eCommerce

Chapter 4Business-to-Consumer eCommerce

Sales Sites

Three routes to having an online presence:

• Buying space on an Internet ‘shopping mall’ and letting someone manage the service for you

• Buying an off-the-shelf shop front/catalogue software package

• Building a system from scratch

Information/Entertainment Provision

Information types:• News• Articles• Analysis• Advice• Music• Software• Games… the list goes on and

on

Bad Business Practice

• It is bad business practice to:– send out large untargeted email

mailings advertising goods or services (the practice which has come to be known as spamming)

– laden a web page with excessive amounts of advertising – particularly large graphics/animation files or large java applets

Revenue Options

• Sponsorship• Payment by number of

impressions• Payment by number of

‘click throughs’

Advertising

• Advertising should be:– well designed– relevant

Print-Based Media Will Survive

• We buy them at train stations and read them on the way to work

• They can be passed around and shared

• They have puzzles and crosswords

• The telephone bill is not going up and up while we read them!

Push Technology-bases Sites

• Usually browsing the web means– an information provider publishes content on a

web server– users ‘pull’ content from that server– the server does not initiate any data transfer, the user requests this in real time

• With ‘push technology’, the information is delivered to the customer– the customer wants to be updated with new

content on the server and registers for the information

– the customer receives content updates regularly and automatically

– the server actually initiates content delivery to the customer

Other Services

• Search engines• Recruitment• Brokering• Auctions• Stockbroking• Marketing• Advertising• Merchant services

Brokering• Business-to-business

brokering• Information brokering• Truckload matching• Specialized sales

Marketing

Services include:– analysis of your business– design and creation of banner advertising– placement of the advertisement– registration of your site with search

engines– coding of meta-tags on your site (this

provides a site description and keywords for the automated search engines to log)

– site usage analysis– the establishment of reciprocal links with

sites related to your company– email campaigns

Tools Available

• Password Protected Areas• Chat Rooms• Bulletin

Boards/Newsgroups• Catalogues• Credit Card Transactions

Catalogue Information

Methods of provision:• Either special software is used

offline to convert the data to a static set of linked web pages (which are then uploaded to the web server)

• Or the database itself is put online and is queried through an interface which generates web pages 'on the fly' as a result of user input.

Security

• Confidentiality – ensures that messages between parties are safe as recipient.

• Authentication – ensures that when a message is received, it is actually from the person it claims to come from.

• Integrity – prevents the unauthorised creation, alteration or deletion of data during transmission from the originator to the recipient.

• Non-repudiation – prevents a customer from subsequently denying verify the message has not been that they placed an order or made a commitment.

Merchant Services

Examples:• WorldPay

- www.worldpay.com• SecureTrading

- www.securetrading.com• NetBanx

- www.netbanx.com

Choosing an InternetService Provider (ISP)

• Will you run chat rooms?• Will you use video?• What volume of hits do you expect?• Will you lose money if the site's down? If so how

much?• How many products or services do you intend to

offer?• How much eMail will you receive?• Will you be sending high volumes of eMail yourself?• Will you want to maintain a high position in search

engines?• A large corporate may require the ISP to have:

– mirrored servers– backup communications links– physical security at its business premises– fire protection

Building the Business Case

• Understanding your objectives

• Understanding the business model

• Balancing costs against profits

Different Types of Business

• Existing businesses taking advantage of the web

• Small-time entrepreneurs seeing a sales opportunity and setting up a small shopfront

• New Internet start-up companies with innovative ideas

Objectives

• Do you know what your target audience is?• Will the site be used for:

– Sales?– Marketing?– Research?– Delivery of Goods or Services?

• Do you need it to be integrated to other systems?

• Are two versions of the site needed – one for the Intranet and one for public access via the WWW?– Do you know what sales levels are likely to be?– Can you cope with them?

What is the Business Model?

