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New eCommerce Trends and Technologies. David Strom david@strom.com +1 (516) 944 3407 Centra Presentation 2/9/2000. Agenda. Build or buy your web storefront? What becomes success? Future trends . Topic 1: Build or Buy Your Web Storefront. Rent : outsource to a CSP Buy suite of software
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New eCommerce Trends and Technologies David Strom david@strom.com +1 (516) 944 3407 Centra Presentation 2/9/2000 Centra presentation (c) David Strom Inc. 2000
Agenda • Build or buy your web storefront? • What becomes success? • Future trends Centra presentation (c) David Strom Inc. 2000
Topic 1: Build or Buy Your Web Storefront • Rent: outsource to a CSP • Buy suite of software • Build it yourself Centra presentation (c) David Strom Inc. 2000
Evaluating CSPs • Do they offer storefront design? • Have in-house programmers? • Hosting of your own web server machine? • How many payment systems do they support? • What kinds of accounting reports do they offer? Centra presentation (c) David Strom Inc. 2000
www.psi.net/web/ecommerce.shtml www.Best.com/bizcomm.html www.Brainlink.com/html/saleslink.htm www.Earthlink.net IBM: mypage.ihost.com www.Netcom.com business.Mindspring.com/prod-svc/smbiz/ www.outer.net/ONCommerce (OuterNet) Some CSP Examples Centra presentation (c) David Strom Inc. 2000
Earthlink pricing explained Centra presentation (c) David Strom Inc. 2000
CSP Approaches • GeoShop/Yahoo • ViaWeb/Yahoo • iCat/Intel • Encanto • iTool • Others entering a very crowded field Centra presentation (c) David Strom Inc. 2000
GeoShop/Yahoo Builds on GeoCities “communities” but for merchants (www.geocities.com/join/geoshops) $25/month for just commercial listings $180/month (or more!) for actual transactions working with Internet Commerce Services Corp. who uses Open Market Transact servers (www.icoms.com/pp.htm) Centra presentation (c) David Strom Inc. 2000
$100/month (<50 items) or $300/month options CyberCash processing $500 setup Solid reporting and admin options ViaWeb/Yahoo Centra presentation (c) David Strom Inc. 2000
Free for <10 items, $99/mo. for 100 items No per-transaction fees Email and browser-based notifications of purchase completion Advanced items like upsell, featured products, cybercash gateways iCat/Intel Commerce Online Hosting Solution Centra presentation (c) David Strom Inc. 2000
iTool Demo • www.itool.com/admin/controlpanel.cfm • $25-$100/mo. Centra presentation (c) David Strom Inc. 2000
Sitematic • Flat rate for $40/mo • Staging/production site concept • More templates and controls Centra presentation (c) David Strom Inc. 2000
Turnkey server/software for free! Payment gateway included ($50 initial, $70/month) Web storefront, shopping cart, catalog system Also need secure cert, merchant bank account All managed via browser, steps are clearly documented Encanto Centra presentation (c) David Strom Inc. 2000
The Suite Approach • Leading contenders • What is part of the suite and what isn’t • Prices and platforms Centra presentation (c) David Strom Inc. 2000
Popular eCommerce Suites Centra presentation (c) David Strom Inc. 2000
Popular eCommerce Suites (con’t) Centra presentation (c) David Strom Inc. 2000
Four Typical Elements • Catalog • Storefront designer • Ordering/inventory system • Shopping cart/check out system Centra presentation (c) David Strom Inc. 2000
The Cold Hard Reality of Suites • Suites are nothing more than collection of products • Lack integration among various elements • Difficult to setup, customize, and use • Require you to live “inside” their structure • Limited payment options • Sounds like early MS Office Centra presentation (c) David Strom Inc. 2000
Payment Systems Included in Each Suite • Microsoft: Verifone, Buy Now • IBM (Net.Commerce): Verifone, SET/eTill • OpenMarket: Verifone • WebSite Pro: IC Verify, PC Authorize, CyberCash, others • Intershop: CyberCash, ICVerify, others Centra presentation (c) David Strom Inc. 2000
Sample Stores Included in Each Suite • Microsoft: 4 stores • IBM: eMall, simple and advanced sample stores • OpenMarket: none • WebSite Pro: 1 bookstore • Intershop: 3 stores Centra presentation (c) David Strom Inc. 2000
Database Support Centra presentation (c) David Strom Inc. 2000
Dealing With ODBC • Have to understand how to set up data sources • Intimate knowledge of your data structure • Re-install ODBC drivers at least once! • Best to start with built-in database Centra presentation (c) David Strom Inc. 2000
Store Wizards Included in Each Suite • Net.Commerce (the best) • WebSite Pro (but doesn’t do much) • Intershop (various wizards) • MS Commerce (although you’ll really need to know COM!) Centra presentation (c) David Strom Inc. 2000
Tips • Don’t install anything before making sure you have everything! • Downloads for free, but they expire • Can you export existing files to these systems? Centra presentation (c) David Strom Inc. 2000
Prices of DIY Products Centra presentation (c) David Strom Inc. 2000
Putting Together Your Own Solution • SQL Server database • CyberCash payment system • WebCatalog 3.0 (supports CCash) • IIS web server • Total price: <US$10,000 Centra presentation (c) David Strom Inc. 2000
