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Internet Commerce: Enabling Web Storefronts

Internet Commerce: Enabling Web Storefronts presented by: David Strom David Strom, Inc. USA david@strom.com Why This Tutorial The Internet is moving from a collection of technologies to a set of commercial services To use the Internet successfully: you need to know how it works; but,

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Internet Commerce: Enabling Web Storefronts

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  1. Internet Commerce: Enabling Web Storefronts presented by: David Strom David Strom, Inc. USA david@strom.com (c)David Strom Inc. 1998

  2. Why This Tutorial • The Internet is moving from a collection of technologies to a set of commercial services • To use the Internet successfully: • you need to know how it works; but, • you must also understand why it works… • A fun topic, things changing quickly! (c)David Strom Inc. 1998

  3. Course Topics • What Becomes Success? • Choosing the Right eCommerce Path • Installing and Operating Your Own Storefront • Examples of various products (c)David Strom Inc. 1998

  4. Course Approach • Discuss technology • Provide pointers • Give examples • Provide insight into various approaches and technology choices (c)David Strom Inc. 1998

  5. What This Course is Not About • Nuts and bolts of payment systems • In-depth on security (c)David Strom Inc. 1998

  6. Some Disclaimers • I’ve lived in the Internet for a long time • Fundamental aspects of Internet dynamics are unavoidable • I have consulted to some of the vendors mentioned (c)David Strom Inc. 1998

  7. Today’s Topics • I: What Becomes Success • II: Choosing the Right eCommerce Path • III: Installing and Operating Your Own Storefront (c)David Strom Inc. 1998

  8. Topic I: What Becomes Success? • Overview of eCommerce market • Review physical storefront success factors • Propose some definitions • Define success for the web • Draw up five eCommerce principles (c)David Strom Inc. 1998

  9. Overview of eCommerce Market • Predictions • Success factors • Five principles (c)David Strom Inc. 1998

  10. eCommerce Revenue Predictions are Wide-Ranging

  11. IDC says the web will become a mass market in the US by 12/98! With 100 million users! Let’s not confuse web users with eCommerce BUYERS! And Not Very Believable (c)David Strom Inc. 1998

  12. US$5 million/month via the web in sales Started 11/96 Generating lots of new buyers, who wouldn’t ordinarily use their service Ticketmaster (c)David Strom Inc. 1998

  13. Then there is Disney.com • Web site Daily Blast signing up 15k members/month • Sales via web are equal to 3x-5x of physical Disney store! (c)David Strom Inc. 1998

  14. And of Course, There is the Porn Industry • “However, extensive interviews with adult site owners yield a picture of a highly charged market of approximately 10,000 sites generating about $1 billion in revenue per year, most through electronic credit card transactions.” • from Interactive Week (c)David Strom Inc. 1998

  15. Sad State of Today’s eCommerce Marketplace • Poor quality tools • Hard-to-find stores • Limited payment methods • Credit card snooping perceptions • Older browser versions can’t view latest sites (c)David Strom Inc. 1998

  16. Case in Point: Buying a Bike Rack • Item not carried: outdated catalog • Telesales not familiar with web • No cross-sell or substitutions online • Needed three phone calls to complete purchase (c)David Strom Inc. 1998

  17. Let’s Learn From the “Real World” • Compare what works for physical stores • Try to extend to the web (c)David Strom Inc. 1998

  18. Critical Success Factors for Physical Storefronts • Location • Branding • Good service • Good product selection • Proper pricing and margins • Traffic (c)David Strom Inc. 1998

  19. First Problem: • None of these translate on the ‘net! (c)David Strom Inc. 1998

  20. 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 (c)David Strom Inc. 1998

  21. An Example of bad location: Montana Meats • www.imt.net/~lingerie/buffalo/buffalo.html • Can’t they afford their own domain name? • www.company.com/~anything is BAD NEWS! (c)David Strom Inc. 1998

  22. Another Case: Buying Toner and Batteries • www.cartridgesusa.com, www.batterybarn.com • Catalog shows pictures of parts • Easy to find relevant item • But payment acknowledgement incomplete (c)David Strom Inc. 1998

  23. 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! (c)David Strom Inc. 1998

  24. Traditional Advertising Doesn’t Apply Anymore • Can’t measure anything • Every site has its own banner sizes • The Web is not TV (c)David Strom Inc. 1998

  25. One Working Definition of Success: • SURVIVAL! • If a site is still running after 12 months, and getting more traffic, it is a success. (c)David Strom Inc. 1998

  26. Does a site actually have to sell something? • Many actual eCommerce sites don’t do the complete transaction (Cisco) • Require faxes or telephone calls! • Some merely have catalogs • A good example: Singapore Power Authority www.spower.com.sg/readmeter.cgi?cmd=form (c)David Strom Inc. 1998

  27. Good eCommerce Examples • Easy to find merchandize • Good service • Individual customization is key • Simple navigation • Business-to-business focus (c)David Strom Inc. 1998

  28. 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! (c)David Strom Inc. 1998

  29. 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 (c)David Strom Inc. 1998

  30. AMP connect.ampincorporated.com (c)David Strom Inc. 1998

  31. 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 (c)David Strom Inc. 1998

  32. Save in Translation Costs • AMP catalog in several languages • Translation cost was US$100,000 • Versus US$1.5MM to produce separate translations of print editions (c)David Strom Inc. 1998

  33. Silicon Investor www.techstocks.com • Difficult to find anything • Incomplete database of companies • Companies are arranged poorly (c)David Strom Inc. 1998

  34. First Principle of eCommerce: • It is easy to find what you are selling! (c)David Strom Inc. 1998

  35. 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 to choose from (c)David Strom Inc. 1998

  36. Amazon (c)David Strom Inc. 1998

  37. Update your directories! • This one is almost a year old • www.asiapage.com/alist.html#jewellery (c)David Strom Inc. 1998

  38. Non-secure servers • Many SG sites collect credit cards on them • GoodWood Florist • www.asiapage.com/goodwood (c)David Strom Inc. 1998

  39. Second Principle of eCommerce: • Deliver solid service! (c)David Strom Inc. 1998

  40. Dell • Most notable site for computer buyers • Customize the features you want via a web form • Simplifies and personalizes the shopping experience • WYSIWYB (buy) • >US$1MM/day in sales! (c)David Strom Inc. 1998

  41. Dell (c)David Strom Inc. 1998

  42. Canadiantire.com • eFlyer uses email notification along with web forms • Customize exactly what coupons and deals are sent to you (c)David Strom Inc. 1998

  43. Third Principle of eCommerce: • Individual customization is key (c)David Strom Inc. 1998

  44. BMW Motors • Example of what not to do • Use gratuitous graphics • Cheesy low-res videos • Toys, not tools (c)David Strom Inc. 1998

  45. BMW (c)David Strom Inc. 1998

  46. Compare with Subaru • Find specific information about each car • Can price options to your particular needs (c)David Strom Inc. 1998

  47. How NOT to Design a Payment Screen • www.netmar.com/~hamorder/cshorder.shtml (c)David Strom Inc. 1998

  48. How NOT to take advantage of bandwidth • www.clickdiz.com • Two different pages, one for SG ONE, one for all others • But SG ONE page has just heavy graphics -- why? (c)David Strom Inc. 1998

  49. A better example: fishing licenses • Simple, quick, and does the job with a minimum of clutter • www.permit.com (c)David Strom Inc. 1998

  50. Fourth Principle of eCommerce: • Make navigation simple! • Use small graphics, site maps, indexes • Avoid clutter, frames (c)David Strom Inc. 1998

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