E-commerce in the digital era

E-commerce strategy implementation

Learning objectives

1. Liệt kê và phân tích được các vấn đề thách thức trong vận hành mô hình kinh
doanh trên mạng
2. Xác định và thực hành các nguyên tắc xây dựng chiến lược kinh doanh: mục
tiêu, mô hình, tài chính, vận hành, nhân sự, marketing
3. Phân tích các vấn đề về chiến lược kinh doanh thương mại xã hội đối với các
SMEs
4. Liệt kê và phân tích các vấn đề về giao tiếp kinh doanh trong thương mại xã
hội
5. Trình bày được các cấp độ giao tiếp, các cấp độ tham gia của khách hàng, và
các vấn đề trong xây dựng danh tiếng 2
Contents

 Barriers to e-commerce

 E-commerce strategies

 E-commerce strategies of SMEs

 Communication strategies

 Customer engagement

3
Barriers to e-commerce (Rào cản đối với TMĐT)

 Authentication of buyers and sellers (Xác thực người mua và người bán)

 Generating and retaining trust (Tạo và duy trì lòng tin)

 Order fulfillment and delivery (Thực hiện và giao hàng)

 Security, and domain names (Bảo mật và tên miền)

Barriers to e-commerce

 Cultural differences: e-commerce >> cross-cultural users. (Sự khác biệt về văn hóa: thương mại
điện tử >> người dùng đa văn hóa.)
 Cultural attributes: social norms, local habits, and spoken languages (Thuộc tính văn hóa: chuẩn
mực xã hội, thói quen địa phương và ngôn ngữ nói)
 Globalizing the business websites: creating different sites for different countries, taking into account
site design elements, price quotes and payment infrastructures, currency conversion, customer
support, and language translation. (Toàn cầu hóa các trang web kinh doanh: tạo các trang web khác
nhau cho các quốc gia khác nhau, tính đến các yếu tố thiết kế trang web, báo giá và cơ sở hạ tầng
thanh toán, chuyển đổi tiền tệ, hỗ trợ khách hàng và dịch thuật ngôn ngữ.)
 Barriers to e-commerce

 Legal Issues
 International legal issues: the United Nations Commission on International Trade Law
(UNCITRAL) Model Law on Electronic Commerce 1985, 2006 (to provide national
legislators with a set of guidelines that are internationally acceptable, which specify
how to overcome some of the legal constraints in the development of e-commerce).
 UNCITRAL Model Law on International Commercial Arbitration 1985, With amendm
ents as adopted in 2006
 Geographic issues and localization: transportation and communication infrastructures
between and within countries and the type of product or service being delivered.
 Web localization: names, colors, sizes, and packaging.
Barriers to e-commerce

Economic and Financial Issues

 Taxation

 Electronic payment systems

 Pricing
Breaking down the barriers to e-commerce

 Be strategic: Follow the entire strategy life cycle

 Know your audience: cultural issues and legal constraints

 Localize: websites/stores need to be localized (local languages, products, price, local

currencies, local terms, conditions, and business practices based on local laws and cultural
practices).
 Think globally, act consistently: brand management, pricing, ad design, and content
creation and control are consistent with the company’s strategy.
Breaking down the barriers to e-commerce

 Value the human touch: human translators are preferred over machine translation programs.

 Clarify, document, explain: Pricing, privacy policies, shipping restrictions, contact

information, and business practices should be well documented, located on the website, and
visible to the customer.
 Offer services that reduce trade barriers: It is not feasible to offer prices and payments in all
currencies, so provide a link to a currency exchange service (e.g., xe.com) or to a currency
conversion calculator. In B2B e-commerce, integrate EC transactions with the
accounting/finance information system of the major buyers.
E-commerce strategy

 Business strategy is built to address 3 questions:

1. How can my business create value for customers?

2. How can my business create value for

employees?

3. How can my business create value by

collaborating with suppliers?
 Value creation? Willingness to pay (Customer) –
Price – Cost – Willingness to sell (Supplier)
E-commerce strategy

 Value creation foundation

 Low cost
 Differentiation
 Porter’s competitive advantage
E-commerce strategy

1. Establish clear goals and key performance indicators (KPIs)

2. Set expectations and ensure employees are aware of their roles and responsibilities

3. Delegate work and allocate resources effectively

4. Put the plan into action and continuously monitor its progress

5. Adjust your plan as necessary

6. Ensure your team has what they need to succeed and agrees on the desired outcome

7. Evaluate the results of the plan

Source: Havard Business School Online

E-commerce strategy
E-commerce strategy

 Examples for social media project goals

E-commerce strategy

 Examples for e-commerce KPIs

1. Web analytics (e.g., sessions and users, new and returning visitors, goal conversion rate,
time on page, average page load time, organic vs paid sessions, average session duration,
top 5 search queries, pages per session, top 10 landing pages…)

2. Financial reports (e.g., ROE, ROI, EPS, Stock price)

3. Marketing data (e.g., Web traffic sources, leads, page views, cost per lead, returning
visitors, conversion rate, click-through rate).

