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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

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    1. Exploiting eCommerce to your advantage David Strom CW Post May 2001 Seminar david@strom.com

    2. Critical Success Factors for Physical Storefronts • Location • Branding • Good service • Good product selection • Proper pricing and margins • Traffic

    3. First Problem: • None of these translate on the ‘net!

    4. 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

    5. An Example of bad location: Montana Meats • Link • Can’t they afford their own domain name? • www.company.com/~anything is BAD NEWS!

    6. 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!

    7. Traditional Advertising Doesn’t Apply Anymore • Can’t measure anything • Every site has its own banner sizes • The Web is not TV

    8. One Working Definition of Success: • SURVIVAL! • If a site is still running after 12 months, and getting more traffic, it is a success.

    9. 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

    10. 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

    11. 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!

    12. 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

    13. 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

    14. First Principle of eCommerce: • Make it easy to buy!

    15. 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

    16. 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)

    17. Amazon vs Borders • Borders link • Cookies vs logins • Who makes it easier to buy books?

    18. Update your directories! • This one is almost a year old

    19. 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

    20. Second Principle of eCommerce: • Deliver solid service!

    21. 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)

    22. Dell problems • Site is now very complex • Print ads contain “eValue” codes • Too many pages to get to actual PC configuration

    23. Now Compare with Other PC Makers • Gateway • IBM • Compaq • Micron • … which is easiest to customize your PC?

    24. Third Principle of eCommerce: • Individual customization is key

    25. BMW Motors • Example of what not to do • Use gratuitous graphics • Cheesy low-res videos • Toys, not tools

    26. You Never Want To See This Screen!

    27. Compare with Subaru • Find specific information about each car • Can price options to your particular needs

    28. A better example: fishing licenses • Simple, quick, and does the job with a minimum of clutter

    29. How NOT to Design a Payment Screen

    30. 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

    31. Fifth Principle of eCommerce: • Make payments easy!

    32. 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)

    33. 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

    34. Sixth Principle of eCommerce: • Make the buyer feel secure!

    35. How Should You Use Email? • When to communicate? • What to communicate? • When is email helpful and when is it spam and annoying?

    36. 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

    37. 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

    38. When to Send a Customer Email? • To acknowledge the order was placed • To say items shipped (or not ) and money changes hands

    39. Seventh Principle of eCommerce: • Communicate effectively and frequently!

    40. 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