Marketing in E-Commerce

Hello again from cyberspace!


During the 90's and into the 2000's, people consumed the Internet by way of the personal computer. Web browsers, mice, screen resolution, and full keyboards all helped to define marketing and sales done online by having a well-defined customer experience while sitting at a computer. But a new player to the scene is changing this formula: the smartphone. The popularity of the iPhone, which took off in 2007, has spearheaded the recent mobile boom, where Samsung and other competitors have entered the market with Android based phones.

With the recent smartphone sales explosion, which surpassed PC sales in 2011, people are spending less time scrolling and typing and more time flicking and pinching. Some marketing techniques used in traditional Internet advertising do not fit well in the mobile landscape. There isn't a lot of room on a 5" screen, so top banners and right gutter ads are hard to execute when designing a mobile website.

While the techniques maye need to be updated, the categories have not. There are still four classes of marketing, outlined below:

Information

This include basic informational descriptions about the product, such as news, weather, traffic, points of interest, and the like.

Entertainment

These programs provide value to customers in the form of amusement and emotional triggers. Popular mediums for this method include videos, music, games, and wallpapers.

Raffles

A traditional method of marketing involves giveaways and prizes that are advertised in the mobile space. Popular methods of implementing such raffles include "liking" pages through Facebook, "tweeting" via Twitter, or scanning QR Codes, an improved bar code commonly scanned with smartphone cameras.

Coupons

These programs offer monetary incentives to try a product, much like traditional coupons found in the Sunday newspaper.

While there may be no honor amongst thieves, there is honor amongst marketers. According to the Mobile Marketing Association, there are guidelines on how to market, and following these guidelines will maintain your company's honor by respecting the customer.  Some of guidelines for marketers in the code of conduct include giving customers choice and consent for involvement with marketing programs, and security, which should always be top priority when handling customer information.


As long as there are people selling goods and services, there will be a need to advertise to customers. Good marketers go where the people are, and people are increasingly using their smartphones to go online. The medium may be changing, but a good marketer will always rise to the challenge to show their goods in a creative and engaging way.

WACky App Development

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Today's post is dedicated to a case study on the differences in creating apps for the iOS and Android operating systems. Sorry kiddies - no link to the article this time. This is a pay-to-play study downloaded from the Harvard Business Library, so you'll just have to take my word for it. Don't worry - this post will summarize and analyze the points made in the article. Please note that the case is fictional and for instructional purposes only.


The case study tells the story of Sonnja Huot, the director of online services development team for Thorsen Bank, as she and her team embark on developing a mobile banking app. The big question facing Sonnja is "Do we develop this app for Android or iOS?".  Much like the Betamax vs VHS wars of the 1980's, we are seeing a similar format war between Apple's iOS and Google's Android mobile operating systems.


While other mobile developers like Windows, RiM, and Nokia all have mobile platforms, Sonnja's decision between iOS and Android is based on long-term potential for the app. Each has its own challenges and opportunities that need to be weighed carefully, and advantages and disadvantages of developing for each platform are outlined below.

The Apple Path

 

From a marketing and customer perspective, iOS is more attractive because the user base is younger and wealthier, and iPhone users intend to continue purchasing Apple products. In addition to that, a third of all mobile phone users wanted their next phone to be a iPhone, and the iTunes store leads other app markets which makes it an attractive place to sell third-party apps.


However, developing for iOS can be a double-edged sword, as Apple reviews the code for each app and either approves or denies the app for sale in the iTunes store. Apple also retains the right to remove apps already on their store at their discretion. There are several examples of Apple butting heads with other companies over their review process, like the dispute with Adobe over placing Flash on iOS. While the Adobe example is not an everyday occurrence, this remains a risk to placing an app on iTunes. It can also be difficult to set a launch time since Apple offers no 'pre-approval' process for apps, and a company cannot predict whether their app will 'cut the mustard'. Fortunately, Thorsen Bank is not without recourse, and there are several things they can do to help expedite the app approval process, including:

Submit simple, bug-free code

This sounds easy, but giving the apple development team less to review and reject will help get the app to market faster.

 

Play by the rules

It will also help to familiarize the team with Apple's licensing requirements. Keeping the app compliant with Apple's rules will give the reviewers less reason to reject the app.

 

Request Expedited Review

According to Apple, developers can request expedited reviews for approval, but Apple notes that there is no guarantee that the requests will be granted.

Based on the pros and cons, iOS is not the clear-cut winner. The 'cool' factor of having an iPhone app shouldn't be underestimated, both in terms of market perception as well as winning younger, wealthier clients. On the other hand, your app's existence is reliant on the whims of Apple, and Thorsen Bank will be left with little recourse if met with app store challenges.

The Android Path

 

On the other hand, Sonnja could develop the app for the Android operating system. Android exists on the opposite end of the app development spectrum from Apple in many ways. Android runs on no less than 60 different devices, some of which are not even phones. The Android marketplace has none of the rigors that the iTunes store has. In fact, unless your app is causing problems, it is likely that Google will never see the code in your app. This can make a definitive release date possible by putting Thorsen Bank back in the driver's seat.


But the same diversity that frees an Android developer from the hoops set up by Apple are also the biggest challenge in making an Android app. With so many different versions of the operating system, different devices with different screen sizes, proprietary changes made by companies and wireless service providers, just releasing an update could be an even bigger endeavor than the initial release. In fact, this fragmentation is one of the biggest hurdles facing Android in the not-so-distant future. Just maintaining the app across all supported devices and operating systems may become a full-time job of the department, rather than upgrading and improving the product.


