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In this chapter, you will
1. Understand the factors an entrepreneur should consider before launching into e-commerce.
2. Explain the 11 myths of e-commerce and how to avoid falling victim to them.
In addition, you will
3. Explain the basic strategies entrepreneurs should follow to achieve success in their e-commerce efforts.
4. Learn the techniques of designing a killer Web site.
5. Explain how companies track the results from their Web sites.
6. Describe how e-businesses ensure the privacy and security of the information they collect and store from the Web.
The Internet has transformed the way that companies of all sizes do business. Yet one lesson that entrepreneurs engaged in e-commerce have learned is that business basics still apply; companies engaged in e-commerce still have to take care of their customers and earn a profit to stay in business.
Companies of all sizes are busy establishing their presence on the Internet because that’s where their customers are.
Online and Internet-influenced sales account for 60% of total retail sales, or more than $2.16 trillion, in the United States.
Modern shoppers expect to be able to purchase the products and services they want across multiple channels, including the Internet, mobile devices, social media, television shopping channels, catalogs, and brick-and-mortar stores. The multichannel approach that today’s shoppers utilize blurs the boundaries between physical stores and the Internet.
eMarketer estimates that 12.8% of total global retail sales will occur online in 2019, totaling nearly $3.6 trillion.
Despite the many benefits the Internet offers, not every small business owner is ready to embrace e-commerce.
Before launching an e-commerce effort, entrepreneurs should consider these important strategic issues.
Doing business on the Internet takes more time and energy than many entrepreneurs expect. These six factors are essential to achieving e-commerce success.
Scores of entrepreneurs have plunged unprepared into the world of e-commerce only to discover that there is more to it than merely setting up a Web site and waiting for orders to start pouring in. Make sure you do not fall victim to one of these e-commerce myths.
Some entrepreneurs think that once they set up their Web sites, their expenses end there. Not true! Without promotional support, no Web site will draw enough traffic to support a business.
Just like traditional retail stores seeking to attract customers, virtual companies have discovered that drawing sufficient traffic to a Web site requires constant promotion – and lots of it! Setting up a Web site and then failing to drive customers to it with adequate promotional support is like setting up a physical store in a back alley; you may be in business, but nobody knows you’re there!
Customers who shop online today are experienced Internet users whose expectations of their online shopping experiences are high and continue to rise.
Try these useful tips to increase Web site conversion rates.
Because Web shoppers are increasingly more discriminating, companies are finding that they must improve their Web sites constantly to attract and keep their customers.
Modern e-commerce entrepreneurs can build a basic Web site for next to nothing, outsource the tasks of storing and shipping products, lease space on a server, and rent cloud-computing software to operate their online businesses – all of which lower the cost and complexity of starting an online company. Although e-commerce platform providers advertise low monthly fees (often as low as $30 per month) for a basic Web site, entrepreneurs often must hire Web designers to make their sites look polished and professional, which can cost several thousand dollars.
The costs involved with launching an E-Commerce site can add up quickly.
Promoters who hawk “get-rich-quick” schemes on the Internet lure many entrepreneurs with the promise that making money online is easy. It isn’t.
Selling products and services online can be very profitable, but making money online requires an up-front investment of time, money, and energy.
The Internet allows companies to gain access to almost unbelievable amounts of information about their customers’ online behavior.
Concern over privacy and the proper use of this information has become a topic of debate by many interested parties, including government agencies, consumer watchdog groups, and customers.
Building a successful e-business is not different from building a successful brick-and-mortar business; both require well-thought-out strategies.
Recall from Chapter 5 that one goal of developing a strategy is to set a business apart from its competition. The same is true for creating a strategy for conducting business online. It is just as important, if not more so, for an online business to differentiate itself from the competition if it is to be successful.
As important as it is to have the right technology to support an e-commerce business, this is not the most crucial ingredient in the recipe for success. What matters most is understanding the underlying business and developing a workable business model that offers customers something of value at a reasonable price and produces a profit for the company.
The entrepreneurs who are proving to be most successful in e-commerce are those who know how their industries work inside and out and then build an e-business around that knowledge.
As convenient as online shopping is, customers still expect high levels of service.
Customer service is just as important (if not more so) online as it is in traditional brick-and-mortar stores.
This figure shows the leading causes for shopping cart abandonment.
Figure 10.5 shows the Customer Experience Maturity Model, which provides a roadmap for online companies to improve the level of customer service they provide their online customers.
On the Internet, “more” does not necessarily equate to “better.”
A good rule of thumb is to include no more than three major pieces of information on each page. Providing clear links to pages that contain more information allows customers who want more information to find it easily.
Studies show that sites that load slowly have higher bounce rates and lower conversion rates because customers abandon them for faster-loading sites.
Designing an attractive, efficient Web site and driving traffic to it are important in building a successful e-business. However, designing the back office, the systems that take over once customers place their orders on a Web site, is just as important as designing the site itself.
The potentially large number of orders that a Web site can generate can overwhelm a small company that has failed to establish the infrastructure needed to support the site. Although e-commerce can lower many costs of doing business, it still requires a basic infrastructure in the channel of distribution to process orders, maintain inventory, fill orders, and handle customer service.
Nearly half of all small businesses do not have Web sites, and many of those that do have sites lack the capability to handle sales online. To online shoppers, especially, these businesses might as well be invisible because doing business online and offline are inextricably connected.
Experienced online shoppers, particularly Millennials and those in Generation Z, expect to do business across multiple channels. Therefore, a multichannel presence is essential for small businesses, even for those that consider themselves completely “local.”
Try these guidelines for building a successful e-commerce strategy.
Try these guidelines to build the credibility of your Web site.
Companies that fail to develop Web sites that are mobile friendly suffer from lower search engine result rankings and miss out on potential sales because they appear farther down in search engine result pages.
Two-thirds of the world’s online users are active on social media. As a result, social media tools such as Facebook, Twitter, LinkedIn, Instagram, Snapchat, and YouTube have become key components of companies’ e-commerce efforts.
Search engine optimization strategies have become an essential part of online companies’ marketing strategies.
This table shows Click-through Rates for E-commerce Sites by Position in Google Organic Search Engine Results Pages (SERPS).
Setting up a shop online has never been easier, but creating a Web site that drives sales requires time and commitment. To be successful, entrepreneurs must pay careful attention to the look, feel, efficiency, and navigability of their Web sites and the impression their sites create with shoppers. A site’s look and design determines a visitor’s first impression of the company.
How can entrepreneurs design Web sites that capture and hold potential customers’ attention long enough to make a sale? What can they do to keep customers coming back on a regular basis? There is no surefire formula for providing a best-in-class online shopping experience, but try these suggestions.
Web sites offer entrepreneurs a treasure trove of valuable information about how well their sites are performing – if they take the time to analyze it.
Here are some common measures of Web site performance.
The Web’s ability to track customers’ every move naturally raises concerns about the privacy of the information companies collect. Concerns about privacy and security are two of the greatest obstacles to the growth of e-commerce.
The costs associated with a security breach include not only the actual cost of the lost data and the lawsuits that inevitably result but also the long-term impact of the lost trust that customers have for a business whose security has been breached.