Business to Consumer eCommerce
Types of eCommerce Solutions:
The fulfillment process
Implementation
Over the last few years, eCommerce has become the buzzword of the business
and the finance communities. As a result, more and more companies are
jumping into the Internet and eCommerce for fear of being left behind.
Boards are directing CEO's to get eCommerce initiatives going and to get them going fast. In a lot of cases the problem is management does not have a clear understanding of what eCommerce is, and how it is different from traditional bricks and mortar commerce.
Part one of this series attempts to provide a basic technical overview of the essential elements of eCommerce and to detail some of the differences these systems have over traditional commerce.
Types of eCommerce Solutions:
eCommerce sites can be divided into two basic types: business to consumer (B2C) and business to business (B2B). In the first wave of eCommerce solutions, companies such ToysRus and a raft of clothing retailers, focused on turning their retail operations into B2C eCommerce operations. In the more recent second wave of eCommerce activity, companies have begun to look at how they can use eCommerce to sell or buy goods from other businesses. Recent initiatives include the recent announcement by Ford and General Motors of their intent to handle all procurement through a joint B2B site and sites like eSteel.
Basic Technical Elements of a B2C eCommerce solution:
- Web browser – well known software on the consumers' computer that allows them to connect to the WWW and use the standard encryption software (SSL) to shop securely
- Secure web server – basic server software that allows a web site to serve information to and collect information from users without risk of the information being stolen (uses SSL)
- Database engine – a piece of software or collection of files that organize and store product and customer information for easy retrieval and management
- Storefront software – the visual elements to a store and the software that allows the user to choose what products to look at and buy
- Shopping Cart – a piece of software that keeps track of the items that customers are interested in buying. Generally includes functionality for adding, removing, reviewing, taxing and paying for products
- Credit Card Validation Software – a set of software and connections to the financial institutions that provide the store with the ability to verify and charge items to credit cards. These solutions are can be either real time - i.e. verification and charging takes place while the customer is 'in' the store - or batch processing - i.e. where the credit cards are verified and charged later.
- Order Tracking and Fulfillment System – a method of tracking the orders in the database and processing them through a standard procedure to ensure that they are filled.
B2C eCommerce Order Flow/Site Functionality
The order flow and site functionality for B2C eCommerce sites can be broken down three ways – taking the order, processing the payment, and fulfilling the order.
The process of taking an order through a B2C eCommerce system is very similar to the process in traditional stores. In the following narrative, the traditional action that corresponds to the eCommerce action appears in parentheses.
- the shopper visits the company web site (goes to the store),
- the site now creates a shopping cart for the user that follows with the user throughout the store
- some sites collect customer information and allow users to login to restore preferences and shopping carts even after they have left the store and returned
- the shopper searches for the products they want by clicking through store pages or using a search engine provided by the store site (browses the shelves or gets a sales staff to find an item for them),
- each time a user browses or searches, the storefront software asks the database to provide the information that matches the search criteria
- browsing is actually a set of predefined searches that make sense in the context of the store
- searching allows the user quick access to a specific item or a type of item outside of the browse functions
- the shopper puts the desired items in their shopping cart (same),
- system records information about item into shopping cart (generally contained in the database)
- the shopper reviews shopping cart (heads to checkout),
- eCommerce system provides a list of all items in the cart
- calculates tax on items and provides total
- user able to remove items, proceed to checkout, or continue shopping
- the shopper chooses a shipping option (generally not required for walk in shopping),
- system collects and records shipping information
- system determines cost and displays
- user proceeds to payment (user takes out wallet)
- storefront software switches to secure mode if not already and transfers user to payment processing system
At this point, the eCommerce store moves into payment processing functionality,
- user provides payment and customer information (pays for items),
- storefront software collects and records customer information
- storefront collects payment information, and may or may not record
- if real time validation is used, credit card validation software communicates with banking institution or credit card portal service
- if real time validation is used, credit card validation software receives verification of validity of card / sufficient funds from financial institution
- if card passes, validation information is recorded in database related to customer shopping cart (which becomes the customer order)
- if card fails, software displays error to user and provides option of trying another card
- if batch validation is used, credit card information is recorded to the database and the user is thanked for their order
- customer leaves store (same)
The fulfillment process
Once an order has been accepted and payment processed, the eCommerce site turns to fulfillment. The fulfillment process is either an issue of picking and shipping the product, or for sites that use just in time procurement, the fulfillment process is the ordering and (drop)shipping of the product.
- eCommerce stores provide means for fulfillment staff to review orders
(stocking or special ordering)
- if an eCommerce solution is carrying stock, the eCommerce system
will either be the fulfillment system or should at least tie into the
legacy fulfillment system at the warehouse
- reports in the fulfillment system will allow the staff to track an
order through various stages, which could include ordered (for drop
shipping), received (for back ordered stock), shipped/filled
- eCommerce store picks the stock and packs for shipment
- system may need to print packing lists and mailing labels
- advanced fulfillment systems will include an inventory system that
will track availability of stock and reflects this availability in the
eCommerce site
- eCommerce store arranges for shipping of purchased goods
- store will need to arrange to ship the goods in the method indicated
in the customer order
- some fulfillment systems will link into a shipping company system
and pickup will be automated to happen as soon as a shipment is marked
as filled in the eCommerce fulfillment system
- for eCommerce stores who drop ship purchased goods, the system - increasingly
through B2B eCommerce solution - or staff notifies the supplier and
marks order filled when confirmation of shipment is received
- orders can be transmitted via a B2B eCommerce solution, fax, phone,
or other direct links to suppliers
- the eCommerce will need to get a receipt of shipment from supplier
and update the customer order status
- in some jurisdiction, credit cards cannot be charged until goods
are actually shipped
Implementation
While the actual implementation of a particular site may not include all aspects discussed, and the implementation may be more or less robust, the general technology and functionality will be present. If a site has lower volumes, the eCommerce solution generally provides limited functionality for fulfillment and shipping integration. The high volume site will have more advanced system.
In the next article, we will review the basics of a B2B eCommerce solution and focus on the key aspects that are emerging to these solutions that are different from the B2C eCommerce solutions.
Leon Salvail is the CEO of Global Village Consulting Inc. He can be contacted
at lsalvail@global-village.net
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