ENTREPRENEURSHIP

& E-COMMERCE © 2018 WAIRINDI DANIEL

THE INTERNET REMAINS A PLACE WHERE YOU
CAN START WITH NOTHING AND SOON
CHALLENGE THE gods.
-MARK DIMASSIMO
INTRODUCTION (INTERNET & THE CHANGING FACE OF
BUSINESS)
There is a growing interest in the use of e-commerce
as a means to perform business transactions over the
internet. It accounts for US$1.9 trillion of global
transactions (KPMG, 2017)
The most successful companies embrace the Internet
as a mechanism for transforming their companies and
for changing everything about the way they do business.
E-commerce has launched a revolution, a new
industrial order. For only few years past, the term of e-
commerce is now everywhere across the entire world.
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INTRODUCTION (INTERNET & THE CHANGING FACE OF
BUSINESS)

In the world of e-commerce, speed and

flexibility matter much more than size of the
business.
Best suited for selling on the Web are High-
volume & low-margin commodity products.
People define e-business in various ways
and images to the extent that it has no
standard definition.
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 WHAT IS E-COMMERCE?
E-business or e-commerce is often interpreted
as selling products over the internet.
In its broader sense, e-commerce can be
interpreted as the use of electronic transmission
mediums to engage in the exchange, including
buying and selling, of products and services
requiring transportation, either physically or
digitally, from location to location.
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 WHAT IS E-COMMERCE?
CONT’D …
Electronic commerce involves all sizes of
transaction bases and it requires the digital
transmission of transaction information.
In commercial point of view, e-commerce
can also be defined as transaction activities
between firms and individuals; also it involves
in the exchange of money, goods or duties.
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 WHAT IS E-COMMERCE?
CONT’D …
This definition clearly excludes email,
telephone, fax, as well as internal
computing accomplished by accounting
sales, inventory, treasure, personnel or
executive information systems.
In short, these definitions exclude inter-
organisational systems in total.
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 FORMS OF E-COMMERCE
There are many forms of commercial
transactions that can occur in daily life
from;
Business to Business (B2B)
Business to Consumer (B2C)
Consumer to Consumer (C2C)
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THE INTERNET: CHANGING THE FACE OF BUSINESS
A poll by Insureon and online small business
directory Manta also revealed:
81% of small businesses say online sales are
important or very important to their business’s
success.
Small businesses that sell products online use the
following platforms: Company website: 66%;
Amazon: 24%; eBay: 22%; Shopify: 7%; Etsy: 4%;
Alibaba: 2%; Jet: 2%; and Magento: 1%
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 THE INTERNET: CHANGING THE FACE OF BUSINESS
When asked if their revenue has increased as a result of selling
products online:
43% say it has had a significant impact.
38% say their revenue has increased moderately.
19% say selling online only had a minimal impact on revenue.
When asked about the impact of online retailers on sales:
68% report a positive impact.
32% report a negative impact.
The ecommerce trend is expected to grow this year. Business
forecaster Kiplinger predicts a 15 percent increase in web sales in
2018.
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THE INTERNET: CHANGING THE FACE OF BUSINESS