4. Operational data (e.g., delivery time, average stock volume)

5. Others (Employees: turnover rate, overtime hours)

E-commerce strategy
 Strategic planning
E-commerce strategy
 Strategic planning
E-commerce strategy
 Strategic execution
E-commerce strategy for Small and Medium-sized Enterprises

 e-commerce can be one of the most effective business strategies for small and medium-sized
enterprises (SMEs).
 SMEs initiated online presence and opened webstores because they realized there were
opportunities in marketing, business expansion, cost-cutting, procurement, and a wider
selection of partner alliances.
 Challenges: SMEs’ inability to handle large volumes of products, lack of knowledge or IT
expertise in the SME, and limited awareness of the associated opportunities and risks.
 Choosing an e-commerce: must be made in the context of the company’s overall business
strategy.
 Opportunities: e-commerce helps reach a larger number of buyers and sellers.
E-commerce strategy for Small and Medium-sized Enterprises
E-commerce strategy for Small and Medium-sized Enterprises
Additional guidelines

1. Effective marketing and advertising

2. User-friendly website

3. Good relationships between customers and merchants

4. Proper supply chain management and order fulfillment

5. Integration with internal and external information systems

6. Use of appropriate business models (including revenue models)

7. Effective and efficient infrastructure

8. Organization culture regarding becoming an e-business and social business

9. Effective leadership of the digital business team

E-commerce communication

 Media are communication channels used to disseminate news, information, entertainment

and promotional messages. Like all media, social media can take many different forms,
including text, images, audio, or video.
 People use social media for social interactions and conversations. Social media are one
type of media, with two differentiating characteristics:

1. They consist of online platforms and tools

2. They blend technology and social interactions for the co-creation of value.
E-commerce communication

E-commerce communication objectives

 Commerce is the ultimate goal of social media communication with customers and
prospects, as mentioned previously. Organizations set very specific, measurable objectives
before beginning any communication campaign, thus, helping to determine the
budget/staff time.
 Companies can also set tactical objectives to support sales goals, such as increasing
conversations, driving traffic to the website, gaining a large number of “likes” on
Facebook, or changing negative views of the brand.
E-commerce communication

Consumer behavior in online environments

1. Initiator: recognizes and suggests the need to buy a specific product or service.

2. Influencer: tries to convince other people to make a purchase.

3. Decider: makes the final buying decision.

4. Buyer: purchases the product or service and pays for it.

5. User: uses the product.

6. Followers: seek advice from others and are influenced by the advice.

7. Influencers: have large networks of followers, or have reputations as being experts and fair
(e.g., bloggers, review writers).

8. Advocates: loyal customers who are satisfied with certain products or services and are willing,
when asked, to provide testimonials to this effect.
Listening to customers

 Collective listening occurs through quantitative and qualitative primary market research
and social media monitoring via live dashboards.
 Individual listening occurs through participation in social media conversations and by
monitoring these conversations through various techniques.
 Marketers want to know three critical things that relate to a consumer’s experience with
the AIDA model (Attention, Interest, Desire, and Action):

1. What proportion of their target markets know the company’s brands and individual products
(attention)?

2. Are the attitudes of the markets positive or negative toward these brands (desire, interest)?

3. What proportion of the market purchases the products and how frequently do they make
repeat purchases (action)?
Listening to customers
Developing market communication

 Understanding consumers >> developing marketing communication goals >> social

media campaigns
 Social media participation increased employee productivity while working with customers:
information gathering and sharing, idea generation, and morale building.
 Social media also connects business partners and distribution channel members for
increased e-commerce activity.
 One important feature of social media communication is that, with their messages,
companies can effectively and efficiently target markets as small as one person.
Developing market communication
 Owned social media Paid social media Earned social media
Definition Channel a brand partially controlled Brand pays to leverage social media When customers become the channel
platforms
Examples Corporate and micro sites with Installs (cost per install—CPI) WOM (Word of Mouth); Buzz; Viral
social hooks; Facebook fans; Social actions (cost per action—CPA);
Twitter; Branded channels; Social engagement (cost per
Communities; engagement—CPE); Sponsorships
E-mail; CRM
Role Build “social CRM” channels for Ability to reach consumers in social Social media as earned media is often the
longer-term relationships with platforms and act as catalyst that feeds result of a well-executed and well-
consumers owned and earned media coordinated owned social and paid media

