Unit IV Case Study

BBA 3331, Introduction to E-commerce 1

Course Learning Outcomes for Unit IV Upon completion of this unit, students should be able to:

2. Define tools of the customer interface. 2.1 Identify tools that can improve website performance.

5. Distinguish the different stages of developing a website.

5.1 Examine considerations used in developing an e-commerce website.

Course/Unit Learning Outcomes

Learning Activity

2.1 Unit Lesson Chapter 4, pp. 187–220, 232–239 Unit IV Case Study

5.1 Unit Lesson Chapter 4, pp. 187–220, 232–239 Unit IV Case Study

Reading Assignment Chapter 4: Building an E-commerce Presence: Websites, Mobile Sites, and Apps, pp. 187–220, 232– 239

Unit Lesson A well-designed and intuitive website will leave a lasting impression. Examples of well-designed e-commerce sites include Amazon (amazon.com) and Walmart (walmart.com). In this unit, we highlight the importance of building and creating a website that is effective and lasting. This unit also provides key characteristics of an effective web presence through an e-commerce website. Web Presence How does one establish a web presence? There are several methods to establish a web presence, but it really boils down to letting everyone know who and where you are. Prospective customers find their way to an e-commerce website as a result of the content developed and the efforts of the entrepreneur in communicating with potential buyers through other forms of online and social media. As the e-commerce site’s presence increases so does the potential for the return on investment (ROI). Building an e-commerce website requires a lot of detail, but studies have shown that it largely comes down to human psychology. In other words, how do prospective customers navigate and use the website, and most importantly, what is their perception of the products and services offered through the site? As Figure 1 shows, there are specific e-commerce design characteristics that need to be a part of a website to be successful.

UNIT IV STUDY GUIDE

E-commerce Presence

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The aforementioned characteristics are just a few key features necessary for an e-commerce site to compete and be successful. Furthermore, it is imperative that e-commerce enterprises increase their presence in the mobile device domains by making their websites mobile-friendly and by following best-practice strategies to leverage social media and e-commerce. The aesthetic elements are key as they represent the enterprise’s goods and services. Just as vital is the infrastructure used to build the e-commerce site. How does an entrepreneur get started with the process of building and launching an effective e-commerce website? Next, we outline the foundational aspects of building an effective web presence: 1) development of a website and 2) implementation of a user interface (UI). Envisioning All e-commerce sites begin with a purpose and a vision. This step usually includes the site’s strategy, the target audience, and major milestones to build the site. The envisioning stage needs to be supported by an examination of the business’s strengths, weaknesses, opportunities, and threats; this is often referred to as a SWOT analysis (Figure 2). A properly executed SWOT analysis will identify areas affecting the viability of the business venture. Every business has different objectives. Entrepreneurs need to know what it is they want to achieve with their online businesses, as this will facilitate prioritizing and identifying activities that are needed to set the right plan in motion. Anyone planning to build an online presence needs something to sell—an idea, product, or service. Let’s start by asking a few questions: Why do you want to be online? What is it that you want to sell? Who will buy from you? Building the right e-commerce site requires extensive research to identify competitors, assess the need of your product and/or service, and find your target audience. A business plan can help in identifying all critical elements of a business venture. According to Gleeson (n.d.), a business plan can help to accomplish the goals listed below.

Clear Value Proposition

• Remember, the website’s value proposition is the number one aspect that determines whether prospective buyers spend more than a few seconds at your website.

• A strong value proposition is the reason customers buy from your site rather than the competition.

Accurate Merchandise or

Services Description

• Descriptions of products and services have become extremely important.

• Customers care about how specific items will look once delivered; however, people buying a high-end electronic device also care about the specifications of the device along with how it looks.

Use of Accurate and High-Quality

Graphics

• Visuals are particularly important in an e- commerce website.

• One of the most proven methods of selling an item is to get it into the customer’s hands. Since this is not possible in an online environment, the best alternative is to get prospective buyers to visualize it in their hands.

Visual Hierarchy (Follow Fitts’s Law)

• The key principle of Fitts’s law is that the time needed to move a pointing device to the desired target is a function of the distance to said target combined with the size of the target (Goktürk, n.d.).

• In other words, a site’s design needs to be instinctive to navigate because the desired actions become intuitive due to the site’s visual hierarchy.

The Site Appearance is

Trustworthy

• A key aspect of any site is trustworthiness. When competing with the established players of e- commerce, the brand recognition tells buyers that you are trustworthy.

• A new e-commerce site must reflect the ability and willingness to deliver on the value proposition.

Figure 1. E-commerce design characteristics

Strengths Weaknesses

Opportunities Threats

SWOT Analysis

Figure 2. SWOT analysis matrix

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1. Map the future: A business plan helps in managing the new venture more effectively as putting ideas on paper helps visualize different scenarios along with specific objectives and goals needed to launch your e-commerce site.

2. Support growth and secure funding: A business plan outlines specific opportunities available from the business (this is also a part of the SWOT analysis). If the business needs investors, this step provides details as to the unique selling proposition (USP) of your e-commerce site.

