eCommerce Operation

Provide an overview of how operations of an eCommerce

website should be

Le Thiet Bao
5/31/2012



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May 31, 2012




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1. SOLUTION OWNERSHIP
Obviously there is not a single owner of an
eCommerce operation. There are multiple individuals
and team roles that serve as owners of specific
elements. I see ownership or ultimate accountability
in three key areas of the operation.
1.1. Feature Set
The product manager is responsible for sorting and
prioritizing inputs from stakeholders that represent
multiple functional areas of the business. Its essential
that the product manager know and understand the
goals and objectives of the current business plan. These serve as the guide post by which decisions
related to priority are made.
The features of a website may be grouped into high level categories such as communication, order
entry, or customer relationship. Communication features are related to targeted messages, product
display, guides, and instructions. These types of features aim to merchandise the products in the store
effectively and to guide customers to targeted areas. Order entry features make sure the customer can
put products into a cart and complete the sales funnel. Typical features in this area involve payments,
delivery, and order processing. Customer relationship features involve the customer profile, self service
ability, help pages, and contact-us type pages.
1.2. Results
Depending on the area being measured, the results of the eCommerce operation are owned by the
product manager, marketing, or the IT group.
The product manager is responsible for ensuring the site content and functionality are aligned to
business goals. This role should make sure that system stays up-to-date, contains fresh content, and
does not contain elements that prevent customers from ordering. Results are measured in areas such as
product accuracy, web site release cycle timing, and resolution of business needs.
The marketing group is responsible for defining programs and metrics that align to the three
eCommerce key performance indicators:
1. The number of customers to the store
2. The number of customers that buy from the store
3. The amount of money that customers spend in the store
The IT systems group is responsible for the availability and performance of the site. If you dont have IT
at the table as an accountable group for eCommerce results in your organization then you need to think
twice. Sites that are unavailable to a customer when they choose to shop create a lost sale. There are
plenty of sites on the Internet to shop from and chances are a competitor site is available. Slow speed?
A definite customer turn-off. Make sure the store is open and the lights are on.


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1.3. Competitive/Industry Alignment
Who is responsible for making sure that your site content and offering are competitive with the current
market or better yet distinguish you from your competition? This part of the operation should be
assigned to Sales and Marketing. Sales because they have the closest relationships with customers and
clients. They should be aware of how competitors are positioning their products and services. Theyll
know why youve not been able to close deals in the past and theyll know what customers are asking to
have in the web site. The marketing group may contain a strategist that can analyze industry level trends
or provide input on potential new products where there could be market demand. They can use tools
such as SWOT analysis (Strength, Weaknesses, Opportunities, and Threats) to examine how the
eCommerce site fits into its market space.
Certainly there are more team members in an eCommerce operation. Each team member is part owner
of the overall system and responsible for their contributions. Let me know your thoughts on a
eCommerce operation. Is your organization structured differently or do you think it should be structured
differently?
2. CONTENT MANAGEMENT
This is the second post in a series about defining components of an eCommerce organization. The first
post explored elements of solution ownership. Today Ill look at the area of content management. An
important aspect of any eCommerce site is that the content of the site must be up-to-date and it must
be correct. Prospects and customers rely on the content management owners to keep the store front
ready for shopping.
There are four distinct areas of content management, but a given site may not require all four areas.
2.1. Product Setups
The product or service setups area defines attributes about the product or service that customers will
review while shopping. This includes a description, key characteristics, images, delivery options, etc. On
the Internet, product attributes are vital because customers are shopping based on your description, not
on the ability to touch and feel the product. Since they have the ability to shop multiple stores at the
same time, then they will use your product descriptions to make sure that they are comparing the same
product. Product owners use descriptions to merchandise a product in the online store.
2.2. Mar keting Setups
Setups from the marketing organization center around ads, promotions, or surveys. The marketing
group will use the eCommerce store to show advertisements either for their own products within the
site or for other products outside the site. eCommerce stores have space or screen real-estate available
for advertisements and the content managers will swap ads in-an-out of this space based on the
instructions from marketing. This same space could also be used for promotional items on the site such
as 2-for-1, free shipping, or percentage-off discounts. I link surveys with marketing setups because
marketers will use customer surveys or other types of customer input areas to gauge the effectiveness
of products, services, and the customer experience. The Internet has given marketers other options in
addition to a question/answer type survey. Options include product ratings, product comments, idea


