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Explore the fundamentals of E-commerce for both B2C and B2B models, covering topics such as security, payment processing, fulfillment, and customer service. Enhance your online retailing knowledge in this detailed session.
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Web Site Design and Authoring Session 12 Scott Marino Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2B vs. B2C Security and Privacy SSL Firewalls Shopping Carts Advertising Search Engines Affiliate Programs Business Models Topics Scott Marino MSMIS Summer Session 1 - 2001
E-commerce • E-commerce (electronic commerce or EC) is the buying and selling of goods and services over the Internet, especially the World Wide Web • B2C - Business to Consumer • Retailing focus • B2B - Business to Business • Focus on services and goods for other businesses • Little or no contact with the end consumer Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2C • E-tail or E-retail - selling goods to end consumers • Consists of a web site, ordering mechanism, payment processing, fulfillment, and customer service • The web site displays the good or services for sale • Displays an image and a description • Images should be clear and fast loading • Descriptions should include all details possible • May require a search function to locate products Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2C • A shopping cart system is used for ordering merchandise • Holds the items selected • Can add items, remove items, and change the quantities • Should perform inventory checks if needed • Handles the checkout process • Captures names, addresses, and phone numbers • Performs credit card validation and inventory updates Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2C • Payment for orders • Most retailers perform real-time credit card validations • Need a Visa / MasterCard merchant account from a bank • Need a credit card authorization service to talk to the bank’s servers • The shopping cart must interface with the credit card authorization service Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2C • Must provide Secure Sockets Layer (SSL) encryption for security between the web browser and your site • Verisign is the most common and widely recognized • Equifax is new to the SSL market • SSL or Secure Electronic Transmission (SET) used between the server and the authorization service • SET used between the authorization service and the bank Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2C • Fulfillment Systems • Can ship the orders from your own location • Can drop ship directly from the wholesaler or manufacturer • Can use a 3rd party fulfillment company • Need to be designed for peak volume • Usually the December holiday season • A mechanism for processing returns is also required Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2C • Customer service is important for retailers • Must be able to answer questions and complaints in a timely manner • Can provide e-mail, telephone, or web chat customer service • Can out-source the whole process • Providing a “Frequently asked questions” (FAQ) page reduces the number of questions Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2C • Building credibility is important • Provide a customer feedback page with compliments • Show a complaint with a happy resolution • Join the Online Better Business Bureau • Add the BizRate or Gomez rating service • Provide a privacy policy Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2B • Can provide goods or services to other businesses • B2B usually has less headaches than B2C • Studies show that there is more money spent on B2B than B2C • Common B2B functions include: • Wholesalers offering support to retailers • Advertisers and Marketers • Consulting Services Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2B • Wholesalers can create web based services to support its retailers • Can provide a web site interface to show available merchandise • Can interface to the shipping department for order status inquiries • Can provide electronic ordering via EDI or XML • EDI - Electronic Data Interchange • XML - Extensible Markup Language Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2B • Advertising companies come in many forms • Some are direct to consumer marketers while others offer support services • Provide services to promote a business to consumers • Search Engines, Banner Ads, E-mail campaigns • On the web, you have to put your company in front of potential customers Scott Marino MSMIS Summer Session 1 - 2001
E-commerce B2B • Consulting services can provide technical and other non-technical support • Technical includes creating web sites and adding enhanced features to an existing web site • Credit card processing, mailing list support, reminder services, referral services, and other site add-ons • Non-technical services include customer service and other business consulting Scott Marino MSMIS Summer Session 1 - 2001
Security • Any type of online payment requires an SSL encrypted connection • Required by Visa and MasterCard to accept electronic payments • Most consumers have learned to look for the little lock or key in the browser window • Verisign is the most common SSL provider • They perform detailed background checks before issuing a key Scott Marino MSMIS Summer Session 1 - 2001
Security • All data should be encrypted on the server, and stored for as short a period as possible • All databases should be secured and password protected where possible • A firewall should block incoming connections from unknown sources • Only trusted sources allowed in • There are services that perform site-wide security tests Scott Marino MSMIS Summer Session 1 - 2001
Security • Add blocks to restrict access from high fraud areas • Eastern Europe including Romania and Yugoslavia • Indonesia • Egypt and parts of the Middle East • Monitor the server logs and look for suspicious activity and hacking attempts • Block them right away • Report them to the ISP • Most ISP’s have anti-hacking policies Scott Marino MSMIS Summer Session 1 - 2001
Privacy • Every commercial site should provide a privacy policy and/or a terms of use policy • Should detail: • What information is captured • Why it is captured • What you will do with it • Any steps you have taken to protect the data • Visitors are very sensitive about giving away information Scott Marino MSMIS Summer Session 1 - 2001
