Ecom101-project

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E-Commerce 2018: Business. Technology. Society

Fourteenth Edition

Chapter 3

Building an E-Commerce Presence

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Learning Objectives

3.1 Understand the questions you must ask and answer, and the steps you should take, in developing an e-commerce presence.

3.2 Explain the process that should be followed in building an e-commerce presence.

3.3 Identify and understand the major considerations involved in choosing web server and e-commerce merchant server software.

3.4 Understand the issues involved in choosing the most appropriate hardware for an e-commerce site.

3.5 Identify additional tools that can improve website performance.

3.6 Understand the important considerations involved in developing a mobile website and building mobile applications.

Slide 2 is list of textbook LO numbers and statements

The Financial Times: A Remodel for 21st Century Publishing Profitability

Class Discussion

What were the Financial Times’ objectives in redesigning its e-commerce presence?

What considerations, if any, unique to the newspaper business were involved?

What did the Financial Times do to meet the needs of mobile device users?

Imagine Your E-Commerce Presence (1 of 3)

What’s the idea? The vision includes:

Mission statement

Target audience

Intended market space

Strategic analysis

Marketing matrix

Development timeline

Preliminary budget

Imagine Your E-Commerce Presence (2 of 3)

Where’s the money?

Business model(s)

Revenue model(s)

Who and where is the target audience?

Demographics, lifestyle, consumption patterns, etc.

What is the ballpark? Characterize the marketplace

Size, growth, demographics, structure

Imagine Your E-Commerce Presence (3 of 3)

Where’s the content coming from?

Know yourself—S W O T analysis

Develop an e-commerce presence map

Develop a timeline: Milestones

How much will this cost?

Simple website: up to $5000

Small startup: $25,000 to $50,000

Large corporate website: $100,000+ to millions

Figure 3.1 S W O T Analysis

Figure 4.1, Page 197.

A SWOT analysis describes your firm’s strengths, weaknesses, opportunities, and threats.

Figure 3.2 E-Commerce Presence Map

Figure 4.2, Page 198.

An e-commerce presence requires firms to consider the four different kinds of presence, and the platforms and activities associated with each type of presence.

Building an E-Commerce Site: A Systematic Approach

Most important management challenges:

Developing a clear understanding of business objectives

Knowing how to choose the right technology to achieve those objectives

Main factors to consider

Management

Hardware architecture

Software

Design

Telecommunications

Human resources

Planning: The Systems Development Life Cycle

Methodology for understanding business objectives of a system and designing an appropriate solution

Five major steps:

Systems analysis/planning

Systems design

Building the system

Testing

Implementation

Figure 3.5 Website Systems Development Life Cycle

Figure 4.5, Page 202.

System Analysis/Planning

Business objectives:

List of capabilities you want your site to have

System functionalities:

List of information system capabilities needed to achieve business objectives

Information requirements:

Information elements that system must produce in order to achieve business objectives

Table 3.2 System Analysis, Business Objectives, System Functionalities, and Information Requirements for a Typical E-Commerce Site (1 of 2)

Business Objective	System Functionality	Information Requirements
Display goods	Digital Catalog	Dynamic text and graphics catalog
Provide product information	Product database	Product description, stocking numbers, inventory levels
Personalize/customize product	Customer on-site tracking	Site log for every customer visit; data mining capability to identify common customer paths and appropriate responses
Engage customers in conversations	On-site blog; user forums	Software with blogging and community forum functionality
Execute a transaction	Shopping cart/payment system	Secure credit card clearing; multiple payment options
Accumulate customer information	Customer database	Name, address, phone, and e-mail for all customers; online customer registration

Table 3.2 System Analysis, Business Objectives, System Functionalities, and Information Requirements for a Typical E-Commerce Site (2 of 2)

