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E-Commerce and theEntrepreneur
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Copyright 2008 Prentice Hall Publishing 2Chapter 9: E-Commerce
The Internet: Changing the Face
of Business
The most successful companies embrace the
Internet as a mechanism for transforming their
companies and for changing everythingabout theway they do business.
Business basics still apply online just as much as
they do in brick-and-mortar businesses.
In the world of e-commerce, size matters less than
speed and flexibility.
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Copyright 2008 Prentice Hall Publishing 3Chapter 9: E-Commerce
The Internet: Changing the Face
of Business
Nearly 10 percent of the worlds population 627
million peoplehas shopped online at least once.
Items purchased most often online: books, music,DVDs, travel services, clothing, tickets for
entertainment events, electronics, and toys.
In the U.S., 12 percent of total retail sales will occuronline in 2010.
Study: by 2010, the Internet will influence one-half
of all retail sales.
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Copyright 2008 Prentice Hall Publishing 5Chapter 9: E-Commerce
Benefits of Selling on the Web
Opportunity to increase revenues and profits
Study: 72 percent of small online companies report
increased sales, and 65 percent report higher profits.
Ability to expand into global markets
Ability to remain open 24 hours a day, seven
days a week
Capacity to use the Webs interactive nature toenhance customer service
Power to educate and inform
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Copyright 2008 Prentice Hall Publishing 6Chapter 9: E-Commerce
Benefits of Selling on the Web
Ability to lower the cost of doing business
Study: 73 percent of online small companiesexperienced savings because of lower
administrative costs.Ability to spot new business opportunities
and capitalize on them
Ability to grow faster Power to track sales results
Conversion ratethe percentage of customersto a Web site who actually make a purchase.
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E-Commerce
70 percent of small businesses in the U.S. have aWeb presence.
Of those small business owners who do not
have Web sites: 77 percent say their products and services are not
suitable for selling online.
37 percent say they do not see any benefits of sellingonline.
Barriers:
Not knowing how or where to start
Cost and time concerns
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Factors to Consider Before
Launching into E-Commerce
How a company exploits the Webs
interconnectivity and the opportunities it creates to
transform relationships with suppliers, customers,and others is crucial to its success.
Web success requires a company to develop a plan
for integrating the Web into its overall strategy.
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Factors to Consider Before
Launching into E-Commerce
Developing a deep, lasting relationship withcustomers takes on even greater importance on the
Web.
Creating a meaningful presence on the Webrequires an ongoing investment of resourcestime, money, energy, and talent.
Measuring the success of a Web-based sales effortis essential to remaining relevant to customerswhose tastes, needs, and preferences constantlychange.
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Assessing Your Companys
Online Potential
1. Does your product have broad appeal tocustomers everywhere?
2. Do you want to sell your product to customers
outside of your immediate geographic area?3. Can the product you sell be delivered
conveniently and economically?
4. Can your company realize significant costadvantages by going online?
5. Can you draw customers to your companys Website with a reasonable investment?
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12 Myths of E-Commerce
Myth 1: Setting up a business on the Web is
easy and inexpensive.
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Follow-up Investments
Setting up a Web site is only the first investment:
Redesign Web site
Buy more computer hardware
Automate or expand warehouse to meetcustomer demand
Integrate Web site into inventory control system
Increase customer call-center capacityLesson: Focus on your companys core
competencies and outsource all other aspects ofdoing business online.
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12 Myths of E-Commerce
Myth 1: Setting up a business on the Web is
easy and inexpensive.
Myth 2: If I launch a site, customers willflock to it.
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Promotion Is the Key!
Print URL on everything related to yourbusiness
Web-based newsletters
Write articles that link to your companysWeb site
Host a customer chat room
Sponsor online contests
Establish a blog
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12 Myths of E-Commerce
Myth 1: Setting up a business on the Web iseasy and inexpensive.
Myth 2: If I launch a site, customers will flockto it.
Myth 3: Making money on the Web is easy.
Study: Web retailers invest 65 percent of revenue in
marketing and advertising, compared to just 4 percent fortheir off-line counterparts.
Myth 4: Privacy is not an important issue on
the Web.
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Privacy Online
Study: 80 percent of Internet users say that
privacy of their personal information is
either important or very important. Estimate: If online companies were able to
alleviate customers online privacy and
security issues, online retail sales would be
24 percent higher!
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12 Myths of E-Commerce
Myth 5: The most important part of any e-commerce effort is technology.
Myth 6: Strategy? I dont need a strategy to
sell on the Web! Just give me a Web site andthe rest will take care of itself.
Myth 7: On the Web, customer service is not
as important as it is in a traditional retailstore.
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The Importance of Service
on the Web Study: 57 percent of Web shoppers who fill their
online shopping carts become frustrated and leave
the site before checking out.
Result: For every $1 they spend online, customersleave behind $4.51 in abandoned shopping carts.
Reasons:
Shipping and handling charges too high
Delivery times too long
Checkout process too lengthy
Insufficient product information available
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Strategies for E-Success
Focus on a market niche.
Develop a community.
Attract visitors by giving away freebies. Make creative use of e-mail, but avoid
becoming a spammer.
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14.7%
3.5%
14.3%
2.7%
20.8%
3.7%
19.5%
3.6%
20.0%
3.7%
21.0%
4.0%
13.0%
2.5%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
Rate
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
Day
E-Mail Read and Click-Through Rates by Day of the Week
% Opened
% Read
For businesses,
Friday is the best
day to send e-mails.
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Strategies for E-Success
Make sure your Web site says credibility.
Consider forming strategic alliances.
Make the most of the Webs global reach. Promote your site online and offline.
Develop an effective search engine
optimization strategy.
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Copyright 2008 Prentice Hall Publishing 23Chapter 9: E-Commerce
Search Engine Strategies
Natural (organic) listingsarise as a resultof spiders, powerful programs searchengines use to crawl around the Web.
Paid (sponsored) listingsshort text adswith links to the sponsoring companys Website.
Paid inclusionwhen a company pays asearch engine for the right to submit eitherselected pages or its entire Web site contentfor listing.
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Copyright 2008 Prentice Hall Publishing 24Chapter 9: E-Commerce
Designing a Killer Web Site
Understand your target customer.
Give customers what they want.
Select a domain name that is consistent with
the image you want to create for yourcompany and register it.
Short
Memorable Indicative of a companys business
Easy to spell
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Copyright 2008 Prentice Hall Publishing 26Chapter 9: E-Commerce
Designing a Killer Web Site
Include an e-mail option an atelephone number in your site.
Give shoppers the ability to
track their orders online. Offer Web shoppers a special all
their own.
Follow a simple design. Create a fast, simple checkout
process.
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Copyright 2008 Prentice Hall Publishing 28Chapter 9: E-Commerce
Tracking Web Results
Web analyticstools that measure a Websites ability to attract customers, generatesales, and keep customers coming back.
Only 40 percent of e-businesses use Webanalytics strategically to refashion theirWeb sites.
Commerce metrics
Visitor segmentation measurements
Content reports
Process measurements
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Copyright 2008 Prentice Hall Publishing 29Chapter 9: E-Commerce
Tracking Web Results
Counter Log-analysis
software
Click-streamanalysis
Clustering Collaborative
filtering
Profiling systems
Artificial intelligence
Performance Indicators:
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Copyright 2008 Prentice Hall Publishing 31Chapter 9: E-Commerce
Ensuring Web Privacy
Take an inventory of the customer data
collected.
Develop a company policy for the
information you collect.
Post your companys privacy policy
prominently on your Web site and follow it.
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Ensuring Web Security
Virus detection software
Intrusion detection software
Firewall