MODELS FOR E-COMMERCE

Two types of e-commerce make up nearly all the e-commerce activity on the web, business –to-consumer (B2C) and business-to-business (B2B).

Although there are naturally many more of the web who would be primarily classified as consumers (at least by businesses) the B2B e-commerce market is currently larger in terms of dollars spent. The B2B market reached an estimated $137 billion in 2000, whereas B2C reached approximately $10 billion. Let’s explore each of the two e-commerce business models in more detail.

BUSINESS-TO-CONSUMER

The B2C business model is commerce transacted between a business and a consumer. This model is characterized by high margins and low volume. This means that each individual shopper is not expected to buy more than one of any given item and is further expected to make relatively modest purchase, generally under $100. As in a traditional retail store, the margin (price markup on purchase) is high.

BUSINESS-TO-BUSINESS

B2B commerce transacted between separate businesses. It’s similar to bulk rate buying in that it’s characterized by high volume and low price margins. A business is likely to need large quantities of an item, such as desk calendar for every employee or enough paper towels to stock six rest rooms for several months. Because such customers buy in bulk and buy repeatedly a B2B company is able to offer products at a lower margin.

THE SEVEN KEYS TO E-COMMERCE SUCCESS

Creating an e-commerce site can be very simple if you have the right elements in place. However the process can also be extremely arduous if the project is not planned properly. A knowledgeable management staff with realistic expectations is key to e-commerce success.

A successful e-commerce management team must address al aspects of the project start to completion. In the effort there are seven key ingredients to e-commerce success.

1.      Generating demand.

2.      Ordering

3.      Fulfillment

4.      Payment processing

5.      Service and support

6.      Security

7.      Community

These elements are discussed in the following sections.

GENERATING DEMAND

If you expect customers to visit your site. You will need to create awareness of your products and services. There are several methods for generating awareness and demand, including Web advertising, traditional advertising and direct email.

ORDERING

After demand has been generated the true test begins. Can you turn your visitors into buyers? The ordering process on your site must be as straightforward and efficient as possible. If it’s too cumbersome a potential buyer may abandon the process midstream. Keep the forms as short and simple as possible.

FULFILLMENT

After an order has been placed stay in communication with the customer until it has been fulfilled. Immediately send an automatic email to the customer verifying the order information. In addition provide a phone number and e-mail address where the customer can reach a customer support representative to inquire about the status of the order. If applicable provide a tracking number for the package, so the customer can check with the shipping company on the status of the shipment. Ensure that the package is shipped in a timely manner and that the packaging material is sufficient to prevent damage.

PAYMENT PROCESSING

Arguably the most important part of the process us actually transferring funds from the buyer to your company. By far the most common method is via credit card, but there are other options worth trying. The more options you give a customer the more likely they are to purchase from your site.

The three models for payment processing in e-commerce on the web are; Credit card model, Cash model and Check model.

SERVICE AND SUPPORT

It’s extremely important to provide excellent customer support so you can generate trust and loyal customer base. It a customer does not know how to contact your after submitting an order, he or she will wonder whether the shipment will ever arrive. It’s essential to have clearly accessible help area on your site. Include instructions on how to use all of the features on your site---browsing products, changing account information , viewing order status , returning items, cancelling an order and so on---and provide contact e-mail and phone number information.

More advanced customer support software is also available. The Land’s End customer support area features an automatic call back request feature, a live chat feature and co-browsing capabilities. These features are powered by Cisco system Intelligent contact Management Solutions.

SECURITY

Security is a major concern for online shoppers and it should be an e-commerce company number are priority. Credit card numbers and home addresses are stolen from web site database with alarming frequency so you must do everything possible to safeguard your data from unauthorized access. Use certificates, attachments that provide proof of identification from a well known vender such as VeriSign and use SSL technology to encrypt the data sent across the internet.