Business Objective	System Functionality	Information Requirements
Provide after-sale customer support	Sales database	Customer I D, product, date, payment, shipment date
Coordinate marketing/advertising	Ad server, e-mail server, e-mail, campaign manager, ad banner manager	Site behavior log of prospects and customers linked to e-mail and banner ad campaigns
Understand marketing effectiveness	Site tracking and reporting system	Number of unique visitors, pages visited, products purchased, identified by marketing campaign
Provide production and supplier links	Inventory management system	Product and inventory levels, supplier I D and contact, order quantity data by product

Systems Design: Hardware and Software Platforms

System design specification:

Description of main components of a system and their relationship to one another

Two components of system design:

Logical design

Data flow diagrams, processing functions, databases

Physical design

Specifies actual physical, software components, models, and so on

Figure 3.6(a) Logical Design for a Simple Website

(a) Simple Data Flow Diagram

This data flow diagram describes the flow of information requests and responses for a sample Web site

Figure 4.6(a), Page 205.

This data flow diagram describes the flow of information requests and responses for a simple website.

Figure 3.6(b) Physical Design for a Simple Website

Figure 4.6(b), Page 205.

A physical design describes the hardware and software needed to realize the logical design.

Building the System: In-House Versus Outsourcing

Outsourcing: Hiring vendors to provide services involved in building site

Build own versus. outsourcing:

Build your own requires team with diverse skill set; choice of software tools; both risks and possible benefits

Host own versus. outsourcing

Hosting: Hosting company responsible for ensuring site is accessible 24/7, for monthly fee

Co-location: Firm purchases or leases Web server (with control over its operation), but server is located at vendor’s facility

Figure 4.7 Choices in Building and Hosting

Figure 4.7, Page 206.

You have a number of alternatives to consider when building and hosting an e-commerce site.

Insight on Business: Weebly Makes Creating Websites Easy

Class Discussion

What value does Weebly offer to small businesses?

Are there any drawbacks to using Weebly to create an e-commerce presence?

How are service providers like Weebly changing the nature of e-commerce?

Testing the System

Testing

Unit testing

System testing

Acceptance testing

A/B testing (split testing)

Multivariate testing

Implementation and Maintenance

Systems break down unpredictably

Maintenance is ongoing

Maintenance costs: Similar to development costs

A $40K e-commerce site may require $40K annually to upkeep

Benchmarking

Figure 3.10 Factors in Website Optimization

Figure 4.10, Page 213.

Website optimization requires that you consider three factors: page content, page generation, and page delivery.

Simple versus. Multi-Tiered Website Architecture

System architecture

Arrangement of software, machinery, and tasks in an information system needed to achieve a specific functionality

Two-tier

Web server and database server

Multi-tier

Web application servers

Backend, legacy databases

Figure 3.11(a) Two-Tier E-Commerce Architecture

Figure 4.11(a), Page 215.

In a two-tier architecture, a web server responds to requests for web pages and a database server provides backend data storage.

Figure 3.11(b) Multi-Tier E-Commerce Architecture

Figure 4.11(b), Page 215.

In a multi-tier architecture, a web server is linked to a middle-tier layer that typically includes a series of application servers that perform specific tasks, as well as to a backend layer of existing corporate systems.

Web Server Software

Apache

Leading web server software

Works with U N I X, Linux operating systems

Reliable, stable, part of open software community

Microsoft’s Internet Information Server (I I S)

Second major web server software

Windows-based

Integrated, easy-to-use

Table 3.4 Basic Functionality Provided by Web Servers

Functionality	Description
Processing of H T T P requests	Receive and respond to client requests for H T M L pages
Security services (Secure Sockets Layer)/ Transport Layer Security	Verify username and password; process certificates and private/public key information required for credit card processing and other secure information
File Transfer Protocol	Permits transfer of very large files from server to server
Search engine	Indexing of site content; keyword search capability
Data capture	Log file of all visits, time, duration, and referral source
E-mail	Ability to send, receive, and store e-mail messages
Site management tools	Calculate and display key site statistics, such as unique visitors, page requests, and origin of requests; check links on pages

