1. Е-Бизнес Лекция 3

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

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

4. 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)

5. 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

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

7. 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

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

9. 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

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

11. 1- 11 The Digital Enterprise

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

13. 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

14. 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 2005-2009 Forecast update, April 2007

15. 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

16. 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

17. 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

18. 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:

19. 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?

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

21.  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

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

23.  Customer Experience  Graphical and Design Issues  Business ◦ payments? – try to buy something (VISA 4111 1111 1111 1111) ◦ estimate traffic (www.alexa.com)www.alexa.com ◦ check the Google rank ◦ regular customers? ◦ failed-to-convert visitors? ◦ look at the competition  Technical

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

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

26. 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

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

28.  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...

29. 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?

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

31. 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

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

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

34. 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

35. 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

37.  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

39. Web 2.0 is the network as platform, spanning all connected devices; Web 2.0 applications are those that make the most of the intrinsic advantages of that platform: delivering software as a continually-updated service that gets better the more people use it, consuming and remixing data from multiple sources, including individual users, while providing their own data and services in a form that allows remixing by others, creating network effects through an "architecture of participation," and going beyond the page metaphor of Web 1.0 to deliver rich user experiences. Tim O'Reilly, “Web 2.0: Compact Definition?”Web 2.0: Compact Definition?

40.  Sharing  Collective intelligence  Self-service  Customer centricity  Personalization  Recommendation

41.  Services, not packaged software, with cost-effective scalability  Control over unique, hard-to-recreate data sources that get richer as more people use them  Trusting users as co-developers  Harnessing collective intelligence  Leveraging the long tail through customer self- service  Software above the level of a single device  Lightweight user interfaces, development models, AND business models Source: O’Reilly, T., What is Web 2.0

42. 1- 42 The EC Framework, Classification, and Content

43. 1- 43  social networks Web sites that connect people with specified interests by providing free services such as photo presentation, e-mail, blogging, etc.  Business-oriented networks are social networks whose primary objective is to facilitate business

44. 1- 44 The Web 2.0 Framework, Classification, and Content

45. Spread of Broadband ◦ Increasingly ubiquitous connections A generation of “web natives” ◦ Living on the web ◦ Social networking; blogging; instant messenger Create, not just consume Some hard lessons about data ownership ◦ Don’t steal my data; don’t lock me in

46. Exploit the Long Tail ◦ At internet scale even niche communities are very large ◦ “We sold more books today that we didn't sell at all yesterday, than we sold today of all the books that did sell yesterday.”  Amazon employee quoted on Wikipedia Success of web services ◦ No need to own the user interface. It's your data that they want Users can enrich your data ◦ “Harnessing collective intelligence of users” ◦ Review and Recommend; Social Bookmarking; Folksonomies

47. The Power of XML ◦ Easier to exchange and process application independent data Agile Engineering ◦ Incrementally developer your product; short release cycles ◦ Continually adapt to user need ◦ “The Perpetual Beta” Maturation of the browser ◦ XHTML, DOM, CSS, Javascript ◦ Browser as platform, not just document viewer

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

50.  Customer ◦ Active (e.g., wikipedia) vs. passive (CRM)  Process ◦ Flexible on-demand process  Technology ◦ Service-oriented computing, Web 2.0, mobile technology  Product/services ◦ Personalization and customization

51.  Web-based application is designed in a machine-interoperable form so that different applications are easily integrated on-demand.  Example: ◦ web services for stock analysis ◦ Web services from Amazon.com

52. ServiceBroker ServiceRequesterServiceProvider Publication(WSDL) Discovery(UDDI) Link(SOAP)

54.  Personalized product  Personalized content  Personalized web page  Personalized transaction process  Personalized services

55.  Mobile commerce  Location-based commerce  Blog marketing  Target marketing  Information brokering

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

57. Open Source Web Services Mashups Additional Impact

58. 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

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

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

61. Pricing Promotions Order fulfilment Returns Real time delivery checking Channel interaction

62. CSS Content with Style

68. RSS : Content Syndication

72. Web Services: Open Data

73. Publish Data Not Pages ◦ Remember: its your data that they want, not your user interface ◦ RSS feeds are web services, too “Mashups” ◦ Remix Data to Create New Applications 184 Web services listed on ProgrammableWeb.comProgrammableWeb.com ◦ Photo sharing; calendars; messaging; blogging ◦ File storage; ecommerce; advertising; search

75. MAP API EVENTS API IMAGE API

76.  No one predicted the “dot-com” bust  No one predicted Web 2.0  Is it a lesson from the past that the future of the Web is unpredictable?

77. Three alternative trends of Web development Human Communities Machines, devices, computers Facilitates Human-to- Human interaction Facilitates Software-to- Software interaction Facilitates Machine-to- Machine interaction Applications, services, agents

78. “The semantic wave embraces four stages of internet growth: Web 1.0, was about connecting information... Web 2.0 is about connecting people. Web 3.0, is starting now… and it is about … connecting knowledge… Web 4.0 will come later … and it is about connecting intelligences in a ubiquitous web where both people and things can reason and communicate together.” [“Semantic Wave 2008”, Mills Davis ] “Semantic Wave” (Web X.0) We may add here: Web 5.0 will come finally and it is about connecting models in a “Global Understanding Environment” (GUN), which will be such proactive, self- managed evolutionary Semantic Web of Things, People and Abstractions where all kinds of entities can understand, interact, serve, develop and learn from each other. [Vagan Terziyan]

79. 79  Fresh, useful data is the core  The ability for other parties to manipulate that data  “Living” applications that can be easily adapted  Harnessing the collective experience  “The Web as a platform,” independent of user platform  Primary focus of participation, rather than publishing  Trusting of users to provide reliable content

80.  Information has “machine processable” and “machine-understandable” semantics  Can be built upon the framework of the existing Web technology  Ontologies are the basic building block of a semantic Web

81. WWW URI, HTML, HTTP Bringing the computer back as a device for computation Semantic Web RDF, RDF(S), OWL Dynamic Web Services UDDI, WSDL, SOAP Static

82. WWW URI, HTML, HTTP Bringing the Web to its full potential Semantic Web RDF, RDF(S), OWL Dynamic Web Services UDDI, WSDL, SOAP Static Semantic Web Services

83.  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

84. Web 2.0 hard to define, but very far from just hype ◦ Culmination of a number of web trends Importance of Open Data ◦ Allows communities to assemble unique tailored applications Importance of Users ◦ Seek and create network effects Browser as Application Platform ◦ Huge potential for new kinds of web applications