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submission, forums, discussion groups, etc. The survey thus has become a much more interactive and
dynamic tool. The eCommerce team has the ability to use the comments from one customer to
influence the decision making of another customer.
2.3. Online Content Setups
The online content area includes electronic content for customers to consume online, not to physically
buy. This could include things such as news articles, blog posts, product specification sheets, videos, or
images. This type of content is the main course at a news agency or blog where the provider is offering
information, ideas, and opinions to customers/readers. In todays age this type of content can be self
managed by the author or sent by the author to a centralized groups that posts the information to the
site. The most important thing is to keep the content fresh and relavent to the readers. Allow the
readers to comment and be involved with the online content. Make it more of a conversation rather
than a speach.
2.4. Client Setups
In some cases business-to-business (B2B) sites or sites that offer products on behalf of an organization
will need to have a client based setup. In this model the client is an organization and a customer is the
buying agent of the product or service. If the web site servers multiple clients then it will need to have
client profiles from the content management and setup team. A client setup would include elements
such as a name, address, billing type, tax rate, allowable delivery values, etc. Custom setups might
include rules which effect processing of orders or information related to the client. Items in custom
setups might include order processing holds for verifications, removal of some web site features, special
customer messaging, etc. Some client setups might also include branding of the eCommerce site. In a
private label arrangement you would setup your site to look and feel like the client branding so that the
customer doesnt know they are shopping on a third party site. Co-branded setups would contain pieces
of your branding as well as the client.
Content management is a distinct area of the eCommerce operation because content of the site should
be constantly changing and updating. Whether an organization chooses to make the content creators
the same as the content implementors is a tactical decision. Just make sure to equip the implementor
with the proper tools to keep the content up-to-date in an efficient manner



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3. PRODUCT MANAGEMENT
The responsibility for product management or product selling is a different group or individual. In this
context product is not the eCommerce software but the product or service being sold on the
eCommerce site.
Another way to organize the functional roles of content manager and product/service manager are to
combine them. Doing this offers a couple of advantages to the eCommerce team and individuals
involved:
1. It allows the product/service manager to expand their experience and knowledge to Internet
related skills. I often hear product/service managers tell me that they would like to get more
involved with Internet activities but they are not sure where to get started. They have
performed the role of a traditional product/service manager which is channel independent. But
they would like to understand more of the intricacies with online setup to give them personal
growth.
2. The same is true in reverse for those that have only been involved with data management
activities. As a by-product of their working with online product/service setup these individuals
often become subject matter experts on these product/services because they understand the
business rules and attributes necessary to sell. Allowing them an opportunity to step into a
management role allows the possibility to grow the individual in the direction of a business
owner with experience in the marketing, finance, and supply chain management of a
product/service.
Assigning the role of product/service management and online management to the same person then
has advantages for both the individual and the organization. I realize that eCommerce is only a single
channel among many options. However, depending on the business, the Internet may be the only
channel. So this is an option that organizational designers should consider based on their situation.
Functionally, the product/service management area of the eCommerce operation is responsible for:
Merchandising Determining how to use the characteristics and features to promote and sell.
Cross Selling Determine which, if any, additional products/services are a complementary or
related product to the primary. These are then offered and/or recommended during the sales
process to the customer.
Comparison Deciding the main characteristics and features used as part of the decision
making process by the customer. This provide a comparison of similar products so that
customers can look at the differences between features to make an educated comparison.
Search Decide the categories in which to place a product so as to enable the customer to
find the product/service through navigation of the site or using the internal search page.



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4. DEMAND MANAGEMENT
Its been a few months since I wrote about the building blocks of an eCommerce operation. Previously I
wrote about the areas of solution ownership, content management, and product management. In this
post Ill list some of the key elements from the demand management area. I have three more areas on
my master eCommerce operation plan, so you this is post 4 of 7 on this topic.
As with any type of product or service there is a need within the marketing area to create awareness.
This fits into the area of demand management. Its composed of activities that promote and create
awareness about your product or service in such a way that it creates demand. An eCommerce site,
especially one that represents a brand that is not well known, will need a good deal of work in the
demand management area.
4.1. Search
Search demand is broken into two areas: natural and paid. These two types of search management are
the source of many books, reviews, and blogs and really there is an entire industry around Search Engine
Optimization (SEO). In the context of building an eCommerce operation whats important to know is that
at a minimum you should have a focus on natural search results. Natural search results are those shown
in the center content area of search engine results. You dont pay to be listed in these results, but how
you structure your pages will determine your ranking in these results. Search is dominated by Google
right now and with the growing popularity of mobile devices to augment the capabilities of computers,
the Yellow Pages is quickly fading into a tool of the past. So if youre not tuning your site for natural
search results, you should sooner than later.
The paid search results are usually on the top or down the right side of the search results page. Youll
pay to be listed in these results based on keywords in the search query. This requires a bit of focused
discipline in your eCommerce organization as well, because someone needs to manage the keywords
you buy and monitor them for success or failure in attracting traffic.
4.2. eMail
eMail is a large component of the demand management strategy for eCommerce organizations today.
Youll want to have someone knowledgeable about all of the eMail regulations and guidelines such as
opting-in/out, spam, and list management. Additionally, the copy or content in each email plays a role in
how successful it is in achieving the desired action from the recipient.
4.3. Online Advertising
Another option for eCommerce demand management is online advertising. Techniques used in this
space are sponsored banner ads and pop-ups that users see when they visit a site. Depending upon your
audience and product, online advertising may be a good component to add to your overall advertising
plan.


