In the past two articles we looked at why businesses should go for a website. In this article, we shall look at the challenges of building an e-commerce centric website. Certainly there are technology problems, but more important are meeting customer expectations and integrating both offline and online business practices. As we shall see, e-commerce sites scope are much broader and complex than sites of other kind.

1. Technology
2. Order Processing
3. Payment Handling
4. Website Security
5. Catalog Structure
6. Maintaining SKU Numbers
7. Real Time System
8. Pricing Practices
9. Shipping
10. Handling Returns
11. Customer Care Support

1. Technology

One of the most important decisions for a merchant is to choose the right technology. This becomes more critical if the merchant/business cannot afford an in-house technical team. Such merchants are at the mercy of software vendors. Before arriving at the technology the merchant should make it a point to talk to many such vendors. This process not only helps merchants to get familiar with various technologies but also the minute details required for building a scalable website. There are also FREE E-COMMERCE solutions available on the Internet. osCommerce, VirtueMart/Joomla and Zen Cart are some of the freely available e-commerce solutions.

2. Order Processing

An online order can be processed in two ways. Once an order is placed, an automatic order processing system acknowledges the order, verifies and processes credit card transactions and also interfaces the order system with the inventory system for processing shipment (shipment will have to be done manually). Order Processing System (OPS) enables order taking system is completely integrated with inventory and shipping system in real time. On the other hand, an order taking system is only responsible for accepting and acknowledging the order placed (order taking systems, may or may not handle credit card transactions). Once this is complete, manual process takes over at the inventory end. To provide real-time services, merchants can go for Order Processing System (OPS).

3. Payment Handling

In an e-commerce environment payments can be accepted from a Credit Card, via Bank Transfer, Cash-on-Delivery (CoD) or by traditional banking instruments like Cheque etc. So a merchant should consider all these options carefully before choosing his/her mode for accepting payment. Merchants can consider CoD for customers, who are not comfortable using credit cards over the Internet or with no credit cards.

4. Website Security

Online merchants would have to collect personal information of buyers (may include credit card information) for payment towards the goods ordered. Measures should be taken to ensure the safety of the data. It is advisable for merchants (especially small ones) to not to collect or store credit card information in their system.

Instead of handling credit cards directly in their site, merchants can direct shoppers to a payment gateway website along with any necessary information like the amount to be collected etc. The payment gateway website collects credit card number, CVV number and any other required information for verification purpose. Then the payment gateway checks the balance (and other details such as name, address etc are also checked) and either approves or rejects the customer transaction. After this the payment gateway passes the control to the shopping site along with verification result.

Note: A payment gateway facilitates the transfer of information/funds between a payment portal (such as a website or mobile phone) and the front-end processor or the acquiring bank (e.g. credit card issuing bank). Payment gateway is the server where the customer completes the online transaction by providing his/her credit card/bank account information. The payment gateway process is more complex than what is stated above.

5. Catalog Structure

In an e-commerce environment, the most important task for merchants is to maintain a product catalog that is consistent across various categories. Merchants need to invest lot of effort in maintaining such a catalog. Care should be taken to fit products that normally does not fit into any of the defined categories, or products that can fit into many categories. There would also be situations where additional sub-categories would have to be created in the catalog structure to accommodate a particular product. Offline merchants can overlook categorization if they do want a presence in the net. But a consistent product catalog is a requirement for a robust and scalable e-commerce website.

Part II of the article will appear next week.

Last week, we posted on why businesses should have a website. Now it has been decided to have a website. But before proceeding any further have you or your associates decided on what to expect from your website. What would be the goal or objective of the website? Like any business investment, investment in a website should also be measurable. It can be measured in terms of increase in revenue, fresh sales lead, improved customer relationship and spreading awareness. So before starting the work on your website identify what you want your website to do for your business. Given below is a sample list of points for businesses to ponder on.

What’s the goal of the website?

• To inform?
• To build a community?
• To gain valuable market research?
• To reduce support and customer service costs?
• To reach a broad audience with a message?
• To find sales leads?
• To conduct e-commerce?
• To gain advertising revenue?
• To brand your company?
• To build trust?
• To reduce printing and mailing costs?

