Exploiting eCommerce to your advantage

David Strom

CW Post May 2001 Seminar

david@strom.com

Critical Success Factors for Physical Storefronts

• Location

• Branding

• Good service

• Good product selection

• Proper pricing and margins

• Traffic

First Problem:

• None of these translate on the ‘net!

Now Try to Agree on Definitions for Web Stores

• What determines a good location?– Position on a search page – Nearness to popular destination– Ad on a popular server

• What determines branding?– Memorable domain name– Popular search category destination

An Example of bad location: Montana Meats

• Link

• Can’t they afford their own domain name?

• www.company.com/~anything is BAD NEWS!

Determining Traffic

• Hard to do -- is it hits, page views, registered users?

• [HITS = How Idiots Track Success]

• Hard to measure -- do you count gifs? Use log files?

• No general agreement on any metrics!

Traditional Advertising Doesn’t Apply Anymore

• Can’t measure anything

• Every site has its own banner sizes

• The Web is not TV

One Working Definition of Success:

• SURVIVAL!

• If a site is still running after 12 months, and getting more traffic, it is a success.

Does a site actually have to sell something?

• Many actual eCommerce sites don’t do the complete transaction

• Require faxes or telephone calls!

• Some merely have catalogs

• Examples: Singapore Power Authority

Principles of Good eCommerce

• Easy to find merchandize

• Good service

• Individual customization is key

• Simple navigation

• Make payments easy

• Make buyer feel transaction is secure

• Communicate effectively and frequently

AMP Connect

• Have customers in 100 countries

• Speak many languages

• Produce 400 catalogs covering 135,000 items

• Mailings cost US$7MM/yr

• Fax back cost US$800,000/yr

• But you can’t buy anything directly!

Solution: “Step Searching”• Saqqara.com software to enhance Oracle database• Provide user feedback as they type in the query• Show how many matches in the database• Different mechanisms for searching:

– by part number

– by alphabetical names

– by part family

– by picture even

AMP Connect (con’t)• And can set to list parts that are available in

specific countries!• Updated daily with over 200 item changes• Detailed drawings saves time for customers

to pick the right item• Saved AMP over US$5MM in production

costs• Saved US$1MM in translation costs

First Principle of eCommerce:

• Make it easy to buy!

Amazon.com• Services frequent readers with a variety of programs

– Editorial comments– If you liked this book, you’ll like...– Notification of new books by author, topic– Simplified “1-Click” ordering

• Uses simple pages and email• Associates program for commission kickbacks• Gift certificates via email• And ... lots of books, toys, electronics, etc. to choose

from

Use Affiliates Programs Wisely

• They bring traffic to your doorstep

• Nice revenue sharing model

• Lots of them to choose from to model your own on: – AssociatePrograms.com– Refer-it.com

• Shopnow.com (payment processing)

Amazon vs Borders

• Borders link

• Cookies vs logins

• Who makes it easier to buy books?

Update your directories!

• This one is almost a year old

Another Side of Service: Repeat Business

• Make the shopper feel part of the family

• Shopping as entertainment (online auctions)

• “Do what I mean” search function (Amazon again looks at common misspellings made in the previous 24 hours for book searches)

• Periodic targeted email updates and reminders

Second Principle of eCommerce:

• Deliver solid service!

Dell positives

• Most notable site for computer buyers

• Customize the features you want via a web form

• Simplifies and personalizes the shopping experience

• WYSIWYB (buy)

Dell problems

• Site is now very complex

• Print ads contain “eValue” codes

• Too many pages to get to actual PC configuration

Now Compare with Other PC Makers

• Gateway

• IBM

• Compaq

• Micron

• … which is easiest to customize your PC?

Third Principle of eCommerce:

• Individual customization is key

BMW Motors

• Example of what not to do

• Use gratuitous graphics

• Cheesy low-res videos

• Toys, not tools

You Never Want To See This Screen!

Compare with Subaru

• Find specific information about each car

• Can price options to your particular needs

A better example: fishing licenses

• Simple, quick, and does the job with a minimum of clutter

How NOT to Design a Payment Screen

Common mistakes with payments

• Provide too few or too many order confirmation pages

• Confusing methods and misplaced buttons on order page

• Make it hard for customers to buy things

• Don’t make your customers read error screens

Fifth Principle of eCommerce:

• Make payments easy!

Making the Buyer Feel Secure: the Six Components of

eCommerce Trust• Seals of approval, logos of credit card co’s• Identifiable brand name• Ease of navigation• Order fulfillment easy to understand• Clear purpose and site presentation• Fast and simple technology

(Cheskin Research)

Perceptions of Credit Card Snooping Still Exist

• But are largely popularized by media, not consumers!

• Internet fraud stories are still common from both buyer and seller sides

• Just starting to see authentication services (such as Cybersource) ramp up

• Trust will take a long time

Sixth Principle of eCommerce:

• Make the buyer feel secure!

How Should You Use Email?

• When to communicate?

• What to communicate?

• When is email helpful and when is it spam and annoying?

Email Uses in eCommerce

• Sending order acknowledgement

• Sending shipping notification

• Purchase receipt

• Telling customer when item is in stock or on sale

• Responding to specific queries about service issues

Email Receipts Should Contain the Following Items

• Total price, including shipping • Your address and the store’s• Items ordered• Whether they are in stock or not• When they shipped• Bonus: order number and URL to view this

info online, link to UPS/Fedex tracking system

When to Send a Customer Email?

• To acknowledge the order was placed

• To say items shipped (or not ) and money changes hands

Seventh Principle of eCommerce:

• Communicate effectively and frequently!

Communicate Effectively and Frequently

• Get your response systems in place

• Tie in your storefront with any existing customer relationship management tools and call centers

• Send replies within an hour of initial order, within 24 hours of any query