Ecommerce Guide: Planning for e-commerce

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E-commerce plays an increasingly important role in the way in which products and services are purchased.

E-commerce systems such as your website can be used to market and sell to customers, and to provide after-sales support. E-commerce can also be an important part of strengthening relationships and improving the efficiency of your dealings with suppliers and other key trading partners.

This guide looks at the key issues to consider when planning for the introduction of e-commerce. It provides advice on how best to identify the opportunities for e-commerce within your business and the solutions available. It also emphasises the need to plan for the ongoing development and maintenance of any e-commerce system at the outset.

Identifying e-commerce opportunities

There are several different ways you might use e-commerce in your business.

Direct sales
Many businesses use e-commerce for the direct selling of goods or services online. For some businesses such as those selling software or music, the actual sale and delivery of goods can be made online. However, for most the supply of goods will continue to require a physical delivery.

If you plan to sell online, you may need to rethink many of your business activities. This is because you will fundamentally change the way in which you interact with your customers - for example, if customers place orders online instead of talking to a salesperson. You will also need to work out how every aspect of a transaction is handled - including order confirmation, invoicing and payment, and deliveries and returns. 

Pre-sales
You can use your website for pre-sales activities - exploiting the widespread use of the internet to generate sales leads. At its most basic this can be through the use of 'brochureware' - having an online version of your promotional materials on your site. Other options include email campaigns or online advertising to attract visitors to your own website where you can promote your products.

Post-sales support
You can also use the internet to automate aspects of your customer support to reduce the number of routine customer service calls. This can be achieved by using your site to answer the most frequently asked questions, or by putting technical information online.

However you decide to use e-commerce, it is important to define your expectations from the outset. What level of sales are you hoping to make? How many sales leads are you looking to generate? What percentage reduction in customer telephone calls are you expecting to achieve? Ensure that targets are put in place so that you can measure the success, or otherwise, of your e-commerce facility.

 

Making an e-commerce site easy to use

The ease with which a customer is able to use an e-commerce site is an important part of its success. It's also an important part of your online brand image.

There are three elements of the shopping process that influence how easy and enjoyable the customer finds it to shop on an e-commerce site - the shop front, shopping cart and payment software.

Shop front
The shop front is the interface presented to the customer. This often incorporates an online catalogue that enables them to browse for products and identify those they wish to purchase.

Customers should be able to find the product they are looking for quickly. An eight-second guideline is frequently cited - if customers are unable to find the product within that time, they are likely to go to an alternative site.

The design of the shop front should make shopping intuitive, with the customer knowing at all times what stage of the buying process they are at.

Always give the end user the ability to search your site to locate the product.

Shopping cart
This is the software that facilitates easy selection and payment for products purchased by a customer from an e-commerce website. Once the goods have been selected, the customer should find the checkout clearly signposted, so that they can proceed to pay for the goods.

The system should process the order speedily and provide you with a summary, including any packing and shipping requirements. It should also generate a printable receipt and allow you to send a confirmation email to the customer.

Payment software
Most customers will wish to pay for their purchases with credit or debit cards. There are three options for accepting such payments - you can:

  • open a merchant account
  • use a payment processing company
  • set up an online shop within a virtual shopping mall

 

Trading partner relationships

As well as offering new ways of doing business with customers, e-commerce also provides new ways of building closer links and improving business relationships with key trading partners.

These internet-based technologies and processes also allow you to improve your own business efficiency. Some of the key technologies are listed below.

Intranets
These are private internal company networks that use the same browser-based technology and network protocols as the internet. Intranets:

  • are protected from unauthorised use by a firewall

  • improve efficiency by enabling employees to search the business' knowledge and information store from their own desktop, regardless of location

Extranets
This is a shared intranet that allows users to share key trading data such as inventory levels and sales trends. Extranets can:

  • be made available to selected external partners, such as vendors, contractors, suppliers and key customers

  • be used for exchanging data and applications, and sharing specific business information

  • improve supply chain management

See our guide on the benefits of intranets and extranets.

Supply chain management
The concept of supply chain management revolves around having the right product in the right place, at the right time, and in the right condition.

The key aspects of supply chain management include the ability of businesses to:

  • exchange information on stock levels

  • fulfil orders more quickly

  • minimise excess inventory

  • improve customer service

  • use a networking infrastructure to ensure good response times and speed

E-marketplaces
There are many online exchanges that enable suppliers, buyers and intermediaries to come together and offer products or services to each other, according to set criteria. Buyers and sellers work interactively with bids and offers. When a deal is made, it is a match between the buyer and seller on variables such as price, volume and delivery costs.

Reverse auctions are buyer-controlled events and are used to attract bids, with the lowest bid winning. Buyers post details of the goods they want to buy and suppliers compete to provide them.

 

Recognising the ongoing commitment

Even in the planning stages of an e-commerce project, it is important to understand how the website will be maintained on a day-to-day basis. There are also various marketing and security issues that need to be taken into account.

Site maintenance
Changes in product details, product ranges, special offers, up-to-date advertisements and sales information will all need to be maintained throughout the life of the site. In addition, you should consider redesigning the site on a periodic basis in order to improve the features offered to customers and keep the site looking fresh.