Then there is the lack of app security review for the Android marketplace. Being in the banking industry, Thorsen is held to a higher standard of security for their software, and Android devices are a more likely target for security breaches. In fact, a recent study shows that nearly 1/4 of all Android apps are a security risk. A toxic combination of apps on one user's phone may be enough to bring about a media smear campaign that could ruin Throsen's reputation. Apple is the clear winner in this arena with their rigorous review process, but that doesn't mean that Apple is immune to security threats. However, any blame for a breach in security could be aimed at the gatekeepers rather than the victims.


Again, we don't have a clear-cut victor. Android offers a chance to put your app on a huge number of devices, is programmed in the near-universal Java code, and there are no hurdles to releasing the app on schedule. However, the number of devices and versions of operating systems can make maintaining an app, much less releasing updates, a staggering proposition.



Finally, there is the business question behind all of the tech-talk: will this app create profit for Thorsen? The article proposes that Sonnja has a game-changing idea for the app which can set Thorsen Bank apart from the competition, regardless of the platform for which it is released. But just the idea is not enough to securely place Thorsen at the top of the pyramid, as the competition won't give up and go home. They must continue to innovate to keep their app in ahead of the competition, or risk their hard fought position in the market. Other companies have fallen into this trap, most notably (and topically) RiM, which failed to address the iPhone threat in time. As reported by the Wall Street Journal, RiM was a victim of its own hubris:

"According to interviews with more than a dozen former RIM executives and industry executives who worked closely with the company, it was a blinding confidence in the basic BlackBerry product that was at the root of RIM's current troubles." 

To say that RiM was brought down only by ignoring outside threats most certainly oversimplifies the situation, but the point remains that first place is not only won - it must also be maintained.

E Marketplaces and their types

Hello again from cyberspace!


Ever consider all the ways to do business in the Internet? If so, you're in luck, because this post is dedicated to e-marketplaces! We will review the components of an e-marketplace, and it isn't as easy as it looks on the surface.


Put simply, an e-marketplace is an area that brings customers and sellers together to conduct business. The idea of a marketplace is not a new one, only the introduction of the Internet. In order to make an e-marketplace, though, a few non-traditional elements are needed as there are not any fruit stalls or bustling city streets to be had. Once necessity that hasn't change, however, is goods and services. Without goods and services, there's nothing to conduct business over, is there?


But behind that, we need several new elements. The first of which is the electronic infrastructure by which to connect buyer and seller. On a large scale, this infrastructure is the Internet itself, but it also includes computers for the buyer and seller, as well as the people to maintain both. There is also the front end of the marketplace where the customers interact. Much is contained in the front end of a website, and many people are unaware of anything that goes on behind the scenes. But, of course, there is also a back end to the website, which handles the order fulfillment, payment processing, user accounts, catalog updates, and all the other administrative duties involved with running a website. Finally, there are intermediaries which glue the entire process together. They range from ISPs to UPS - the first one allows the Internet to be there for the transaction, and the second plays a major role in moving goods purchased online. There are many other types of intermediaries involved with the e-marketplace, too numerous to list.


Each of these elements are complex, and are indeed industries unto themselves. So the next time you buy something online, stop to appreciate the amount of effort it took to allow to sit in your jammies and buy that salad shooter!

Homemade App-lecause

Hello again from cyberspace!


Ever dreamed of making your own app for your smartphone? Don't know anything about Objective C? No problem! Today, we'll discuss this article in The Economist about the prevalence of do-it-yourself mobile app software.


Many apps available are developed by large companies to enhance your shopping experience, like a Bank of America app which lets you work with your money. Some of the most popular games are developed by companies, like Zynga. But now Do-It-Yourself app kits have become the rage.


According to the article, there are several software options available for the novice user to develop an app. Included are:

App Inventor

A free app development kit created for Android by MIT

Conduit

A mobile app development kit which offers various levels of pricing (including free)

AppMakr

iOS App development kit

Each of these share one major similarity - there is no coding required! This makes it easy for the casual app enthusiast to get to work regardless of their app knowledge. It also means we are looking down the barrel of an app deluge. According to the article, there are around half a million apps available for iOS and Android apiece. This makes me wonder if the future is not in pre-packaged apps, but in developing my own, on the spot apps...


On second thought, even the simplest apps need careful planning and implementation.  And then there's the saying "The mark of a master is to make something difficult appear easy" - while some of the most popular apps appear effortless, there is no doubt a team of talented and experienced programmers behind the execution of that app!

Defining E-commerce

Hello again from cyberspace!


With this blog's new focus on electronic commerce, it will be beneficial what e-commerce actually is, along with the how the Internet can affect the relationships within a business.


While the Internet is typically seen as central to e-commerce, it is defined in these posts as the process of buying, selling, transferring, or exchanging products, services, and information via computer networks. These networks can include the Internet, connecting the business to other entities, or within a company's own intranet. By this definition, even adding an internal system for a company that functions by transferring data will be considered e-commerce. The benefit of this system may not be immediately apparent to the customer, but (hopefully) having the system in place will either lower costs or allow the company to compete in different areas.


Any of these sharing transactions can be a combination of purely or partially electronic, or be transacting with real or digital goods. For example, a company could be selling electronic goods in the physical space, like Gamestop which specializes in selling video games and other software. The transaction could also begin on the Internet, but involve the movement of physical goods, an arena in which Amazon excels. Amazon has also entered into purely electronic transactions by way of their cloud based services. In AWS, Amazon is leasing server space for companies to host their services on Amazon computers. The cloud has gotten a lot of press lately, and Amazon is helping to bring it to the common user with their web services.


I'm sure that none of these definitions are ground-breaking, but it is good to set the central definitions for the next series of blogs.