Е-Бизнес Лекция 3

 E-Commerce Business Models  Digital Enterprise  E-Commerce  E-Commerce 2.0

1- 3  business model A method of doing business by which a company can generate revenue to sustain itself

1- 4  Six elements of a business model include descriptions of: 1.Customers to be served and the company’s relationships with these customers including customers’ value proposition 2.All products and services the business will offer 3.The business process required to make and deliver the products and services 4.The resources required and the identification of which ones are available, which will be developed in house, and which will need to be acquired 5.The organization’s supply chain, including suppliers and other business partners 6.The revenues expected (revenue model), anticipated costs, sources of financing, and estimated profitability (financial viability)

1- 5  revenue model Description of how the company or an EC project will earn revenue  value proposition The benefits a company can derive from using EC

1- 6  The major revenue models are: ◦ Sales ◦ Transaction fees ◦ Subscription fees ◦ Advertising fees ◦ Affiliate fees ◦ Other revenue sources

1- 7  Information brokers (informediaries)  Bartering  Deep discounting  Membership  Value-chain integrators  Value-chain service providers  Supply chain improvers  Social networks, communities, and blogging  Direct sale by manufacturers  Negotiation  Online direct marketing  Electronic tendering systems.  Name your own price  Find the best price  Affiliate marketing  Viral marketing  Group purchasing  Online auctions  Product and service customization  Electronic marketplaces and exchanges EC Business Models Typical EC Business Models

1- 8  Benefits to ◦ Organizations ◦ Consumers ◦ Society  Limitations ◦ Technological ◦ Nontechnological

1- 9  digital enterprise A new business model that uses IT in a fundamental way to accomplish one or more of three basic objectives: reach and engage customers more effectively, boost employee productivity, and improve operating efficiency. It uses converged communication and computing technology in a way that improves business processes

1- 10  corporate portal A major gateway through which employees, business partners, and the public can enter a corporate Web site

1- 11 The Digital Enterprise

 Build your on-line Business.  How to adopt e-commerce for your Business?

Trends  Growing importance of electronic commerce  Domestically & Internationally  Globalisation (whether we like it or not!)  Internet is creating a new economy: the digital economy (or the e-economy); new services; new delivery vehicle  ICT as an enabler to economic growth (and social development); contributes to GDP growth; productivity gains

Worldwide e- commerce spending projected to grow at CAGR of 23%, exceeding $8.75 trillion in 2009 Worldwide E-Commerce Sales Source: IDC, Worldwide Internet Usage and Commerce Forecast update, April 2007

A fundamental picture for E-Commerce AwarenessReceiptUsagePurchaseResearch Happy Usage Repeat Unhappy with Research chooses not to buy Unhappy with product, service or delivery PROMOTER DETRACTOR

consumers spending 34% of their time on-line marketers spend only 6% of their budget on-line Marketing is a $450 billion industry and we are all making decisions with less data and discipline that we apply to $100,000 decision in other aspects of our business Jim Stengel, GMO at Procter & Gamble

only 1-8% of visitors will purchase anything conversion rate only 30-50% of those who put anything in the basket will eventually buy customers research online & buy online

How will customers find the site? search engines optimisation, other site to drive traffic target advertising... How to convert a visitor into a paying customer? eliminating barriers, good design of customer experience, security, reassurance... How to keep the customer? post-purchase services, customer engagement, channels... Fundamental Questions:

Advising companies – how to improve their sites Running e-commerce development projects Designing effective on-line marketing Building new better e-commerce stores Designing new interface elements (AJAX) Analyzing and supporting the evolving businesses Designing secure 24/7 hosting Copywriting and taking photographs Where are the jobs?

 Customer Experience  Graphical and Design Issues  Business  Technical

 Customer Experience ◦ customer journeys ◦ language of the site ◦ complexity of the navigation ◦ does the site make it easy to do business ◦ do they listen to the customers?  Graphical and Design Issues  Business  Technical

 Customer Experience  Graphical and Design Issues ◦ your first impressions ◦ use of space & colour ◦ fit with brand? ◦ sense of time?  Business  Technical

 Customer Experience  Graphical and Design Issues  Business ◦ payments? – try to buy something (VISA ) ◦ estimate traffic ( ◦ check the Google rank ◦ regular customers? ◦ failed-to-convert visitors? ◦ look at the competition  Technical

 Customer Experience  Graphical and Design Issues  Business  Technical ◦ technology, standard shopping cart software ◦ search effectiveness ◦ accessibility (legal issue in the UK)

 Customer Experience  Graphical and Design Issues  Business  Technical

Make the core pages working harder Provide better decision support Integrate better with the business and payment Optimise for search engines More, richer information Improve customer reassurance Use modern interface techniques (e.g. AJAX) Better sense of personality Common Suggestions

Landing pages? Affiliate schemes? Price comparison sites? Syndicating? Social networking? Blogging? Mashups? and some more modern ideas...