3. Develop and communicate a course of action: A business plan assists in developing and sticking to a given course of action. Committing specific actions to paper helps in aligning the business and focusing on key activities.

4. Help manage cash flow: Cash flow management is critical to new business ventures. Gleeson (n.d.) notes that most businesses fail because they unsuccessfully manage cash flow—not because they are not profitable. Having a healthy cash flow management process also facilitates investment from third parties.

5. Support a strategic exit: At some point, the founders of the venture would want to consider exiting the business with the idea of liquidating their investments. Planning an exit strategy in the initial business plan facilitates that effort. Common business exit strategies include mergers, buyouts, and initial public offerings (IPOs).

Laudon and Traver (2018) highlight various steps needed to build and implement a successful e-commerce website. These steps include envisioning the process, drafting the business model, identifying the target audience, describing the marketplace, conducting a SWOT analysis, and developing milestones. All of these elements predominantly figure in a comprehensive business plan. The envisioning step along with creating a comprehensive business plan to support the vision and mission are the beginning stages of the process for developing an e-commerce website. The business plan, created in this stage, will guide critical decisions and changes that will take place as the site is developed. The website planning phase is a methodological approach, which is critical to a strong web presence (Sullivan, 2001).

Core concepts (Laudon & Traver, 2018)

Planning The planning stage of the process involves identifying all requirements of the new e-commerce solution and its participants, content, and target audience (Levy, 2009). The business objectives outlined in the business plan should dictate the decision as to the type of technology and information architecture needed. Information architecture refers to the layout and navigation, as well as best online practices to deliver a lasting user experience (Levy, 2009). In other words, prospective buyers will want to intuitively view, find, select, pay, and obtain products and services from the website. Best practices of website development include the elements below:

 development of the e-commerce site design (architecture, content, navigation);

 creation of functional specifications (features, processes);

 creation of the project plan (schedules, resources, contingencies);

 creation of development, testing, and production environments; and

 development of the website closing phase. The planning phase represents an outline of the major project milestones. It is an agreement of deliverables, features, priorities, and production/release dates. The goal of this phase is to develop a comprehensive solution to meet customers’ requirements.

CORE CONCEPTS

A comprehensive business plan encapsulates all of the elements of a well-thought-out e- commerce strategy. The business plan ensures a cohesive vision and serves as a blueprint for how you will operate your website (Laudon & Traver, 2018).

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The UI E-commerce websites need to provide a user experience along with providing products and services. The user or customer interface is where the website provides value to the user. A clear example is Amazon, which is where customers find what they are looking for in a few clicks of the mouse. Critical elements must be included in a website’s design to ensure a good and memorable customer experience. An enhanced customer experience includes the relevance of the information, navigation intuitiveness (Fitts’s law), searchable options, and security. Lee and Benbasat’s (2004) research showed that a UI can be broken down into seven unique characteristics, known as the seven Cs.

1. Context refers to the website design’s look and feel. 2. Content refers to the relevance of the content to the target audience, including text, graphics, and

sound. 3. Community refers to customers facilitating the generation of other prospective buyers. This is usually

done through social media. 4. Customization refers to the site’s ability to adjust to the customer’s preferences, usually done through

cookies or customer buying history. 5. Communication refers to the e-commerce site’s (company) communication medium, usually done

through e-mail, customer support, or social media. 6. Connection refers to the ability of the website to link to other relevant sites, usually other company or

partner sites. 7. Commerce refers to the site’s ability to perform safe financial transactions.

Conclusion Building an e-commerce website is not a trivial undertaking. Several factors must be taken into consideration such as software, hardware, target audience, web design elements, and organizational competence. A project plan is key when establishing a web presence as it contains all critical elements for a successful design, development, and launch of an e-commerce site.

References Gleeson, A. (n.d.). Five reasons you need a business plan. Retrieved from http://articles.bplans.co.uk/starting-

a-business/five-reasons-you-need-a-business-plan-2/364 Goktürk, M. (n.d.). 37. Fitts’s law. In The glossary of human computer interaction. Retrieved from

https://www.interaction-design.org/literature/book/the-glossary-of-human-computer-interaction/fitts-s- law

Laudon, K. C., & Traver, C. G. (2018). E-Commerce 2017: Business, technology, society (13th ed.). Boston,

MA: Pearson Education. Lee, Y. E., & Benbasat, I. (2004). A framework for the study of customer interface design for mobile

commerce. International Journal of Electronic Commerce, 8(3), 79–102. Retrieved from https://libraryresources.columbiasouthern.edu/login?url=http://search.ebscohost.com/login.aspx?direc t=true&db=bth&AN=13045340&site=ehost-live&scope=site

Levy, G. (2009, June 26). 6 crucial steps to planning your e-commerce website [Blog post]. Retrieved from

http://www.ecommercepartners.net/blog/6-crucial-steps-to-planning-your-e-commerce-website.html Sullivan, G. A. (2001). gasTix: A sample .net e-business. Retrieved from

http://www.informit.com/articles/article.aspx?p=131100&seqNum=5