Electronic Commerce

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Electronic Commerce
MIS 6453 -- Fall 2004

• eCommerce Strategy Issues

Instructor John Seydel, Ph.D.
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Student Objectives

• Distinguish among connectivity options available
  for ecommerce
  
• Apply revenue model concepts to the ASIB case
• Discuss important issues associated with
  establishing and maintaining an effective Web
  presence
  
• Relate the 7 Cs model to Web presence guidelines

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Internet, Intranet, Extranet?

• Internet collection of interconnected networks
  connected via redundant backbone lines and
  routers
  
• Intranet interconnected network that does not
  extend beyond organization that created it
  
• Extranet
• Intranet extended to include entities outside
  boundaries of organization
  
• Connects companies with suppliers, business
  partners, or other authorized users

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Networking Options

• Public network any computer network or
  telecommunications network available to the
  public
  
• Private network a private, leased-line
  connection that physically connects the intranets
  of two or more organizations
  
• Leased line a permanent telephone connection
  between two points
  
• VPN
• Extranet that uses public networks and their
  protocols
  
• IP tunneling effectively creates a private
  passageway through the public Internet
  
• Encapsulation process used by VPN software
• VPN software must be installed on the computers
  at both ends of the transmission

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Connection Speed Concepts

• Bandwidth amount of data that can travel
  through a communication line per unit of time
  
• Net bandwidth actual speed that information
  travels
  
• Symmetric connections provide same bandwidth in
  both directions
  
• Asymmetric connections provide different
  bandwidths for each direction

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Standard Connection Available to End-Users

• Voice-grade connections
• POTS, or plain old telephone service
• Uses existing telephone lines and analog modem
• Provide bandwidth between 28 and 56 Kbps
• Digital Subscriber Line (DSL) connection
  methods do not use modem
  
• Integrated Services Digital Network (ISDN)
  bandwidths between 128 Kbps and 256 Kbps
  
• Broadband connections
• Operate at speeds of greater than 200 Kbps
• Asymmetric digital subscriber (ADSL)
  transmission bandwidth is from 100 to 640 Kbps
  upstream and from 1.5 to 9 Mbps downstream
  
• Cable modems provide transmission speeds
  between 300 Kbps and 1 Mbps
  
• DSL private line with no competing traffic

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Leased Line Options for End-Users

• Typically for business services
• Include
• DS0 (digital signal zero) telephone line
  designed to carry 1 digital signal
  
• T1 line (also called a DS1) carries 24 DS0
  lines and operates at 1.544 Mbps
  
• Fractional T1 provides service speeds of 128
  Kbps and upward in 128-Kbps increments
  
• T3 service (also called DS3) offers 45 Mbps

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Wireless Service

• Fixed-point
• One version uses system of repeaters to forward
  radio signal from ISP to customers
  
• Repeaters transmitter-receiver devices
  (transceivers)
  
• Mesh Routing directly transmits Wi-Fi packets
  through hundreds, or even thousands, of
  short-range transceivers
  
• Cellular
• Third-generation (3G) cell phones combine
  latest technologies available today
  
• Short message service (SMS) protocol used to
  send and receive short text messages
  
• Mobile commerce (m-commerce) describes the
  kinds of resources people might want to access
  using wireless devices

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A Caution About Wireless

• Lets not mix apples and oranges
• Textbook addresses two aspects of wireless
• Connectivity between networks
• Options
• Fixed-point service
• Cellular service (2 Mbps)
• Compare to broadband alternatives
• Interconnectivity within network
• Options
• Bluetooth
• Ethernet
• 802.11a
• 802.11b
• 802.11g
• Compare to 10/100/1000 Mbps LAN connections
• Keep in mind the bandwidth of importance is the
  minimum along the route

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Internet2

• Experimental test bed for new networking
  technologies
  
• Has achieved bandwidths of 10 Gbps and more on
  parts of its network
  
• Used by universities to conduct large
  collaborative research projects

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The ASIB Case

• Recall the Scientific Problem-Solving Method
• Identify problem (criteria, constraints, . . . )
• Determine alternatives
• Evaluate alternatives
• Select best alternative
• Implement and monitor
• What is the problem here?
• Current situation
• Desired situation
• What are the alternatives here?

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eCommerce Revenue Models

• Web catalog
• Digital content
• Advertising-supported
• Advertising/subscription (mixed)
• Fee-for-transaction
• Fee-for-service
• Other . . . ?

