Requirements For Good Commerce by alicejenny


Facing E-Commerce
          Challenges Facing E-Commerce

• For some people computers still take too long to turn on.
    • Longer than opening a book or making a phone call.

• The logic of consumers saving money through internet is often flawed.
    • It costs money to buy a computer.
    • Computers use electricity.
    • Internet costs telephone charges and often other charges.

• Logic of reduced costs by selling through internet is often flawed.
    • see next page.

• The electronic Marketplace, whilst global, is still relatively small. It needs to
         be bigger in order to make more buyers want to be a part of it.
                                Conflicting Logics ?

   E-commerce Retailer                                        Traditional Retailer
   - One Office + warehouse(s)                                - Office, Shop(s), warehouse(s)
   - Expensive but Fewer (?) Employees                        - Cheap but Relatively More (?) Employees
   - Large Advertising / Promotions Costs                     - Small Advertising / Promotion Requirements

More efficient stock                                                 Distribution to
management (since                                                  Retail Store than to
centralized locations)                                                 individuals
if large enough scale,
but more handling &
packaging costs,                                                                    Retail Store
expensive one to one                                                                Perhaps relatively high
distribution and high                                                               inventory costs if small
                                                 Economies of                       scale but getting better
return costs etc.
                                                scale influence                     due to ECR and larger
                                                                                    shop units
                      www                         advantages

         Customer                                           Customer
         Little liklihood of chance encounter               Greater liklihood of chance encounter
Conflicting Logics ? – Amazon Solution

  ”Christmas 2002 was's
    busiest ever, with over 6.2 million
     items ordered from November 1
         through to Christmas.”

      ”The busiest dispatch day was
     December 17 when over 200,000
  items were sent from's
   distribution centre in Milton Keynes.”
  , January 24, 2003
Conflicting Logics ? – Amazon Solution

”We continue to focus on offering customers the
  best possible shopping experience through
   lowering prices, increasing selection and
 providing a site that's quick and easy to use.

    Shipping charges can be one of the main
  barriers to shopping on-line and with free UK
  delivery now in place we're hoping that more
  customers will try our service this Christmas.

Quite simply - if you're shopping elsewhere, you
       could be wasting time and money.”

      Robin Terrell, Managing Director of, Nov 4, 2002
   Conflicting Logics ? – Amazon Solution

   Scale & Logistical       Low Prices, Easy Ordering,
& Warehousing Expertise    Fast Delivery, Good Selection

   Scale & Partnership      Free Super-Saver Delivery
     with Royal Mail              in UK / USA

   Scale & Partnership            Low Price
     With Suppliers            & Efficient Stock

                               High Awareness,
   Scale, Advertizing &
                              Targeted Efficiency,
    Direct Marketing
                              Household Name &
                              Relationship Value

Scale & Partnership With
Traditional Competitors,   More Customers, Synergy,
    eg: Toys Are Us,        & therefore More Scale
  Waterstones Books,       & Efficient Online Channel
        Freeserve              for All Concerned
        Challenges Facing E-Commerce
• There is as yet insufficient evidence to support the value of the various
         forms of e-commerce.
              • Would you spend a lot of money on involvement in a business if
                   you have no idea how many and what sort of people will be
                   aware of your business. At least in a city centre you can see
                   the traffic of people ?

• The simplicity of e-commerce means that there are often too many
         competitors and therefore business is spread to thinly.

• Internet is not always the best source of information
               • It is often quicker to get information by asking an expert than by
                      searching on the internet (eg. travel agencies).

• Positive expectations lead to confidence which leads to investment and
         involvement by business and customers.
             •Expectations are wobbly at present.
        Challenges Facing E-Commerce

• E-commerce businesses are often run by people who are inexperiences
   in the areas of business in which they are involved (eg: ?)