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4.4. Print Media
eCommerce team members should not forget about traditional media. They can use print to create
awareness through many vehicles such as newspaper, magazines, billboards, etc. In some cases you may
want to print reorder directives on printed materials the customer receives.
4.5. Offers
Many eCommerce sites offer coupons or promotions to encourage sales. So your eCommerce team
needs to organizationally matrix to those who create the promotions and offers as incentives. The offer
that works in a brick and mortar storefront may not be the same one that works best for eCommerce.
Test and then test again.
4.6. Social Media
eCommerce teams must now consider their involvement role in social media. Consumers have the
ability to create online content today in the form of product/service reviews, status updates, blog
postings, etc. The wrong approach is to ignore the conversation or pretend its not there. Instead,
designate someone to be involved in the conversation. Use the opportunity to add value to your
customers and prospects. Become and established voice in your industry.
4.7. Partnerships and Portals
The final area of demand management that Ill discuss is through partnerships and portals. You may be
in a situation where you can introduce your product to to new markets based on the established
framework set by someone else. Two examples are the Amazon Associates program and integrations
with Ariba. With Amazon Associates, you can merchandise product from another retailer and receive a
commission based on it. This creates the possibility to expand your product offering because the partner
site offers a broader scope of product. In the Ariba example, Ariba serves as a partner aggregator for
spend management from subscribing companies. If you integrate with the aggregator in this type of
arrangement then they can offer your products to their subscribers . This could open the doors for new
buyers of product that already have established a relationship with the procurement enabler.



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5. METRIC MANAGEMENT
The term metric in this case refers to a measurable unit of an item that is relevant to the success of the
eCommerce operation. Typically, management will also specify a few key performance metrics or key
performance indicators to provide focus on those with direct correlation to business success. The
measurements are intended to be a measure of success against some threshold. That threshold might
be a value set by previous baseline or it could be a stretch goal to show improvement in a certain area.
Within the eCommerce group Ill call out the areas where its important to have metrics.
5.1. Web Analytics
Web site analytics provide information about how many people are visiting your site, what actions they
take, information about their purchase, and other metrics about their identity. This area is important
because it assists with determining if your merchandising tactics are working to close sales or provide
customers with answers to service needs. Common metrics in this area include:
number of visitors
number of cart abandonments
number of session abandonments
number of purchases
geographic location
referral source (organic, link, keyword, etc.)
keywords or adwords used for entry
5.2. Customer Involvement
Metrics for customer involvement include traditional survey results but have expanded in recent years
with the advancement of social media. Marketers now have the ability to measure customer
involvement through other techniques such as Twitter, Facebook, blog comments, and customer
reviews. Results in customer involvement can be both qualitative and quantitative. Common metrics in
this area include:
number of customer reviews
average ratings on customer reviews
customer feedback on survey questions
number of customers participating in discussion groups or fan pages
reach of customers as followers



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5.3. Financial
Metrics related to sales of your products and services are also part of metric management. Depending
on your business, you may look to measure revenue, average cart purchase amount, product up-sell
statistics, or retail value. When measuring the financial results of the operation be sure to specify if the
metric is taken from the web site analytics or the back office reporting. Its important to note that the
numbers may vary slightly based on the ability of customers to cancel, modify, or return their order after
its placed on your web site.
5.4. Channel
Metrics related to channel are used to measure the effectiveness of the Internet channel compared to
other channels such as phone, paper, or retail store front. In some businesses, its important to get as
many Internet orders as possible if it provides the lowest cost to service. In other cases, it may be more
desirable to have channels work in tandem to capture a sale in anyway possible. Create goals on channel
usage and then measure the percentage of orders that come in by each channel. You should also keep
the financial metrics split by channel.
5.5. Product
Metrics related to products will involve the type, attributes, and quantity of products sold on an
eCommerce site. Cross-sell and up-sell metrics belong in this group. Common metrics in this area
include:
items per order (IPO)
number of SKUs sold
optional attributes purchased



