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By 2003, e-commerce revenues are expected
to equal 7% of the U.S. GDP. But what does "e-commerce" really
mean, and what might this prediction mean for you? E-commerce
is a broad-stroke term that may include the capabilities
to initiate, process, and complete business transactions
with your supply chains and customers. A first step in
e-commerce for many businesses is accepting orders and
payments from customers.
Online sales will reach $126 billion by 2003. Should
an online store be part of your Web strategy? If so,
what is the best approach to integrate online sales into
your business? Here are five steps that will help walk
you through the e-commerce maze.
Planning Stage. To develop a solid e-commerce strategy,
first evaluate your products and services, your customers,
your business goals, and your strategy. Despite its high
profile in the media, e-tailing still only accounts for
about one percent of all retail sales. Is your product
a good candidate for online sales? Evaluate its feasibility
with such criteria as ease and costs of shipping, product
liability, custom product features, the need for personalized
salesmanship to help with selection and product use,
price points compared with brick-and-mortar retail prices,
and customers' readiness to buy your particular product
online.
Look at your entire sales and order fulfillment process
from promotion to after-sales service. Which tasks would
it make sense to carry out online? How would that help
acquire customers, increase value to your customers,
expedite the sales process, and reduce costs? A top e-commerce
Web site may cost $50 million to build. Yours probably
has a much more modest budget. Nonetheless, adding e-commerce
functionalities varies greatly in cost, depending on
various factors including the technological complexities
of your site. Setting realistic expectations based on
your business requirements will go a long way to implementing
an e-commerce solution that's just right for your business.
Technical Evaluation. The technology used to facilitate
online transactions can be as simple as creating an online
form to accept credit card information via a secure server.
The credit card information is processed much like a
telephone purchase. If you opt for a higher degree of
automation, you will need shopping cart software to accept
credit card information, an Internet merchant account
with a bank to accept charges, and a credit card clearing
service.
A sophisticated e-commerce solution may automate the
entire process of processing payments, issuing the order
to the production department, tracking the order progress,
managing the customer database, and supporting customer
relations. The right solution for your business depends
on your anticipated sales volume, your online strategy,
and your budget.
Site Design. Equally important to the e-commerce back-end
is the design of the Web site where your customers visit,
browse, and buy. An effective site design is built to
maximize your target customers' positive experience.
It should be clear and easy to navigate, and the pages
should load fast enough for the speed of Internet connections
of your customers.
If you do not have the talent in-house, partner with
a professional Web design team who understands your customers
and your business and knows how to effectively integrate
your Web site design with the back-end e-commerce technology.
Operations. Your online store faces many operations
issues similar to those of brick-and-mortar catalog stores:
handling shipping and shipping charges, calculating applicable
taxes, processing orders, handling returns, and offering
customer services. Pay attention to the jurisdiction
issues, as your online store may be subject to the laws
of jurisdictions where your customers reside. If you
sell to customers in other countries, you will need to
consider customs, taxes, and other issues such as privacy
and warranties. These issues are not trivial, and undoubtedly
will impact your profitability and even the viability
of your business.
Customer Experience. What do you like your customers
to expect from you? Your online store is an excellent
vehicle to extend your brand online. On the other hand,
poor customer experience online will cause harm to your
reputation and hurt sales. A successful online store
builds customer loyalty, and offers the same great service
during and after sales that customers expect from doing
business with you. Pay attention to customers' privacy,
to product warranties, and to what steps you will take
to rectify situations if you fail to meet your customers'
expectations. Optimize your site design and focus on
your customer service policy to maximize usability and
user experience.
Internet technologies continually evolve. So will your
customers' experiences and expectations for doing business
with you online. An online store can be a crucial factor
in a company's growth strategy. Maybe you should be part
of that 7% of the U.S. GDP that e-commerce is expected
to create by 2003.
Copyright Eva Chiu and InfoAdvantage.
E-Business
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