Web Enabled Commerce

This week we explore the opportunities available for conducting commerce on the web. We have already looked at the Internet, networking, and the web, but we now look at specific uses of the web for commerce. The outline presented here is intended to help point out important topics and terms, but is not intended to replace the lecture or text.

Objectives

• describe how the Web is changing business commerce
• explain the functionality of various Web technologies
• compare and contrast web server options
• explain business-to-business and business-to-consumer practices on the Web
• give examples of features and services that successful business websites offer
• describe some online web commerce annoyances such as spam and adware
• discuss ways of avoiding identity theft

Web technologies

• intranet: a network operated similarly to the Internet, but restricted to staying within an organization
• extranet: an intranet with additional exclusive access, often to employees of partner or client companies
• HTTP: HyperText Transfer Protocol; the protocol used to transfer web pages
• HTTPS: HTTP Secure; HTTP with encryption added for security
• URL: Uniform Resource Locator; a unique address for a web page; this is what you type into the location box of the browser to go to a specific page
• domain name: a human-friendly name used to identify websites (such as kraft.com, ups.com, or klickfamily.com)
• TLD: Top Level Domain; the last part of the domain in a URL (.com, .edu, .gov, etc.)
• HTML: HyperText Markup Language; the language that most web pages are written in
• XHTML: eXtensible HTML; HTML which follows the rules of XML - XHTML sample page
• XML: eXtensible Markup Language; similar to HTML, but more strict, and has the ability to be extended and adapted by users to fit many different kinds of data markup; much easier to process than previous record formats (the following files all represent the same data):
  • sample text file with employee data
  • sample binary file with employee data
  • sample XML file with employee data
• FTP: File Transfer Protocol; one protocol used to transfer files between computers
• RSS: Really Simple Syndication, Rich Site Summary (there is some disagreement over what it currently stands for); an XML format used to describe content changes on a website; allows users to subscribe to a site and have software which can check this information and either notify the user of updates, or download the updated or new content automatically
• blog: weB LOG; allows anyone to publish their thoughts to an already saturated Web; some blogs are very influential, but most will tell you what someone ate or watched on television last night
• trackback: a feature which lets the author of a blog post know when their post has been mentioned elsewhere on the web
• wiki: a website that allows users to add to the content and edit the content
• MOOC: Massive Open online Course
• CMS: Content Management System; a system that makes it easier for non-technical people to add, modify, and delete content from a web site
• podcast: a digital audio recording; commonly used with RSS to make subscription and automatic download available; great for time-shifting radio broadcasts and publishing lectures, tutorials, and personal "radio" shows
• IM: Instant Messaging; basically chat with a small number of participants, often only two
• cookies: small text files stored on a client computer to help identify it to a server, and/or to store some information such as items in a shopping cart, or user interface preferences (see the cookie demonstration web page for an example)
• hits: the number of times a web page is requested; sometimes used as a measure of success (which is a bad idea as can be easily demonstrated in class or by request)
• clickstream tracking: tracking the history of what links a user clicks on within a site
• SEO: Search Engine Optimization; tactics used to make sure an organization's online presence gets a high ranking placement in search engines such as Google, Yahoo!, and Bing
• spyware: software used to track a user's activities on a computer; may be illegal technically, but companies are often given a pass, and those annoying licenses you click on to install software often include you allowing a company to do this
• adware: software which is often given away free, but displays ads as you use it; a price is usually charged to remove the ads
• typosquatting: a website which is created to take advantage of people's spelling errors, usually to try to sell them something or get information from them; examples are arifrance.com, which used to sell discounted travel to take advantage of people who were really trying to reach airfrance.com
• Flash: used to present animation on websites; also used to create web sites with a nicer user interface (development software is proprietary to Adobe)
• Other technologies are commonly available to provide shopping carts, credit card processing, search engines, form processing, etc.

Web hosting options

• web hosting: paying a company to put your website on one of their servers and provide Internet access to it; service should include automatic backup, troubleshooting, some basic software applications for free, email accounts, and possibly extras
• dedicated hosting: having a server for one company's exclusive use
• shared hosting: using one server to host websites from several companies
• brick-and-mortar: refers to traditional stores
• click-and-mortar: companies that combine an online presence and traditional stores (such as Wal-Mart, Sears, etc.)
• pure-play: refers to stores that exist entirely on the web (such as Amazon or Google)
• load balancing: used on busy sites to handle large loads; traffic is divided up between different servers which all contain duplicates of the website
• mirrors: machines which contain duplicates of a website; often used for load balancing; sometimes used for backup purposes (eg. klickfamily.com/david/school contains a mirror of www.kishwaukeecollege.edu/faculty/dklick)
• co-location: this is used by companies that want to control their own website completely, but will have the servers installed at a different physical location; this way, the company can pay a third party that specializes in maintaining servers to keep their hardware and Internet connection running in a secure location; it is called co-location because the third party contracts with several companies to place all of their servers together in one location
• static web pages: web pages that don't change without the maintainer of a web site changing them (most of my instructor pages are static)
• dynamic web pages: web pages that update automatically, often based on data read in from a file or database (eg. eBay auctions) (an example of a dynamic web page is available on request and will probably be shown in class)
• Choosing a hosting service:
  • applications provided: shopping cart, forms processing, credit card processing, etc.
  • database provided: what kind, how much storage, etc.
  • storage space
  • traffic limits
  • technical support: type, quality, hours, cost
  • email support
  • design and development services
  • reliability: uptime, backups, procedures, stability of company and employees, location
  • scalability: can website grow and stay with this provider
  • security: company, location, employees, software used, procedures
  • setup fee
  • ongoing fees
• check out www.upperhost.com for sample reviews of hosting providers