Topic 2: What Becomes Success? • Overview of eCommerce market • Review physical storefront success factors • Propose some definitions • Define success for the web • Draw up eCommerce principles Centra presentation (c) David Strom Inc. 2000
Sad State of Today’s eCommerce Marketplace • Poor quality tools • Hard-to-find stores • Limited payment methods • Credit card snooping perceptions • Older browser versions can’t view latest sites Centra presentation (c) David Strom Inc. 2000
Case in Point: Buying a Bike Rack • Item not carried: outdated catalog • Telesales not familiar with web • No cross-sell or substitutions online • Needed three phone calls to complete purchase Centra presentation (c) David Strom Inc. 2000
Another Case: Buying Theater Tickets • Web site doesn’t carry event information in real time • Orders are fulfilled weeks later • No indication on web site of sold-out or nearly so events Centra presentation (c) David Strom Inc. 2000
Let’s Learn From the “Real World” • Compare what works for physical stores • Try to extend to the web Centra presentation (c) David Strom Inc. 2000
Critical Success Factors for Physical Storefronts • Location • Branding • Good service • Good product selection • Proper pricing and margins • Traffic Centra presentation (c) David Strom Inc. 2000
First Problem: • None of these translate on the ‘net! Centra presentation (c) David Strom Inc. 2000
Now Try to Agree on Definitions for Web Stores • What determines a good location? • Position on a search page • Nearness to popular destination • Ad on a popular server • What determines branding? • Memorable domain name • Popular search category destination Centra presentation (c) David Strom Inc. 2000
An Example of bad location: Montana Meats • Link • Can’t they afford their own domain name? • www.company.com/~anything is BAD NEWS! Centra presentation (c) David Strom Inc. 2000
Determining Traffic • Hard to do -- is it hits, page views, registered users? • [HITS = How Idiots Track Success] • Hard to measure -- do you count gifs? Use log files? • No general agreement on any metrics! Centra presentation (c) David Strom Inc. 2000
One Working Definition of Success: • SURVIVAL! • If a site is still running after 12 months, and getting more traffic, it is a success. Centra presentation (c) David Strom Inc. 2000
Does a site actually have to sell something? • Many actual eCommerce sites don’t do the complete transaction • Require faxes or telephone calls! • Some merely have catalogs • Examples: Singapore Power Authority • Cisco Connection Online Centra presentation (c) David Strom Inc. 2000
Principles of Good eCommerce • Easy to find merchandize • Good service • Individual customization is key • Simple navigation • Make payments easy • Make buyer feel transaction is secure • Communicate effectively and frequently Centra presentation (c) David Strom Inc. 2000
AMP Connect • Have customers in 100 countries • Speak many languages • Produce 400 catalogs covering 135,000 items • Mailings cost US$7MM/yr • Fax back cost US$800,000/yr • But you can’t buy anything directly! Centra presentation (c) David Strom Inc. 2000
Solution: “Step Searching” • Saqqara.com software to enhance Oracle database • Provide user feedback as they type in the query • Show how many matches in the database • Different mechanisms for searching: • by part number • by alphabetical names • by part family • by picture even Centra presentation (c) David Strom Inc. 2000
AMP Old Screen Centra presentation (c) David Strom Inc. 2000
AMP Connect (con’t) • And can set to list parts that are available in specific countries! • Updated daily with over 200 item changes • Detailed drawings saves time for customers to pick the right item • Saved AMP over US$5MM in production costs • Saved US$1MM in translation costs Centra presentation (c) David Strom Inc. 2000
First Principle of eCommerce: • Make it easy to buy! Centra presentation (c) David Strom Inc. 2000
Amazon.com • Services frequent readers with a variety of programs • Editorial comments • If you liked this book, you’ll like... • Notification of new books by author, topic • Simplified “1-Click” ordering • Uses simple pages and email • Associates program for commission kickbacks • Gift certificates via email • And ... lots of stuff to choose from Centra presentation (c) David Strom Inc. 2000
Use Affiliates Programs Wisely • They bring traffic to your doorstep • Nice revenue sharing model • Lots of them to choose from to model your own on: • AssociatePrograms.com • Refer-it.com • Shopnow.com(payment processing) Centra presentation (c) David Strom Inc. 2000
A Different Take on Affiliates: ClickRewards • Pays you in airline miles for your patronage • Accrue miles on many sites • You redeem benefits on their site Centra presentation (c) David Strom Inc. 2000
Amazon vs Borders • Borders link • Cookies vs logins • Who makes it easier to buy books? Centra presentation (c) David Strom Inc. 2000
Update your directories! • This one is more than a year old! Centra presentation (c) David Strom Inc. 2000
Another Side of Service: Repeat Business • Make the shopper feel part of the family • Shopping as entertainment (online auctions) • “Do what I mean” search function (Amazon again looks at common misspellings made in the previous 24 hours for book searches) • Periodic targeted email updates and reminders Centra presentation (c) David Strom Inc. 2000