Key ideas in eCommerce (lecture 1)

Written by: Jonathan Briggs

September 26, 2006 [2884 views]

This first session is about setting the scene and defining some of the issues that we will be covering in more detail in later sessions.

I expect you to find some of the terms familiar and others new. As we got through the lecture you should make notes on things that you don't understand and ask questions using the comment form below.

It’s about transacting business online

• Buying (directly, affiliates, agents)
• Selling (auctions, markets)
• Negotiating (tendering, procurement)
• Can be between businesses and customers (B2C) or between businesses and other *businesses (B2B) or between customers (P2P)

Its huge and growing

• Christmas ecommerce grew 88% between 2003 and 2004 (Verisign 2005)
• 100 million Europeans online spending €100 billion per annum (Forrester, 2006)
• UK expected to grow from €43 billion in 2006 to €76 billion by 2011

There is a difference between doing it well and doing it badly

• Secure
• Trusted
• Integrated
• Well branded
• Well promoted

Understand the basics of traditional business to look for areas of improvement

• Need to appreciate how companies turn raw materials into products
• Why the value of goods changes as they are passed down the supply chain
• How pricing strategies affect both sales and margins
• How staff are used productively to make or sell products or services
• How companies use promotions and offers to acquire new customers while trying to minimise the cost of acquisition
• How companies try to maximise long term customer value
• How companies compete against their competitors

Ecommerce has encouraged all sorts of new thinking about business and the development of new models

• Online auctions
• Group buying
• Pricing models
• Sales of distressed inventory
• Online advertising
• Social Networking (mySpace, SecondLife, BeBo)

Understand your visitors

• Who are they?
• What are they looking for?
• Are they looking for specific products, cheapest prices or browsing categories?
• What are their worries and anxieties?

Design customer journeys

• Customers don’t always start at the home page
• Search engines, advertising, price comparison engines, referrals and weblogs are likely starting points
• Imagine the whole journey from Google to sale and beyond
• Consider journeys for other visitor tasks such as making a complaint or searching for a store location
• Think about repeat visits and how they can be encouraged
• We need to find ways to monitor how the site is performing and analysing the results

Understand competitors

• We need tools to identify and analyse competitors in a market
• We need to learn from their successes and mistakes
• By optimising our site for visitor needs we may be able to appear higher in the search results than our competitors
• Look at their marketing, pricing and customer service
• Even big companies can have surprisingly poor ecommerce presences

Understand your technologies

• Content management
• Shopping carts
• Security

Consider different levels of development

1. eBay, Amazon
2. PayPal
3. Actinic, OSCommerce
4. Specialist software
5. Bespoke system

Understand the role of partners

• Payment
• Suppliers
• Fulfilment
• Address lookup
• Web Services
• Syndication
• Aggregation
• Price comparison
• Booking engines
• Drop shipping

Does it all make sense? Ask questions (or make comments) here...

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