Understanding ecommerce

Transcription

1 Understanding ecommerce This published material was prepared by CARAT under award number B from National Telecommunications and Information Administration (NTIA) U.S. Dept. of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the NTIA or the U.S. Dept. of Commerce.

2 Course Overview Goal Expose small business owners to the fundamental concepts of ecommerce as well as how to use ecommerce technology, tools and strategies to improve their marketing and sales activities and enhance their bottom line.

3 Course Overview This course will cover: How businesses use ecommerce tools to increase sales, lower operating costs, and attract and retain customers How ecommerce solutions can be used to support marketing and sales How to select and implement an ecommerce solution appropriate for your business including a survey of popular ecommerce products and services

4 Course Outline Part 1 Making the Case for ecommerce The Business Case for ecommerce Keys to a Successful Project Fundamentals of ecommerce Part 2 Selecting an ecommerce Solution Building a Decision Matrix Types of ecommerce Solution

5 Course Outline Part 3 ecommerce Solutions ecommerce Product Comparisons ecommerce Product Demonstrations Payment Processors Part 4 Discussion Best Practices Practical Applications for Your Business Q&A

6 Poll A Little About YOU Does your company have a web site today? Do you use or 3rd party service to sell your products? (e.g. Etsy.com) Do you have an online store or catalog? Do you take payments via your web site?

7 Remember the Four P s of Marketing? Product What you offer is what they need Pricing Aligned with sense of value and competition Place Make it easy to buy! Promotion Express your value proposition!

8 How Do You Use the Internet? Web browsing (e.g. search) Enter a checkmark in the blank square next to any of the ways that you most commonly use the Internet. Shop online Download music Watch videos Read the news

9 Keys to a Successful ecommerce Project 1. Define Your Goals 2. Establish a Budget 3. Set a Timeframe 4. Set Your ROI* Expectation 5. Define Key Performance Indicators (KPIs) 6. Select a Solution that Matches Your Needs 7. Offer a Compelling Value Proposition 8. Offer a secure, high-trust shopping experience * ROI = Return on Investment

10 Fundamentals of ecommerce

11 The Process of Retail Commerce Production Manufacturing Shipping Storage Marketing Placement Advertising & Promotion Sales Opportunity (Customer) Decision Purchase Fulfillment Transaction Processing Fulfillment Delivery

12 Traditional Retail Sales Offline commerce is Retail Stores ( brick & mortar ) Catalog & Mail Order Sales Open Markets (e.g. farmers markets) Door-to-Door Sales

13 Commerce on the Internet ecommerce is Electronic commerce or ecommerce consists of buying and selling products or services via Internet and computer networks

14 What You Need Products! Photos Descriptions Prices Supporting Information Shipping Details Warranties & Guarantees Return Policy Upsell Recommendations

15 Basic Product Display Computer-generated product display: photo, name, price (Boring! No descriptions, no branding messages, no calls to action!)

16 Basic Purchase Transaction Customer Online Store Shopping Cart Issuing Bank Payment Processor Credit Card Institution Gateway Merchant Bank

17 Basic Purchase Fulfillment Fulfillment Shipping Order Service Your Warehouse Delivery Service Customer

18 Part 2 Selecting a Solution Building a Decision Matrix Determining Requirements

19 1. Define Your Business Goals What are your business goals? For example: Increase sales Increase the number of customers in a key category Increase the sale of specific products Leverage existing infrastructure Extend and expand your business reach DON T throw solutions at undefined problems!

20 2. Establish a Budget Costs to consider: Cost of acquisition (e.g. price or monthly fees) Installation Configuration Training Inventory Management Fulfillment Tech support Make sure to factor in the costs of consultants!

21 3. Set a Timeframe DO plan ahead! DO allow time for installation, configuration, testing, staff training DO budget time for employees to play with the system DON T schedule the project launch for a busy time of year

22 4. Set Your ROI Expectation ecommerce must have a positive impact on your bottom line or it s not worth it! Total project cost: XX Expected annual increase: % and $ Expected annual savings: % and $ Total annual ROI on CRM: [months/years] Total project cost / annual ROI ROI = [months/years] to recover total project cost Set benchmarks to track progress (KPIs!)