Site Management Tools

Basic tools included in all web servers

Verify that links on pages are still valid

Identify orphan files

Third-party software for advanced management

Monitor customer purchases

Marketing campaign effectiveness

Keep track of hit counts and other statistics

E.g. Webtrends Analytics 10

Dynamic Page Generation Tools

Dynamic page generation:

Contents stored in database and fetched when needed

Common tools:

C G I, A S P, J S P, O D B C, J D B C

Advantages

Lowers menu costs

Permits easy online market segmentation

Enables cost-free price discrimination

Enables content management system (C M S)

Application Servers

Web application servers:

Provide specific business functionality required for a website

Type of middleware

Isolate business applications from Web servers and databases

Single-function applications being replaced by integrated software tools that combine all functionality needed for e-commerce site

E-Commerce Merchant Server Software

Provides basic functionality for sales

Online catalog

List of products available on website

Shopping cart

Allows shoppers to set aside, review, edit selections, and then make purchase

Credit card processing

Typically works in conjunction with shopping cart

Verifies card and puts through credit to company’s account at checkout

Merchant Server Software Packages (1 of 2)

Integrated environment that includes most of functionality needed

Shopping cart

Merchandise display

Order management

Two main options

E-commerce merchant service sites (e.g. Yahoo Aabaco Small Business)

Open-source merchant server software

Merchant Server Software Packages (2 of 2)

Key factors in selecting a package

Functionality

Support for different business models, including (m-commerce)

Business process modeling tools

Visual site management and reporting

Performance and scalability

Connectivity to existing business systems

Compliance with standards

Global and multicultural capability

Local sales tax and shipping rules

Choosing Hardware

Hardware platform:

Underlying computing equipment needed for e-commerce functionality

Objective:

Enough platform capacity to meet peak demand without wasting money

Important to understand the factors that affect speed, capacity, and scalability of a site

Right-Sizing Your Hardware Platform: the Demand Side

Customer demand:

Most important factor affecting speed of site

Factors in overall demand:

Number of simultaneous users in peak periods

Nature of customer requests (user profile)

Type of content (dynamic versus. static Web pages)

Required security

Number of items in inventory

Number of page requests

Speed of legacy applications

Right-Sizing Your Hardware Platform: the Supply Side

Scalability:

Ability of site to increase in size as demand warrants

Ways to scale hardware:

Vertically

Increase processing power of individual components

Horizontally

Employ multiple computers to share workload

Improve processing architecture

Outsource to cloud service, C D N

Table 3.8 Vertical and Horizontal Scaling Techniques

Technique	Application
Use a faster computer	Deploy edge servers, presentation servers, data servers, etc.
Create a cluster of computers	Use computers in parallel to balance loads.
Use appliance servers	Use special-purpose computers optimized for their task.
Segment workload	Segment incoming work to specialized computers.
Batch requests	Combine related requests for data into groups, process as group.
Manage connections	Reduce connections between processes and computers to a minimum.
Aggregate user data	Aggregate user data from legacy applications in single data pools.
Cache	Store frequently used data in cache rather than on the disk.

Table 3.9 Improving the Processing Architecture of Your Site

Architecture Improvement	Description
Separate static content from dynamic content	Use specialized servers for each type of workload.
Cache static content	Increase R A M to the gigabyte range and store static content in R A M.
Cache database lookup tables	Use cache tables used to look up database records.
Consolidate business logic on dedicated servers	Put shopping cart, credit card processing, and other C P U-intensive activity on dedicated servers.
Optimize A S P code	Examine your code to ensure it is operating efficiently.
Optimize the database schema	Examine your database search times and take steps to reduce access times.

Other E-Commerce Site Tools

Website design: Basic business considerations

Enabling customers to find and buy what they need

Tools for search engine optimization

Search engine placement

Metatags, titles, content

Identify market niches

Offer expertise

Links

Buy ads

Local e-commerce

Table 3.10 E-Commerce Website Features That Annoy Customers (1 of 2)

Feature

Requiring user to view ad or intro page before going to website content

Pop-up and pop-under ads and windows

Too many clicks to get to the content

Links that don’t work

Confusing navigation; no search function

Requirement to register and log in before viewing content or ordering

Slow loading pages

Content that is out of date

Table 3.10 E-Commerce Website Features That Annoy Customers (2 of 2)

Inability to use browser’s Back button

No contact information available (web form only)

Unnecessary splash/flash screens, animation, etc.

