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e-commerce: From online stores to social networks

Michael McDonnell Winterstorm Solutions michael@winterstorm.ca http://syntheticlibrarian.com/ 2007-10-30. e-commerce: From online stores to social networks. My Background. E-Commerce Experience. TELUS Charitable Giving System ($X,000,000+) Skibanff.com ($X00,000)

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e-commerce: From online stores to social networks

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  1. Michael McDonnell Winterstorm Solutions michael@winterstorm.ca http://syntheticlibrarian.com/ 2007-10-30 e-commerce:From online stores to social networks

  2. My Background E-Commerce Experience • TELUS Charitable Giving System ($X,000,000+) • Skibanff.com ($X00,000) • Bernard Callebaut Chocolate e-store ($X0,000) • E-commerce infrastructure at TELUS ($X0,000) • Mortgage Application for many Credit Unions e-commerce - Michael McDonnell

  3. B2C E-Commerce: Overview e-commerce - Michael McDonnell Online Stores 1 Advertising Networks 2 Social Networks 3

  4. Online Stores:Components & Processes e-commerce - Michael McDonnell 1 • Catalogue • List of Products • Descriptions • Prices • Options, size, etc. • Pictures Customer Catalogue a b Shopping Cart 2 • Shopping Cart • A temporary list of item to be purchased c 3 • Checkout • Billing Info • Shipping Address • Shipping Cost • Record Order • Process Payment d Payment Collection Checkout

  5. Online Store Example:Bubblehut.ca e-commerce - Michael McDonnell • http://www.bubblehut.ca • Site sells soaps and candles • The website is just a catalogue • No database at all • Just “flat” files stored on the web server • All “e-commerce” is handled by the 3rd party • Shopping cart • Checkout • Payment processing • Paypal never tells bubblehut your CC info

  6. Online Store Example:Chapters.ca e-commerce - Michael McDonnell • http://chapters.ca/ • Site sells books • The website has an extensive catalogue • BIG Database • Probably uses software called “endeca” (very popular for high-end retail and large university libraries) • All “e-commerce” is handled “on-site” • Shopping cart • Checkout • Payment processing (with the exception of payment clearing)

  7. Payment Process:Internet Merchant Account e-commerce - Michael McDonnell Customer Store Website a b d Pay the Merchant Charge Credit Card c Payment Gateway Example: http://www.beanstream.com/

  8. Payment Process:PayPal Account e-commerce - Michael McDonnell Customer a PayPal b c Pay the Merchant Charge Credit Card

  9. Payment Security:Virtual Accounts at Citi Bank e-commerce - Michael McDonnell

  10. Payment Secutiy:Visa Chip Cards e-commerce - Michael McDonnell • A typical plastic card with an embedded computer chip and microcomputer. • Enables encryption of confidential information and personalization of usage limits. • A card reader reads the encrypted data, and password authentication is used to verify users.

  11. Payment Security:Mastercard SecureCode e-commerce - Michael McDonnell

  12. Online Purchase Behaviour e-commerce - Michael McDonnell Most Purchased Least Purchased Computers & Software Travel Gift Cards Toys Videogames == “Commodity” Items Food Cars & Car Parts Pet Supplies Appliances and tools Health & Beauty Products == “High Touch” Items Digital Products – Ideal for Online Sale Commodity-like Mass-customizable Delivered by download No need for intermediary Global in reach • Examples: • Tickets (travel, events) • Music, Images, Video • Books, News, other info. • Software Source: Shop.org; Forrester Research

  13. Advertising Networks e-commerce - Michael McDonnell • Online stores are now common • Internet used to increase sales • not just to facilitate sales • Advertising is now big business • US$7.9 BILLION in 1st Q 2006 • 37% higher than 1st Q 2005 • Web Analytics is growing • Analyze web data to convert visitors into buyers

  14. Example:Google AdWords e-commerce - Michael McDonnell Pay-per-click Price set by bid Pay when user clicks Ads appear on Search results Related Website Other places Targeted by keyword Select keywords Set maximum price for add to appear with that keyword Ad Position Determine by competition based on bids http://adwords.google.com/

  15. Example:Google AdSense e-commerce - Michael McDonnell Display Ads Get paid! Pay-per-click Paid when user clicks Pay-per-impression Paid when is displayed 1000 times Targeted by keyword Ad keywords match content of your webpage Ad are relevant to your audience Ad Appearance You determine size, and appearance of ads http://www.google.com/adsense/