U.S. Dept. of Commerce Reported that online

sales in the U.S. totaled $119 billion in the
fourth quarter of 2017 accounting for 9.1% of
all retail sales; compared to 3.5% online retail
sales just 10 years ago.
Items purchased most often online include
books, clothing/accessories/shoes, airline
tickets, electronic equipment, and hotels.
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WHAT WEB SHOPPERS WANT
Retail Customers
1. Competitive prices
2. Well-designed presentation
3. Good selection
4. Reliable shipping
5. On-time delivery
6. Easy ordering
7. Customer support
8. Valuable product info
9. Posted privacy policy
10. User-friendly navigation
02/02/2021
Business Customers
1. On-time delivery
2. Competitive prices
3. Well-designed presentation
4. Good selection
5. Easy ordering
6. Valuable product info
7. Customer support
8. Reliable shipping
9. Posted privacy policy
10. User-friendly navigation
© 2018 WAIRINDI DANIEL 11
APPROACHES TO E-COMMERCE
Online shopping malls
Storefront building services
Internet service providers (ISPs)
Hiring professionals to design a
custom site
Building a site in-house
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ONLINE SHOPPING MALLS
Advantages:
Simplicity
Low cost
Disadvantages:
 Lack of prominence
 Lack of control over site
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 STOREFRONT-BUILDING SERVICES
An electronic storefront is an e-commerce
solution for merchants who want to host a website
that advertises their products or services and for
which consumer transactions are generated online.
An Online Storefront includes; Product display,
online ordering software, inventory management
applications, billing and online payment system,
and payment processing software, Web analytics
and secure socket layer (SSL) security.
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 STOREFRONT-BUILDING SERVICES
A shopping cart interface together with customer
check-out software, analytic interfaces for the
purpose of growing online businesses as well as
predictive analytics to anticipate future shopping
trends.
Advantages: Simplicity & Low cost in terms of
monthly charges
Disadvantages: Cookie-cutter approach &
Handle only a limited number of products
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 INTERNET SERVICE PROVIDERS
Provide many of the same features as storefront
design services but offer more flexibility and
customized designs.
Can grow with a company as its online sales
volume grows.
What to consider when choosing: Cost,
Downtime, Quality of backup systems, and
Capacity for hosting sites
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 HIRING PROFESSIONALS
Key advantage: Ability to customize a site,
making it anything an entrepreneur wants.
Major disadvantage: Cost
 A custom-designed site can be cost
 The site is even more expensive when
you want it complete both front-office
and backoffice integration
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BUILDING A SITE IN-HOUSE
Key advantage: Complete
control over the site and its design,
operation, and maintenance.
Major disadvantage: Cost of
hiring staff can be quite expensive!

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 THE INTERNET: CHANGING THE FACE OF BUSINESS
WORLD INTERNET USAGE AND POPULATION STATISTICS
JUNE 30, 2018 - Update
Penetration
Population Population Internet Users Growth Internet
World Regions ( 2018 Est.) % of World 30 June 2018
Rate (%
2000-2018 Users %
Pop.)
Africa 1,287,914,329 16.9 % 464,923,169 36.1 % 10,199 % 11.0 %
Asia 4,207,588,157 55.1 % 2,062,197,366 49.0 % 1,704 % 49.0 %
Europe 827,650,849 10.8 % 705,064,923 85.2 % 570 % 16.8 %
Latin America / Cari 652,047,996 8.5 % 438,248,446 67.2 % 2,325 % 10.4 %
bbean
Middle East 254,438,981 3.3 % 164,037,259 64.5 % 4,894 % 3.9 %
North America 363,844,662 4.8 % 345,660,847 95.0 % 219 % 8.2 %
Oceania / Australia 41,273,454 0.6 % 28,439,277 68.9 % 273 % 0.7 %
WORLD TOTAL 7,634,758,428 100.0 % 4,208,571,287 55.1 % 1,066 % 100.0 %
NOTES: (1) Internet Usage and World Population Statistics estimates in June 30, 2018. (2) CLICK on each world region name for
detailed regional usage information. (3) Demographic (Population) numbers are based on data from the United Nations Population Division. (4) Internet usage information
comes from data published by Nielsen Online, by the International Telecommunications Union, by GfK, by local ICT Regulators and other reliable sources. (5) For definitions,
navigation help and disclaimers, please refer to the Website Surfing Guide. (6) The information from this website may be cited, giving the due credit and placing a link back to
www.internetworldstats.com. Copyright © 2018, Miniwatts Marketing Group. All rights reserved worldwide.

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THE INTERNET: CHANGING THE FACE OF BUSINESS

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THE INTERNET: CHANGING THE FACE OF BUSINESS

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BENEFITS OF SELLING ON THE WEB
To provide an avenue for your entrepreneurial idea
The opportunity to increase revenues and profits.
The ability to expand their reach into global
markets.
The ability to remain open 24 hours a day, seven
days a week.
The capacity to use the web’s interactive nature to
enhance customer service.

