E-Business

• The share of e-commerce in the complete retail business sales volume (B2C) is still low (around 10%). The differences between the industries are considerable.
• B2C e-commerce sales increase from year to year, while the traditional sales channel stagnate in the most industries.
• E-commerce is an additional trade form. The conventional trade forms continue to exist but they have to suffer decreasing sales.
• In some industries, e-commerce causes significant transformations, e.g. in media, travel.
• If the automated electronic business transactions between companies are included, the B2B e-commerce volume is much larger than the volume of B2C e-commerce.

• Pure online suppliers (pure players), e.g. Amazon, ebookers, 121time
• Mail-order merchants with online channel beneath other channels (phone, e-mail, based on print catalogue) , e.g. La Redoute, Otto
• Stationary merchants (physical stores) with online channel, e.g. coop@home
•  Multichannel suppliers with combinations of physical stores, ecommerce, printed catalogues with the potential of providing crosschannel services, e.g. Weltbild, Exlibris, Manor, Digitec, Hotelplan
• Manufacturers with online direct sales, e.g. Freitag, Swiss
• Electronic marketplaces, e.g. eBay, Ricardo, Siroop (from 2016 to 2019)
• Flash-sale suppliers (with offers limited in time or quantity), e.g. Groupon, DeinDeal, QoQa

Buyer during the buying process

• Inform about product
• Agree with conditions
• Select payment methods and confirm that you are willing to buy

Supplier during the selling process

• Give conditions
• Deliver products on time
• Send invoice

• E-commerce is the support of business relationships and processes of a company with its customers using networked information technology.
• E-commerce can comprise one or more transaction phases
• Mostly, the term e-commerce refers to transaction processes in which at least the agreement phase takes place online. Companies usually use this understanding of the term for defining their e-commerce sales.
• On the other hand, this understanding excludes many variations of ecommerce, specifically in the are of cross-channel services. This is the reason to use a broader understanding of e-commerce

1. Animation phase
2. Information phase
3. Agreement phase
4. Fulfillment phase
5. Loyalty phase

• 42.5% Webshop, from which already ordered
• 28.2% browser
• 7.1% price comparison pages
• 3.6% website of the producer
• 2.5% other webshops
• 2.1% websites with product test reviews
• 1.3% travel and hotel rating portal
• 0.5% online magazines
• 0.5% opinion portal
• 0.1% social network-website
• 0.1% QA-portal
• 4.2% others
• 7.3% don't know

• Offline Marketing
  • Brands of the supplier/vendor
  • Offline advertisements (newspaper, poster, radio, TV, etc.)
  • Communicate domain name offline
  • Cross-channel promotion
• Online Marketing
  • Select a useful domain name
  • Search-engine marketing or optimization (“the power of Google …”)
  • Price comparison services like toppreise.ch, preissuchmaschine.ch, kayak.com
  • Newsletters, social media
  • Sponsoring, banner advertising, link change
• Affiliate programmes (brokers as partners)
• Awards for innovation, activities, projects, publications, also together with VIPs, trade fairs, associations, journals, etc

• Couponing (e.g. groupon, DeinDeal)
• Club shopping (e.g. eboutic, FashionFriends)
• Live shopping (e.g. DayDeal, QoQa)
• Social shopping (e.g. Stylefruits, Pinterest)
• Curated shopping
• Flash sales
• Promotion (combining different offers to get free stuff)

Search Engine Marketing

Search Engine Marketing

• Search engine optimization (SEO)
  • Goal: optimise the web site in view of the fact that it should be listed in the organic search results when users search for certain search terms
  • The organic search results are clicked much more often than the paid search results
  • Search engines use many different indicators to calculate the relevance of a web site, e.g. meta-tags, keywords in the content
• Search Engine Advertising (SEA)
  • Pay for advertisements displayed when users search for certain search terms
  • The price is determined by the demand ( and other factors) and usually paid per click.
  • Also called keyword advertising, pay per click advertising, paid search
  • Example. Google adwords.

Search Engine Optimization = SEO

Search Engine Advertising = SEA

• How can we create access to prospective customers?
• How and where does the need of the potential customer originate?
• What is the real need of your potential customer?
• How does your potential customer use the internet at the moment of perceiving his or her needs?
• What and who stimulates and influences customer needs?
• How can we be different compared to our competitors?

Ask questions:

• Which information does the prospective customer need to make his/her decision?
• What makes the shopping decision difficult for the customer and what makes great fun?
• How can expensive, time-consuming or difficult information processes be made easier?
• Does the customer find the products and the information about it?
• Does the platform support smartphones and tablets?
• Are repeated purchases supported by useful functions?

The goal of a supplier in the animation phase is to get the attention of potential buyers and to get the customer to think they need their products/services

Information intensive product programme presented with details:

• Multilinugal
• Always updated
• With individual prices
• Availability
• Connection to back-end systems is necessary

• Initial situation: The (potential) customer is convinced of the product or offering and would like to buy it.
• Negotiate and make a contract
  • The customer needs information about prices, rules for orders (e.g. the minimum order), guarantees, conditions of delivery, terms of payment, etc.
  • Generating a contract
• The usual B2C-order process in e-commerce:
  1. Choose product
  2. Fill the shopping basket
  3. Read the terms of business
  4. Click the "accept button"
  5. E-Mail with confirmation of order is sent
  6. Contract is made

• Up-selling
  • Suggest a product with a higher margin
• Cross-selling
  • Recommend complementary products, e.g. printer and toner cartridges
• Cross-referencing
  • Lead customer to other products or product groups

• Is the check-out process (conclusion of the contract) simple, clear, fast and secure?
• Are prices, delivery times, withdrawal terms, guarantee, etc. clarified for a purchase?
• Is there a hotline in case of problems?
• Have active selling measures like up- and cross-selling been applied?
• Can products and services be configured online?

