Unit 2
Planning online business
Electronic commerce or e-commerce refers to buying and selling of products and services over the internet or electronic platform. It facilitates the buyers and sellers from different geographical locations to connect with each other for purchase and sale of goods and services without physical interactions. Internet is a global wide area network that connects computers throughout the world. It is used in all sectors of the economy. It provides different types of services like web, email, social media, online gaming, software updates, online payments, online education etc. Internet is inseparable from ecommerce. Ecommerce develop and expand its business with the network of internet. The nature and dynamics of internet in ecommerce are-
Figure: Nature and dynamics of ecommerce
- Facilitates buying and selling:
Web technology enables the e-business to go for buying and selling of goods and services both on retail and whole sale basis. It facilitates the retail customers to access different online shopping sites to make purchases and also the business units to access the retail and wholesale online shopping sites to sale their products.
2. Customised software:
Different software are developed from time to time to provide better services to ecommerce consumers for online shopping, internet banking, mobile banking, e-ticket, information dissemination etc. Different business units able to develop their software to provide services to the potential customers. BHIM, Gpay, Paytm etc. for money transfer, SBI yono for banking, make my trip , trivago etc. for hotel booking, IRCT for railway ticket, Netflix, Amazon prime etc. for OTT are some of such software.
3. Payment gateway:
It facilitates to develop secured payment gateway for ecommerce businesses to make online payment, transfer etc. Customer uses different payment gateways like Airtel money, BHIM, Gpay, Paytm etc. for online payment and online money transaction.
4. Data storage:
It facilitates the businesses to store their data conveniently and retrieve it when necessary with the help of cloud system.
5. Digital marketing:
It facilitates the ecommerce businesses to go for digital marketing of their products and services through social networking sites like youtube, facebook, instagram, wats up, educational software, emails etc.
6. Promotes digital education:
It facilitates the publishers to sell e-books through appropriate application software. Kindle, Biyu, unacademy etc. software.
Key takeaways
- Electronic commerce or e-commerce refers to buying and selling of products and services over the internet or electronic platform. It facilitates the buyers and sellers from different geographical locations to connect with each other for purchase and sale of goods and services without physical interactions.
Pure-online business operate solely on the Internet, while brick & click business models combine a physical presence with online selling or marketing. Brick & click business businesses may operate a website that sells products or advertises those it sells on the high street. The difference between pure online business and brick and click online business are –
Basis of difference | Pure online business | Brick and click online business |
| It operates only on internet. | It is the blender of online business and physical existence of business. |
2. Cost | It incurs less overhead cost as compared to brick and click online business. | It incurs more overhead cost in terms of property, large employee set up, warehouses etc. |
3. Nature | It directly started its through internet without physical existence. | It initially started its business offline and later added an online website for greater reach of customer. |
4. Benefits to customer | It able to provide huge discount and rebate to customers due to less overhead costs. | It is not able to provide huge discount and rebate to customers due to the overhead costs. |
5. Marketing | It needs to invest more money and give more promotional effort to attract customers and gain their confidence because it has no physical existence. | It incurs less expenses and promotional effort because of its physical presence. |
6. Examples | Amazon, Flip kart, Make my trip etc. | Reliance trends, Big bazar, State Bank of India, LICI etc. |
Key takeaways
- Pure online operates only on internet but Click and Brick is the blender of online business and physical existence of business.
Before starting any online business the founder/founders must assess the market requirements and potentiality of business in the market. There are certain steps to assess the requirement for an online business designing, developing and deplaying the system-
Figure: Requirement for online business design
- Identify product/service and customer: The first step to start online business is to identify the product/service to be sold through online and the target customer group. In this process the vendor must keep in mind-
- The chosen product/service for online sale must have sufficient demand in the market.
- The price of the ecommerce product/service must be reasonably decided so that the customer can afford it and the seller able to earn revenue from it.
- The ecommerce product/service must have sufficient stock.
2. Choose the ecommerce website: In the next step the vendor should choose the appropriate ecommerce website to sell their ecommerce product/service. The vendor must select the appropriate ecommerce platform to sell their product/service. Some of the points to be keep in mind to select ecommerce website are-
- The ecommerce website should have good brand image in the market.
- The ecommerce website should have reliable payment gateway for quick transfer.
- The ecommerce system should have well integrated logistic system for fast delivery of goods.
- The vendor should fulfil the conditions of ecommerce websites.
3. Ecommerce website testing: Testing of ecommerce website is necessary to access large number customers conveniently. It is tested by considering the elements like-
- Customer flow/visitors in the ecommerce website.
- The functionalities of the website i,e, filters, payment option, category, cart etc.
- Security and reliability of the website.
- Performance of the website etc.
4. Marketing: In the next step the vendor should go for effective marketing of products with the help of effective marketing tools to access the target customer group. Some of the popular marketing methods are print media, electronic media, social media marketing, content marketing etc.
