Ecommerce Ecosystem

Understanding the ecommerce ecosystem is equally important as understainding the steps to start an ecommerce business.

With this blog post, I’ll share a basic ecommerce business ecosystem that would be of your help to know the fundamentals behind it.

Feel free to comment on it and also let me know if I have missed out something which you think is very important to consider in ecommerce ecosystem.

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Online Presence - Step 3: Online Business Strategy and Tactics (Part1)

Strategy is a big picture. It has to summarize on “How are you going to achieve your defined objective?”, while tactics are the methods to implement your defined strategy.

E-Strategic Decision Options: Before taking your business online understand or review your business goals and objectives as it will help you understand what type of website is best suited for your business?




Is it just an electronic brochure or a micro site or a full fledged ecommerce website? After deciding up on what type of website you need, you should decide up on the marketing mix to define a clear cut online business strategy.

Marketing mix (a.k.a) 4ps are the essential elements to define the marketing strategy (be it online or offline). Before applying these 4Ps to the internet marketing/business you need to understand the additional 3Ps that’ll make internet marketing plan more stringent and powerful. The 3ps includes – People, Physical Evidence, and Processes.

Product – Product in internet marketing mix can be considered as two things,

1. Your actual product that you want to sell Online
2. Your Website itself is also a product

We all know that product/services that are sold via internet cannot be touched or experience it lively and to overcome this ecommerce site owners have to provide…

• Extensive product information – Product Description, specifications/features
• Multiple product images in different dimensions,
• Product tour through Video/flash presentation,
• Product Reviews from the consumers

These strategies will help online shoppers make informed buying decision. If you sell services then consider giving out case studies, free trials, product demos, testimonials, etc.

The Website through which the product is being sold is also a Product

• Your ecommerce website layout and design has to be User and Search Engine Friendly
• Ease of Navigation to reach the actual product,
• Good Website functionality (example: Search functions, product comparison function, etc)
• Customization and Personalization

These are just few things that has to be shown on your website to make it as an effective product and also to gain distinct competitive edge.

Price – Internet is a transparent medium. Online shoppers can get the pricing information from the sources like comparison shopping engine, internet marketplaces, auction sites, competitor sites, etc. and if your product price doesn’t just satisfy the online shoppers you cannot grow your wallet. It is very essential to continually monitor the product prices and fix an optimum product price to sustain in the long run.

Placement – Internet itself is a place where products can be purchased. Internet can be seen as a new and additional distribution channel for your products/services to reach your end audience. Your website on internet is not the ONLY place to sell products hence mull over other alternative and multiple online places such as marketplaces, affiliation, etc to sell your products. The more widely you appear in the internet, the more chance of being visible in front of your target customers.

Promotion – As said above internet is definitely a good place to sell products, but selling via internet requires effective promotion. To promote your products you need to utilize the online communication tools. The widely popular communication channels are online advertisement, online PR, sponsorship, email, search engine promotion, etc. you need to mix and integrate these promotional tools to enjoy the maximum benefit.

People – When a shopper visits a traditional shop there would be a sales guy attending him, but when an online shopper visits an ecommerce website there is no chance that your customers will get a warm welcome, therefore consider humanizing your online business. There has to be different online contact strategies, so that your customers when feel like asking questions can get in touch with you instantly. One way of doing it is enabling "a live customer chat." No business can sustain without a real person’s involvement so make sure that your online business is backed up by the real people to service your online customers quickly and effectively.

Physical Evidence – Trust is still a matter of concern to the online users. Your website visitor, especially the first time visitor would not trust your website even if it has got an excellent visual appearance, rich applications or any other factor that would appeal a typical online visitor. Online shoppers look for prompt response to assure your authenticity. Tools like online security symbols, privacy policy, returning policy, trusted payment processing, customization and personalization, user reviews, encourage users for cross channel shopping by providing some discounts, if you have got an offline store will help you gain tremendous trust.

Processes – If you have a clearly defined process then it will have a positive impact in the overall service quality. It is imperative to integrate front-end and back-office systems to build the online business process. Setting up an online business process is not an easy task, hence care has to be taken to develop and optimize your online business process.

