ELECTRONIC COMMERCE PHASES

Marketing

There is nothing new about marketing and the need to target consumers. The general goal is to target potential buyers and entice them to give your site a whirl.

What is new is the ability to use the medium of the Internet to target consumers in different ways. While we might not think of banner advertising, targeted e-mails, sweepstakes, etc., as “e-commerce,” they can be a critical part of the process in the e-commerce cycle.

Another hot topic on the Net today is the building of community, and creating sticky applications. The goal is to provide an environment that will entice the site visitor to come back repeatedly. Examples include discussions forums, polls, surveys, chat, etc.


Customer Visitors

Of course, what is e-commerce without the customer! In this case our customer is the cyber-surfer who was decided to type in your URL or click on a link to visit your Web site. The biggest distinction we need to make here is the difference between the business-to-business, the purchaser is another business entity who with need to have various purchasing options, including credit card, purchase order, and/or credit account (net payment). The seller may need to provide a purchase order number to the buyer. There may be additional requirements for large dollar purchases and mission critical purchases, including authenticated receipt of order, electronic transfer of funds, etc. Many of these issues have been addressed traditionally through Electronic Data Interchange (EDI), which provides agreed upon data interchange standards for businesses.

In the traditional consumer-to-business model the shopper is typically an individual who is going to pay with a credit card and have the item shipped to her home. In this book, we are going to look at the technology behind the core shopping process with a specific focus on consumer-to-business purchasing. But, many or these processes are equally apropos for business-to-business transactions.

Web Site Visit

Once the individual visits the Web site, the fun begins. Once a business site is downloaded, a number of things can happen to begin building that e-commerce experience for a customer, immediately we can begin tracking and profiling this consumer. And, based on that information, we can begin to target products that the consumer may be most interested in. This step begins the e-commerce shopping process.

Product Browsing

If the visitor likes what he sees upon entry to the Web site, he will hopefully begin to browse through the site product pages. Typically a visitor will browse through departments and then products within those departments. As a potential customer goes through this shopping experience, he may be enticed with products on sale, promotions, related or upgraded products, etc.

Shopping Basket

The next step is for the shopper to add products into her “shopping basket.” The shopping basket is simply a list of products the shopper has selected, the quantities, prices, attributes (color, size, etc.), and anything else related to the potential order Shopping baskets often offer options to clear the basket, remove items, and update quantities. In Part II we’ll be explore the basics of the shopping process, including product browsing, the shopping basket, etc.

Checkout

Once the shopper has all of his items ready for purchase, he will begin the checkout process. On the consumer-to-business side of things. The consumer will typically enter in his shipping and billing address information. The shopper might also add in additional information for a gift greeting, gift wrapping and other information for ancillary services.

Tax and Shipping

Once the business site knows where the product is going to be shipped and billed, it can execute two important business-rule calculations for taxes and shipping. Taxes can be as easy as simply charging for a state tax if the person lives next to a nexus for the business. Or, in rare cases you may need to provide local tax rate support usually only where you have local representation such as storefronts in multiple states, etc. It so, then you may need to consider support for local country or city taxes based on the shopper’s zip code. Likewise, shipping can be as simple as charging a flat fee or as complicated as calculating charges specific to each product purchased and correlated to distance the product has to shipped.

Both of these issues can be even more challenging when it comes to handling international ordering. If the business has never supported international orders before, this may represent many challenges and new requirements. But, make no mistake about it, when your site launches, people from other countries will find it one way or another.

Payment

Once we have a subtotal for the product purchase, and tax and shipping are calculated, we are ready for the shopper to present payment. As mentioned above, the options will be quite different of business-to-business and consumer-to-business transactions. In consumer-to-business e-commerce, the typical purchase is via a credit card. Or, depending on situation COD or invoice options may be available. In business-to-business e-commerce, all options may need to be available, including purchase orders. Also, for large ticket purchases where inventory, advanced availability, and other issues may come up, a quote or follow-up with final pricing, ship time, etc., may be required as well.

With credit cards, there are options to either clear/transact the credit cards offline or transact them online. Online processing is over the Internet via services such as CyberCash and HP-Veriphone. When using online processing, the credit card data is securely transmitted over the net, and a response is sent back indicating whether the card cleared or not.

Receipt

Once the order has been placed, we might want to return a receipt to the purchases. For business-to-business e-commerce, the receipt might be a listing to attach to a purchase order. For the consumer, that might be a reprint of the order on the screen or a listing e-mailed to the purchaser. In both cases, this process can be easily automated (as will be demonstrated in this book).

Process Order

At this stage, the cutting of leaves the patience and we hit the back end of the e-commerce equation. If we did not automatically process the credit card, then the first call to order is to process the financial transaction. In general, standard business rules take over in this phase, just as if the order came in via the phone or mail. The Internet does afford the option to keep the consumer informed of the order status. We may want to show that the order has been processed, all items are in stock, etc. To do this, a method will need to be set up on the Web site.

Fulfill Order

Once we have a valid order, it needs to be fulfilled. This can actually be the most challenging business process to work on. Many different scenarios come into play depending on the type of business you are in.

If you are a traditional retailer with storefronts, there may be an issue of having central inventory to fulfill from. And, even though 90% of the transactions are electronic, there will be those customers who need to make a phone call or send an e-mail to the business.

If you provide fulfillment via a fulfillment house or service, then there might be integration issues with the fulfillment house’s system. Even if you do your own fulfillment, there may be integration issues between the Web server and your back end fulfillment systems.

Ship Order

The last step in the process is to get the product to the customer. As in the “Process Order” stage, we can provide order status back to the customer. In this case at may include the UPS or FedEx shipping member for the customer to track their shipment.