Chapter 7 IS-300 E-Business & E-Commerce

Aselia Thomason (Final Exam)

Recommendation Algorithms

• algorithms that analyze user behavior (past purchases, searches, clicks) to suggest products or content

• commonly used by Amazon, Netflix, and Spotify to increase sales and engagement

E-Commerce Revenue Strategies

• online product sales

• subscriptions

• digital advertising

• affiliate revenue

• marketplace transaction fees

Online marketing strategies

• viral marketing: content spreads rapidly through sharing

• affiliate marketing: partners earn commission for referrals

• reverse auctions: buyers set price, sellers compete

• electronic tendering: online bidding process (B2B)

Opening Case - Pinterest

• Pinterest is a visual social media platform that allows users to discover, save, and organize content, often related to future purchases.

• The platform strongly supports social commerce by influencing buying decisions through images and inspiration.

• Pinterest drives high-intent traffic to e-commerce websites, meaning users are often ready to buy.

• Users on Pinterest tend to spend more per order compared to users from other social media platforms.

• The case shows how IT, recommendation algorithms, and visual engagement can enhance customer engagement and increase e-commerce revenue.

Social Commerce (S-Commerce)

the use of social media platforms to support buying and selling benefits include:

• increased customer engagement

• real-time feedback

• trust through reviews and social proof

• direct shopping through social apps

E-Commerce Business Models

• B2C (Business to Consumer): Amazon selling to customers

• B2B (Business to Business): suppliers selling to companies

• C2C (Consumer to Consumer): eBay

• C2B (Customer to Business): freelancers selling services

What three ways can B2C operate as?

1. Brick-And-Mortar Business: Trader Joes

2. Click-And-Mortar Business: Barnes and Noble

3. Pure-Play (Virtual) Business: Google

Mobile Commerce Integration

Using smartphones and tablets for shopping, payments, and customer interaction

—includes mobile apps, mobile wallets, and social media shopping

Omnichannel Strategies

Integration of physical stores, websites, mobile apps, and social media to provide a seamless customer experience across all channels

Blockchain and Digital Payment Mechanisms

Blockchain is a decentralized, secure digital ledger. Used for:

• Cryptocurrencies (Bitcoin)

• Faster, lower-cost transactions

• Improved transparency and security

Electronic Marketplaces

• Buy-side marketplaces: organizations purchase from suppliers

• Sell-side marketplaces: companies sell to other businesses

• Electronic exchanges: third-party platforms connecting many buyers and sellers

Behavioral Advertising

• targets users based on past behavior (sites visited, products viewed)

• use cookies and tracking to deliver personalized ads

• example: looked at shoes → see shoes ads later

• Pros: highly personalized, better conversion rates

• Cons: privacy issues, requires strict data compliance

Contextual Advertising

• targets based on current page content, not personal data

• analyzes keywords/topics on the webpage

• ex: reading tech news —> sees smartphone ads

• Pros: privacy-safe, matches current user interest

• Cons: less personalized, relies on page accuracy

E-Commerce Plan

• strategic blueprint specifically for launching or running an online business

• focuses on the digital side of operations: how the company will attract online customers, process transactions, deliver products, & use tech to generate revenue

Traditional Business Plan

• outline how a company will operate, make money, and grow

• used to communicate strategy to investors, partners, and internal teams

• common elements: executive summary, market analysis, products/services, marketing strategy, financial plan, management team

Digital Marketing Strategies

• SEO (search engine optimization): the process of improving a website to rank higher in organic search

• PPC (paid advertising model): paid ads per click

• social media: engagement and promotion

• email: direct communication with customers

Operational risk

• website downtime or crashes

• supply chain disruptions

• inventory shortages

• order fulfillment erros

Risk mitigation strategies

• backup systems, multiple suppliers, inventory software

Competitive strategies

• cost leadership, differentiation, and innovation