To be continued... Subscribe or Bookmark (Ctrl+d)

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My New Domain Name

Thank you for dropping by. I am happy to announce you that from today onwards http://www.bizonnet.blogspot.com will be redirected to http://www.online-businessblog.com

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Important Notification

Hello Readers,

Please accept my apology for not updating this blog since July 2008. I am very much busy with my day job.

In coming days, you'll find lot of new articles, tips and tricks on how to start and run online business successfully. Please journey over to my blog by bookmarking it or subscribe to RSS feeds

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Online Presence - Step 2 Set SMART Objective

The next step to follow while building a successful online presence is to set a SMART business objective.

SMART means Specific, Measurable, Attainable, Realistic and Timely.

Re-define your offline business Vision, Mission and Goals. Ask yourself “where do you want to go” and “what do you want to accomplish?”, “Why do I appear Online?”

The following are a general 5 objectives of internet marketing that has to be SMART... This can be demonstrated in terms of 5S

Sell – One reason to appear online could be to sell more.

Serve – Add benefit and value to the customers.

Save – Cost saving. There are many cost issues involved with business. Example: Reduce transaction cost or reduce printing cost.

Speak – Understand customer preferences very closely. Internet is one of the best mediums to interact with customers to gather information by conducting online interview, chat rooms, and discussion boards.

Sizzle – Build brand via internet channel.

Each of the above mentioned objectives/reasons would further drill down to set specific SMART objective.

Online Web Presence - Step3: Defining Strategy and Tactics for your Online Business (Will be available shorty, keep visiting or Subscribe to RSS feeds)

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Online Presence - Step 1: Situatuion Analysis

Importance of Situation Analysis: To have a successful online business, a perfect online business system is required, and to create a successful online business system one has to analyze, the Current situation of his business, Set achievable goal, Develop Strategy/Tactic, Organize for the online presence (take action, control and form resources).

Situation Analysis helps you identify “Where Are You Now”, and from there it will help you identify, “Where Do You Want To Go?” (Vision/Mission and Goals)

How to conduct Situation Analysis? Situation analysis is one form of Business Analysis. It further boils down to two categories - Internal (within your organization) and External (outside your organization).

General Business Analysis
Defining KPIs
SWOT Analysis
Competitor Analysis
Market Research and Demand Analysis
Technology Analysis
Online Intermediary Analysis (Online Distributors)

Internal analysis-(Factors that affect your internal business environment)
If you do not own any offline business, but interested to start an internet business then you should consider exploring… Different Internet Business Models Available…
What is your online business idea?

Is it about selling products or delivering services? Is it a new/innovative concept?...

What ever be your business, the first step is to conduct a Business Analysis (Current Situation of your business/idea) for creating a successful online business.

Let’s consider you currently own an Offline Business. The following are the analytical areas

General Business Analysis - What is your current offline business model? Retailer or Wholesaler or Manufacturer or an Agent...What products you sell offline? Tangible or Non-Tangible...

Analyze your KPIs/Metrics – What are the key performance indicators that will identify online business’s success (This purely depends upon your business model and online business objective – Where you want to be and what you want to achieve)

Sample KPIs/Metrics
Sales Conversion – Online product purchase
Enquiries - That lead to offline purchase
Online Registrations
Cost per visitor
Average order value
Cost Per Page Views
Average order size
Toll-free number calling
Awards – Win high profile award for any of the business functions like customer care
Costs – Lessening the cost of particular business function
Reach (New Visitors) – Reaching untouched customers. Are they qualified?
New vs. Returning – How are the behavior of new and returning visitors? Who purchased online? Etc,

There could be many other KPIs/metrics that will define the success of your business. Remember KPI must reflect with the business goals. It has to be measurable and quantifiable. To know more about KPI Visit here…

SWOT ANALYSIS: SWOT is a tool to explore business Internal Strength/Weaknesses and External Opportunities/Threats.

