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Exploiting eCommerce to your advantage. David Strom CW Post May 2001 Seminar david@strom.com. Critical Success Factors for Physical Storefronts. Location Branding Good service Good product selection Proper pricing and margins Traffic. First Problem:.

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Exploiting eCommerce to your advantage

David Strom

CW Post May 2001 Seminar

david@strom.com


Critical Success Factors for Physical Storefronts

  • Location

  • Branding

  • Good service

  • Good product selection

  • Proper pricing and margins

  • Traffic


First Problem:

  • None of these translate on the ‘net!


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


An Example of bad location: Montana Meats

  • Link

  • Can’t they afford their own domain name?

  • www.company.com/~anything is BAD NEWS!


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!


Traditional Advertising Doesn’t Apply Anymore

  • Can’t measure anything

  • Every site has its own banner sizes

  • The Web is not TV


One Working Definition of Success:

  • SURVIVAL!

  • If a site is still running after 12 months, and getting more traffic, it is a success.


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


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


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!


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


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


First Principle of eCommerce:

  • Make it easy to buy!


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 books, toys, electronics, etc. to choose from


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)


Amazon vs Borders

  • Borders link

  • Cookies vs logins

  • Who makes it easier to buy books?


Update your directories!

  • This one is almost a year old


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


Second Principle of eCommerce:

  • Deliver solid service!


Dell positives

  • Most notable site for computer buyers

  • Customize the features you want via a web form

  • Simplifies and personalizes the shopping experience

  • WYSIWYB (buy)


Dell problems

  • Site is now very complex

  • Print ads contain “eValue” codes

  • Too many pages to get to actual PC configuration


Now Compare with Other PC Makers

  • Gateway

  • IBM

  • Compaq

  • Micron

  • … which is easiest to customize your PC?


Third Principle of eCommerce:

  • Individual customization is key


BMW Motors

  • Example of what not to do

  • Use gratuitous graphics

  • Cheesy low-res videos

  • Toys, not tools


You Never Want To See This Screen!


Compare with Subaru

  • Find specific information about each car

  • Can price options to your particular needs


A better example: fishing licenses

  • Simple, quick, and does the job with a minimum of clutter


How NOT to Design a Payment Screen


Common mistakes with payments

  • Provide too few or too many order confirmation pages

  • Confusing methods and misplaced buttons on order page

  • Make it hard for customers to buy things

  • Don’t make your customers read error screens


Fifth Principle of eCommerce:

  • Make payments easy!


Making the Buyer Feel Secure: the Six Components of eCommerce Trust

  • Seals of approval, logos of credit card co’s

  • Identifiable brand name

  • Ease of navigation

  • Order fulfillment easy to understand

  • Clear purpose and site presentation

  • Fast and simple technology

    (Cheskin Research)


Perceptions of Credit Card Snooping Still Exist

  • But are largely popularized by media, not consumers!

  • Internet fraud stories are still common from both buyer and seller sides

  • Just starting to see authentication services (such as Cybersource) ramp up

  • Trust will take a long time


Sixth Principle of eCommerce:

  • Make the buyer feel secure!


How Should You Use Email?

  • When to communicate?

  • What to communicate?

  • When is email helpful and when is it spam and annoying?


Email Uses in eCommerce

  • Sending order acknowledgement

  • Sending shipping notification

  • Purchase receipt

  • Telling customer when item is in stock or on sale

  • Responding to specific queries about service issues


Email Receipts Should Contain the Following Items

  • Total price, including shipping

  • Your address and the store’s

  • Items ordered

  • Whether they are in stock or not

  • When they shipped

  • Bonus: order number and URL to view this info online, link to UPS/Fedex tracking system


When to Send a Customer Email?

  • To acknowledge the order was placed

  • To say items shipped (or not ) and money changes hands


Seventh Principle of eCommerce:

  • Communicate effectively and frequently!


Communicate Effectively and Frequently

  • Get your response systems in place

  • Tie in your storefront with any existing customer relationship management tools and call centers

  • Send replies within an hour of initial order, within 24 hours of any query


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