Developing an e-shop Linking business strategy and practice

1. Developing an e-shopLinking business strategy and practice Dr Nancy Pouloudi & Vassilis Kokodinis Department of Management Science and Technology Athens University of Economics and Business (pouloudi@aueb.gr - kokodini@aueb.gr)

2. Lecture plan • Building on the issues identified in the B2C lecture • Showing how the business concerns can be supported (or not) in practice • Using a specific software package • Drawing from examples of well developed assignments • Discussing the implications of using specific technology Dr Nancy Pouloudi

3. Introduction from B2C lecture… Areas of concern in developing an e-shop: • The shop-front: interface and ease of navigation • Organization of products and product categories • Pricing: a single price? offers? • Language? Currency? Other customization/localization? • Advertising (of others? by others?) • Security? • Does the e-shop reflect company culture/policies? • Logistics support: inventory; production; distribution Dr Nancy Pouloudi

4. 1. Setting the scene • What products to sell? To which customers? • Example • An e-shop for technologically advanced electronics/gadgets of low value • Target group: • young male (18-35 yrs old) • middle upper socioeconomic group • high educational level Dr Nancy Pouloudi

5. Supporting background research Market research: • Internet penetration in Greece [low but growing fast] • Profile of Internet users [primarily male – 12.7%, aged 18-34 yrs old – 32.6%, living in urban areas 13.3%] • On-line purchases of these products among the favourable • Research on competitors (Germanos & Kotsovolos: limited product line, higher prices) Dr Nancy Pouloudi

6. 2. Implementation A. Business vs. Customer view • Product management • Pricing policies • Payment management B. Business analysis • Order management (link to logistics) • Sales analysis (link to strategic decisions) Dr Nancy Pouloudi

7. using Microsoft Site Server Implications of reference to specific software • Provides a development environment – does not require technical knowledge • Supports two ‘views’ of the B2C context: • Business (guided to map business choices/decisions onto the e-shop) • Consumer (guided to use the e-shop) • Manager and customer see this as a ‘black box’ • The software’s characteristics may enhance or limit which business decisions can be implemented Dr Nancy Pouloudi

8. Home Page Company Profile Categories Search Simple Search Special Offers Advanced Search Results Page Detail Results Add to Basket E-Mail Confirmation Final Order site map - Example Dr Nancy Pouloudi

9. E-shop implementation step-by-step 1. Product management • Organize products in categories • Consider ‘packaging’ products together (e.g., selection of wines) • Enhance appearance – entice the customer: • Use images • Allow customization such as alternative product views (e.g., color/ size) Dr Nancy Pouloudi

10. Implementation continued 2. Promotions & pricing policies • Web discount: cheaper than off-line (e.g., Easyjet) • up-selling: special discounts • cross-selling: “site recommendations” [advantage: the whole product range is projected] • Dynamic site recommendations (e.g., Amazon) • Offers to loyal customers • Customization premiums? Dr Nancy Pouloudi

11. Implementation continued 3. Payment management • Confirmation of order & shipment method • Payment method • Multiple methods of payment • Agreements with trusted third parties • Information on security provisions • The privacy principles apply [Notice/ Choice/ Security/ Review and correction] Dr Nancy Pouloudi

12. Example (wine)What the customer sees in the main page: Dr Nancy Pouloudi

13. Tree of Products Dr Nancy Pouloudi

14. Tree of Products Dr Nancy Pouloudi

15. What the manager sees - Product categories Dr Nancy Pouloudi

16. What the manager sees - Products Dr Nancy Pouloudi

17. Cross Selling Dr Nancy Pouloudi

18. Cross Selling Manager View Dr Nancy Pouloudi

19. UpSelling - Manager View Dr Nancy Pouloudi

20. Purchasing a product Dr Nancy Pouloudi

21. Purchasing a product Dr Nancy Pouloudi

22. Purchasing a product Dr Nancy Pouloudi

23. Purchasing a product Dr Nancy Pouloudi

24. Registering Dr Nancy Pouloudi

25. Shopping Basket Dr Nancy Pouloudi

26. Giving Credit Card Information Dr Nancy Pouloudi

27. Purchase Information Dr Nancy Pouloudi

28. Receipt Dr Nancy Pouloudi

29. Business analysis • Order management and sales analysis • Internal processes set in motion, for example: • Is the item in stock? • Shipment of order to customer • Updated information to sales, marketing, production • Management information (orders per month, by customer, by product) • Reporting on sales activities • Statistical analysis • Feedback on previous business decisions – improvement strategies Dr Nancy Pouloudi

30. Business views vs. technology architecture • Microsoft Site Server is based on a 3-tier architecture: • Business Logic Tier (cf. manager view – reflects the business decisions) • Presentation Tier (cf. customer view) • Data Tier (supporting the other two – holds both product and transaction information) Dr Nancy Pouloudi

31. Software limitations[why s/w selection is important] • Inability to support multiple product catalogues or comparisons of similar products • Inflexibility in payment methods supported • Lack of integration with internal processes (e.g., additional overhead for linking to ERP systems) • Cannot handle dynamic content or personalized interface • Few promotion mechanisms • No customer management support • Inadequate statistical analysis • Limitations in localization(language/currency) • Cannot support additional value-adding business models (e.g., auctions; virtual communities) Dr Nancy Pouloudi

32. Next session:2/10: Lecture4 – Introduction to e-business models Prepare: - Read executive summary of e-factors report