Definition: SWOT Analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. Source: Wikipedia

What are your Internal – Strengths and weakness?
Strengths could be your specialization and expertise; Weaknesses could be lack of particular expertise

Strengths could be…
Unique product/services (with extra benefits/features)
Good offline reputation
Large clean and qualified customer database

Weaknesses could be…
No technical team to assist
Financially not very sound
Lack of ecommerce market knowledge

The above mentioned are just imaginary Strengths and Weaknesses.

External analysis: Outside your organization that will affect your business.

What are external – Opportunities and Threats

Opportunities are external factors that could help organization to trap the market.
Threats are changes in the environmental factors that could trash the business.

Opportunities:
Customer buying preferences
Not too much of competition

Threats:
Rapid change in technology
Two major competitors are online

Competition Analysis:
Under competition analysis you have to analyze how many of your competitors are online? What is their Website Strategy? What extra benefits do they provide to the customers? Do they have both online and offline presence? You can also look who is more successful? Click-and Mortar or Pure Play Online Retailers.

Market Research and Demand Analysis:
Market research is a powerful tool for any company to understand about the market they deal with. We all know that internet is loaded with full of information and resources. You can easily utilize these resources to define an unambiguous marketing strategy. So, before getting taking your business online consider doing online market research….

The components of online market research

Who are your target audience?
Where are they based?
Are they buying products online? If not, why not?
If they buy products Online, What makes them to buy?
Understand your target market’s need
Geographic location
Market segmentation
Online consumer buying process
Demand analysis includes - Does your product have demand over internet? You can do this by simply conducting keyword research.

How many of your customers prefer buying online? You also need to consider understanding, how many are cross-channel buyers (Search Online and Purchase offline)?

Technological Analysis: Examine what technology is needed to run and manage online business?

Intermediaries –Online and Offline:
How many online intermediaries (distributors) are available on internet?
Are your competitors are already working with them?
How to make partnership with these online intermediaries?

Conclusion:
Situation analysis is worth doing as this would further help you in deciding “Where you want to go?” (Your online business objective)

Online Web Presence – Step2: Define Vision, Mission and Goals for your Online Business (Will be available shortly)
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Where is internet business in eBusiness framework?

In my last post I promised my readers that I’ll be posting series of articles on how to start an internet business from scratch, in other words, how to build a successful online presence (if you already run an offline business). Before getting into the series of articles, let us first understand…

Where internet business stands in the whole of ebusiness framework?

Ebusiness means “Automating the existing business process with the help of internet/web technology”

As a business owner you have to decide which function/process of the business you want to automate.

Is it Marketing/Sales or Human Resources or Finance or Production and Operations or Supply Chain or any other key business function?

Let us take the business from the following broader perspective…

B2B (Business to Business) – The buying side of a business - includes buying raw materials or services, warehousing, logistics, etc. You can automate the buying process by using extranet, which will be open to only those who are closely associated with your buying side of business. (Taking orders and transactions via the web - eCommerce)

B2E (Business to Employee) – The internal processes of the business can be automated by means of intranet (internet within the company). This could be manufacturing, production/operations, management, etc. The use of extranet will help organization to improve internal communication between employee and business.

Applications used here are…

Knowledge Management tools
Decision support systems
Enterprise Resource Planning (ERP) applications – can also be used in B2B section, etc…

B2C (Business to Customer) – The selling process of the business can be automated by using extranet and internet. This includes

E-CRM,
E-Commerce sites,
Selling management application,
Supply Chain management, etc

On the whole each automated business functions/processes are connected for effective communication and smooth transaction by using the incredible channel called Internet. It also includes e-marketing (internet marketing) and e-commerce in the whole ebusiness framework.

Any business process which utilizes the internet channel can be described as Internet business because this particular business process runs via internet channel.

Web Technologies + Your Retail Sales Transaction = eBusiness (eCommerce, Internet Retail)

In this blog I’ll be discussing much about creating an eCommerce sites – that is automating marketing and selling process of your business, (assuming that you already have an offline store) and thus now you become a Click and Mortar company. (You run business by both online and offline means)

Since the inception of web technology and various internet applications there are many innovative internet business models available which can be also be called as Internet business.

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