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E-commerce 2021: Business. Technology. Society.

Sixteenth Edition

Chapter 4

Building an E-commerce Presence: Websites, Mobile Sites, and Apps

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Learning Objectives

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

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

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

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

4.5 Identify additional tools that can improve website performance.

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

Walmart Website Redesign: Going Upscale in Its Fight to Compete With Amazon

Class Discussion

Why is Walmart considered an underdog in the e-commerce arena?

What was Walmart’s objective in redesigning its website?

How does Walmart’s website differ from Amazon’s website?

How has the Covid-19 pandemic impacted Walmart?

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 4.1 S W O T Analysis

Figure 4.1, Page 193.

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

Alt Text

Long description: An example of a SWOT analysis describes various strengths, weaknesses, opportunities, and threats, as follows: Strengths are current sites do not address market needs, unique approach, easy navigation, better personalization, customer base growing, high value market segment, and superior social strategy. Weaknesses are limited financial resources, no prior online no existing user base, no media attention, no web design expertise, and no computer background. Opportunities are ability to address large market with unmet needs, potential to capture significant share of this market, potential to develop related sites. Threats are approach could be copied by competitors, advertisers may not want to try a new site, rapid pace of technological development, low market entry costs.

Figure 4.2 E-commerce Presence Map

Figure 4.2, Page 194.

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.

Alt Text

Long description: A map depicts the different types of e-commerce presence, the platforms on which each is used and related activities for each, as follows: Type of presence, website or app. Platform, traditional, mobile, tablet. Activity, search, display, affiliates, and sponsorships. Type of presence, social media. Platform, Facebook, Twitter, Pinterest, Instagram, and blogs. Activity, conversation, engagement, sharing, and advice. Type of presence: email. Platform, internal lists, purchased lists. Activity, newsletters, updates, and sales. Type of presence, offline media. Platform, print, radio, and t v. Activity, education, exposure, branding.

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 4.5 Systems Development Life Cycle

Figure 4.5, Page 198.

Alt Text

Long description: An illustration depicts the five major steps in the systems development life cycle, as follows: The systems development life cycle begins with systems analysis and planning, then systems design, then building the system, then testing, and then implementation service delivery. Best practices include continuous availability of 99% or more, design for scalability, build in management for end-to-end delivery, plan for growth, design system for high-speed performance, understand and optimize workload on system.

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 4.2 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 4.2 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 4.6 A Logical and Physical Design for a Simple Website

Figure 4.6 Page 201.

Alt Text

Long description: An illustration depicts a simple data flow diagram and physical design for a simple website, as follows: A, simple data flow diagram. The data flow diagram describes the flow of information requests and responses for a simple website. A website customer submits an H T T P request. Login is verified, and the visitor accepted or rejected based on information exchanged with the customer database. Catalog pages are displayed, based on information from the catalog database. The customer purchases products, and the purchase is entered into the order database. The order is fulfilled, products are shipped, order is shipped and confirmed, and sent to the website customer. B, simple physical design. A physical design translates the high level logical into the physical components, such as computers, telecommunications links, and software necessary to carry out the logical design. The customer uses cable, D S L, T 1, satellite, cellular or WI FI to connect to the internet, which is connected by cable or FIOS to your firm’s website, hosted by H P or Dell Web servers and 5 terabytes of storage. The website includes H C L Commerce, Oracle S Q L database, ad server, online catalog, mail server, and shopping cart.

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 202.

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

Alt Text

Long description: A matrix with four squares depicts the choices in building and hosting an e commerce site: either in house or outsource, as follows: At the intersection of hosting the site in house and building the site in house, a square with the following label: completely in house, build in, host in. At the intersection hosting the site in house, building the site outsource, a square with the following label: mixed responsibility, build out, host in. At the intersection of hosting the site outsource, building the site in house, a square with the following label: mixed responsibility, build in, host out. At the intersection of hosting the site outsource and building the site outsource, a square with the following label: complete in house, build out, host out.

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, Maintenance, and Optimization

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 4.10 Factors in Website Optimization

Figure 4.10, Page 209.

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

Alt Text

Long description: An illustration depicts three major factors in website optimization, as follows: Page generation factors are server response time, device-based accelerators, efficient resource allocation, resource utilization thresholds, monitoring site performance. Page delivery factors are content delivery networks, edge caching, and bandwidth. Page content factors include optimize H T M L, optimize images, site architecture, and efficient page style.

Alternative Web Development Methodologies

Prototyping

Agile development

DevOps

Component-based development

Web services

Service-oriented architecture (S O A)

Microservices

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 4.11 Two-Tier and Multi-tier E-commerce Site Architectures

Figure 4.11, Page 213.

Alt Text

Long description: An illustration provides an overview of two tier and multi tier e commerce site architectures, as follows: A, two tier architecture. In a two tier architecture, a web server responds to requests for web pages and a database server provides backend data storage. User requests for pages are sent to the web server to the content management or database server, which sends the pages back through the web server. B, multi tier architecture. A physical design describes the hardware and software needed to realize the logical design. In the web server layer, incoming internet requests are sent to the web servers. The middle tier layer includes e commerce servers, application servers, database servers, ad servers, and mail servers. The backend layer includes corporate applications, finance, production M R P, enterprise systems, and H R systems. Incoming internet requests are sent through each layer and then returned up through the layers to the web server layer.

Web Server Software

Apache

Leading web server software

Works with UNIX, 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 4.4 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

Example: Webtrends Analytics 10

Dynamic Page Generation Tools

Dynamic H T M L (D H T M L): used to change a way a web page looks but does not generate a unique web page

Dynamic page generation:

Contents stored in database and fetched when needed to create a unique web page

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 3)

Integrated environment that includes most of functionality needed

Shopping cart

Merchandise display

Order management

Merchant Server Software Packages (2 of 3)

Different options for different-sized businesses

Small and medium-sized businesses: Shopify; Bigcommerce, Vendio, open-source solutions

Mid-range: H C L Commerce; Sitecore Experience Commerce

High-end: S A P Hybris Commerce, Oracle A T G Web Commerce, Magento

Many now also available as cloud-based SaaS solutions.

Merchant Server Software Packages (3 of 3)

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 hosting, use content delivery network

Table 4.8 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 4.9 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

E-commerce Website Features That Annoy Customers (1 of 2)

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

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 4.11 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

Java, J S P, and JavaScript (including Node.j s)

JavaScript-based tools: React, Vue, Angular J S, D3, jQuery and Ajax)

Typescript

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

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

Website personalization alters site based on who is viewing it

Customization: ability to change the product to better fit the needs of the customer

E-commerce customization focuses on generating personalized product recommendations

Cookies a basic method to achieve personalization

Other more sophisticated tools available

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 users with disabilities can effectively access site

Insight on Society: Designing for Accessibility

Class discussion:

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

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 4.13 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

Flutter

React Native

Appery.io

Codiqa

Swiftic

PhoneGap

Axway 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: Duolingo’s Mobile App Powers Language Learning

Class Discussion

Why do you think Duolingo’s mobile app has been such a major factor in its success?

What business model does Duolingo use?

Why is A/B testing an important part of Duolingo’s process?

Careers in E-commerce

Position: U X Designer

Qualification/Skills

Preparing for the Interview

Possible Interview Questions

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