Ecommerce (1)

e-commerce:From online stores to

social networks

Michael McDonnell

Winterstorm Solutions

[email protected]

http://syntheticlibrarian.com/

2007-10-30

mailto:[email protected]


e-commerce - Michael McDonnell

My Background

E-Commerce Experience

• TELUS Charitable Giving System ($X,000,000+)

• Skibanff.com ($X00,000)

• Bernard Callebaut Chocolate e-store ($X0,000)

• E-commerce infrastructure at TELUS ($X0,000)

• Mortgage Application for many Credit Unions


Online Stores

Advertising Networks

Social Networks

B2C E-Commerce: Overview

1

2

3


Online Stores:Components & Processes

Customer Catalogue

ShoppingCart

CheckoutPaymentCollection

a

b

c

d

Catalogue• List of Products• Descriptions• Prices• Options, size, etc.• Pictures

1

Shopping Cart• A temporary list of

item to be purchased

2

Checkout• Billing Info• Shipping Address• Shipping Cost• Record Order• Process Payment

3


Online Store Example:Bubblehut.ca

http://www.bubblehut.ca Site sells soaps and candles The website is just a catalogue

No database at all Just “flat” files stored on the web server

All “e-commerce” is handled by the 3rd party Shopping cart Checkout Payment processing

Paypal never tells bubblehut your CC info

http://www.bubblehut.ca/


Online Store Example:Chapters.ca

http://chapters.ca/ Site sells books The website has an extensive catalogue

BIG Database Probably uses software called “endeca” (very popular

for high-end retail and large university libraries) All “e-commerce” is handled “on-site”

Shopping cart Checkout Payment processing (with the exception of payment

clearing)

http://chapters.ca/


Pay theMerchant

Payment Process:Internet Merchant Account

Customer StoreWebsite

PaymentGateway

a

b

c d

ChargeCredit Card

Example: http://www.beanstream.com/

http://www.beanstream.com/


Pay theMerchant

Payment Process:PayPal Account

Customer

PayPal

a

b c

ChargeCredit Card


Payment Security:Virtual Accounts at Citi Bank


Payment Secutiy:Visa Chip Cards

A typical plastic card with an embedded computer chip and microcomputer.

Enables encryption of confidential information and personalization of usage limits.

A card reader reads the encrypted data, and password authentication is used to verify users.


Payment Security:Mastercard SecureCode


Online Purchase Behaviour

Most Purchased Least Purchased

1. Food2. Cars & Car Parts3. Pet Supplies4. Appliances and tools5. Health & Beauty Products== “High Touch” Items

1. Computers & Software2. Travel3. Gift Cards4. Toys5. Videogames== “Commodity” Items

Digital Products – Ideal for Online Sale

1. Commodity-like2. Mass-customizable3. Delivered by download4. No need for intermediary5. Global in reach

Examples:• Tickets (travel, events)• Music, Images, Video• Books, News, other info.• Software

Source: Shop.org; Forrester Research


Advertising Networks Online stores are now common

Internet used to increase salesnot just to facilitate sales

Advertising is now big businessUS$7.9 BILLION in 1st Q 200637% higher than 1st Q 2005

Web Analytics is growingAnalyze web data to convert visitors into

buyers


Example:Google AdWords

• Pay-per-click– Price set by bid– Pay when user clicks

• Ads appear on– Search results– Related Website– Other places

• Targeted by keyword– Select keywords– Set maximum price for add to appear with that

keyword

• Ad Position– Determine by competition based on bids

http://adwords.google.com/



Example:Google AdSense

• Display Ads– Get paid!

• Pay-per-click– Paid when user clicks

• Pay-per-impression– Paid when is displayed 1000 times

• Targeted by keyword– Ad keywords match content of your webpage– Ad are relevant to your audience

• Ad Appearance– You determine size, and appearance of ads

http://www.google.com/adsense/



E-commerce 2.0 Participation == Value

For the customer For the business

ExamplesYouTubeAmazonE-bay “Professional” Bloggers


Example:YouTube

Customers

Participate by

distributing

the ads

http://www.youtube.com/watch?v=zBu5dL4QCnY

http://www.youtube.com/watch?v=zBu5dL4QCnY


Example: Amazon

user generated content Reviews Ratings Buying Patterns

“People who bought this book also bought…”

Online Bookstore or Online Community?

