New eCommerce Trends and Technologies

1
New eCommerce Trends and Technologies

• David Strom
• david_at_strom.com
• 1 [phone]
• Centra Presentation 2/9/2000

2
Agenda

• Build or buy your web storefront?
• What becomes success?
• Future trends

3
Topic 1 Build or Buy Your Web Storefront

• Rent outsource to a CSP
• Buy suite of software
• Build it yourself

4
Evaluating CSPs

• Do they offer storefront design?
• Have in-house programmers?
• Hosting of your own web server machine?
• How many payment systems do they support?
• What kinds of accounting reports do they offer?

5
Some CSP Examples

• www.psi.net/web/ecommerce.shtml
• www.Best.com/bizcomm.html
• www.Brainlink.com/html/saleslink.htm
• www.Earthlink.net
• IBM mypage.ihost.com
• www.Netcom.com
• business.Mindspring.com/prod-svc/smbiz/
• www.outer.net/ONCommerce (OuterNet)

6
Earthlink pricing explained
7
CSP Approaches

• GeoShop/Yahoo
• ViaWeb/Yahoo
• iCat/Intel
• Encanto
• iTool
• Others entering a very crowded field

8
GeoShop/Yahoo

• Builds on GeoCities communities but for
  merchants (www.geocities.com/join/geoshops)
• 25/month for just commercial listings
• 180/month (or more!) for actual transactions
• working with Internet Commerce Services Corp. who
  uses Open Market Transact servers
  (www.icoms.com/pp.htm)

9
ViaWeb/Yahoo

• 100/month (lt50 items) or 300/month options
• CyberCash processing 500 setup
• Solid reporting and admin options

10
iCat/Intel Commerce Online Hosting Solution

• Free for lt10 items, 99/mo. for 100 items
• No per-transaction fees
• Email and browser-based notifications of purchase
  completion
• Advanced items like upsell, featured products,
  cybercash gateways

11
iTool Demo

• www.itool.com/admin/controlpanel.cfm
• 25-100/mo.

12
Sitematic

• Flat rate for 40/mo
• Staging/production site concept
• More templates and controls

13
Encanto

• Turnkey server/software for free!
• Payment gateway included (50 initial, 70/month)
• Web storefront, shopping cart, catalog system
• Also need secure cert, merchant bank account
• All managed via browser, steps are clearly
  documented

14
The Suite Approach

• Leading contenders
• What is part of the suite and what isnt
• Prices and platforms

15
Popular eCommerce Suites
16
Popular eCommerce Suites (cont)
17
Four Typical Elements

• Catalog
• Storefront designer
• Ordering/inventory system
• Shopping cart/check out system

18
The Cold Hard Reality of Suites

• Suites are nothing more than collection of
  products
• Lack integration among various elements
• Difficult to setup, customize, and use
• Require you to live inside their structure
• Limited payment options
• Sounds like early MS Office

19
Payment Systems Included in Each Suite

• Microsoft Verifone, Buy Now
• IBM (Net.Commerce) Verifone, SET/eTill
• OpenMarket Verifone
• WebSite Pro IC Verify, PC Authorize, CyberCash,
  others
• Intershop CyberCash, ICVerify, others

20
Sample Stores Included in Each Suite

• Microsoft 4 stores
• IBM eMall, simple and advanced sample stores
• OpenMarket none
• WebSite Pro 1 bookstore
• Intershop 3 stores

21
Database Support
22
Dealing With ODBC

• Have to understand how to set up data sources
• Intimate knowledge of your data structure
• Re-install ODBC drivers at least once!
• Best to start with built-in database

23
Store Wizards Included in Each Suite

• Net.Commerce (the best)
• WebSite Pro (but doesnt do much)
• Intershop (various wizards)
• MS Commerce (although youll really need to know
  COM!)

24
Tips

• Dont install anything before making sure you
  have everything!
• Downloads for free, but they expire
• Can you export existing files to these systems?