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BENEFITS OF SELLING ON THE WEB CONT’D …
The power to educate and to inform
customers
The ability to lower the cost of doing
business.
The ability to spot new business
opportunities and to capitalize on them.
The ability to grow faster.
The power to track sales results.
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 FACTORS TO CONSIDER BEFORE
LAUNCHING INTO E-COMMERCE
How a company exploits the Web’s interconnectivity
and the opportunities it creates to transform
relationships with suppliers, customers, and others is
crucial to its success.
Web success requires a company to develop a plan
for integrating the Web into its overall strategy.
Developing a deep, lasting relationship with
customers takes on even greater importance on the
Web.
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 FACTORS TO CONSIDER BEFORE
LAUNCHING INTO E-COMMERCE CONT’D …
Creating a meaningful presence on the Web
requires an ongoing investment of resources –
time, money, energy, and talent.
Measuring the success of a Web-based sales
effort is essential to remaining relevant to
customers whose tastes, needs, and preferences
constantly change.
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 FACTORS TO CONSIDER BEFORE
LAUNCHING INTO E-COMMERCE CONT’D …
What exactly do you expect a web site to do for your
company?
How much can you afford to invest in an e-commerce
effort?
What rate of return do you expect to earn on that
investment?
How long can you afford to wait for that return?
How well suited are your products and services for selling
on the web?
How will the “back office” of your web site work?
How will you handle order fulfillment?
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 FACTORS TO CONSIDER BEFORE
LAUNCHING INTO E-COMMERCE CONT’D …
What impact, if any, will your web site have on
your company’s traditional channels of
distribution?
What mechanism will your site use to ensure
secure customer transactions?
How will your company handle customer
service for the site?
How do you plan to promote the site to draw
traffic to it?
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 FACTORS TO CONSIDER BEFORE
LAUNCHING INTO E-COMMERCE CONT’D …
What information will you collect from the
visitors to your site?
Have you developed a privacy policy?
Have you tested your site with real, live
customers to make sure that it is easy to
navigate and easy to order from?
How will you measure the success of your
company’s web site?
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 TWELVE MYTHS OF E-
COMMERCE
1. Setting up a business on the web is easy and
inexpensive
2. If I launch a site, customers will flock to it
3. Making money on the web is easy
4. Privacy is not an important issue on the web
5. The most important part of any e-commerce effort
is technology
6. “Strategy? I don’t need a strategy to sell on the
web! Just give me a web site, and the rest will take
care of itself”
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 TWELVE MYTHS OF E-COMMERCE
CONT’D …
7. On the web, customer service is not as important
as it is in a traditional retail store
8. Flash makes a web site better
9. It’s what’s up front that counts
10.E-commerce will cause brick-and-mortar retail
stores to disappear
11.The greatest opportunities for e-commerce lie in
the retail store
12.It’s too late to get on the web
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 TWELVE MYTHS OF E-COMMERCE
CONT’D …

Myth 1: If I launch a site, customers

will flock to it.

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 PROMOTION IS THE
KEY!
Include your URL on everything related to your
business
Use social media such as Facebook and You-Tube to
drive traffic to your site
Network – build relationships with other companies,
customers, trade associations, online directories, and
other Web sites to interact with customers
Make your site compatible with mobile devices
Use QR codes
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 TWELVE MYTHS OF E-COMMERCE
CONT’D …

Myth 2: Online customers are easy to please.

Experienced online shoppers tend to be
unforgiving and quick click to another site
if their shopping experience is subpar or
they cannot find the products and
information they want.
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 TWELVE MYTHS OF E-COMMERCE
CONT’D …
Myth 5: I don’t need a strategy.
►An online strategy is critical to success
►Define the target audience
►Understand customers’ needs and wants
►Create a strategy to set
your site apart from others
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 TWELVE MYTHS OF E-COMMERCE
CONT’D …
Myth 6: The most important part of an e-
commerce effort is technology.
►Understand the underlying business...
►…then use technology to develop an
online business model that provides
customer value in a profitable way.

