Interactive Order Processing

When providing our site with an order processing system, we have two basic ways to go. The option number one is to sign up for an IMA – internet merchant account and combine it with a PSP – payment service provider. Bank providing IMA will check the available funds, authorize transactions and exchange the funds between creditor bank and your account. With this option, you will have to meet strict legal criteria with your web’s security in order to comply with bank’s policies. The PSP will ensure a safe transfer of your customers’ credit card information. Payment service providers screen for frauds and they are often referred to as Payment Gateways.



The other option is that instead of IMA and PSP, you use services of PPC – payment-processing companies. They are easy to set up, but your customer will be sent to PPC’s website in order to make the payment. That means customer gets interrupted and might start having second thoughts on the purchase. Moreover, the payment settlement periods can be up to 60 days. However, PayPal and Google Checkout usually transfer the payment within days.

Now let’s lose a few words on how the transaction actually happens. Obviously, customer has to first submit the credit card info to the PPC. The PPC then transfers this information to a merchant bank (your bank). The merchant bank then passes the information to the credit card network (such as VISA). The CCN then submits the information to the creditor bank (customer’s bank). This issuing bank then approves or declines this command according to the creditor’s available funds and sends a message about whether the transaction took place or not. This message takes an inverse route and ends up being shown to the customer and you. Then the merchant executes the exchange and the issuing bank sends an appropriate amount of money to the CCN, which subsequently transfers it to your bank account.

I think using services of PPC over IMA/PSP is a way more convenient. It saves you quite a few hours you would have otherwise had to spend securing your web. That would also cost you unnecessary amounts of money. Since there is now competition among the CCN’s, we can expect their services only to improve.

There are more PPC than just PayPal and Google Checkout. One of the serious competitors to them is the MoneyBookers. According to, Moneybookers has a great currency conversion rate.

Another example of a PayPal/Google Checkout competitor could be Serve. As described by, it is a new service offered by American Express. You link it to your bank account and then send and receive payments by using internet browser. The transaction supposedly happens instantly.


The Online Shopping Experience Vol.2

In this part of the online shopping experience tutorial, which is a sequel to ‘Enhancing the flow through the purchasing funnel’, I will focus more on the aspect of easing the decision-making for the consumer and leading the consumer through the check-out process. Out of the seven steps, which enhance conversions at your site, we are down to just four.

4. Enable customer decision making – To help customers decide, preferably in our favor, we should provide all the products with relevant and detailed descriptions, images or other multi-media. In addition to that, proper keywords should describe the products to bring higher traffic. Enabling consumers to share pages with products on social media sites can add to your success as well. Besides listing stock availability and similar descriptors, alternative products should be offered as well as independent ratings done by other customers.

5. Reduce shopping cart abandonment – The shopping cart should be always easily accessible from all coves of the site. Such measures should be implemented to ensure that the shopping cart stays updated even when customer leaves and comes back again. Unless the taxes are the same throughout the area where you offer to ship, the shopping cart billing info should differentiate the price and the tax for the area the shipment goes to. This will prevent ‘cart shock’ to some extent. Some other tips are to enable consumer to redeem coupons etc. Offering live help support will enhance your eCRM (customer relationship management).



6. Keep registration short and optional – This advice pretty much explains itself. Don’t force customers to go through long registration process if they don’t care for it. Provide help in case of forgotten passwords etc.

7. Streamline checkout – During the check-out process, a progress indicator should be shown to customer to give a sense of navigation. All the distractions should be limited. We should offer various types of payment as well as delivery methods. At the end of the checkout, a confirmation page should appear and confirmation e-mail should be sent.

An example of a good product description is given in an article at It presents a company called J. Peterman. They sell unique retro style, classy clothes. The description is exceptionally detailed and the overall design of the site is great. presents a great article, where five companies are rated on a quality of their checkout process. One of them is Nike. It is listed because, overall, its method of checkout is considered good. Then the author explains some pros and cons and even actions to take to do away with the cons. Apparently, the pros include photos of product displayed throughout the process, showing total order amount, security seals, nice/visible buttons and live/chat help. The disadvantage is, according to the author, that you have to go through some membership gaining process.

Enhancing the flow through the purchasing funnel

In order to transfer your prospects into customers, the unnecessary barriers have to be eliminated. That improves the online experience and most surely raises your conversion rate. However, one has to first understand properly the needs and goals of one’s web users. This can be achieved through usage of personas and other types of research. The seven main steps, which should be taken in order to enhance the conversion, are as follows.

1.Promote online presence – This can be done by a successful e-mail campaign, search engine optimization or utilizing social media. In addition to that, on can use services such as Google Places and try to be present where one’s customers spend time online.

2.Create customer confidence – There are various methods, which can be used to instill customers’ confidence. It is always good to highlight the security system, which is being used. Other third party certifications can only add to the overall sense of security at your site. The contact information as well as all the privacy/security policy information should be easily accessible. Last but not least, actually it should be one of the first things to consider, is the web design, which invokes the first impressions.

3.Enhance product findability – This requires that products are sorted in distinct categories. Wherever we happen to be at the website, we should be able to clearly identify our location, for instance, through breadcrumb navigation. Putting the search box in the same spot throughout the web gives an organized feeling. Searching tool should have a predictive type-ahead option and there should be other options to help refine the search.

These were the three initial steps, dealing mainly with the style of the platform. The other four steps deal with helping the customers decide and get through the check-out. They will be described in a following blog post.

Let’s now look at some examples of these three stages. When it comes to promoting the online presence, I chose a website called It is the world’s largest online social media magazine. It managed to gain popularity mainly through social media and the word of mouth!