  16. E-commerce 2.0 e-commerce - Michael McDonnell • Participation == Value • For the customer • For the business • Examples • YouTube • Amazon • E-bay • “Professional” Bloggers

  17. Example:YouTube Customers Participate by distributing the ads http://www.youtube.com/watch?v=zBu5dL4QCnY e-commerce - Michael McDonnell

  18. Example: Amazon e-commerce - Michael McDonnell • user generated content • Reviews • Ratings • Buying Patterns • “People who bought this book also bought…” • Online Bookstore or Online Community? • More participation = More value

  19. Example: E-bay e-commerce - Michael McDonnell • Customer-to-Customer (C2C) Sales • Customer Participation IS the business • Reputation Ratings • Payment Processing • More participation = More value

  20. Example: Professional Bloggers e-commerce - Michael McDonnell • FREE Content • PAID for Advertisements • Goal: attract an ATTENTION • Goal: find an AUDIENCE • Audience Participation • Builds COMMUNITY • More participation = More value (to community)

  21. Light Reading e-commerce - Michael McDonnell Fiction Rainbow’s End by Verner Vinge Pattern Recognition by William Gibson Non-fiction The Tipping Point by Malcolm Gladwell The Long Tail by Chris Anderson Makin’ Money! AdWords (Pay for Ads) AdSense (Get Paid for Ads) Blogs Seth Godin Micropersuasion Charlene Li (Forrester Research) Many-to-many Apophenia (Web 2.0 section) Articles Viral Marketing (Jurvetson 1997) What is Web 2.0 (O’Reilly 2005)

  22. Questions? e-commerce - Michael McDonnell michael@winterstorm.ca http://syntheticlibrarian.com/ I would be happy to answer your questions you have now, or by email later.

  23. OLD SLIDES e-commerce - Michael McDonnell • All slides after this one are old slides deleted from the presentation but preserved for reference.

  24. Online Stores e-commerce - Michael McDonnell Suppliers Customers Banks • Products • Prices • Descriptions • Accounts Your Website Payment Processor Database Web Hosting Company

  25. Online Stores:Hardware Infrastructure e-commerce - Michael McDonnell Web Server Database Server Catalogue • Software Programs • Catalogue • Shopping Cart • Checkout • Payment Processing • Static Data • Images • Web Pages Data Product Info Shopping Cart Contents Orders Customer Account Info Shopping Cart Checkout

  26. Early e-commerce:Online Stores e-commerce - Michael McDonnell • Internet used to conduct retail sales (B2C) • A bit of history: • Problem: No Security = No Sales • Solution: Encryption and Digital Signatures • SSL : Secure Socket Layer • HTTPS = HTTP + SSL (Security)

  27. Why SSL?Encryption e-commerce - Michael McDonnell • Encryption • Hackers “sniff” and capture data • Encrypted data can be captured, but not decrypted Browser Router Router Router Router Router Hacker Router Sniffer Server

  28. Why SSL?Digital Signatures • Authentication • Hackers reroute connections • Server “key” cannot be faked • Fake server cannot pretend to be real one Browser Router Router Router Router Router Hacker Router FAKE Server Server e-commerce - Michael McDonnell

  29. 3rd Party Hosted Shopping and Payment e-commerce - Michael McDonnell 1 Customer Catalogue Online Store 2 Shopping Cart Payment Processing Company 3 Checkout 4 Payment Collection

  30. 3rd Party Payment Only e-commerce - Michael McDonnell 1 Customer Catalogue Online Store Website 2 Shopping Cart Payment Processing Company 3 Checkout 4 Payment Collection

  31. Payment Processing Hidden From User e-commerce - Michael McDonnell Customer Catalogue 1 Online Store Website 2 Shopping Cart Payment Processing Company 3 Checkout Payment Collection Payment Gateway 4 5

  32. B2C Marketing: Spawn.com Video e-commerce - Michael McDonnell • http://highered.mcgraw-hill.com/sites/007305223x/instructor_view0/videos.htm#

  33. Future e-commerce:Web 2.0 e-commerce - Michael McDonnell • Collaboration and Participation • Read+WRITE vs Read-ONLY • Examples • Flickr • http://flickr.com/ • Del.ico.us • http://del.ico.us/ • AskMetaFilter • http://ask.metafilter.com

  34. Example: My Space & Facebook e-commerce - Michael McDonnell • “Social Networks” • PAID for Advertisements • PAID for Customer Profile Information?? • Goal: develop a NETWORK • Audience Participation • Reveals IDENTITY • Builds COMMUNITY • More participation = More value (to business)

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