Mgt 240 LectureMgt 240 Lecture

E-commerce: E-commerce:

Successful Retailing on the Successful Retailing on the WebWeb

November 18, 2004November 18, 2004

MiscellaneousMiscellaneous

Lecture homework 5 due tomorrow Lecture homework 5 due tomorrow by 5pmby 5pm If you have picture files, you have to If you have picture files, you have to

upload them to your dropbox folder tooupload them to your dropbox folder too Second lecture exam on December Second lecture exam on December

22ndnd in class in class Exam review and MIS career session Exam review and MIS career session

on Tuesday, Nov 30on Tuesday, Nov 30thth at regular class at regular class timestimes

Retail on the WebRetail on the Web

E-tail sales figures keep rising at a E-tail sales figures keep rising at a very healthy ratevery healthy rate

More potential customers on the webMore potential customers on the web

Further along the learning curve about Further along the learning curve about what workswhat works

Consolidation in retail categoriesConsolidation in retail categories

Entrance of brick and mortar retailersEntrance of brick and mortar retailers

The State of Retailing The State of Retailing OnlineOnline

What key indicators seem to be improving What key indicators seem to be improving for online retailers?for online retailers? Sales upSales up Revenues upRevenues up Percentage of all retail sales upPercentage of all retail sales up Important in certain categoriesImportant in certain categories Cost of customer acquisition downCost of customer acquisition down Marketing costs downMarketing costs down Conversion rates have improvedConversion rates have improved Highly profitable multi-channel customersHighly profitable multi-channel customers

Retailing on the Web Retailing on the Web ExamplesExamples

AmazonAmazon OverstockOverstock REIREI Land’s EndLand’s End

Retailing on the Web Best Retailing on the Web Best PracticesPractices

Home pageHome page

Retailing on the Web Best Retailing on the Web Best PracticesPractices

NavigationNavigation

Retailing on the Web Best Retailing on the Web Best PracticesPractices

Product pagesProduct pages

Retailing on the Web Best Retailing on the Web Best PracticesPractices

Checkout processCheckout process

Converting Browsers to Converting Browsers to CustomersCustomers

How can online stores improve their How can online stores improve their conversion rates?conversion rates? Site ease of useSite ease of use Improve navigationImprove navigation Simplify checkout processSimplify checkout process Opt-in emailsOpt-in emails CommunityCommunity RecommendationsRecommendations

What Causes Customers to What Causes Customers to Buy on Impulse?Buy on Impulse?

What site design features influence What site design features influence impulse buying? Why?impulse buying? Why? Not price!Not price! Search capabilitiesSearch capabilities Category structure and linksCategory structure and links Navigational easeNavigational ease Cluster recommendationsCluster recommendations Personalized recommendationsPersonalized recommendations

Are You Driving Your Are You Driving Your Visitors Away?Visitors Away?

What are some common online store What are some common online store design flaws?design flaws? Lack of quick orientation for first-time Lack of quick orientation for first-time

visitorsvisitors Hard to follow processesHard to follow processes Missing prices or shipping chargesMissing prices or shipping charges Poor graphic designPoor graphic design Poor navigational structurePoor navigational structure

Online Retailing: More than Online Retailing: More than a Web Sitea Web Site

What do customers expect from online What do customers expect from online stores?stores? Trusted brandTrusted brand Attractive surroundingsAttractive surroundings Easy-to-find and always available merchandiseEasy-to-find and always available merchandise Competitive quality and priceCompetitive quality and price Good customer serviceGood customer service Rewards for loyaltyRewards for loyalty Links between online and physical storesLinks between online and physical stores

Convenience is KeyConvenience is Key

Online stores must strive forOnline stores must strive for Ease-of-useEase-of-use Product availabilityProduct availability Site availabilitySite availability Multiple access devicesMultiple access devices Price not as importantPrice not as important Personalization, community important for Personalization, community important for

emotional connectionemotional connection Opt-in emailOpt-in email

Important E-Retail Store Important E-Retail Store FeaturesFeatures

Clarity and ease of navigationClarity and ease of navigation Fast loading pagesFast loading pages Shopper privacyShopper privacy Technical supportTechnical support Return and exchange policiesReturn and exchange policies Right look and feelRight look and feel

How Can Retail Web Sites How Can Retail Web Sites be Designed for Ease of be Designed for Ease of

Use?Use? Fewer and simpler screensFewer and simpler screens Multiple search optionsMultiple search options Appropriate category hierarchiesAppropriate category hierarchies Well thought out navigational structureWell thought out navigational structure Good product informationGood product information Support for ordering processSupport for ordering process Real-time inventory checksReal-time inventory checks Personalization opportunitiesPersonalization opportunities

Acquiring More of the Acquiring More of the Customer’s BusinessCustomer’s Business

How can cross or up-selling be How can cross or up-selling be achieved in an online environment?achieved in an online environment? Complementary or step-up item Complementary or step-up item

recommended on product pagerecommended on product page Recommendations during product Recommendations during product

configurationconfiguration Others?Others?

Fostering Customer LoyaltyFostering Customer Loyalty

How can customer loyalty be How can customer loyalty be fostered by online stores?fostered by online stores? PersonalizationPersonalization Customer serviceCustomer service Loyalty programsLoyalty programs Convenience applicationsConvenience applications

Wish listsWish lists Personalized helpPersonalized help EducationEducation

Determining Retail Web Site Determining Retail Web Site SuccessSuccess

Old measuresOld measures HitsHits Page viewsPage views Session lengthSession length

New methodsNew methods SurveysSurveys InterviewsInterviews Usability testingUsability testing Click stream analysis – data miningClick stream analysis – data mining

Obtaining Customer Obtaining Customer IntelligenceIntelligence

Customer intelligence opportunitiesCustomer intelligence opportunities Web site interaction dataWeb site interaction data Purchase historyPurchase history Registration provides demographic Registration provides demographic

detailsdetails IP address provides information about IP address provides information about

customercustomer

Using Customer IntelligenceUsing Customer Intelligence

Customer Intelligence UsesCustomer Intelligence Uses Use web-based customer knowledge in Use web-based customer knowledge in

other channelsother channels PersonalizationPersonalization Targeted marketingTargeted marketing Site designSite design Product varietyProduct variety Customer segmentationCustomer segmentation

Retail on the WebRetail on the Web

Back end processes important too!Back end processes important too! Order processingOrder processing Customer accountsCustomer accounts Communication with suppliersCommunication with suppliers InventoryInventory FulfillmentFulfillment Customer serviceCustomer service ReturnsReturns

Advantages of Brick and Click Advantages of Brick and Click RetailersRetailers

Back-end infrastructure already in placeBack-end infrastructure already in place WarehousesWarehouses Customer serviceCustomer service Existing supply chainsExisting supply chains Order processing and shippingOrder processing and shipping Brand recognitionBrand recognition Synergies between online and physical Synergies between online and physical

storesstores