23 5. Define Your KPIs KPIs = Key Performance Indicators Aligned with mission & goals Quantifiable Data is cost-effective to collect and analyze Used by management to measure progress and effectiveness Source:

24 Poll: Which of these have you completed? Defined your business goals? Established a budget? Set a timeframe? Defined your ROI expectations? Defined your KPIs?

25 Considerations: Business Business needs vs. feature set Scalability Productivity tools (e.g. inventory mgmt) Single source solution or multi-vendor? Can the project be phased? Does the project provide a competitive advantage?

26 Considerations: Financial Price of acquisition Recurring costs (e.g. monthly fees, transaction fees) Maintenance costs (e.g. support costs) Installation and configuration costs Estimated ROI vs budget

27 Considerations: Users Ease of use Technical abilities of team members Accessibility (e.g. via the Web, via smartphone) Ability to be customized Specific needs (e.g. ability to generate specialized reports)

28 Considerations: Technical Ability to export data Update/upgrade process Flexibility, scalability Need/ability to integrate with other systems and databases Stability of vendor/source Ability to accept bulk uploads of products, text and images

29 Technical Support Needs In-house/on-site technical resources? What does your team need? What can you afford? What does the vendor offer? On-call: 24/7 or restricted support Online or web help Built-in help On location assistance On-site/off-site training

30 Build vs Buy vs Customize Options: Buy a product, adapt your business processes Build a custom solution to conform to your business processes Hybrid: buy and customize Risks: Custom development is very expensive! Rarely on time and under-budget. Who will support your custom solution? If you over-customize a commercial product, what will happen when a new version is released?

31 Part 3 ecommerce Solutions Types of ecommerce Solution ecommerce Examples & Comparisons Payment Processors Back Office Services

32 Components of an Online Store Website Shopping Cart Payment Processor Policy Statements Business Information

33 Types of ecommerce Solution Locally installed & hosted Server, Website & Software Vendor-hosted Web-based Online Marketplaces Online Store Builders Online Stores

34 Online Store Solutions Online Marketplace Online Auction Online Merchant Service Online Retail Store Online Payment Processor

35 Online Marketplace A web site that you sells your products as well as many others Examples: Amazon (everything!) Iron Planet (heavy equipment) Stubhub (tickets)

36 Amazon Marketplace Sell directly on the product detail page where Amazon.com sells the same item new. Listing is free - you only pay a fee if you sell. Product categories include: Books Music Video Video Games Office Products DVD Electronics Tools & Hardware Kitchen & Housewares Outdoor Living Sports & Outdoors Musical Instruments

37 Amazon Marketplace

38 Amazon Marketplace

39 Online Merchant Service An online service that allows you to set up an online store to sell your products Examples: Shopify.com Yahoo Stores Volusion

40 Example: Volusion.com

41 Example: Shopify

42 Shopify: Alpine Exposures

43 Yahoo Store: Scootertronics

44 Yahoo Stores: Cost

45 Issues with Stores Benefits: All in one solution Wide array of design templates Drawbacks: May limit customizing & branding Takes time to learn the store builder

46 Online Auctions: ebay Good Example: Popular, low-tech, inexpensive

47 Online Retail Store A branded web site that is owned by a company and sells only its lines of selected products Examples: Target.com Macys.com <YourDomainName.com>

48 Design Counts! Good Example: Modern Layout, Visually Attractive

49 Selling Customized Merchandise Examples: Zazzle Blurb Printfection

50 Example: Zazzle Make and Sell Customized Merchandise

51 Zazzle: Travel Bureau

52 Payment Processors Companies that process credit card transactions. Systems that accept credit card information from the customer and transfer funds to your merchant account

53 Typical Services Shopping Cart Online Credit Card Processing Virtual Terminal Merchant Account Gateway Checks by Web, Phone and Fax

54 Typical Fees Service Fee (e.g $30/month) Gateway Fee (e.g. $20/month) Transaction Fee - % (2.5% to 5.5+%) Transaction Fee Flat (e.g. 15 cents) Return Fees Report Fees

55 Payment Processors Examples