Ecommerce (1)

e-commerce:
From online stores to
social networks
Michael McDonnell
Winterstorm Solutions
michael@winterstorm.ca
http://syntheticlibrarian.com/
2007-10-30

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

e-commerce - Michael McDonnell

B2C E-Commerce:
Overview

1 Online Stores

2 Advertising Networks

3 Social Networks

Online Stores:
Components & Processes
Catalogue
Customer
a
Catalogue 1 • List of Products
• Descriptions
• Prices
• Options, size, etc.
b • Pictures

Shopping Cart
Shopping
Cart 2 • A temporary list of
item to be
purchased
c
d Checkout
Payment
Collection
Checkout 3 • Billing Info
• Shipping Address
• Shipping Cost
• Record Order
• Process Payment

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

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)


Payment Process:
Internet Merchant Account
a
Store
Customer
Website

b

d
c
Charge Payment Pay the
Credit Card Gateway Merchant

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

Payment Process:
PayPal Account

Customer
a

PayPal
b c

Charge Pay the
Credit Card Merchant


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. Computers & Software 1. Food
2. Travel 2. Cars & Car Parts
3. Gift Cards 3. Pet Supplies
4. Toys 4. Appliances and tools
5. Videogames 5. Health & Beauty Products
== “Commodity” Items == “High Touch” Items

Digital Products – Ideal for Online Sale
1. Commodity-like Examples:
2. Mass-customizable • Tickets (travel, events)
3. Delivered by download • Music, Images, Video
4. No need for intermediary • Books, News, other info.
5. Global in reach • Software
Source: Shop.org; Forrester Research e-commerce - Michael McDonnell

Advertising Networks
 Online stores are now common
 Internet used to increase sales
 not just to facilitate sales

 Advertising is now big business
 US$7.9 BILLION in 1st Q 2006
 37% higher than 1st Q 2005

 Web Analytics is growing
 Analyze web data to convert visitors into
buyers

Example:
Google AdWords
• Pay-per-click • Targeted by keyword
– Price set by bid – Select keywords
– Pay when user clicks – Set maximum price for
add to appear with that
• Ads appear on keyword
– Search results
– Related Website
• Ad Position
– Other places – Determine by
competition based on
bids
http://adwords.google.com/

Example:
Google AdSense
• Display Ads • Targeted by keyword
– Get paid! – Ad keywords match
content of your
• Pay-per-click webpage
– Paid when user clicks – Ad are relevant to your
audience
• Pay-per-impression
– Paid when is displayed • Ad Appearance
1000 times – You determine size,
and appearance of
ads
http://www.google.com/adsense/

E-commerce 2.0
 Participation == Value
 For the customer
 For the business
 Examples
 YouTube
 Amazon
 E-bay
 “Professional” Bloggers


Example:
YouTube
Customers
Participate
by
distributing
the ads

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 • Blogs
– Rainbow’s End by Verner – Seth Godin
Vinge – Micropersuasion
– Pattern Recognition by – Charlene Li (Forrester
William Gibson Research)
• Non-fiction – Many-to-many
– The Tipping Point by – Apophenia (Web 2.0
Malcolm Gladwell section)
– The Long Tail by Chris
Anderson
• Articles
• Makin’ Money!
– Viral Marketing (Jurvetson
– AdWords (Pay for Ads)
1997)
– AdSense (Get Paid for
Ads) – What is Web 2.0 (O’Reilly
2005)


Questions?

michael@winterstorm.ca
http://syntheticlibrarian.com/

I would be happy to answer your
questions you have now,
or by email later.

OLD SLIDES
 All slides after this one are old slides deleted
from the presentation but preserved for
reference.


Online Stores
Customers

Banks

Suppliers •Products Payment
•Prices Your Website
Processor
•Descriptions
•Accounts

Database

Web Hosting Company

Online Stores:
Hardware Infrastructure
Web Server Database
Catalogue Server
Software Programs
1. Catalogue Data
1. Product Info
2. Shopping Cart

3. Checkout Shopping 2. Shopping Cart
Contents
Cart
4. Payment
3. Orders
Processing
4. Customer
5. Static Data
Account Info
• Images
• Web Pages Checkout


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
Browser Router Router Router
 Hackers
“sniff” and
capture data
 Encrypted Router Router Hacker Router

data can be
captured, but
not decrypted Sniffer
Server


Why SSL?
Digital Signatures
 Authentication
Browser Router Router Router
 Hackers
reroute
connections
 Server “key” Router Router Hacker Router
cannot be
faked
 Fake server
cannot pretend Server
FAKE
Server
to be real one


3rd Party Hosted Shopping
and Payment
1
Customer Catalogue

2 Online Store

Shopping Payment
Cart Processing
3
Company
4
Payment
Checkout
Collection


3rd Party Payment Only
1
Online
Customer Catalogue
Store
Website
2

Shopping Payment
Cart Processing
Company
3

4
Payment
Checkout
Collection


Payment Processing
Hidden From User
1
Customer Catalogue
Online
2 Store
Website
Shopping Payment
Cart Processing
Company
3

4 Payment 5 Payment
Checkout
Collection Gateway


B2C Marketing: Spawn.com Video
 http://highered.mcgraw-
hill.com/sites/007305223x/instructor_view0/vi
deos.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


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)

Recommandé

Recommandé

Contenu connexe

Tendances

Tendances (8)

En vedette

En vedette (20)

Similaire à Ecommerce (1)

Similaire à Ecommerce (1) (20)

Plus de Onkar Sule

Plus de Onkar Sule (11)

Dernier

Dernier (20)

Ecommerce (1)