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 TWELVE MYTHS OF E-COMMERCE
CONT’D …
Myth 7: Customer service is not important.
Study: 22% of online shoppers expect higher
levels of customer service than they do offline.
Concern:
►The average conversion rate for e-commerce
sites is just 3.2%!
►75% of Web shoppers abandon their shopping
carts without checking out.
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 THE IMPORTANCE OF SERVICE ON
THE WEB
Study: 75% of Web shoppers who fill their on-line
shopping carts become frustrated and leave the site
before checking out.
Reasons:
Shipping charges too high
Delivery times too long
Checkout process required too much information
Insufficient product information available
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REASONS FOR ABANDONING ONLINE SHOPPING CARTS

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 TIPS FOR REDUCING SHOPPING CART ABANDONMENT
RATE

Streamline the steps in the checkout process

Include a progress indicator on each
checkout page
Provide a link back to the items in the
shopping cart
Allow customers to see if an item is in stock

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 TIPS FOR REDUCING SHOPPING CART
ABANDONMENT RATE CONT’D …
Include product photos in the shopping cart
Make it easy for customers to change the
contents of their carts
Give customers the option of calling to
resolve problems they encounter during
checkout
Make it easy for customers to pay for their
online purchases.
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 TWELVE MYTHS OF E-COMMERCE
CONT’D …
Myth 8: Flashy Web site are better than simple
sites.
►Fast download times increase sales potential
Myth 9: It’s what’s up front that counts.
►Order systems and support are critical
Myth 10: Its too late to get on the Web.
►Web opportunities still exist
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 PRIVACY AND THE WEB
Privacy on the Web does matter!
Jupiter Communications survey: 64% of
Web customers distrust Web sites.
Develop a company policy for the
information you collect.
Safeguard information your company
collects from customers.
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 ENSURING WEB
PRIVACY

Take an inventory of the customer

data collected.
Post your company’s privacy policy
prominently on your Web site and
follow it.
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 STRATEGIES FOR E-
SUCCESS
Focus on a Niche in the Market
Develop a Community out of your visitors.
Attract Visitors by Giving Away “Freebies”
Make Creative Use of E-mail, but Avoid Becoming a
“Spammer”
Make Sure Your Web Site Says “Credibility”
Consider Forming Strategic Alliances
Make the Most of the Web’s Global Reach
Promote Your Web Site Online and Offline
Develop an Effective Search Engine Optimization (SEO)
Strategy
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 SEARCH ENGINE
STRATEGIES
Natural (organic) Listings – Arise as a
result of “spiders,” powerful programs search
engines use to crawl around the Web, looking
at key words, links, and other data.
Paid (sponsored) Listings – Short text ads
with links to the sponsoring company’s Web
site that appear on the results page of a search
engine.
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 SEARCH ENGINE
STRATEGIES
Beware of Click Fraud – Occurs when a
company pays for clicks that are generated by
someone who has no interest in or intent to
purchase its products or services.
Paid inclusion – when a company pays a
search engine for the right to submit either
selected pages or the contents of its entire Web
site
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 FACTORS THAT WEB SHOPPERS
SAY ARE MOST IMPORTANT

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9 - 47 9 - 47
 DESIGNING A KILLER WEB
SITE
Start with & understand your target customer.
Give Customers What They Want
Select a domain name that is consistent with the
image you want to create for your company and
register it.
Short
Memorable
Indicative of a company’s business
Easy to spell
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 DESIGNING A KILLER
WEB SITE
Be Easy to Find & Make Your Web Site Easy to
Navigate
Create a Gift Idea Center
Build Loyalty by Giving Online Customers a
Reason to Return to Your Web Site
Establish Hyperlinks with Other Businesses,
Preferably Those Selling Products or Services That
Complement Yours
Include an E-mail Option, an address and a
Telephone Number in Your Site
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 DESIGNING A KILLER WEB
SITE (CONT’D)
Give Shoppers the Ability to Track Their Orders
Online Offer Web Shoppers a Special All Their Own
Follow a Simple Design; Create fast, simple
checkout process
Assure customers that their online transactions are
secure.
Follow up every online transaction with an order-
confirmation e-mail.
Post shipping and handling charges up front
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 TIPS FOR WEBSITE
DESIGN
Avoid clutter/disorder/untidiness.
Avoid huge graphic headers that must
download first, prohibiting customers from
seeing anything else on your site as they wait (or
most likely, don’t wait).
Include a menu bar at the top of the page that
makes it easy for customers to find their way
around the site.
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 TIPS FOR WEBSITE DESIGN CONT’D…

