electronic commerce strategy technologies and applications

e c o m m e r c e

It was the best of times, it was the worst of times(..) it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us

(Charles Dickens, A Tale of Two Cities)

The elements of e-Commerce

Search Company Customer P e r f o r m a n c e E a s e o f U s e Product Negotiation Order Payment Delivery After-sales Community
3

A e s t h e t I c E f f e c t

I n n o v a t i o n

Elements
 The basic elements:  An e-Shop on a Server  User (customer) with a web Browser  An Internet connection  Additional issues:  Visibility  Ease of Use  Order Processing  Online Payments  Security  Delivery Systems  After-Sales
4

Elements
Customer Search Browser Delivery After Sales Internet Orders Payment Store Systems e-Shop

e-Visibility
 Getting the site noticed and the online customers visiting the store.  Ways of advertising a web presence and getting customers in through the door include:  Site Name  Conventional Advertising  Portals  Malls  Search Engines  Links  Personal Recommendations
6

e-Visibility site name

 The surest way of finding a site is the URL.  If the URL is memorable then the site is made:  amazon.com  A sensible simple site name can be guessed by users:  britishairways.com

e-Visibility conventional advertising

 An irony of e-Commerce sites is the apparent urge to advertise them through conventional media.  Conventional advertising of Internet addresses has a three-fold effects:  It boosts the image of the organisationit gives an air of modernity and high-tech;  It lets the customer know that the organisation has Internet facilities;  It can give users access via the URL.
8

e-Visibility portals
 The first page a user sees is the portal.  An advert on a popular portal is the web equivalent of a TV advert at half time in the cup final or in a break during the Superbowl it is seen by millions.  An advert on a popular web search engine is a similar piece of property.  Adverts on the portal can be:  Banners  Little boxes  Menu of services
9

e-Visibility malls
 An Internet shopping mall models itself on the American shopping mall, a lot of shops, under one roof with a pleasant shopping atmosphere.  The intention is to generate interest and thus trade for all the shops.  An Internet mall can provide common services. Possibilities include:  Shared advertising.  Common facilities.  e-Cash.  Common customer files.  The drawback of joining a mall is that, as for any good retail location, the rents can be high. 10

e-Visibility search engines

 A search engine is a standard way to find any Internet site and that includes e-Shops.  Finding a specific e-Commerce site may or may not be easy - a successful e-Shop could do with appearing in that top ten list of hits.  The search engines index the web by:  Manual indexing;  Automatic Indexing (web crawlers).  Crawlers look at:  The <TITLE> tag is a prime target.  The<META>is also checked-----and many other aspects of the site and its use.  Note, the best of the search engines list only about 15% of internet sites.
11

e-Visibility links
 Online adverts on the web are also links to the site hypertext links.  Links are included on a variety of other sites with a variety of deals being done.

e-Visibility personal recommendations

Satisfied customers will bookmark the site, come back to the site again and recommend it to their friends possibly the best way of getting business

12

The e-Shop
 e-Shops come in all shapes and sizes. They range from:  A few simple web pages for a local craftsman  Complex sites offering services that include online ordering and payment  The full service e-Store needs: an extensive range of facilities; these include:  Company information  Customer registration  Dynamic web pages  Site indexes and search facilities  Online order entry and payment systems  Sophisticated security protection systems  After sales service and support  Feedback systems

13

The e-Shop online information

 Trust is an issue on the Internet and it is not an issue that is likely to go away.  Trust can be engendered by:  Brand name and trading record.  A site that gives a professional image.  The inclusion of company information.  All of this does not prove that a site is genuine but it can reassure potential customers.

14

The e-Shop customer registration

 e-Commerce customers have to give their suppliers details about themselves. It is less information than would be required to open a bank account but more than is normally needed to buy some cornflakes.  Providing this information raises privacy issues:  Will the information be put to other uses?  Will the e-Vendor compile a customer profile?  Is the information secure?  The context in which the e-Commerce vendor asks for this information is also important:  Customer registration prior to using the site  Customer details only when an order is placed.
15

The e-Shop site navigation

if a site is not designed with usability in mind, people will be frustrated with the site. People that are frustrated with the site dont bookmark, dont buy, dont revisit, and wont tell other people about the site. (Rhodoes, 1999)  Site navigation is aided by:  A site index;  A site search engine;  Logical sequencing of facilities with clear links to the next stage in any process.

