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Monday, July 18, 2005

Build an E-Commerce Solution You Can Take to the Bank

Posted: 2005-07-18T00:12:47Z


In the 1990’s we saw an aggressive expansion of communications into virtual or online environments. Some of this expansion sought to duplicate an existing offline presence. In other cases, it was an extension; while others expected this new capability to replace “bricks and mortar.” These strategic decisions were fundamental to the success or failure of those organizations as well as how the web has evolved.

Some of the advantages of an online environment include less expensive transaction costs compared to a physical environment. Content can be designed and delivered to meet dynamic and individual consumer needs and, designed well, it can also provide an efficient investment of consumers’ time.

There are also some disadvantages or difficulties in online environments, including requirements for a new and different infrastructure. New staff, skills, and management are also often required. Because people are interacting with machines (computers) there can be a challenge or difficulty in delivering a “warm” personal interface that welcomes consumers and makes them feel comfortable. To accomplish this, the site must be designed and content provided in an intuitive and user friendly way.

Business on the web creates an even more complex consideration in that consumers cannot touch and feel or experience the goods or services delivered as they can in a physical or offline environment. Because of this, several considerations must be taken into account including effectively communicating the features, benefits, look and feel that consumers need to understand and be enticed to purchase. Security has always been an issue in online environments and many declared early on that this obstacle would prohibit the success of broad-based, mass E-Commerce. While much of this has been overcome, the recent news has been filled with companies divulging lapses in security and breeches of fiduciary responsibilities. For this reason, security remains an important issue in continuing the success of E-Commerce.

As shown below, the trend for E-Commerce is and has been impressive. According to recent government statistics, the use of E-Commerce has increased nearly four-fold, since 4Q1999 when approximately .6% of all retail transactions (adjusted for seasonality, holiday, and trading day differences) occurred online to now when approximately 2.2% of transactions were placed online in 1Q2005. This seems to leave little doubt about the future of this exciting medium; however, showing up is not good enough and there are winners and losers. There are also missed or lost opportunities and how, not if, an E-Commerce experience is designed, developed, delivered and managed may well be the determining factor in how much leverage this marketing tool provides to its owners and users.

Estimated Quarterly U.S. Retail E-Commerce Sales as a Percent of Total Quarterly Retail Sales: 4th Quarter 1999– 1st Quarter 2005; U.S. Census Bureau, Department of Commerce; May 20, 2005

Considerations for E-Commerce sites include overall impressions consumers receive from the site, as well as what content is provided, how it is organized and how it is accessed. It is also important to understand elements of design, navigation, security, and technical considerations in providing an effective business interface. A technique for maximizing the effectiveness of these elements is the development of “use cases” where profiles of user segments are created with projected scenarios of how they would expect to use the site. These are then used to build flow paths, develop content, and design navigation to support an effective user experience. Testing these beta environments with users in focus groups allows a closer inspection of actual use and allows the design to be refined based on user input. On occasion, moderate to extensive changes can be suggested based on user input if a model or projection was incomplete.

Specific questions that may be considered include:
o Does the website address the needs of the users?
o Are security processes and tools in place to ensure the security of all transactions and the identity of users?
o Are transactions able to be accomplished quickly and effectively?
o Is the user able to recognize the value of subsequent, ancillary, and additional purchases to maximize the value of the relationship?
o Can users quickly get the "big picture" of what is offered by the website?
o Does the website contain accurate, high quality content (i.e., interesting, useful resources)?
o Is the authority of the website clear?
o Are authentic resources used (i.e., reviewed materials, established sources, primary materials)?
o Is the content relevant, useful, and meaningful to the intended audience?

Using these as a part of an effective assessment, shows areas where the site is particularly effective or less so. Evaluating the site’s purpose, strengths and weakness along with available budget, resources and risk considerations, allows the team to focus on opportunities that will deliver the greatest value in the least time and with less risk.

It is important to measure and assess site performance continuously and several tools are available for this. Defining success metrics based on business expectations and consumer needs set the performance standards to evaluate marketing activities. Combining these elements can provide a Consumer Engagement Index as a general assessment of how well the site is performing.

Specific elements that may also need to be considered include assisting staff and management in identifying and quantifying strategic opportunities, assisting sales and sales management in identifying, establishing, building and maintaining consumer relationships, supporting sophisticated, results oriented communications strategies and tactics, supporting increasingly effective and efficient marketing, and aiding in the overall management of the organization relative to its business and financial objectives.

Alliances and partnerships are an important element of an organization’s service delivery and it is important to recognize and manage these relationships effectively. Be sure to provide a notice to consumers alerting them when they are leaving the corporate site and noting that the experience in that environment is not the direct responsibility of your company. It is important that the company work closely with partners to ensure a smooth transition between environments and that the same or higher standards of security and consumer experience management are delivered. This transition back to the company’s site should also be managed in a way that allows easy navigation so consumers receive full value from other company and partner offerings.

Recognizing that existing relationships may currently meet many consumers’ requirements, it is important to continuously understand consumers’ changing expectations so that these are consistently met or exceeded. This may require a routine assessment of consumers’ needs, availability of providers supported on the corporate or partner sites, as well as satisfaction levels with those products, services, and providers. Developing a report card to assess these is an important element in maintaining the high quality relationship consumers expect and deserve.

The technologies available to support and assist in developing and managing these environments are in constant flux. Due consideration should be taken in determining tool, capability, total costs of ownership, availability of experienced support resources, and how well each tool supports consumer and organizational requirements. Of course, needs, tools, and capabilities change over time, but it is important to make decisions based on near-term requirements but balanced against longer-term viability. Treated appropriately, technology is an investment and we should make technology decisions that allow the organization to be flexible and extend capabilities beyond current needs.

Staff and human resources may be the most critical element in the mix. Regarding the core team, it’s important to identify and consider the various functions or activities that need to be performed, the skills required to accomplish those activities, and the number of folks on hand or required to do the work. It is important to evaluate and understand who will be doing what, what tools are required and some sense of the work volume and required effort. We must recognize where there are gaps to be filled and make plans to address them.

Due consideration ensures the organization structure supports functions but also workflow processes. Consider processes and process management. Cross functional teams and project management can be complex. Use these considerations, manage the environment well and you will be on the way to building an E-Commerce site you can take to the bank.Please feel free to use any or all of this information to improve your life and the lives of others. "A life without giving is a life without living." Brett Gow


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