 Where do the customers come from? ◦ Google, ads, other sites, direct URL...  Not all of them are going to buy! ◦ research, collect information...  Where they arrive? ◦ home page, landing pages, product pages, offers...  Customer Journey & Barriers ◦ errors, popups, registration, bad navigation...  Reassurance ◦ security, privacy, delivery...

When they encounter barriers: problems, poor search, confusion, errors When they are not happy with the research price comparison Research on-line & buy off-line Payment, delivery, security... Not happy using your stuff: buy once, never again Why do customers not buy?

Search Engine Optimisation Internet Advertising Other... Customers will not buy if they can’t find you

Create content & services Keyword-rich relevant text Page titles, headlines, META tags Keyword-based design (content & landing pages) Avoid barriers (Flash, tables, frames) Analyse server logs Update your site frequently Search Engine Optimisation

Traditional banners (and popups) Google ad-words, Pay per click Affiliates schemes Widgets/Gadgets, Web Services Internet radio, podcasts RSS Viral Campaigns (YouTube) Internet Advertising

TV, radio, papers Direct mail Outdoor Interactive outdoor Ambient or Guerrilla Marketing More and less traditional...

1. Requiring login to order 2. Complicated checkout 3. Not showing shipping prices upfront 4. Vague or hard to find return/privacy policies 5. Poor product descriptions 6. Lack of filtering & sorting 7. Poor or no search facility 8. Using excess of Flash images 9. Unreachable customer service 10. No contact details

Evaluate an e-commerce site of your choice. To get best results, work in pairs and choose 2 companies in the same product area as a comparison study. Avoid air lines, books, DVD’s, phones, cars, supermarkets – as they are usually rich & good. Some suggestions: cosmetics, perfumes, jewellery, fashion, furniture, plants & gardening, sports accessories

Marketing 2.0 Social 2.0 Engage 2.0 Channel 2.0

 The Future of EC ◦ Web 2.0 The second-generation of Internet-based services that let people collaborate and share information online in perceived new ways—such as social networking sites, wikis, communication tools, and folksonomies 1- 37

1- 38 The EC Framework, Classification, and Content

1- 39 The EC Framework, Classification, and Content

1- 40  social networks Web sites that connect people with specified interests by providing free services such as photo presentation, , blogging, etc.  Business-oriented networks are social networks whose primary objective is to facilitate business

Customer centric Gathering the data demographics behaviour attitude decisions Generating Personas Identifying your most valuable customers Understanding Your Customers

Behaviour Triggered Marketing Trigger EventMarketing ActChannel adding an item to the cart up sell additional related itemssite checkout failed follow-up, giving another opportunity to purchase left the site without purchase proper advertising on other sites to encourage a return visit and completing a purchase banner no purchase for a couple of months survey to check what is wrong direct mail top spending customer special thank-you letter with a promotion (discount voucher) direct mail buying historynew offer, e.g. a new book by the same author birthdaysend birthday card with a voucher

Marketing Measurement Continuous Optimisation Marketing Optimisation

The role of an influencer The power of a social network Why is the community so important? Facebook, LinkedIn, Nasza Klasa, YouTube

Forums, FAQ’s, Comments Reviews Blogs & Wikis Lists Behaviour based elements Customers who bought this item also bought Feedback Ratings Social Tools

Open Source Web Services Mashups Additional Impact

Loyalty: beyond collecting the points reward – experience – brand Word of Mouth: beyond the ‘tell a friend’ social tools – widgets – social space Cross Selling: beyond the recommended purchase other items in the same category – customers who bought this also bought... – quick adds – looks good with... – complete the look – bundles – recently viewed – recommended for you – customer rated matches building a long-term relationship with the customer

Personalisation User Innovation Quality Search Rich Application Interface Ethical and Green Customer Experience Management (continued)

On-line store High street store Call centre By mail Mobile commerce In-store kiosk One customer, one seller, multiple channels

Pricing Promotions Order fulfilment Returns Real time delivery checking Channel interaction

 Modern e-commerce is much beyond a digital catalogue with web based front  Web 2.0 is: ◦ User generated content ◦ User participation and engagement ◦ Service oriented design & new interfaces ◦ Openness and transparency ◦ Decision support ◦ Social computing ◦ Building a reputation