer (SSL) technology Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall

Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright ©2012 Pearson Education, Inc.  Publishing as Prentice Hall Copyright ©2012 Pearson Education, Inc. publishing as Prentice Hall