Source: webcredible.co.uk

These are just some of the many possibilities. But many businesses think that a website is sort of a name-board to provide information on company, contact etc. Businesses need clear understanding on how to harness the power of web.

Internet, with inbuilt level playing field, has made it possible for even small businesses to compete against bigger retailers. So it would do well for businesses to build a strong business tool on the Internet rather than a simple marketing tool.

So like any business decisions, stakeholders should think like their target customers. Businesses have two options. The first is to study their competitor websites and identify features that are attractive or missing. Second is to put themselves in the shoes of their customers and ask these basic questions. 1. Why do visitors visit the website? 2. What information will they be looking for?  3. For what other reasons will they visit the site?

Businesses should present the identified points/features to identified stakeholder group for providing structure to the findings and translating them to a website. Then businesses can form an informal user group to identify issues related to usability, aesthetics etc.

Depending on the involvement and the effort, websites need to be newly developed or redesigned or scrapped and built from scratch. But the most important point to bear in mind is that a well designed website will attract good results and referrals. It would definitely be one of those decisions that you would want to take credit for.

Why do you have/need a website? I meet a lot of people from various walks of life. Most of the time we end up talking about websites and my favorite question is, what the need is for a website. Some people know their answer very well but most of them do not have a single clue on why they are having a website. The answers that I come across are different like the people I meet. Below are some of the interesting responses that I had gathered all these years.

1. Peer Pressure
2. Isn’t it cool to be on the web?
3. Available 24/7
4. Not limited by geography constraints
5. Register my brand name in Internet
6. Attract customers during research phase itself
7. Maintain relationship with customers
8. Cost-effective marketing
9. Visiting Card has too much of white-space
10. Improve communication with customers

1. Peer Pressure

As with any technology adoption, “Peer Pressure” is driving businesses to the web. My competition is on the web, so I also would like to be part of it. But being a recent entrant, Johnny-come-latelies will have to overcome lot of challenges to make their presence felt.

2. Isn’t it cool to be on the web?

Everybody’s talking about IT (InterneT). The numbers churned out in media is very impressive (almost 1.5 billion Internet users). Youngsters have taken to the web in a big way. So would like to be part of the future.

3. Available 24/7

The website is available 24/7, 365 days a year. This makes it convenient for the merchant to strike/build relationship, with customers and potential customers, even on holidays and after-working hours.

4. Not limited by geography constraints

Being on the Internet also provides global visibility as websites are not limited by geography. Moving to the web essentially globalizes the customer-base.

5. Register the brand name in Internet

Many businesses want to register their brand name in the Internet, before someone else takes them. Registering a website also ensures the business look professional. In addition they also get professional email-ids with business names part of it.

6. Attract customers during research phase itself

These days Internet is the first-stop for people to find information, research on products and services and to connect. A website, available 24/7 without geography constraints, is an ideal location to tell its visitors about the business and its products and services. A website is also not constrained by any physical limitations so that businesses can display wide variety of products and services. Just imagine having an employee attend all the business queries even during the nights. This will definitely incur additional expenses and he/she will not be in a position to attend all the calls. But on the other hand, websites can also be used as a first-level call-centre i.e. to educate visitors on the features including photos of products and services. This enables employees to concentrate on other important questions. A website can also be used to publish information on events, offers, promotions etc.

7. Maintain relationship with customers

A website can also be used to accept feedback/comments from the customers and not only to publish information. The queries can be aggregated and segmented and can be added to the FAQ (frequently-asked-questions) section, on an on-going basis. Businesses can project a professional and positive attitude with a website that is up-to-date

8. Cost-effective marketing

Internet provides unmatched reach, 24/7 availability and interactivity. Adding cost-effectiveness to the list makes Internet the best media for marketing businesses. The ROI provided by Internet cannot be matched by traditional media like Radio, Newspapers, and Television etc. Websites can be effectively used to publish about business products, services, events, offers, promotions etc.