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6. RELEASE MANAGEMENT
Release management provides for the justification, prioritization, and specification of software that
comprises your eCommerce portfolio. Certainly software development is a discipline unto itself, but
these elements cover the basic disciplines and functions of the process. This area of your eCommerce
operation needs to focus on the ability to get work started, the ability to prioritize a lengthy queue of
requests, and the ability to specify what to build.
6.1. Business Case and Modeling
Business case activities are mostly used for new software development or development that can be
capitalized according to Statement of Position 98-1. Business cases will typically cover:
Objectives
Risks
Estimated costs
Estimated return
Building a business case is not likely to be the favorite activity of the team. But doing this does provide
great deal of value for your organization:
Allows you to build financial forecasts
Allows you to build a project budget
Shows the expected return of the work
Mechanism to gain upper management support and resource allocation to your project
Removes pet features
Keeps discussions on the merits of the features
Removes emotion
Software modeling is another term with a diverse meaning and that comprises many disciplines, tools,
and methods. For an eCommerce team, modeling can be a piece of the front end project justification. A
software model provides a simple representation of the eCommerce release for the purpose of relaying
its purpose, meaning and structure. The model may be composed of graphics, wire frames, or flow
charts.
6.2. Feature Prioritization
Software shops have lists of items comprised of new feature requests, previously discovered defects,
marketing tests, and customer requests. Developing a framework for prioritizing all these ideas can be
tricky due to office politics, available resources, financial justification, etc. But prioritizing the list is an
essential activity because the size of the list is longer than what you can accomplish. Plus youll want to


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make sure you are solving the requests in a proper order. Here a few ideas for how teams might
prioritize work:
Based on what customers will pay to receive
Based on estimated return value
Based on level of effort
Use prioritization families Groups of related requirements
First in First Out
Value to cost Highest value to lowest cost first
Contractual obligations first
Requirements and Specifications
Documenting requirements is another area thats a discipline all unto itself and their are many
alternative methods for requirements specification. The important aspect of this part of your
organization is that you have team members that a) know the business b) know your customer needs
and c) are flexible to be able to modify requirements with changing business conditions. Rather than
focusing on any one particular method, I advocate having the right type of team member on point for
requirements gathering and specification. Adaptability to change to is paramount because the needs of
the business and dynamics of your environment will change



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7. USER EXPERIENCE AND USABILITY
The area tasked with defining the customer experience and usability of the site is of utmost importance.
This part of your team defines the flow of the site, the visual appearance, and how customers interact
with it. The important thing to remember is that to the customer, they are not interacting with your site.
They are interacting with your brand. Your eCommerce site is an extension of your brand. It can find,
make, keep, and lose customers based on the experience they have with your site.
The experience and usability of the site can be molded in four key areas of release management. They
are prototypes, mockups, use cases, and process maps. They fit logically together and in sequence to
guide the designer and implementors in the final output.
7.1. Prototypes
The prototype is used to show the concept of a software program or release. The eCommerce team
could use a basic functional piece of software, a sequenced set of pictures, a storyboard of hand
drawings, or any other type of visual output to display their prototype. The idea is to gain acceptance of
the software concept and to create discussion about it to help mold and shape the final output. I know
many traditionalists will argue that a true prototype must be a functional piece of software. I do believe
this is valuable, and one form of a prototype, but today with todays tools we have the ability to link
static pages together without necessarily making them functional. Remember, the key purpose of this
step is to communicate an idea or concept to stakeholders.
In some cases, the prototype is used as a proof of concept. Can the design team make something work
on a smaller scale so that it increases confidence it can be done on a larger scale. In this case, the
prototype is important in order to secure funding for the software release.
7.2. Use Cases
The use case describes how a system responds to actions on it. In an abstract sense we can think of
objects performing actions on the system and then specifying how the system will react. The objects
could be people, other programs, or events. The objects are often called actors and the use case creates
a series of steps that describe the action and the resulting response from the system.
The use cases have value because they help the designers and testers to craft the expected flows of the
system. A use case document is also typically easy to read and less formal and verbose than many
traditional requirements documents.
It should be noted here, that my good friend Mike Cottmeyer tells me the proper name in agile
development methods is user story. Looks like in the case of a user story, the documentation of the
requirement is simplified but requires and additional step of documenting an acceptance test.
Regardless of the methodology used, remember the key task with this work is to define the expected
use of your system. Define who will use it, how they will use it, and what they expect to see as the
results.


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7.3. Process Maps
Once you have established use cases for a release, you can combine all of them with a process map, or
flow chart. This document defines how all the pieces of the software will fit together and flow to make a
complete system. It shows how various use cases may be linked, describes decision points, and shows
the possible paths through a system.
7.4. Mockups
The mockup is a way of designing the user interface of system through images or drawings. The
mockups are not functional. The purpose of the mockups are to allow your designers to create the page
layouts that comprise the system. Theyll be considering things like object locations, form layouts,
colors, fonts, etc. Dont discredit the importance of this step. Many a A/B test has proven that things
like the color of button or location of an object on the screen can have impact on your site conversion
rates. You dont necessarily need a designer for this task, but you do need someone who is visual that
can bring your process flows to life.