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Chapter 4 E-business revenue models Reference Book By: Gary Schneider Revenue Strategy Issues for E-Commerce Channel conflict & cannibalization: Companies that have existing sales outlets often worry that their Web sites will take away sales from those outlets. This creates a channel conflict since the websites are interfering physical stores’ sales activities. The problem is also called cannibalization since the Web site’s sales consumes sales that would be done in the physical stores. Strategic alliances: It means forming a group with other organizations so that they can achieve a bigger sales volumes. A small organization can team-up with the popular e-commerce Web sites to access a bigger customer base. Luxury goods strategies: Luxury goods retailers sell some of the product lines through Web sites. They do not sell expensive/high-fashion products online because they want the customers to come to the stores and experience those. Rather, they post some basic information related to those products. Revenue Strategy Issues for E-Commerce Overstock sales strategies: Selling overstock items through Web site is a good strategy since it can reach to a larger customer base rather than a location. It includes a separate link to the overstock/clearance items and they are sold at discounted price. This way, the outlets do not need to overstock items. Also, selling overstock items through Web site is a good idea since the catalog can be updated very frequently than for the physical outlets. Creating An Effective Business Presence Online In the physical world, a business tries to make a presence to the stakeholders by establishing headquarters, factories, warehouses, sales centers etc. Thus, on the Web, a business can present itself in attractive ways. In case of some businesses, the customers and other stakeholders go through the Web sites to understand the presence. Identifying Web presence goals: On the Web, a business has opportunities to come-up with an attractive Web site with the main goal of creating a distinctive presence. A good Web site design can provide many image-creation features. It can serve as a sales brochure, product showroom, a customer connection point etc. Before a business appears its presence online, it must formulate the Web presence goals as to: Attracting visitors, Making visitors stay and explore, Convincing to follow links, Creating impression consisting with brand’s/organization’s image, Building relationship, Encouraging to return to the Web site etc. Creating An Effective Business Presence Online Making Web presence consistent with brand image Different firms, even those in the same industry, come-up with different Web pages even after they have established powerful brand images. Web presences convey brand images to the customers and it is one of the key factors for high profitability. Luxury brand establishes Web presence differently from similar but cheaper products. They do not cram Web sites with a lot of information like cheaper brand products do. This way they try to maintain images to its customers. Web Site Usability How the Web is different: Web acts differently from other ways in which companies have communicated with customers. Companies must improve Web presence so that it is accessible by more people and it is easier to use. Also, it makes sure that the presence encourages visitors to trust and develop loyalty to the brand. Making the Web presence different from the physical world is important to survive in the virtual world. Businesses need to regularly research the Web presence to understand the customer needs. Previously, some companies made Web presences by including basic information on products and e-mail. But, they were understaffed to answer those e-mails that resulted in a poor brand image. A standard Web presence should include a standard set of information on products, organization’s history, mission, vision, future plan, success stories, financial information and ways to communicate with the organization. Thus, a customer feels the brand that turns into loyalty. Web Site Usability Meeting the need of Web site visitors: During a Web site designing, an organization needs to study the motivations behind visiting a Web site. These may include: learning about products/services, buying products/services, obtaining information on warranty, service, return policies; obtaining general information on company etc. In addition to the motivations, there are technology issues. Visitors use different devices, Web browsers and devices to access to the Web sites with different internet speeds. Thus, all visitors have different experiences using the Web site and they pose as challenges to the Web site designers. They try to optimize Web sites for all platforms. Web Site Usability Making Web sites accessible: One of the best ways to accommodate a broad range of visitor needs, including the of visitors with disabilities, is to build flexibility into the Web site’s interface. For example, visually impaired use special browser to access Web site contents A site can give the visitor the option to select smaller versions of images so that the page loads on a low-bandwidth connection. If the site includes streaming videos, it allows the visitors to select streaming quality so that the visitors can best use the internet connection. A good site design allows visitors to choose level of details, viewing format etc. The online stores presents product’s in one Web page so that the customers can look at more contents such as more details, more pictures, product reviews etc. Accessibility goals of a business Web site: offer easily accessible facts about the business, allow visitors to experience sites in different ways, provide visitors with a meaningful both-ways communication, sustain visitor attention and encourage return visits, and offer easily accessible information on products and services including demonstration videos. Web Site Usability Usability testing: Most companies fail to understand the needs to perform Web site usability testing. This testing is the testing and evaluation of a site by its owner to ensure ease of use for the visitors and to meet the accessibility that we already discussed. Average e-commerce Web sites frustrate many potential customers to the point that they leave without buying anything. Even best ecommerce sites frustrates customers if it is not easy to navigate. These sites include some contact points so that the customers discuss more about the products/service. Since usability testing is inexpensive, companies should run the testing at certain intervals. If the sites change the navigation experiences, it needs to be tested holistically. Web Site Usability Customer-centric Web site design: A customer-centric Web site design approach must stick to the following guidelines: -design the site around how visitors will navigate, not around the company’s organizational structure; -allow quick access to the information, -avoid using inflated marketing statements, -avoid using business/technical jargons that visitors may not understand, -optimize the site for all Web browsers under all platforms, -be consistent in use of design features and colors, -make sure that navigation controls are clearly labeled, -test text visibility on a range of monitors, -check that color combinations are proper for the color-blind visitors. Besides the regular Web designs, there are design guidelines for mobile devices to access the Web sites as follows: -text should be extremely concise, -navigation must be neatly organized and easy to see, -the set of available functions should be limited like following further links (non-mobile devices) are provided.