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Creating an Effective Web Presence

• Web presence goals
• Needs of website visitors
• Trust and loyalty
• Website design paradigms
• Connecting with customers
• Consider the 7 Cs model

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The 7Cs of the Customer Interface
Context Sites layout and design
Content Text, pictures, sound and video that we
bpages contain

Commerce Sites capability to enable commercial
transactions

Community The ways sites enable user-to-user co
mmunication

Connection Degree site is linked to other sites


Customization Sites ability to self-tailor to
different users or to allow personalization
Communication The ways sites enable site-to-use
r communication or two-way communication

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Fit and Reinforcement of the 7Cs
The success of a business depends on the extent
that all of the Cs work together to support the
value proposition and business model
Supporting Fit Do each of the 7Cs individually su
pport the business model?
Context
Content
Community
Customization
Communication
Connection
Commerce
Reinforcement Are each of the 7Cs consistent with
one another?
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The 7Cs of the Customer Interface
Context Sites layout and design
Content Text, pictures, sound and video that we
bpages contain

Commerce Sites capability to enable commercial
transactions

Community The ways sites enable user-to-user co
mmunication

Connection Degree site is linked to other sites


Customization Sites ability to self-tailor to
different users or to allow personalization
Communication The ways sites enable site-to-use
r communication or two-way communication

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Form vs. Function
The age old argument of form vs. function is
being changed by the Web
Integrated
High
Aesthetically Dominant
Aesthetic/ Form
Frontier is gradually moving outward as
technology advances
Low
Functionally Dominant
High
Low
Function
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Aesthetic Example KMGI.com
High form, low function The KMGI approach used
to make heavy use of visual elements, but lacked
performance capability.
Now, KMGI has integrated more functionality into
its site, while still maintaining some of the
strong visual elements.
BEFORE
AFTER
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Functional Dominant - Brint.com
Low form, high function Brint.com assumes its
users have little need for visual elements or
themes and instead seek ease of use and plentiful
information
Notice the plethora of links
The site is also text-laden
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Integrated Approach - Patagonia
Patagonias integrated approach is a balance of
form and function that creates an attractive and
easy-to-use interface
The links, for instance, are both textual and
graphical
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The 7Cs of the Customer Interface
Context Sites layout and design
Content Text, pictures, sound and video that we
bpages contain

Commerce Sites capability to enable commercial
transactions

Community The ways sites enable user-to-user co
mmunication

Connection Degree site is linked to other sites


Customization Sites ability to self-tailor to
different users or to allow personalization
Communication The ways sites enable site-to-use
r communication or two-way communication

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Dimensions to Content
Content refers to all digital information
included on the site. There are four key
dimensions to content, each carrying choices
about how to convey the sites content
Offering Mix
Appeal Mix
Multimedia Mix
Content Type
Dimension
Products
Cognitive functional, low price, availability,

etc.
Text
Current
Audio
Information
Image
Choices
Emotional humor, warmth, stories, etc.
Reference
Video
Services
Graphics
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Superstore Example - Amazon
One-stop shop where the customer can find a wide
range of goods in multiple product categories
Note the array of product categories on the site.
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Category Killer - Petsmart
Exclusively provides products and services by
specific product or by a customer-needs category
Again, note the categories rather than being
broad, they focus on a single vertical.
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Specialty Store - Frontgate
Focuses on exceptional quality and exclusivity
while selling single or multiple categories of
products
The site offers a broad array of products, but
they are all high-end, premium quality products.
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The 7Cs of the Customer Interface
Context Sites layout and design
Content Text, pictures, sound and video that we
bpages contain

Commerce Sites capability to enable commercial
transactions

Community The ways sites enable user-to-user co
mmunication

Connection Degree site is linked to other sites


Customization Sites ability to self-tailor to
different users or to allow personalization
Communication The ways sites enable site-to-use
r communication or two-way communication

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Six Community Archetypes
Each archetype will be defined and an example of
each will be given
Bazaar
Theme Park
Club
Shrine
Theatre
Cafe
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Bazaar - Yahoo Games
Community that allows users to wander through a
vast number of interest areas but does not
provide any means for users to interact
The site offers a wide collection of games that
can be played with other users, but community is
not a priority the elements of community are not
present (cohesion, effectiveness, etc.).
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Theme Park - VoxCap
Community that focuses on a finite number of
interest areas that are organized by categories
and subcategories
This site encourages activism on world and
community issues, but it is activism that is the
theme.
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Club - Womens Cancer Connection
Community that is highly focused on one area of
interest and promotes a considerable amount of
interaction among members
The most prominent link on the site encourages
member communication on message boards.
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Shrine - Unofficial Cheers Website
Highly focused community with minimal interaction
between members
This site allows comprehensive exposure to a
single topic (in this case, a TV show) with no
interaction among users.
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Theater - iFilm
Community that is focused in a particular area
but allows for moderate interaction among members
Not as focused as a shrine, this site
concentrates on film, but still allows for little
interaction among users.
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Café - Bolt.com
Community that focuses on a common area of
interest but also provides for considerable
interaction among members
Everything you need to speak your mind, hang ou
t, hook up... whatever this teen site allows
for a high level of interaction among its users.
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The 7Cs of the Customer Interface
Context Sites layout and design
Content Text, pictures, sound and video that we
bpages contain