Customer feedback
It is important that the site evolves to meet the needs of your customers. There are a number of actions you can take to encourage customer feedback, including carrying out surveys and putting feedback forms on the site.

Marketing
No matter how well designed your e-commerce site is and how competitive your products and prices are, if the customers are unaware of its existence then you will fail to exploit its potential.

Popular methods of promoting a website include:

  • Email advertising campaigns.
  • Web adverts - including sponsored links where you 'pay per click', banner adverts and reciprocal links. See our guide on pay per click advertising.
  • Digital coupons offering discounts.
  • Online directories.

Use the web tools provided by the search engines to help you optimise your search engine performance and improve your website's ranking. Many of the main search engines - such as Google, Yahoo! and MSN - provide tips, advice and tools to help you improve your website's searchability. Access the Google Webmaster tools on the Google website - Opens in a new window.

Don't forget to take full advantage of search engines by ensuring that they pick up all of the key terms that you think your customers will use to find your site. Each product will have its own key words and descriptions. Your website designer can help you include the key phrases and metadata (information that describes a webpage, but isn't visible on the pages) when designing and building your website. See our guide on search engine optimisation.

The majority of search engines place little value on the 'meta' keywords - ensure that the keyword phrases you chose appear in your webpage title and the page body text. This will improve organic search engine listings. Find out about online marketing on the National B2B Centre website - Opens in a new window.

Security considerations
Using the internet for business purposes is fraught with risks to security. Hackers can attack systems at any time. Whatever your business, there's a real risk that your system may become the target of an attack that could affect your organisation.

You should recognise the need for effective security controls to prevent your site from falling victim to hackers or fraudsters.

See our guide on securing your e-commerce systems.

Contingency planning
The more successful your e-commerce service becomes, the more reliant you will become upon it. You should consider what risks and threats your e-commerce site might be open to and have contingency plans to ensure that you can continue trading should anything go wrong.

 

Who is involved in an e-commerce project?

E-commerce impacts upon almost every function within a business. The interested parties within a business include:

  • board-level management
  • purchasing
  • inventory management
  • manufacturing
  • service provision
  • direct sales
  • sales channel management
  • fulfilment
  • post-sales support
  • marketing and PR
  • accounting
  • training
  • legal

Externally, a variety of suppliers will also need to be involved within an e-commerce project including:

  • existing hardware and software suppliers
  • specialist internet hardware and software suppliers
  • programmers, web designers and consultants used on an 'as required' basis
  • internet service providers
  • domain name registrar
  • telecommunication providers
  • major suppliers
  • major customers
  • advertising/marketing design agencies
  • specialist business media
  • accountants/auditors
  • solicitors
  • training companies

The range of  specialist IT skills required will be dependent upon the scale and complexity of the proposed e-commerce system. However, these skills are likely to include experience of:

  • servers - Microsoft, Sun, Linux etc
  • firewalls and security
  • graphic design and production
  • HTML and XML coding
  • programming languages
  • database technologies

 

CASE STUDY: How planning helped us create a profitable website

Lancashire-based food manufacturer and retailer The Bury Black Pudding Company started trading from a market stall and website in 2002. Since then the business has expanded and it now employs 40 people and supplies major supermarkets. Company director Debbie Pierce explains how online sales are a key part of the business.

What I did
"We have a stall at Bury market and people come from miles around to buy our black pudding. We set up the website so we could deliver to people's doors and reach those who couldn't make the journey to Bury."

  • Emphasise product and brand
    "A local website design business helped us put the site together. We sat down and thought about what we needed on it. You need a bit of history about the business and we wanted to advertise that the stall was there for people to visit. I also wanted to get as much information as possible about the product in and some nice pictures that uploaded instantly. I know if I click on a site and the pictures take ages to load then I click straight off. I think all of these things have helped us make online sales."
  • Keep it simple and easy
    "Some of our customers are of an older generation and, as I am not that computer literate myself, I felt it was important the site was simple to use. You literally click on the front page, there are pictures of what is available, you click on what you want and the pack size, and then you can carry on shopping or go to the checkout.

    "Then users fill in their details, give any delivery instructions and then pay - five or six steps and they're done. Some websites you have to look around for instructions so I made sure everything was clear and there wasn't too much on each page. We also put the secure-payment logo on the home page because I think people want to know the site is secure."
  • Promote positive developments
    "E-commerce was a big part of the business at the beginning, but then we got into the major supermarkets. Now probably about 10 per cent of our sales are online and half of that is repeat business.

"There is also a retail page on the website that says which supermarkets you'll find us in, so users can tell if they are near a store stocking our products. You've got to cover every angle. We also get trade enquiries through the website because there is a page where they are able to email enquiries to us."

What I'd do differently

  • Update web content
    "The website was the first thing we set up and I am due to give it a bit of a revamp soon. Technically I'm not going to do much, though, because I still want it to be easy to use.

"We could have put more information on as we developed as a business. I've not really kept up with it but it is down to finances and time really."

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