5. Develop and grow: In this stage, the vendor should continuously adopt the changing needs and preferences of customers and innovative marketing techniques to develop and grow in the market. Satisfied customers help to survive in the market as well as grow in the market.
Key takeaways
- The steps to assess the requirement for an online business designing, developing and deplaying the system are identify product/service and customer, choose the ecommerce website, ecommerce website testing, marketing and develop and grow.
For starting ecommerce business, the developing and deploying of system is necessary. It indicates development of systems like website, payment gateway, domain name, storage system, logistic stem etc. Different elements of development and deployment of ecommerce system are discussed below-
Figure: Developing and deploying of system
- Find the website
There are numerous ecommerce platforms available in the markets that are easy to use. Some of the tools are expensive while others are affordable. Some of the best tools and their features for your online store development are-
- Shopify
The best ecommerce development platform is Shopify. It has tons of features that will help you develop a scalable online store. It has the ability to sell products across many social platforms like Facebook, Amazon and so on.
- Wix
Wix is best suited for small businesses and startups. It has more than 510 templates that suit all genres of business like sports, beauty and so on. All the templates are optimized for mobile use. Other features include adding product videos, editor and easy user-interface.
- Big Commerce
Another great platform for your ecommerce site is Big commerce. It creates a scalable site and has great SEO tools and has many more features than its competitors.
- Weebly
With plenty of features with drag and drop being one of them, it is the easiest platform. The best feature of Weebly is that it lets you create dedicated pages for all your products.
- Magento
The current favourite tool for developing online store is Magento. All over the globe, the developer prefers it. It integrates advertisement, analytics, and content creation and so on to provide the best user experience.
2. Test the tool
For a successful online store, this step is crucial. Here some things to check in the test which will help to find the right tool:
- How easy is it to customize the features or modify it?
- Are the templates/theme provided suits the business? Also, check whether it’s easy to choose them or not.
- How is the navigation feature and can help customize it to add sub-menus and all?
3. Buy the right plan
In this step, a plan is determined for starting the development process. All these tools come with many plans- free, paid version for individual and paid version for companies. A free plan of all these platforms supports minimum selling of products and runs up to 15 days. If the business developer wants to build an e-commerce store, than it need more features, and functionalities, which mean buying the full version.
4. Register for a domain name
A domain name is the part of URL that has the name of the business. It is crucial to have a good domain name as it builds trust and brand with the consumer. With the help Shopify, Wix and BigCommerce platform, one can buy a great domain name. Here are some tricks and tips to select a correct domain name for the ecommerce solution:
- Country code: Picking a correct country code is crucial. If business developer plans to sell their product to only international clients, use a dot com (.com) domain. If selling to a specific county, then they can use their code. Like Amazon has both .com for US and international consumers and .in for selling just in India.
- No brand name: Avoid using brand or product name in the URL as it can get you into legal troubles.
- Unique: The domain name should be unique, but not so weird that people find it hard to look on a search engine.
- Integrate a keyword: In the domain name, add a term that resonates with your business. The keyword will help the business developer to have a higher rank in search engines which will ultimately get them more traffic and sales.
5. Pick template for website
Templates also known as themes make the site appealing. Here are some tips for choosing the right template:
- Features you want in store: Features are the key to a good website. So, brainstorm and decide which feature is more important for the store. It can be mapped, about us page and so on. Make a list of features and use it narrow down the template.
- Homepage style: Homepage is the first thing consumers will notice about the e-commerce site. So, it is important to make sure that the chosen template does justice to it.
- Smooth navigation: The navigation of the website should be simple and helpful. A potential customer will surf through the site for 10-20 seconds if the template’s navigation feature is weak; it means that they won’t find what they are looking for easily. It will amplify bounce rate of the website.
6. Customizing the template
After choosing the template, the e-commerce development tools allow the user to customize it. For customization, you will have to go to the store’s admin panel. You can modify anything according to your will.
- Text Size, Color and Font
- Color of the theme
- Use of images
- Product’s position and so on.
7. Time to add the products
After customization of template, it’s now time to add products to the website. It is necessary to add these details to the product to make it more alluring consumers:
- Name of the product and name of the brand (If outsourcing)
- Price of the good
- Category
- Weight for physical things
- File (For eBooks and all)
All the platforms have a different policy when it comes to a number of products, product description and variation. A product description is crucial to get the attention of the consumer along with images and category.
8. Payment methods
It is a crucial step in converting a consumer into a buyer. E-commerce development tool makes integrating payment methods of all kinds into the site easy. They connect the user directly to PayPal, Apple and Google Pay, Credit/Debit cards, Master or Visa Cards for paying. The option to pay on delivery is also available. There are three popular payment options:
- Merchant account and payment gateway: In this option, you partner up with a bank and they accept payment on your behalf. After this, they transfer the amount to your business account.