Commerce Sites capability to enable commercial
transactions

Community The ways sites enable user-to-user co
mmunication

Connection Degree site is linked to other sites


Customization Sites ability to self-tailor to
different users or to allow personalization
Communication The ways sites enable site-to-use
r communication or two-way communication

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Dimensions of Customization
Customization of a site can occur in many
different ways

• PERSONALIZATION
• Log-in Registration
• The site recognizes return users and configures
  itself accordingly
  
• Cookies
• Temporary files that track and gather data about
  users behavior
  
• Personalized E-Mail Accounts
• Provided free-of-charge to site users
• Content and Layout Configuration
• Users select layout and content based on their
  interests
  
• Storage
• Sites provide virtual hard-disk storage
• Agents
• Programs designed to perform simple tasks

• TAILORING
• Based on Past User Behavior
• Many sites adjust themselves dynamically based on
  a users past behavior and preferences
  
• Based on Behavior of Other Users
• With Similar Preferences
• Some sites make recommendations to the user based
  on preferences of other users with similar
  profiles
  

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The 7Cs of the Customer Interface
Context Sites layout and design
Content Text, pictures, sound and video that we
bpages contain

Commerce Sites capability to enable commercial
transactions

Community The ways sites enable user-to-user co
mmunication

Connection Degree site is linked to other sites


Customization Sites ability to self-tailor to
different users or to allow personalization
Communication The ways sites enable site-to-use
r communication or two-way communication

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Dimensions of Communication
Communication between a site and its users can
occur in many different ways

• BROADCAST
• Mass Mailings
• Broadcast transmissions of large volumes of
  e-mail targeted at large audiences
  
• FAQs
• Answers to frequently asked questions
• E-Mail Newsletters
• Inform site subscribers of site changes, special
  offers, etc.
  
• Content-Update Reminders
• E-mail reflecting user interest in a particular
  content area
  
• Broadcast Events
• Events can be broadcast from a website (webcast)
  that allows limited user control over such things
  as camera angle
  

• INTERACTIVE
• E-Commerce Dialogue
• Organizations and users trade e-mails regarding
  order placement, tracking and fulfillment
  
• Customer Service
• Organizations can provide customer service
  through trading e-mails or live online dialogue
  
• User Input
• User-generated content such as supplier ratings
  and user feedback to the site
  

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The 7Cs of the Customer Interface
Context Sites layout and design
Content Text, pictures, sound and video that we
bpages contain

Commerce Sites capability to enable commercial
transactions

Community The ways sites enable user-to-user co
mmunication

Connection Degree site is linked to other sites


Customization Sites ability to self-tailor to
different users or to allow personalization
Communication The ways sites enable site-to-use
r communication or two-way communication

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Six Connection Archetypes
Destination
PATHWAY-OUT Links lead the user outside the envir
onment of the site links are absolute in that
the users click causes an exit from the original
website.
Hub
Portal
Affiliate
PATHWAY-IN Links are hybrid the users click cau
ses the retrieval of material from the same or
other sites without exiting the current website.
Outsourced Content
Meta-Software
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The 7Cs of the Customer Interface
Context Sites layout and design
Content Text, pictures, sound and video that we
bpages contain

Commerce Sites capability to enable commercial
transactions

Community The ways sites enable user-to-user co
mmunication

Connection Degree site is linked to other sites


Customization Sites ability to self-tailor to
different users or to allow personalization
Communication The ways sites enable site-to-use
r communication or two-way communication

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Dimensions of Commerce
There are many tools that sites provide to
originate and facilitate commerce

• TOOLS FOR ENABLING COMMERCE
• Registration
• Allows the site to store information about users
  and user preferences
  
• Shopping Cart, One-Click Shopping
• Facilitates online shopping by making it more
  user-friendly
  
• Security, Credit-Card Approval
• Enables online transactions by allowing users to
  securely share credit-card information
  
• Orders Through Affiliates
• Sites must be able to track orders that come from
  and go to affiliates
  
• Configuration Technology
• Users can test product compatibility, and price
  trade-offs and product substitutions online.
  
• Order Tracking, Delivery Options
• Once orders are placed on the site, users can
  choose how they would like their products
  delivered and track those orders from the site to
  their front door.

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The 7Cs of Schwab.com
Context Schwab.com is largely functional the onl
y graphics used are those that display market
behavior.

Content Schwab.com is an information-dominant sit
e that generates all of its own material.

Commerce Schwab is essentially a broker with a tr
ansaction-based revenue model. There are also fee
services that Schwab offers.

Community There is very little interaction among
Schwab.com users. The site focuses primarily on
the financial needs of the individual.

Connection Schwab.coms content and information i
s largely generated in-house there are no links
to outside sites.

Customization Schwab.com is highly customizable.
Users can personalize the sites content, layout,
communication and access.
Communication Schwab.com provides e-mail news ale
rts. User response is limited. Basically, the
site is a one-to-many, non-responding site.