Test your site often & Keep your site

updated.
Consider hiring a professional to design
your site.
Incorporate meaningful content in the site
that is useful to visitors, well organized, easy
to read, and current.
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 TIPS FOR A WEBSITE DESIGN
(CONT’D)
Include a “frequently asked questions” section.
If your site is heavy on content, say, 100 or more pages, or
has more that 100 products for sale, include a search tool that
allows visitors to find the product or information they want.
Avoid fancy typefaces and small fonts because they are too
hard to read.
Be vigilant for misspelled words, typographical errors, and
formatting mistakes; they destroy a site’s credibility in no time.
Avoid using small fonts on busy backgrounds; no one will
read them!
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 TIPS FOR A WEBSITE DESIGN
(CONT’D)
Use contrasting colors of text and graphics.
Be careful with frames.
Test the site on different web browsers and on different-
size monitors.
Use your web site to collect information for visitors, but
don’t tie up visitors immediately with a tedious
registration process.
Avoid automated music that plays continuously and
cannot be cut off.
Remember: Simpler usually is better.
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 DESIGNING A KILLER WEB SITE CONT’D …

Offer suggestions for related products.

Provide customer ratings and reviews.
Establish the appropriate call to action on each
page.
Provide customers with multiple payment
options.
Rely on analytics to improve your site.
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 THE PURCHASE FUNNEL

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 TRACKING WEB
RESULTS
Web Analytics – tools that measure a Web site’s
ability to attract customers, generate sales, and keep
customers coming back.
Only about 21% of small businesses use Web
analytics strategically to refashion their Web sites.
►Commerce metrics
►Visitor segmentation measurements
►Content reports
►Process measurements

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 MEASURING ONLINE
PERFORMANCE
Bounce Rate – The percentage of visitors to a site
who view a single page and leave without viewing
other pages.
Cart Abandonment Rate (CTR) – The percentage
of shoppers who place at least one item in a shopping
cart but never complete the transaction.

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 MEASURING ONLINE PERFORMANCE CONT’D …

Cost per Acquisition (CPA) – The

amount it costs to generate a purchase (or
a customer registration).
Conversion (browse-to-buy) ratio –
The proportion of visitors to a site who
actually make a purchase.

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 MEASURING ONLINE PERFORMANCE CONT’D …

Click-through rate (CTR)

CTR = number of clicks / number of impressions
The cost per acquistion (CPA)
CPA = total cost of acquiring a new customer /
number of new customers
The conversion (or browse-to-buy) ratio
Conversion rate = number of customers who made a
purchase / number of visitors to the site
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 ENSURING WEB
SECURITY
Virus detection software
Intrusion detection software
Firewall
Secure Sockets Layer (SSL)
Technology
Charge backs

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 TRACKING WEB RESULTS
Counter
Log-analysis software
Click-stream analysis
Software solutions
Commerce metrics.
Visitor segmentation measurements.
Content reports.
Process measurements.

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TRACKING WEB RESULTS
(CONT’D)
Gathering performance indicators
Clustering
Collaborative filtering
Profiling systems
Artificial intelligence (AI)

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 RETURN ON INVESTMENT
(ROI)
Common measures of ROI:
Cost per action (CPA) - the cost of producing
a particular customer action, such as registering
for a newsletter, requesting information, etc.
Cost per order (CPO) – the cost of generating
a customer order. Can be calculated across all
product lines or for a single product.
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 CONCLUSION
Know what you need to know before
launching into e-commerce
Assess the basic strategies to follow
Know what works on Web sites
Track results and listen to customers

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