- Payment gateway packages: In this option, software integrates all the option into one and processes your card payments.
- Credit card payment: In this option, the payment method is integrated with the store’s cart which means you don’t have to leave the site to complete your payment.
9. Shipping settings
The next step is to set up the shipping settings to deliver the products at right place at right time. Different e-commerce platforms have different options.
Address of the shipping office:
- Include the address of the shipping origin to calculate taxes and all. It also makes printing labels and asking for quotes easy.
- Address of shipping origin office is required when products are not shipped from the main office.
- Shipping zones you want to cover:
- Shipping rates vary between countries and Zones. All development tools allow the user to charge different rates from consumers based on their zones.
- The admin page shows your shipping zones and the individual rate of shipping for each zone.
10. Settings for the store
The online store needs to run properly every single minute and this needs proper settings. It can be done by filling out the preferences for each of the following in the store setting section of the tool.
- Language: Select the language that the customer will see on the website
- Currency: The currency to be dealt in
- Time zone: To track the orders, set up the time zone.
- Address: Contact information and address of the main and local office.
- Store Name: Name of the store, homepage and other pages and online searches.
- Contact Details: A public phone number and an email address
- Setting for the order: In this, the business developer set the option of adding tax to their product or not
- Product settings: In the product settings, decision is made regarding what details about the product.
Key takeaways
- For starting ecommerce business, the developing and deploying of system is necessary. It indicates development of systems like website, payment gateway, domain name, storage system, logistic stem etc.
One to one enterprise is also known as one to one marketing or 1:1 marketing. It is a customer relationship management (CRM) strategy. The terms personalized marketing and individual marketing with the same meaning as one-to-one marketing. Marketing executives claim that one-to-one marketing generates a better return on marketing investment. It’s an approach that is not used to get the customer’s attention, but to keep their attention and their business. As Internet shopping has become more and more prevalent, so has one-to-one marketing. Customers returning to the sites of online retailers where they’ve previously made a purchase will many times find a “Suggestions for You” message waiting for them. In addition, they may receive a follow-up email with those suggestions for additional purchases. Amazon, Netflix, eBay, iTunes, and many other online retailers have developed sophisticated 1:1 marketing systems that follow and track each customer’s every click, recording and categorizing every purchase to develop a personalized customer profile based on those click patterns and purchases.
There are two basic types of 1:1 marketing:
Figure: Types of one to one enterprise/marketing
- Personalization – the company learns the personal preferences and tastes of each consumer and customizes its marketing plan to them. Amazon.com is known for perhaps the most successful 1:1 personalization strategy, recommending products based on past purchases and interests.
- Customization – the company doesn’t learn the preferences of each customer, but instead gives the individual customer the ability to customize the product to their own tastes. A good example of this strategy is a computer retailer that offers a basic platform of a laptop and then gives the customer the ability to tailor many of the laptop’s features (processor, memory storage, loaded programs) to their own tastes and needs. Many online news websites use the same strategy by allowing visitors to pick and choose the types of news stories (international, political, financial, etc.) they want shown most prominently on the site.
Benefits of one to one enterprise
The benefits of one to one enterprise are discussed under the following heads-
Figure: Benefits of one to one enterprise
- Establish a learning relationship with customers
It involves taking information about the customers’ needs, preferences and buying behaviour and stores the information, in order to provide more customised interactions as the relationship progresses. By understanding what drives the customer, it can adjust the product or service and get a competitive edge over others in the market.
2. Increase customer satisfaction and revenue
One-to-one marketing utilises machine learning technology to capitalise on real-time and past statistics. It uses this data to provide an enhanced customer experience throughout the entire journey and pinpoint up selling opportunities that will help the customer and the profit margin.
3. Deliver campaigns tailored to customer interests
Sending out an email that addresses each individual recipient by name is great; it creates warmer leads that people are more likely to open. But it’s not enough if they’re not interested in what you’re selling. Remember that the customers are inundated with a heap of emails every day and if someone sending them something they don’t want, they’ll head straight for the unsubscribe button.
4. Advertise at the right time, in the right places
Digital marketing allows to reaches audience. Do the customers prefer email, social media, SMS or push notifications? Not only that, but one can use the CRM software to make yourself useful at just the right moment.
Key takeaways-
- One to one enterprise is also known as one to one marketing or 1:1 marketing. It is a customer relationship management (CRM) strategy. The terms personalized marketing and individual marketing with the same meaning as one-to-one marketing.
References-
- Amor, Daniel - Pearson Edude. E Business R (Evolution).
- 2.Greenslein & Feinman. Electronic Commerce. TMH.
- 3.David Whiteley. E-Commerce: Strategy, Technologies and Applications. TMH.
- Kotlar, P. (2019). Marketing management (4th edition.). New Delhi, Pearson Education India.
- Retailnext.net
- Www.bigcommerce.com