Shopping Carts • Allow a user to shop for the goods or services offered, place them in a shopping cart, and then pay for those items • Most shopping carts are CGI based and are written in perl or C • C carts are faster because they are compiled • Typically store the cart contents in a cookie • You can purchase or lease a cart Scott Marino MSMIS Summer Session 1 - 2001
Important features Many products Product options Payment options Discounting Shipping options Unix or Windows Coupons Sales Security Frames support Installation Technical Support Upgrades Shopping Carts Scott Marino MSMIS Summer Session 1 - 2001
Advertising • Common advertising terms • CPM - cost per mille • The rate charged to display an ad 1,000 times • CPC - cost per click • The rate charged every time the ad is clicked • CPA - cost per acquisition (or action) • The rate charged for each sale • Can be a flat fee or percentage based • Highly targeted vs. General broadcast • opt-in vs. unsolicited commercial e-mail (UCE) Scott Marino MSMIS Summer Session 1 - 2001
Advertising • Common advertising terms • PPC - pay-per-click • Paying for each click • PPI - pay-per-impression • Paying for each impression • PPS - pay-per-sale • Paying for each sale • Can be a flat fee or a percentage • PPL - pay-per-lead • Paying for sales leads, usually a mailing list sign-up Scott Marino MSMIS Summer Session 1 - 2001
Search Engines • There are search engines, directories, meta-search engines and search portals • Most visitors come to a site as the result of a search • This is usually the least expensive customer acquisition method • Getting top listings in the proper categories with the right keywords is critical • Specific keywords are better than general terms Scott Marino MSMIS Summer Session 1 - 2001
Search Engines • A search engine typically spiders a site and creates an index of all the links • The spider then visit all the links in the web site • Keywords are derived by parsing the page and are built into the index • Keywords are based upon frequency and density on the site • Lycos, AltaVista, and HotBot are the biggest search engines Scott Marino MSMIS Summer Session 1 - 2001
Search Directories • Directories typically review a site before inclusion into the directory • The site is evaluated and placed into the appropriate category • Directories often supplement the category listings with an indexed listing • Yahoo! Is the most popular directory • Yahoo! Is the number 1 property on the internet • DMOZ.org is the open source directory project Scott Marino MSMIS Summer Session 1 - 2001
Meta-Search Engines • A search engine of search engines • These will grab the top listings from other search engines and display them on a single page • These are best for obscure searches or searching with very specific terms • Cyber411 and Mamma are very popular meta-search engines Scott Marino MSMIS Summer Session 1 - 2001
Portals • Portals are usually starting points for visitors when they log on to the web or are considered an anchor site as a starting point for specific topics • Some have common indexes for searching, and others have specific directories • Often links in portals are paid links • AOL, MSN, Garden.com, Fool.com are some populate portals Scott Marino MSMIS Summer Session 1 - 2001
Submitting to a search engine • Put appropriate keywords in your <title> • Add a <meta name="description" content=”title”> to the <head> • Add a <meta name="keywords" content=”keyword,keywords,…”> to the head tag • Make sure to repeat the appropriate keywords several times on the home page • Don’t over-use the words Scott Marino MSMIS Summer Session 1 - 2001
Submitting to a search engine • Visit each search engine • Look for the “add url” or “list a site” links usually found at the top or bottom of the page • Submit the home page and any content appropriate pages • Once submitted avoid altering the page title and meta tags if possible • Do not rename or delete a listed page Scott Marino MSMIS Summer Session 1 - 2001
Submitting to a search engine • There are services that will submit your site to the search engines • These work reasonably well because they re-submit the site periodically • They typically provide some monitoring reports that shows your search engine rankings • The top few search engines provide the majority of all search engine traffic Scott Marino MSMIS Summer Session 1 - 2001
Pay-per-listing • A new trend in search engines is the pay-per-listing model • As ad revenues have fallen, the search engines are looking for additional revenue sources • Allows you to bid for placement in the search results • The higher the bid, the better the placement • Lycos, AltaVista, and others are displaying “sponsored” listings above their own results Scott Marino MSMIS Summer Session 1 - 2001
Pay-per-listing • GoTo.com is the largest pay-per-click listing service • With GoTo, you: • Choose the keywords • Write the listing title • Write the site description • Determine the hyperlink destination • Bid for your placement • GoTo manually reviews ALL submissions Scott Marino MSMIS Summer Session 1 - 2001
Affiliate Programs • Provide revenue opportunities for merchants and affiliates • Merchants provide links and content to help promote their business • Offer PPC, PPL and PPS commissions in exchange for traffic • Affiliates list the merchant companies on their web sites • Sponsor links and ads are displayed in areas of the site Scott Marino MSMIS Summer Session 1 - 2001
Affiliate Programs • Sites that provide useful content with a few tastefully displayed ads that are appropriate will do well • Adding a “My favorite shopping links” page with a few sites is also good • Sites that are cluttered with ads do not do well • Too many brightly colored animated ads are a turn-off • Content is King Scott Marino MSMIS Summer Session 1 - 2001
Affiliate Programs • LinkShare and Commission Junction are two of the biggest • They consolidate many merchants into a single source that pools the earned commissions • Because they require escrow accounts from their merchants, the risk of not being paid is low • Exit traffic / hidden pop-ups is the latest trend in marketing Scott Marino MSMIS Summer Session 1 - 2001
Business Models • Develop an information site and surround it with tasteful affiliate links • Joke-a-day, Recipe-a-day, Quote-a-day sites make money from advertising revenues • Typically charge between $3.00 and $8.00 cpm for top placement sponsorship in a mailing • Can create a personal shopping page for yourself, and use it for discounts when shopping with your merchant partners Scott Marino MSMIS Summer Session 1 - 2001