An article on breadcrumb navigation presents some of the best examples of this method in practice. To mention a few successful implementers, I picked Apple, or Wufoo.

A Key to E-commerce – Right NICHE Product and Customer Experience

Once you know your target market, you have to develop various ‘personas’, which represent the needs, characteristics and expectations of different types of your customers. This method will enable you to choose the right niche products and make you stop think of your customer as yourself, since customers and their wants differ from yours. Niche is a term used to describe the opposite of general. A niche product targets a specific group of customers, who seek a unique and original experience. Providing niche products will decrease your competition issues significantly. It is also proven to ensure a greater customer loyalty.

The process of creating personas can take a while. They are based on a primary data research, which means that you do the research (such as interviews) yourself. Besides the primary data, secondary data should be gathered as well. That can happen online or one can acquire it from third parties, such as research agencies. Once all the data is gathered, an objective decision-making process has to take place. You have to have a clear idea of whom you are reaching.

Do not drop the idea of personas, as their taste might change over time. Many businesses don’t bother to take personas into consideration anymore, once they are half way through the marketing process. When it comes to the actual creation of personas, you have to start asking yourself questions like: who they are, how many of them there are, how do they differ, what are their preferences, what are their demographic features, etc. Then you try to place them into specific situations and you react to them.

As far as the niche side of your business, you have to avoid the general strategies, such as trying to reach the greatest amount of consumers. This requires a lot of resources related to marketing, competition and the customer loyalty is radically lower than in the niche market.

The aim of an e-commerce marketer is to make prospects into customers, in other words, ensuring the conversion. To make this happen, customers have to be provided with an excellent online experience.

As an example of a niche company, we can look, for example, at a company named Zumiez. This company offers unique products related to surfing, skateboarding and snowboarding.

The next company is a niche e-commerce site focusing primarily on luxury knitting yarns. It has grown significantly. The owner has successfully applied SEO (search engine optimization). The article suggests that she continues by focusing on site’s content and engaging her customers with the company through blog or classes.

E-commerce OTAKU theory

What are the pros and cons of e-commerce? As far as I understood from the lecture, the most valuable factors of having an e-commerce website as opposed to a traditional mortar store are the lowered costs and the amount of potential customers that can be reached. And exactly which costs am I talking about? ‘Cause setting up an e-commerce platform can cost a fortune, nowadays.

Well, to start with, let’s mention the difference between e-commerce setup/maintenance and the rent, inventory, facilities and warehousing associated with a mortar store. This itself can be quite a significant difference in favor of e-commerce. On top of that, we need to consider the possibility of distributing directly to the public. In other words, the direct web business model can be implemented so that the manufacturers sell straight to their customers. This tactic has been successfully used by Dell Computer Corp. Basically, it cuts on the costs associated with too many intermediaries in the marketing channel (retailers, brokers etc.). Another interesting example of this method in use is a company called Flowerbud. It is a floricultural business based in Oregon, USA. This company grows flowers and sells them through very well designed and much praised e-commerce site Flowerbud’s web illustrates greatly the concept of tailoring the site’s content to appeal to a niche market, OTAKUs or early adopters. This great idea is presented in an excellent lecture given by Seth Godin.

Flowerbud’s owners have always been big flower enthusiasts and they’ve never cared for selling cheap bouquets to people who don’t really share their passion for flowers. Instead, they focus on a target market, which consists of flower lovers, those who want to present others with fancy looking bouquets. A combination of this approach and the wonderful, niche design of their platform is bringing them ahead of their competition.

Internet World Stats  estimated the total amount of internet users to be over 2.2 billion people at the end of 2011. This obviously makes it possible to market to much greater number of potential customers than when operating from a mortar store. Just in the year of 2010, online transactions reached $186 billion.

Now, what are some of the disadvantages of e-commerce? We can get customers from anywhere in the world, for much cheaper than if we operated a store. The problem is that unlike in the case of mortar stores, we would be expected to provide a prompt delivery and easy online access with an exceptional customer service otherwise, customer could leave by a click of a mouse.

There are various issues and questions to ask oneself when planning for the launch of an e-shop. Most of them have to do with the SMART criteria – specific, measurable, attainable, result-oriented and time-bound. The meaning of each is obvious, but it is further described in various sources such as Wikipedia. Most issues revolve around business purpose, target market and how to market to it, and technical factors concerning the platform, the payment processing etc.

There are few more web business models besides the manufacturer (direct) one. Advertising model serves as a provider of content and services, which are mixed with banner ads that often generate most of the site’s revenue. Another model is the infomediary one, which functions as a marketing campaign support. It collects data about web users and their habits and then sells this data to those who want to utilize it for their marketing campaigns. Then there are various types of merchant model. Either businesses sell solely online, or they have both a mortar shop and an e-shop. Affiliate model stands for the type of web business that pays other sites for placing ads on their pages. Community model is based on the loyalty of the visitors and voluntary contributions. Subscription model charges its visitors fees.

The last important model is the brokerage. It is based on bringing online buyers and sellers together and facilitates the exchange. There are many types focusing on different things like auctions, transactions etc. The one we all know is the auction giant It grew from a small auction platform (1995) to have 55 million users and $15 billion in the value of transactions in 2002. The first quarter of 2012 meant $3,277 billion in revenue, which was $800 million in 2001. An article on the Internet Retailer conveys the notion that there is a Darwinian environment on the eBay, meaning that only the fittest will survive. In 2002, eBay faced an issue whether it is a good idea to allow large companies to operate among the small individuals. Small individuals, however, are still a significant part of the eBay’s business as we can see in the following video 😉