Chapter 9

e-Commerce Systems

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Learning Objectives
Identify the major categories and trends of e-
commerce applications.

Identify the essential processes of an e-

commerce system, and give examples of how
it is implemented in e-commerce applications.

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Learning Objectives
Identify and give examples of several key
factors and Web store requirements needed to
succeed in e-commerce.

Identify and explain the business value of

several types of e-commerce marketplaces.

Discuss the benefits and trade0ffs of several e-

commerce clicks-and-bricks alternatives.

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 Section 1
E-Commerce Fundamentals

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I. Introduction to e-Commerce

Electronic Commerce – the entire online

process of developing, marketing, selling,
delivering, servicing, and paying for
products and services transacted on
networked global marketplaces; more than
just buying and selling online

e-Commerce – the online exchange of

value; more than just buying and selling on
the Internet

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II. The Scope of e-Commerce

Includes marketing, discovery, transaction

processing, product and customer service
process, intranet and extranet access, and
customer collaboration

e-Commerce Technologies – involves most

information and Internet technologies

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II. The Scope of e-Commerce

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II. The Scope of e-Commerce

Categories of e-Commerce
Business-To-Consumer (B2C) e-Commerce – still
small when compared with all online commerce
Consumer-To-Consumer (C2C) e-Commerce – online
auctions, online advertising of personal products
and services
Business-To-Business e-Commerce – most of e-
Commerce is here
Business-To-Government (B2G) e-Commerce

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 Forrester: Web 2.0 Has a Bright Future

What is Web 2.0?

What is Web 2.0 not?
What does Web 2.0 provide?

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III. Essential e-Commerce Processes

Access Control and Security – secure access

between parties to assure trust

Profiling and Personalizing – processes that

gather data on you and your behavior to
provide personalized service; this may raise
ethical issues

Search Management – effective and efficient

search processes are required for a good Web
site; there are more than 30 different search
engines on the Internet
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III. Essential e-Commerce Processes

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III. Essential e-Commerce Processes

Content and Catalog Management

helps e-commerce firms develop, generate, deliver,
and archive text and multimedia data
works with profiling tools
may include product configuration to support
customer self-service and mass customization

Workflow Management – ensure proper

transactions, decisions, and work activities are
performed, and documents distributed
correctly
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III. Essential e-Commerce Processes

Event Notification – monitor all e-commerce

processes and record all relevant events; most
e-commerce applications are event-driven and
respond to things that happen (events)

Collaboration and Trading – a major category

of e-commerce; processes consist of
collaboration and trading services needed by
various stakeholders

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 e-Commerce Tools to Close the Deal

What is “an abandoned cart”?

Why might a customer fail to complete a
purchase?
What tools encourage a customer to complete
the transaction?

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 Innvo Labs: Automated e-Commerce
Processes

What was the weakness in the original

Website?
How did the new Website improve that?
What other benefits did the new Website
provide?

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IV. Electronic Payment Processes

Very complex due to the anonymous nature of

electronic transactions

Web Payment Processes – most rely on credit

card payment processes
Electronic Funds Transfer (EFT) – a variety of
information technologies to capture and
process money/credit transfers between
banks, businesses, and customers

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IV. Electronic Payment Processes

Secure Electronic Payments – measures taken

to ensure security of information in electronic
payments
Encrypt data between customer and merchant

Encrypt data between customer and firm

authorizing credit cards

Take sensitive information offline

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IV. Electronic Payment Processes
A Secure Electronic Payment System

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 Section 2
e-Commerce Applications and Issues

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I. Introduction

e-commerce has changed how firms do

business and is now defining how firms do
business
e-Commerce Trends

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II. Business-To-Consumer (B2C) e-Commerce

Attract potential customers, transact goods

and services, build customer loyalty
e-Commerce Success Factors
Selection and Value – attractive products, competitive
prices
Performance and Service – easy navigation and
purchasing, prompt shipping and delivery
Look and Feel – attractive Website, multimedia catalog
Advertising and Incentives – targeted Webpage
advertising, email promotions, discounts, special offers

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II. Business-To-Consumer (B2C) e-Commerce

Personal Attention – personalized Web pages

and product recommendations, email notices,
interactive support
Community Relationships – virtual communities
and links to related Web sites
Security and Reliability – security of customer
information and transactions, trustworthy
product information, reliable order fulfillment
Great Customer Communications – easy-to-find
contact information, online order status,
product support

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II. Business-To-Consumer (B2C) e-Commerce

Traditional Vs. Web Market

Communications

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 Amazon.com: Partnering and Leveraging
Infrastructure

What service does Amazon provide

through Facebook?
Why might this be a popular service?
What security issues could be a problem
here?

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Stork Craft Manufacturing Helps Wal-Mart
Canada

What industry is Stork Craft in?

What partnership did they enter?
How do they market their products?
What benefits did this give them?

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III. Web Store Requirements

Most B2C e-commerce ventures are retail

businesses on the Web; primary focus is to
develop, operate, and manage the Website to
attract and maintain customers for repeat
sales
Getting Customers to Find You – customers must
find you on the Web
Search Engine Optimization (SEO) – focus
on improving the number/quality of visitors
to a Web site

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III. Web Store Requirements

Serving Your Customers – a Web site should

help serve customers personally and
efficiently so they become loyal customers
Web Cookie File – a file stored on the
customer’s computer with details about their
visit to your Web site

Managing a Web Store – a Web store must

be managed as both a Web site and a retail
store

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 Luxury Goes Digital: Fashion House
Embraces Online Shopping

What was the historical issue of luxury

items?
What was the Net-a-Porter solution?
What issue was lost online and how did
they address this?

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IV. Business-To-Business (B2B) e-Commerce

The wholesale/supply side of e-Commerce

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 Avnet Tears Up the B2B e-Commerce
Playbook

What business is Avnet in?

What was the problem they faced?
What was the solution?
How has that solution worked out?

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V. e-Commerce Marketplaces

One-to-Many – sell-side marketplace – one

major supplier dictates products and prices

Many-to-One – buy-side marketplace –

many suppliers attempt to sell to one buyer

Some-to-Many – distribution marketplace –

many suppliers combine catalogs to attract
a larger audience of buyers

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V. e-Commerce Marketplaces

Many-to-Some – procurement marketplace

– buyers combine purchasing power to gain
lower prices from suppliers

Many-to-Many – auction marketplace –

used by many buyers and sellers

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V. e-Commerce Marketplaces
A Sample B2B e-Commerce Web Portal

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 SpecEx.com: B2B Trading of Wireless
Spectrum

What business is Spectrum Bridge in?

How do they make money in this
industry?
What is the problem with this business
and how are they trying to get around
that problem?

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VI. Clicks and Bricks in e-Commerce

Should virtual electronic business be combined

with physical operations or kept separate?
e-Commerce Integration – the Internet is just
another channel that gets plugged onto the
business architecture
Other Clicks and Bricks Strategies – partial
integration of e-commerce into the physical
business operations, or complete separation of the
two
e-Commerce Channel Choices – a marketing/sales
channel created to conduct/manage e-commerce
activities

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VI. Clicks and Bricks in e-Commerce

An Integrated Vs. Separate e-Commerce

Business

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 IT Lessons from the Demise of Borders

What are the lessons to be learned from

the demise of Borders?
Discuss each lesson and what could have
been done differently.

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 REI: Scaling e-Commerce Mountain

What did REI do with their Website?

Why?
Did it work? If so, how well?
What was the tricky part of making it all
work?

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