Business models

• B2B: Business-to-business
• B2C: Business-to-consumer
• B2G: Business-to-government
• C2C: Consumer-to-consumer
• search advertising: advertising done through a search engine; this is very desirable since it targets people who are presumably already interested in the product
• banners: advertisements placed on a website; websites may be compensated for every user that clicks on the banner to go to the advertised website
• reach percentage: percentage of Web users that have visited a site in the past month
• content providers: refers to the organizations and people who produce content such as news, music, animation, research, tutorials, video, etc.
• Advertising: This is one of the big success stories on the Internet. Advertising is what makes Google one of the top companies in the world.
• exchanges: finding someone to trade with used to be difficult and costly; now the Web makes it easy; the organizer doesn't need to store any inventory and costs are low, but usually gets a percentage of the exchange value
• auctions: organizing auctions used to be complex, time-consuming, and costly; now the Web makes it easy; the organizer doesn't need to store any inventory and costs are low, but usually gets a percentage of the selling price (and sometimes a fee for listing a product)
• reverse auctions: similar to an auction, but the buyer lists what they want to purchase and sellers compete to provide the lowest price
• online business alliances: several business may partner to create one popular site to draw traffic (realtors), or to create one spot for vendors to compete to provide goods and services, or to provide complementary services (eg. Amazon marketplace)
• e-tailing: retailing done online; this market segment has been growing rapidly
• fulfillment: some companies specialize in the logistics of collecting items in large warehouses, and then picking, packing and shipping orders for their customers, or customer of other companies; the process of putting and order together and getting it to the client is called fulfillment
• consumer profiling: companies may use a consumer's history and their database of other consumer histories to target advertising toward the consumer
• conversion rate: the percentage of website visitors who actually make a purchase
• bill payment/presentation: the ability to present bills and take payments online greatly reduces the cost of preparing hardcopy bills, mailing them out, and manually processing the checks mailed in; in addition, the payments generally come in faster and more dependably
• dispersed workforce: just as goods and other services can be procured over the Web, it is now possible to buy labor over the Web; programmers, web designers, researchers, writers, and many other professions can be located anywhere in the world; companies can purchase labor where it is cheapest
• extra-organizational workforce: see dispersed workforce; extra-organizational means that the workers are not direct employees of the company they are working for
• M-commerce: refers to conducting commerce via mobile devices; this can take the form of advertising when you come within a short range of a product or service, or it could even mean using your mobile device to purchase products (eg. parking, vending machines)
• commodity: any product sold for about the same price by many vendors in a competitive market; commodities are distinguished by not being very distinguishable; companies work hard to try to find some way to differentiate their product from others on the market to de-commoditize it

Tips for Web-based commerce

• target customers well and the money spent on the Web will be much more effective
• getting customer information and using CRM software to make the customers total experience more personalized and enjoyable tends to pay large dividends
• use your online presence to shorten the business cycle; this may not seem like much, but it can generate a substantial amount of revenue over time
• let customers help themselves: most customers don't mind helping themselves find answers on your website as long as decent support and tools are available; this is why it is important to provide search capabilities, FAQs, etc.; this saves a lot of money versus paying for employees to help customers; make sure human help is available if needed
• be proactive: don't wait for the customer to decide to return; if they've been absent for a while, send an offer that will encourage them to return to your site (of course, you need their email address for that)
• de-commoditize your products: if your products are becoming a commodity, differentiate them with services or even image; provide package deals and extras to encourage shoppers to buy your products and not view them as just commodities to be supplied by the lowest bidder
• merge your online presence with your regular business model

Problems with online commerce

• spam: unsolicited commercial email; spam filters can be used with email servers or providers to cut down spam
• pop-up windows: windows that pop up in the browser, often from sites you want to leave; sometimes they pop up sop quickly it is hard to get rid of them; most browsers now include pop-up blocking settings
• adware: software that delivers advertising as you use it; some adware requires payment to stop the advertising; many people just stop using it and use something else
• spyware: software which reports back to a server on a user's computer activity, generally without the user's knowledge or consent; used for stealing account information and other malicious activities
• phishing: sending out messages (such as emails) which look authentic and encourage the user into divulging private information (usually by going to an authentic looking, but fraudulent website) [phishing example]
• pharming: redirecting traffic from a legitimate website to a fake website made to look like the original, generally so credit card or other private information can be stolen

Avoiding identity theft online

• don't let your credit out of your sight (such as in restaurants)
• only shop online at well-known and established companies
• try not to do business online with foreign companies if you don't already have a relationship with them
• make sure you are on a secure encrypted connection before entering personal information
• don't respond to emails and divulge anything unless you are absolutely sure you know it is safe
• check to make sure the website really has the domain name you expect and not something slightly different (or a bare IP address)
• use antivirus software and keep it updated (it guards against more than just viruses)
• use a firewall on your internet connection
• unplug your connection to the internet if you see anything suspicious
• don't divulge your social security number
• don't do business with people who contact you by phone
• don't trust the Better Business Bureau (their information is largely meaningless)
• don't let businesses make automtic withdrawals from your accounts
• Are there any others you would like to suggest?