9. Visiting Card has too much of white-space

Believe or not, one gentleman told me that there was too much of white-space on his business card, so he had to fill it up with the name of his website and e-mail address.

10. Improve communication with customers

Websites enhance the communication process between businesses and their customers. Websites enable businesses to keep their customer base informed through various avenues such as e-mail, forums, blogs, enquiry form, message boards etc.

In the last post we saw the advantages of Online Shopping.  As a continuation let us look disadvantages of Online Shopping.

Disadvantages:
Lack of Shopping Experience: The main disadvantage identified by shoppers is that online shopping is not entertaining as a shopping trip to a shopping mall or center. For many, shopping is not only about going to stores for purchasing goods, but also a chance for social interaction and for a few, it is a therapy session. So when shopping online, shoppers do not derive the pleasure of any social contact. But shoppers can utilize the saved time towards meeting up with friends, relatives etc. Though meeting up with friends and relatives may not completely compensate the pleasure derived from shopping at a mall, but at least it can provide part relief.

Lack of Touch and Feel: Certain product categories such as apparels, footwear, accessories, perfumes, groceries etc need to be touched, smelt, felt and tried. But this is not possible in online shopping. At a brick and mortar store, shoppers can browse through racks and racks of physical products, feel them, scrutinize the products closely for any damages etc. If the product happens to be a cloth or an accessory, shoppers can see and feel the texture of the cloth and also try it on to see if it is a right fit. Online shoppers also have valid reasons to worry that the products that they receive may not be the same as the one that was viewed online. With the advent of 3D technology, it is possible to compensate some of the drawbacks associated with online purchase of apparels. May e-tailers in US, Europe, Japan etc are developing virtual fitting room that shoppers can use to try clothes on an image like that of their own.

Privacy Issues: Many online shoppers have serious concerns about sharing their personal information such as name, age and address with a website. Shoppers are concerned about the information they share with websites. Shoppers fear that their personal information can be compromised in many ways, including identity thefts, credit card frauds, solicitation from marketing people, spam mails, etc.

Delay in Delivery: Depending on the product availability it might take anywhere between couple of days to a couple of weeks for the product to be delivered. Normally websites do not say that a particular product is on backorder. Some websites may say that a particular product is on backorder immediately after the purchasing process is complete. Some other websites may take weeks together to inform shoppers that the ordered product is on backorder. This might upset shoppers as they would have wanted the possession of the product before a particular date.

Shipping Charges: Depending on the delivery location and product weight, the store might additionally charge towards shipping and handling. Most shoppers don’t look at the bottom line when the “purchase” button is pressed and they are bit taken back after seeing the final charges as it is normally expensive than the original charge. Sometimes the shipping charges might exceed the market rate.

Too Many Choices: Websites by being virtual and not limited by physical boundaries possess the capability of infinite shelf-space. Many websites boasts tens of thousands products especially online book stores. Though unlimited shelf-space can be very attractive, but shoppers have limited attention span and may be unable to process thousands of products, at a single go. Therefore online stores should ensure products are organized properly under their respective categories and facilitate queries based on product features such as color, weight etc.

Access to Computers and the Internet: Anyone can visit a brick and mortar store for their purchases. But on the other hand, online shopping requires access to computers, an Internet connection, knowledge of computer and Internet, and more importantly a credit card. With so many blocks, senior citizens and those with aversion towards computer and credit cards tend to shop at retail stores.

Shipping Blues: Since websites ship the purchased products through a third party, shoppers can never be sure whether they would get the product in time. There is also a possibility of receiving damaged products and the store could also be delivering products in installments.

Inability to Negotiate: In brick and mortar stores, shoppers have the ability to interact with the salesperson directly. This enables shoppers to negotiate prices and payment terms on products, including those with prices marked. But negotiation of prices and payment terms is not possible in an online environment due to lack of face-to-face interaction.