More participation = More value


Example: E-bay

Customer-to-Customer (C2C) Sales

Customer Participation IS the business Reputation Ratings Payment Processing

More participation = More value


Example: Professional Bloggers

FREE Content PAID for Advertisements

Goal: attract an ATTENTION Goal: find an AUDIENCE

Audience Participation Builds COMMUNITY

More participation = More value (to community)


Light Reading• Fiction

– Rainbow’s End by Verner Vinge– Pattern Recognition by William Gibson

• Non-fiction– The Tipping Point by Malcolm Gladwell– The Long Tail by Chris Anderson

• Makin’ Money!– AdWords (Pay for Ads)– AdSense (Get Paid for Ads)

• Blogs– Seth Godin– Micropersuasion– Charlene Li (Forrester Research)– Many-to-many– Apophenia (Web 2.0 section)

• Articles– Viral Marketing (Jurvetson 1997)– What is Web 2.0 (O’Reilly 2005)



http://sethgodin.typepad.com/

http://www.micropersuasion.com/

http://blogs.forrester.com/charleneli/

http://many.corante.com/

http://www.zephoria.org/thoughts/archives/web20/

http://www.dfj.com/cgi-bin/artman/publish/steve_tim_may97.shtml

http://www.oreillynet.com/pub/a/oreilly/tim/news/2005/09/30/what-is-web-20.html


Questions?

[email protected]://syntheticlibrarian.com/

I would be happy to answer your questions you have now,

or by email later.

mailto:[email protected]



OLD SLIDES All slides after this one are old slides deleted

from the presentation but preserved for reference.


• Products• Prices• Descriptions• Accounts

Your Website

Database

Web Hosting Company

Suppliers

Online Stores

Customers

Banks

PaymentProcessor


Online Stores:Hardware Infrastructure

Catalogue

ShoppingCart

Checkout

Software Programs

1. Catalogue

2. Shopping Cart

3. Checkout

4. Payment Processing

5. Static Data• Images• Web Pages

Web Server Database Server

Data

1. Product Info

2. Shopping Cart Contents

3. Orders

4. Customer Account Info


Early e-commerce:Online Stores

Internet used to conduct retail sales (B2C)

A bit of history: Problem: No Security = No Sales

Solution: Encryption and Digital Signatures SSL : Secure Socket Layer HTTPS = HTTP + SSL (Security)


Why SSL?Encryption

Encryption Hackers

“sniff” and capture data

Encrypted data can be captured, but not decrypted

Browser Router

Server

Router Router

Router RouterRouter Hacker

Sniffer


Why SSL?Digital Signatures

Browser Router

Server

Router Router

Router RouterRouter Hacker

FAKEServer

Authentication Hackers

reroute connections

Server “key” cannot be faked

Fake server cannot pretend to be real one


Online Store

3rd Party Hosted Shopping and Payment

Customer Catalogue

ShoppingCart

Checkout PaymentCollection

1

2

3

4

PaymentProcessingCompany


OnlineStore

Website

3rd Party Payment Only

Customer Catalogue

ShoppingCart


1

2

3

4



Payment Processing Hidden From User

Customer Catalogue

ShoppingCart


1

2

3

4


PaymentGateway

5

OnlineStore

Website


B2C Marketing: Spawn.com Video

http://highered.mcgraw-hill.com/sites/007305223x/instructor_view0/videos.htm#

http://highered.mcgraw-hill.com/sites/007305223x/instructor_view0/videos.htm

http://highered.mcgraw-hill.com/sites/007305223x/instructor_view0/videos.htm


Future e-commerce:Web 2.0

Collaboration and Participation Read+WRITE vs Read-ONLY Examples

Flickr http://flickr.com/

Del.ico.us http://del.ico.us/

AskMetaFilter http://ask.metafilter.com

http://flickr.com/

http://del.ico.us/

http://ask.metafilter.com/


Example: My Space & Facebook

“Social Networks” PAID for Advertisements PAID for Customer Profile Information??

Goal: develop a NETWORK

Audience Participation Reveals IDENTITY Builds COMMUNITY

More participation = More value (to business)

Ecommerce (1)

Economy & Finance

Transcript of Ecommerce (1)