16

The e-Shop product database

 The use of a product database facilitates:  Updating of products and their attributes  Common data for e-Shop and back office  and requires the construction of the web page on the fly.  Examples are:  The Online Bookshop  The Airline Website (integrated with the airline booking system)

17

The e-Shop online orders

 The most common analogy is a shopping basket in the UK and a shopping cart in the US.

 Tangible goods are (electronically) placed in the basket and checked-out when shopping is complete.  For services, such as an airline booking, the search process is also the shopping process and the customer accepts or rejects the resulting proposal(s).
18

Online payments
 Options for online payment are:  Credit Cards  Debit Cards  Stored Value Cards  e-Cash  Delayed Payments  Note, in a shop there is an exchange of value online it is pay now and hope that the goods arrive later.

19

Online Payments credit cards

 Options for online payment:  The most common way of paying for an e-Commerce transaction is with a credit card.  The online use of credit cards is an extension of the customer not present (CNP) protocol which is intrinsically less secure than the conventional use.  Potential problems include:  Fraudulent Use of Credit Cards  Interception of Credit Card Details  Remote Storage of Credit Card Details

20

Online Payments
 Debit Cards  Similar to Credit Cards but less secure.  Stored Value Cards  Not widely used fraud limited to value on card requires a card reader.  e-Cash  Suitable for small payments as yet no generally accepted scheme.  Delayed Payments  Off-line payments - limited normally delays transaction.

acceptance

21

Delivery of goods (e- fulfilment)

 Internet e-Commerce allows users to order what they want, when they want but then they have to wait until the postman arrives.  Delivery depends on the size, nature, urgency and value. Options include:  Post. (You can sell anything online provided it will fit through a letter box.)  Packet/parcel delivery service.  Local Delivery. (Perishable goods often require such a service.)  Collect your Own.  Electronic Delivery.  No delivery. (Intangibles such as an e-Ticket.)
22

Delivery of Goods (e- fulfilment)

 For the delivery stage of the trade cycle the task of delivery is transferred from the retail customer to the vendor and the vendor generally finds it necessary to recoup those costs as delivery charges.  Delivery issues:  cost picking, posting and packaging  trust will the right goods be sent?  security does someone have to be at home to accept delivery?  Online grocery deliveries work to booked delivery slots often a day or two later.

23

Internet e-Commerce Security

 Security breaches can occur on:  The customer side impersonation.  The Internet hacking, etc.  The vendor side inappropriate or dishonest trade.

24

Internet e-Commerce Security

The four pillars of secure e-Commerce:  Authentication:  The sender of a document must be identified precisely and without any possibility of fraud;  Confidentiality:  The contents of a message may not be scanned by unauthorised parties;  Integrity:  Changes made in messages without according remarks must be impossible;  Non-Repudiation:  The sender of a message is directly connected to the contents of the message (and the recipient cannot deny that the message was received). 25

Security - encryption
 Encryption is the conversion of data into a code so that it cannot be read by unauthorised users.  The data is converted into the code by the sender and then decoded by the receiver.  Modern encryption methods use an encryption algorithm and a binary number that is the key. The main options are:  Secret key system  Public key / private key system.  Encryption should be used for transmission but also for customer data on the e-Vendors server.

26

Security Secure Sockets Layer (SSL)

 The stages are:  The vendor transmits the public key (ka) to the intending customer's web browser.  The customers browser generates a secret key (kc) for the session.  The customers browser encrypts the secret key (kc), using the public key (ka) and transmits it to the vendor.  The vendor decodes the message using a private key (kb) and now has the secret key (kc).  Further interchanges between the customers browser and the vendors server can now be encoded and decoded using the secret key (kc).
27

Security digital signatures

 A digital signature is used to authenticate the sender of the message and to check the integrity of the message, i.e. that it has not been altered in transit.

28

Security trusted third parties

 This addresses non-repudiation a copy of the transaction is transmitted to a third party and the record of the transaction can be used to settle any disputes.

29

Exercise 1
 Select two categories of goods, for example groceries and books, and list the advantages and disadvantages to you of ordering these products online. The lists can be compared across a group of students and the differences analysed.

30

electronic commerce strategy technologies and applications

e c o Thanks to Allah m m e r c e
31