COMMUNITY

One of the most important and least tangible aspects of e-commerce success is creating a sense of community at an online store. There are many books on this subject and entire courses are available to study it, still it remains an elusive goal for many sites. The most successful e-commerce sites such as Barnes and Noble (www.bn.com) have made significant efforts in the area of community building via the use of message boards, notifications e-mail, personal pages and customer.

E-COMMERCE TRENDS AND FORECASTS

E-COMMERCE TRENDS AND FORECASTS

Studies of web usage and e-commerce growth show that the web is a growing market. All indications are that the web user population will continue to grow rapidly in the next 5 to 6 years. In addition even though the web population is currently dominated by English speakers the number of users in other parts of the world is growing. The web has already become an important part of the millions of people’s lives.

THE RAPIDLY GROWING WEB

Let’s take a look at some of the statistics that illustrate the growth of the web which gathers information from a variety of freely available sources on the web

Ø  In 1999 almost half of the internet users worldwide were outside of the U.S  and Canada , the number for 2000 will probably push this over the 50 percent mark.

Ø  Women are closing the gap in internet shopping. In 1995 the represented about 36 percent of internet shoppers, today the number is 41 percent.

Ø  In 1999, 40 percent of the adult population of the U.S and Canada were using the internet regularly. That number has been growing steadily since 1995.

Ø  The average user spends 5 hours and 28 minutes per week on the web

DOMINANT TRENDS IN THE EVOLUTION OF E-COMMERCE

As use of the web for purchasing goods becomes more widespread and global there are several dominant trends that will shape the evolution of e-commerce internationalization, standardization, personalization, instant fulfillment, mobile internet access, custom pricing and intelligent. The following sections describe these trends in detail.

INTERNATIONALIZATION

The expectation is that the user population of the web will continue to grow very rapidly and become more global. This internationalization of the web means that businesses conducting e-commerce on the web need to address the needs of non-English speakers if they want to access this global market. More information on the needs of non-English speakers can be found at the W3Cs internationalization site.

STANDARDIZATION

The growing number of electronic transaction on the web also requires the adoption of e-commerce standards by every company that wants to be a major player in the marketplace. These standards include data interchange and such user protection as meaningful privacy statements and trustworthy security system.

PERSONALIZATION

Personalization refers to the growing practice of gathering information about established customers and providing a personalized web site for them when they return to your site. Information on products or topics in which users are interested cab be presented as soon as they arrive at your site. This helps build loyalty. Amazone.com is a good example of a site that tailors information to the user.

INSTANT FULFILLMENT

A trend in the purchase of digital products, such as software is instant fulfillment. Instant fulfillment means that the user receives the product almost immediately after he or she purchases it—via download from the web. Not only have online software venders begun to offer the services, but e-book venders such as Barnes and Noble are also conducting order fulfillment via download.

MOBILE INTERNET ACCESS

Many people believe that wireless internet access using handheld devices, such as personal digital assistants and mobile phones, will become more popular than using the web through desktop computers.

Because of the limited graphical and processing capabilities of these devices, a special internet protocol called the wireless application protocol has been development to provide versions of web sites that are suitable for these devices. To accommodate the growing number of users who will want to purchase products via their wireless devices, e-commerce businesses need to plan to implement WAP in the near future. Some of the internet businesses that are taking advantage of the wireless trend are providers of services that help web sites make their content viewable on wireless devices. The leading such service is currently Avantgo.

CUSTOM PRICING

Custom pricing is being pioneered by Priceline.com an e-commerce site where a user can specially the price he or she wants to pay for a particular service. Currently the site offers airline tickets, hotel rooms, new cars , home financing , rental cars and long distance service. Service providers review each request and if one of the providers accepts, the user is usually bound to following through with the purchase. This is a novel business concept enabled by e-commerce on the web

INTELLIGENT AGENTS

Intelligent agents are software that acts automatically on behalf of the user. These agents will eventually result in a vast improvement in internet searching. Because of intelligent agent ability to understand concepts and search for related topics, this agent is better able to provide relevant search results for users. A good example of intelligent agent technology in use today is Apple Computers Sherlock functionally.