Returns: Even with brick and mortar stores, returns and exchanges can be a nightmare. Just imagine how much more difficult returns and exchanges will be when dealing with online stores. This is due to lack of personal interaction. Many online stores also charge restocking and shipping costs for handling returns. So it is advisable for online shoppers to verify the online store’s policies related to shipping, returns etc before shopping with them.

In the last post we saw the state of Internet and Broadband penetration in Malaysia and Singapore. In this post let us look at the advantages of Online Shopping.

Advantages:
Convenience: The most important advantage of Internet shopping is the convenience factor. Consumers can shop from their Home, Office or virtually from anywhere. All it requires is a personal computer/laptop, an Internet connection and the ubiquitous credit card. With wireless Internet, consumers can also shop while traveling. Nowadays it is also possible to shop through the mobile phone.

24/7 Availability: Online stores are available 24/7. Many consumers find online shopping attractive as web-stores are accessible anywhere and anytime, day and night. Round-the-clock (24/7) availability provides shoppers the ability to take an informed decision at their own pace rather than being pressured to buy a particular product, due to lack of time.

Comfort: The comfort offered by online shopping cannot be matched by physical shopping experience. Offline shopping requires shoppers to travel, browse through the product racks; spend time standing at the bill counter etc. It is no wonder that many shoppers feel drained at the end of their shopping jaunt. There is also a possibility of bouncing onto irritable people, which can spoil the whole shopping experience. But on the other hand, online shopping enables shoppers to shop from the comfort of their bedroom without having to meet anyone physically. Internet shopping is also ideal for shoppers with kids as they can avoid taking them to physical stores.

Anonymity: Internet shopping is the ideal shopping platform for shoppers who value anonymity. Some shoppers may not be comfortable buying products like say lingerie from a physical store. They dread the very thought of being seen at a store like that. But with anonymity that comes with Internet shopping, shoppers no longer need to bother about being seen with such products.

Time Saver: In today’s world time needs to be managed efficiently. Retail store shopping involves lot of time spent on traveling. But online shopping saves travel time to retail stores. The time taken to travel can be spent efficiently by researching on products and merchants. After a thorough research, a few searches and clicks are more than enough for completing the shopping process. The saved time can be effectively spent on other important tasks.

Door Delivery: Products bought online are delivered at shopper’s doorstep. Many stores provide a tracking number generated by the delivery company to consumers, so that they can keep a tab on their delivery.

Save Fuel: For regular shopping, either public transport or private transport, including Car, Motorbike etc., is used. At these times of economy hardship, unnecessary expenditures can impact the financial health of a family. On the other hand, online shopping saves money as consumers need not travel but be able to shop from their home itself. This also helps save fuel, a precious resource these days.

Vast Choices: Online shopping provides shoppers with wide variety of products. Brick and mortar stores are limited by the physical size of their store. So it may not be possible to display all the products. But on the other hand, online stores can display wide variety of products as their store is not limited by physical space.

Speed Shopping: Shoppers need to allot separate timings for their regular shopping trips. The effort could last from couple of hours to almost a day. But in online shopping the whole shopping process right from choosing a product to payment, can be completed in matter of minutes. All the shopper needs to know is where to find the product(s) that he/she wants.
Beyond Boundaries: Online shoppers are not bound by geography as they have access to stores beyond their region. So for example, our local shoppers can shop with stores based out of China and America. This dramatically increases the choice of products at our fingertips.

Long Tail Products: Internet makes hard-to-find products easily available. These are called the Long Tail (term coined by Chris Anderson) products. There are many niche stores that specialize in these kinds of products. These stores sell unique/hard-to-find items in small volumes to many customers. This is another important advantage of online shopping.
Competitive Pricing: As you are aware online stores do not have any physical storefronts. So the cost incurred is comparatively lesser than that of the retail stores. This combined with other factors including lower cost-of-operations (e.g. cost of hosting etc) enables many online stores to pass on the benefits to consumers.

Safe Shopping: “Online shopping and Safety. That is a definite oxymoron!” Heard you say that. But please step back and think how safe it is to hand over your credit card to the waiter at the restaurant, or to the person behind the desk at the department store. Now these guys can misuse the information on your card as they have ample time to note down both the card and the CVV number. But on the other hand you provide your credit card information only to the payment server which collects and passes the information in an encrypted and secure manner.