• It could vary between a basic specification– a simple website selling one product– which uses free web hosting– a third party Merchant Service to process credit

card transactions

• Or an integrated solution– a company may be selling its entire catalogue– to account holding customers– via an Extranet– which integrates sales with the ordering,

invoicing and distribution systems

Tools to be Used

Your decisions about what your ElectronicCommerce website needs to be able to do,

will start to determine:• How goods are delivered• What your hosting requirements are:

– ISP– Running your own server

• What support you are able to offer:– Your contract with your service provider– Your obligations to your readers/customers

• What level of integration with existing systems you require

Top Level Domains

.netthese have been used by organizations

involved in Internet infrastructure activities.orgby not-for-profit organizations.comby commercial organizations

There are also the restricted domains:.gov - (government agencies).edu - (educational institutions).mil - (military)

Second Level Domains

Nominet UK (http://www.nominet.net/) operates a computerized Register for the most popular Second Level Domains (SLDs) within the .uk Top Level Domain. These include:

.co.uk - for commercial enterprises (the largest SLD within the .uk Top Level Domain).org.uk - for non-commercial organizations.net.uk for the host machines of ISPs.ltd.uk and .plc.uk - for use by registered companies only

New Top Level Domains

Introduced to increase the availability of domains:

.firm - businesses, or firms.shop - businesses offering goods to purchase

.web - entities emphasizing activities related to the WWW.arts - entities emphasizing cultural and entertainment activities

.rec - entities emphasizing recreation/entertainment activities

.info - entities providing information services .nom - for those wishing individual or

personal nomenclature

Editor Features Search-and-replace functions (especially for multi-line

text and across multiple pages) Syntax coloring Syntax checking Link checking Spell checking Word wrap/unwrap Frames and table handling Link checking Support for stylesheets Support for dHTML (dynamic HTML) Support for JavaScript Support for server-side includes Support for viewing pages in different browsers Site management Extendibility (can you add your own or new tags?)

Scalability and Robustness

Ensure bandwidth can handle visitor numbers

Sufficient software processing capacity should be planned for

Service level agreement with supplier will help with reliability

Plan for future requirements

Legal Issues

Trading on the Internet raises a number of serious legal issues, in particular:– whether and how a valid contract can

be concluded on the web– what law applies to that contract– the application of consumer

protection laws to transactions concluded electronically across national boundaries

– issues of copyright and intellectual property

eCommerce Issues

How is a contract for the delivery of new supplies made if the ‘offer’ and ‘acceptance’ are generated without human intervention (as is frequently the case in EDI)

When is the contract made Where is the contract made

Typical Agreements

Address: When the contract is made (with the

‘instantaneous’ rule generally being applied) Where the contract is made (with the

agreement typically giving the parties the option to choose either the country in which the node of the network received the message, or inserting a country of their choice)

Evidence that the contract and its terms can be produced in court (through the provision of security measures and procedures)

Consumer Protection

Latest developments (particularly in the European Union) are seeking to grant the following rights to consumers who are party to a ‘distance’ electronic contract:– An absolute right to withdraw for 7 days

after the contract has been formed– The seller will be obliged to execute an

order within a maximum of 30 days from when the order was forwarded by the consumer

Copyright and Intellectual Property Copyright Trademarks Patents

Trademarks

Businesses of all sizes count their trademarks as some of their most valuable assets. eCommerce and the Internet present two particular challenges to trademark owners:– the relationship between registered

trademarks and domain names– the difficulty in applying trademark

protection to the global network that is the Internet

Summary

• Models for Electronic Commerce• Sales•Information/

Entertainment Provision• Information Gathering• Other Services

• Technical Options• Tools Available• Integration with Back

Office Systems• Methods of Delivery• Security• Choosing an Internet

Service Provider

• Building the Business Case• Objectives• Choosing a Business

Model• Tools to be Used

• Designing and Running an Electronic Commerce Website• Domain Names and

Trade Marks• Design Tools• Scalability and

Robustness• Legal Considerations