Benefits Engagement with consumers at Targeting Peer to peer/social

various stages of purchase funnel Immediacy Brand can direct message in paid/ owned
Multiple social channels/touch Scale media
points Peer to peer social distribution Transparent
Each fan/follower can influence Branded content Consumer voice
one-to-many via social graph Measurable Measurable
Increased targeting Brand safe (moderation) Spreads quickly via social graphs
Builds customer loyalty Brand directed
Challenges Multiple channels to build/ maintain Industry standards in early stages Active brand involvement
Ongoing interaction Pricing models evolving Consumers can ignite positive or
Content controlled/not distributed Rapidly changing environment negative conversation quickly
platform
Public CRM

Source: Interactive Advertising Bureau. “Social Media Guide.” February 2010

iab.net/Media/file/IAB SocialMedia_Booklet.pdf
Developing market communication
Consumer engagement in e-commerce

 Customers are socially oriented and engaged.

 Customer engagement: the engagement of customers with one another, with a company,
or a brand.
 There are many levels of online user engagement.
 The benefits of engagement

 Optimize online customer interaction and increase awareness.

 Leverage customer contributions to lead to competitive advantage.

 Leverage employee engagement for competitive advantage.

 Enable organizations to properly and quickly respond to the fundamental changes in consumer behavior
on the Internet.
 Overcome the ineffectiveness of the traditional advertising broadcasting model.

 Overcome the decreasing brand loyalty trend, increasing brand loyalty and a company’s reputation.

 Help companies provide an effective communication agenda

 Help maximize customer value across all online channels.

 Increase sales.

 Decrease operating cost.

The benefits of engagement
Social media engagement levels

 Social media engagement occurs among customers and between the company and Internet
users who are actively discussing the brand. This is compared to traditional media, which
only allows passive exposure, such as when a consumer is watching television.
 Traditional media will prompt engagement when (1) the consumer writes an e-mail or
letter to the editor, (2) telephones a broadcast station, or (3) posts a reaction on their own
or the company’s Facebook or Twitter page.
Social media engagement levels
Engagement metrics
 Engagement metrics: depend on the specific content, promotion, and communication objectives/tools.

 Content viewership: the number of users who consume content, such as reading a blog (page views),
watching videos or listening to podcasts, and downloading white papers.

 Tagging, bookmarking, or “likes” for content that can be counted.

 Membership/follower metrics count the number of RSS subscribers.

 Number of shares measures how many times viral content is shared with others.

 Content creation counts the number of users who upload ads for a UGC contest.

 The number of people who rate or review products, write comments on blogs or videos, retweet
interesting or humorous tweets, and other content-related items measured in previous categories.

 Online games: number playing, length of time in-game, purchase of virtual properties, and clicks on
game links.
Reputation management in e-commerce

 Reputation: the beliefs or opinions that are generally held about someone or something

 e-commerce users can shape the reputation of a company, its brands, and its employees

 Brands and companies must control, monitor, engage, and participate in social media
conversations or pay the consequences.
 Quality, transparency, and trust principally influence company and brand reputations. In order
to be trusted, an entity must be reliable, high quality, authentic, transparent, and follow
through on its promises.
 Marketers often describe a brand as a promise to deliver promoted benefits, and if they do not
follow through on that promise, they are open to attack in social media.
Why does reputation matter?

 It is very difficult for a company to recover from reputation

damage, and according to the experiences of many companies,
it can take several years to repair reputation damage.
 There has been a great deal of talk and information about
using social media for personal branding. This especially
applies to consultants, salespeople, and other professionals, as
well as to college students who are about to enter the job
market.
Build, maintain, monitor, repair, and learn

 It all starts with the company’s actions. The company can use owned or paid media and
join the conversation in earned social media to communicate its benefits to consumers
and other stakeholders.
 Maintaining a positive reputation requires constant Internet and offline media monitoring
and then sometimes participating when things go awry.
 We need to monitor social media conversations 24/7 and assign appropriate personnel to
Facebook and other social media for beneficial user interactions
 Does deleting posts work? Rarely! In many cases, it may only encourage the poster to
scream louder about being censored, as happened in the Nestlé case. Most social media
marketing experts advise deleting only the most offensive posts while trying to address
Build, maintain, monitor, repair, and learn

 Repairing reputations can take years: fixing the fundamental problems causing the crisis,
communicating the solutions to important stakeholders, and enticing social media participants to
spread the conversation.
 In Google search: As with most negative posts, the way to bury it is to be sure the company has
many positive posts and pages that include recent content.
 Most good companies learn from criticism in social media and act upon what they hear. Negative
comments add authenticity in balancing a company’s one-sided owned and paid media, and when
handled well, can boost reputations and sales.
 Product reviews, complaints, and positive suggestions help companies improve products,
processes, and Web content. The best way to encourage this type of posting is by hosting a
conversation on the company’s own social media properties so it becomes easier to identify, learn,