Abundance of Information: Internet is a virtual treasure trove of information and makes information gathering very easy. One of the main advantages of online shopping is that shoppers can easily find deals and compare prices from different online merchants. In 2003, 72% of US online shoppers said they would rather surf online than go to retail stores to attain information about a product. By using general search engines like Google.com and shopping search engines like Shopparadiso.com, consumers can completely research about merchants and products including their prices, features and reviews from experts and fellow shoppers. The whole exercise results in better purchase decision.

Absence of Pressure: Many a times shoppers are forced to buy a product, that is totally unnecessary, due to pressure applied by a merchant/vendor/sales person. But in online shopping a merchant/sales person do not play any direct role. This enables online shoppers to take their own time, without being pressured, to arrive at their purchase decisions.

Ease of Gifting: Online shopping makes gifting very easy even to friends and relatives who reside in different parts of the country/world. All a shopper needs to do is choose a trustworthy website, gift(s), gift wrap and provide the address to which the gift needs to be delivered. The rest including the delivery will be handled by the online store.

Many online stores also offer good deals, easy-payment options and reward-programs. In short, the convenience offered by Internet shopping cannot be matched by any other mode of shopping. But there are also some caveats involved. In the next post, we shall look at the concerns that shoppers have about shopping online.

Remember the heady days of the early 90s, the golden period of Internet, when it was predicted that brick and mortar shops will be obsolete in another 15-20 years and how consumers can shop, from the comfort of their bedroom and pajamas, without having to step out of their homes. Well, we are almost close to the 15 year mark and guess where we stand now. Yes, you are right. We are still standing in the long aisles of the supermarket.

So where is the problem? To be fair, the prediction on comfort shopping has turned out to be true. But brick and mortar stores did not become obsolete as predicted. The reason behind this is customers have not dropped their psychological fears related to online shopping.

This article is the result of interacting with retailers and consumers on the current state of Internet shopping, and looks at their aspirations and expectations. The article also identifies areas for improvement that the retailers should work on. Before proceeding further few points are worth noting.

1. The past few years witnessed rapid growth in the number of online stores
2. Many brick and mortar stores now have a web presence
3. There is an overall increase in the number of online shoppers
4. Shoppers nowadays depend on Internet to do product research to aid their purchase decisions

Detail                                                                Malaysia                Singapore
.                                                                      (Dec-2008)              (Dec-2008)
(A) Broadband Connection (2007)                   1,614,200                4,715,900
(B) Dial-up Connection (2007)                         3,910,000                   103,800
Total (A + B) (2007)                                         5,139,000                3,104,900

Source: Malaysia – http://www.skmm.gov.my Singapore – http://www.ida.gov.sg

Before proceeding further let us first look at the advantages and disadvantages of Internet shopping in the next two posts.

Welcome to Shopparadiso.com. Shopparadiso.com is a price comparison shopping search engine and local retail store deals and vouchers aggregator for Malaysia and Singapore shoppers. We enable shoppers from Malaysia and Singapore to search, compare prices of thousands of products and purchase them directly from hundreds of listed online shopping sites. Our site also provides local retail store deals, offers, promotions and coupons/vouchers of products related to that of the displayed online product category. We also integrate product reviews, tips, and other blog posts from top sites like hardwarezone, cnet etc. By integrating online and local retail store product information, we enable both online and physical store shoppers to find information on the lowest priced online products and the best local retail store deals/offers/vouchers/coupons in one single site along with product reviews/tips and physical store locations etc, thus saving your precious time and money.

Our MISSION is to enable shoppers from Malaysia and Shoppers to easily search, compare and shop online/offline for the best possible price and deals from a trustworthy vendor in the shortest possible time. So the best reason to shop online has finally arrived – always find whatever you’re looking for with ShopParadiso.com.

To know more about us and to experience comparison shopping, visit Shopparadiso.com.