Fulfillment is the satisfaction of a contract within a buying transaction.

Means transfer of ownership from supplier to customer and payment from customer to supplier.

Supermarket

• Customer comes to the store
• Customer keeps to store opening times
• Customer picks (available) products
• Customer queues up at the checkout counter
• Customer pays immediately
• Customer returns empties, exchanges, complaints by himself

Online shop

• Product comes to the customer
• Customers are to be found only in individual time slots
• Merchant picks products (availability critically)
• Payment function must be available immediately
• Merchant usually carries risks and costs of the online payment
• Merchant must prepare for returns and (if necessary) repayments

• Availability of the offered goods
• Height of the logistics costs (warehouse, stock and distribution)
• Delivery to the customer (place and time, handing-over)
• Coping with returns
• Current topics in logistics:
  • Delivery in the evening, flexible delivery places and time
  • Next-day, same-day delivery
  • Delivery to pick-up stations (stores, fuel stations, kiosks, lockers, drive-ins)

Offline Payment (outside check-out process)

• Payment order, bank transfer (e-banking or at the counter, in advance or on invoice)
• Direct debit (in advance or after delivery)
• Cash, debit card(e.g. maestro card, postFinance card) or credit card(e.g. master card, visa, american express) at pick-up station
• Cash on delivery

Online payment (during check-out process)

• Credit card (data transfer often via an online gateway to a payment service provider (PSP))
• Online payment account, e.g. paypal, click2pay
• Direct billing via phone bill
• E-banking, billing systems, e.g. paynet, yellowbill

Payment principles

• Pre-paid (e.g. Twint, Skrill, bank transfer in advance)
• Pay now (e.g. iDEAL, cash at the cash desk)
• Post-paid (e.g. payment on invoice)

Overall payment situation

• Mainly traditional payment systems are in use, in particular bank transfer on invoice and credit card.
• Credit risks are high for the merchants.
• Most merchants check the credit worthiness of the customer before offering payment on invoice.

System service providers support fulfillment processes

Is in between the agreement and the fulfillment phase and is called extended fulfillment process.

It includes payment services, platform services and logistics services.

Blacksocks example:

• Business model= socks by subscription
• Marketing and sales promotion
• Purchasing
• Static web site
• Customer service

The system service provider supports blacksocks by:

• Operation of the online shop
• Operation of the ERP system
  • Master data
  • Order processing
  • Accounts receivable management
  • Interfaces to partners
• Stock management
• Packing and shipping
• payment

• What kind of services are critical in logistics (warehousing, shipping, handing-over, return management)?
• Is it possible for the customer to adjust date and location of handing-over?
• If the customer wants to change the order: Do we have an efficient change management?
• Does the customer need information regarding order and delivery status?
• What kind of payment system is suitable?

Customer relationship management is a customer-oriented management approach. Information systems (1) provide the necessary knowledge to support the front-office processes in marketing, sales and service, (2) improve the acquisition of new customers and customer loyalty and (3) increase customer profitability.

Main goal: getting customer loyalty and retention

• What kind of services do we have to offer (customer service, FAQs, complaints, etc)?
• Does it make sense to offer information about accessories, spare parts, consumption material, replacement, etc.?
• How can we transform our knowledge about the customer into new offers?
• What kind of customer loyalty instruments could we offer (bonus programs, delivery subscription, etc.)?

Digitalisation leads to a fragmented purchasing process

• Customer Journey denotes the customer’s way through the different phases of a purchasing process. The process can be short and linear with a single seller, e.g. when purchasing clothes spontaneously, or fragmented over a longer period of time with several service providers or sellers involved, e.g. when purchasing a car.
• Touchpoints are the moments in which potential customers have contact with a supplier during their customer journey.
• Multichannel suppliers operate several communication or sales channels (e.g. blog, web site, physical store) to offer potential customers a variety of touchpoints during their customer journey. Some touchpoints can be used simultaneously, e.g. a mobile app in the store. Cross-channel means that a customer can switch between channels during the purchasing process.

E-Commerce Suppliers Optimise the Customer Experience in Order to Improve the Conversion Rate

• The conversion rate mostly measures the share of the shop visitors who finalise a purchase.
• The customer experience is regarded as being the key to successful selling. It is good or positive when the requirements of the customer can be fulfilled as easily and appropriately as possible.

A bit yes. Transformation in Commerce

• Today, not the commerce concept as a whole but every individual function is a subject-matter of competition, optimisation and innovation.
• Innovative commerce concepts are created with new combinations of functions, some of them represent an innovation themselves.
• Examples: Uber (no taxis), Booking.com and Airbnb (no hotel rooms), Facebook (no journalists), Youtube (no TV studios).
• The emerging innovative commerce concepts will probably lead to a decrease of the market potential of the traditional commerce segments.
• The big challenge for commerce companies is to find their own combinations of value creation functions which activate demand and can be operated at a good cost-benefit ratio.

Procurement covers the relationships and processes between a company and its suppliers. Dt.: Beschaffung