• E-commerce is such a new industry that many major mistakes are
       inevitable as part of the learning experience.
       • We learn by our mistakes and all great business ideas incur a risk. It
                is perhaps better to try and fail then to never try at all as long
                as the risk was reasonable and calculated.

• The Internet /world-wide-web contains so much unorganised information
         that information overload still often inhibits its efficient operation.
      Challenges Facing E-Commerce

• You can’t touch things through internet

• You can’t hold things through internet

• Your can’t always clearly see things through internet

• You can’t always test or try on things through internet

• E-commerce and Internet still do not contain enough sound, action or
       smell to excite the user.

• Internet / e-commerce is often stressfull / uncomfortable.

• Many people still can’t imagine reading a computer on their laps before
        going to bed. You do’t get a headache reading a book.

• Often and for many people, internet and e-commerce unfortunately lack
         the social element of traditional commerce.
       Challenges Facing E-Commerce

• E-commerce marketplaces often favour price rather than other
       dimensions of a product or service.

• E-commerce is still not very interactive – presentations rather than

• Business to business entertainment is still effective and pleasurable and
        enables empathy, trust and loyalty elements to be included in the
        business relationship.

• E-shops often sell less (have less selection) than traditional shops

• Who knows how many customers e-commerce companies really have.
    • How many times have you registered for a service, forgoten your
          password and then re-registered.
    • How many times have you registered for a service more thsn once with
          different or false personal information.
    • Italian Internet company Freedomland: 20%+ of customers believed to
          exist only on paper, not in reality.
     Challenges Facing E-Commerce

• Customers have come to expect free information on the internet and are
        often unwilling to pay for information.
    • How many times have you left a web site as soon as it asks for money.
    • How many times have you purchased e-commerce services.

• Finding the right e-commerce site and then the right product often takes
         longer than going to a shop or service etc. in person.

• Many customers still do not trust Internet Security and Privacy
    • No powerful, independent proof and certification yet exists.
 Requirements For Good E-Commerce

There are many more than can be described here but some are:

• E-Marketing is not a Lone Ranger
        (integrate with other marketing mix. ex: Dell).

• Build Brands not just Internet Sites.

• Add Value, not just Alternatives.

• Prepare for the Future of Internet (eg. Mobile Internet) but also for Now
        (Short Visions & Long Visions).

• Differentiate.

• Research and Develop (Overcome the limitations of e-commerce).

• Think big & best (there may be only one winner), but spend wisely.
 Requirements For Good E-Commerce

• Think realistically.

• Look for free publicity (eg. news articles etc.)

• Direct Marketing Promotion (eg. e-mail marketing) as well as, if not
   more than Advertising.

• ”Tout a marketing partner’s services in messages to your company’s
   existing clients.” (Marketing News, AMA, Sept 2000, 1,16-17.)

• Partnership is Essential.

• Do not just do what the others do.

• Spread Risks

• Obtain a broadly experienced and educated workforce
 Requirements For Good E-Commerce


• Up-to-Date
• Realistic Technology Usage
• Operational (it works) and Efficient
• Fast
• Consistent (Image, Colour, Layout, Logic etc.)
• Clear, Simple, Uncluttered (eg. not too many scroll bars)
• Logical
• Safe and Secure
• Honest and Trustworthy
• Suitable for Laptops, small screens, mobile internet.
• Multi-Lingual
• Interactive (not essential but desirable)
• Local (eg. .fi or at least Finnish) – this is related to security
• More ways to pay than just credit cards
• Careful with Passwords, people forget them
 Requirements For Good E-Commerce


• Easy to find site, info and products
• Easy to navigate
• Attractive, visually pleasant
• Friendly and Personal
• Perhaps Funny (but be careful)
• Test the site & research customers’ opinions and potential customers’.
• Perhaps Gimmicks (but be careful)
• Professional in Appearance
• Treat Customer as Relationship Customer (relationship building)
• Provide a Whole Service
• Target the Audience’s needs (eg. Saga)

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