25
Prices of DIY Products
26
Putting Together Your Own Solution

• SQL Server database
• CyberCash payment system
• WebCatalog 3.0 (supports CCash)
• IIS web server
• Total price ltUS10,000

27
Topic 2 What Becomes Success?

• Overview of eCommerce market
• Review physical storefront success factors
• Propose some definitions
• Define success for the web
• Draw up eCommerce principles

28
Sad State of Todays eCommerce Marketplace

• Poor quality tools
• Hard-to-find stores
• Limited payment methods
• Credit card snooping perceptions
• Older browser versions cant view latest sites

29
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

30
Another Case Buying Theater Tickets

• Web site doesnt carry event information in real
  time
• Orders are fulfilled weeks later
• No indication on web site of sold-out or nearly
  so events

31
Lets Learn From the Real World

• Compare what works for physical stores
• Try to extend to the web

32
Critical Success Factors for Physical Storefronts

• Location
• Branding
• Good service
• Good product selection
• Proper pricing and margins
• Traffic

33
First Problem

• None of these translate on the net!

34
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

35
An Example of bad location Montana Meats

• Link
• Cant they afford their own domain name?
• www.company.com/anything is BAD NEWS!

36
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!

37
One Working Definition of Success

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

38
Does a site actually have to sell something?

• Many actual eCommerce sites dont do the complete
  transaction
• Require faxes or telephone calls!
• Some merely have catalogs
• Examples Singapore Power Authority
• Cisco Connection Online

39
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

40
AMP Connect

• Have customers in 100 countries
• Speak many languages
• Produce 400 catalogs covering 135,000 items
• Mailings cost US7MM/yr
• Fax back cost US800,000/yr
• But you cant buy anything directly!

41
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

42
AMP Old Screen
43
AMP Connect (cont)

• 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 US5MM in production costs
• Saved US1MM in translation costs

44
First Principle of eCommerce

• Make it easy to buy!

45
Amazon.com

• Services frequent readers with a variety of
  programs
• Editorial comments
• If you liked this book, youll 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 stuff to choose from

46
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)

47
A Different Take on Affiliates ClickRewards

• Pays you in airline miles for your patronage
• Accrue miles on many sites
• You redeem benefits on their site

48
Amazon vs Borders

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

49
Update your directories!

• This one is more than a year old!

50
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

51
Second Principle of eCommerce

• Deliver solid service!

52
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)

53
Dell problems

• Site is now very complex
• Print ads contain eValue codes
• Too many pages to get to actual PC configuration

54
Now Compare with Other PC Makers

• Gateway
• IBM
• Compaq
• Micron
• which is easiest to customize your PC?

55
Third Principle of eCommerce

• Individual customization is key

56
BMW Motors

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

57
You Never Want To See This Screen!
58
Compare with Subaru

• Find specific information about each car
• Can price options to your particular needs

59
A better example fishing licenses

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

60
How NOT to Design a Payment Screen

• http//www.netmar.com/new/norderform.shtml

61
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
• Dont make your customers read error screens

62
Fifth Principle of eCommerce

• Make payments easy!

63
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

64
Sixth Principle of eCommerce

• Make the buyer feel secure!

65
How Should You Use Email?

• When to communicate?
• What to communicate?
• When is email helpful and when is it spam and
  annoying?

66
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

67
Email Receipts Should Contain the Following Items

• Total price, including shipping
• Your address and the stores
• 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

68
When to Send a Customer Email?

• To acknowledge the order was placed
• To say items shipped (or not ) and money changes
  hands

69
Seventh Principle of eCommerce

• Communicate effectively and frequently!

70
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

71
Topic 3 Future Trends

• eWallets and secure transactions
• Caching technologies
• Internet Appliances

72
eWallet Trends

• eWallets will eventually go away
• SET becomes a server-side issue
• SSL still dominates eCommerce transactions for
  many years

73
Caching Trends

• More caching appliances as time goes on
• Better and cheaper caching devices appear
• Most ISPs will use them within a few years if
  they want to retain customers

74
Internet Appliance Trends

• More of them and cheaper too
• Still for SO/HO environments mainly, although
  that is changing
• Already some vendor consolidation

75
Conclusions

• eCommerce crosses many different skill sets
• Software is still too dicey in many areas
• Standards arent much use right now
• Suites dont offer much in the way of integration
• DIY may be the best solution

76
Thanks!

• David Strom
• 1 516 944 3407
• david_at_strom.com
• Copies of this presentation and other eCommerce
  resouces can be found at http//strom.com/pubwork/
  ecommerce