1. Effects of Online Commercialism
LIS 250 Final Project
Dre Weaver
Andy Baker
Chuck Gray
Doug Garmager

2. Question:
How has commercialism of the internet affected corporations and small businesses, and how are these corporations and small businesses still targeting those without internet access?

3. Positive Business Implications of E-Commerce
Overhead
Customer Service
Sales Taxes

4. Overhead Less physical space Few employees, especially in sales
Expansion of business less pricey
Overall savings in overhead can positively impact a fledgling business.

5. Customer Service
As Amazon.com model demonstrates that online business can actual improve on customer business.
Don’t have to drive to store to speak with customer service personnel.

6. Taxes
As of right now, online businesses are not required to pay sales tax.
Provides large incentive to buy online.
Streamlined Sales Tax Project may take away this benefit.

7. Negative Aspects of Internet Commercialism on the Business World
Customer Problems
Small Business Pitfalls
Strategy Misconceptions
Real World Examples…..

8. Internet Consumer Profile
Higher level of education
Greater Internet experience
Credit card concerned
E-shopping only accounts for 2% of total retail spending (as of 2002)

9. Small Business Pitfalls
Difficult for entrepreneurs to perceive limits to growth
Bad for business directors who guide decisions by a “flair for business” or a “gut feeling”
Generally have a hard time handling a large amount of data
Usually a lack of equity and financial resources to pursue strategies correctly

10. Common Internet Strategy Misconceptions
“Get BIG fast”
Initial strategy: price low, market heavily
Misconception that unlimited growth is good
Grow too quick, cannot provide quality service
Forgotten Principles……
Learning curves
Standards Formation
Network Effects
Economies of Scale

11. Real Examples of E-Commerce Failure
Boo.com
Heavily invested site that was too advanced, only accessible for 25% of users (Flash)
“Ask the Builder”
Too many response can be a bad thing….

12. E-Commerce & Retail
“Any transaction completed over a computer-mediated network that involves the transfer of ownership or rights to use goods or services.” –US Census Bureau
In 4th Quarter of 1999 e-commerce equaled .7% of total sales
In 2nd Quarter of 2003 e-commerce equaled 1.5% of total sales

13. E-Commerce Buying Patterns
“Customers are indifferent to good service but highly dissatisfied with bad service”
Tracking buying patterns is much easier for retailers (dynamic pricing)
Software for Consumers has developed out of this (Pricebots)
E-tailers must design sites around these issues and learn from consumer patterns

14. Holiday Sales of E-Tailers
This year, holiday sales expected to rise 42% to $12.2 Billion
Responding to Security Issues, Online shoppers can place orders to be picked up at closest retail store
Consumers have chosen to shop online to save time and energy that is generally wasted in holiday rushing

15. Influencing Consumer Buying
The most successful sales on the internet involve items that can be “Described in Words”
Customers Shop More Online When weather is Bad
Controlling Demographics through customer profiles can help influence buying through pop-ups on rainy days

16. Case Study: Overstock.Com
Targets Women aged 30-45
Median Income of $50,000
Free Cruise Influences Customers
Resulted in 2,741 hits with 1,261 new subscribers to the newsletter
46.01% Conversion Rate keeps Customers informed of new products available and sales targeted at audience

17. Customer Targeting How are companies targeting consumers?
Physical computing solutions
Internet/Software based solutions

18. Physical Computing Solutions
Hewlett Packard - Personal Computer Packages Starting at $800.00
Dell - Personal Computer Packages Starting at $600.00

19. Internet/Software Based Solutions
AT&T - Broadband Internet Services
Kmart - Internet Access through NetZero
Wal-Mart - Internet access in-store and at home.