Music or other audio that plays automatically

Unprofessional design elements

Text not easily legible due to size, color, format

Typographical errors

No or unclear returns policy

Table 3.11 The Eight Most Important Factors in Successful E-Commerce Site Design

Factor	Description
Functionality	Pages that work, load quickly, and point the customer toward your product offerings
Informational	Links that customers can easily find to discover more about you and your products
Ease of use	Simple foolproof navigation
Redundant navigation	Alternative navigation to the same content
Ease of purchase	One or two clicks to purchase
Multi-browser functionality	Site works with the most popular browsers
Simple graphics	Avoids distracting, obnoxious graphics and sounds that the user cannot control
Legible text	Avoids backgrounds that distort text or make it illegible

Tools for Interactivity and Active Content

C G I (Common Gateway Interface)

A S P (Active Server Pages)/A S P.NET

Java, J S P, and JavaScript

ActiveX and V B Script

ColdFusion

P H P, Ruby on Rails, Django

Other design elements:

Widgets, mashups

Personalization Tools

Personalization

Ability to treat people based on personal qualities and prior history with site

Customization

Ability to change the product to better fit the needs of the customer

Primary method to achieve personalization

The Information Policy Set

Set of public statements declaring how site will treat customers’ personal information that is gathered by site

Accessibility rules

Set of design objectives that ensure disabled users can effectively access site

Insight on Society: Designing for Accessibility

Class discussion:

Why might some merchants be reluctant to make their websites accessible to disabled users?

How can websites be made more accessible?

Should all websites be required by law to provide “equivalent alternatives” for visual and sound content?

What additional accessibility problems do mobile devices pose?

Developing a Mobile Website and Building Mobile Applications

Types of m-commerce software

Mobile website

Responsive Web design

Mobile Web app

Native app

Hybrid app

Runs inside native container

App distribution

Based on H T M L5, C S S, JavaScript

Planning and Building a Mobile Presence

Identify business objectives, system functionality, and information requirements

Choice:

Mobile website or mobile Web app

Less expensive

Native app

Can use device hardware, available offline

Table 3.13 Unique Features That Must be Taken into Account When Designing a Mobile Presence

Feature	Implications For Mobile Platform
Hardware	Mobile hardware is smaller, and there are more resource constraints in data storage and processing power.
Connectivity	The mobile platform is constrained by slower connection speeds than desktop websites.
Displays	Mobile displays are much smaller and require simplification. Some screens are not good in sunlight.
Interface	Touch-screen technology introduces new interaction routines different from the traditional mouse and keyboard. The mobile platform is not a good data entry tool but can be a good navigational tool.

Mobile Presence Design Considerations

Platform constraints

Graphics, file sizes

Mobile first design

Desktop website design after mobile design

Responsive web design (R W D)

C S S site adjusts layout of site according to device screen resolutions

Adaptive web design (A W D)

Server delivers different templates or versions of site optimized for device

Cross-Platform Mobile App Development Tools

Objective C, Java

Low cost, open-source alternatives

Appery.io

Codiqa

PhoneGap

MoSync

Appcelerator

Mobile Presence: Performance and Cost Considerations

Mobile first design: Most efficient

Mobile website:

Resizing existing website for mobile access is least expensive

Mobile web app:

Can utilize browser A P I

Native app:

Most expensive; requires more programming

Insight on Technology: Carnival Cruise Ships Go Mobile

Class Discussion

What influenced Carnival in deciding to create a mobile app?

Are there any disadvantages in making a mobile app a central part of the Carnival Cruise experience?

How will the Ocean Medallion system add value to the cruising experience?

Careers in E-Commerce

Position: U X Designer

Qualification/Skills

Preparing for the Interview

Possible Interview Questions