Digital Business Environment
Introduction The scientists who developed the Internet probably did not realise their invention completely changed our world today.From how people communicating, connecting with social network, to how and where people work, Internet is now affecting our daily life in every dimension.Internet still and will continue change our life and behavior, according to data, nearly a third of world population are Internet user, and this number is still growing at an unprecedented speed (IWC, 2012).
Internet affects almost every aspect of people daily activities, thanks to the Internet, people can virtually shopping without going out and get their items delivered to the doorstep in a matter of days.
Information is now much more accessible over the Internet, people can share their life using blogging, and not to mention that business world has expanded to a whole new dimension. Company or individual can now target a much more wide consumers around the world. As much as the Internet has changed our personal lives, the business world has revolutionsied almost beyond recognition since the Internet era.
Jeremy (2011) states the rise of Internet and other technologies is the start of Third Industrial Revolution. Although there is still ongoing debates about this theory, that the Internet has changed the face and pace of our modern business world. Hosted on the server, accessed using the Internet, the website or simply known as the site or web page, is one of the fundamental elements that forms the Internet we use today. It is also the most common way that a company or individual promote and conduct their business.
This paper will thoroughly analyse and discuses a chosen website, the purpose is to take an insight to the digital business environment. Terms such as E-commerce, and CRM (Customer Relationship Management) will be mention and discuss. The technical details of how to build and maintain a website will not be discussed in this article. Overview The website chosen in this paper is Oki-ni, before further analyse the company and the website, it is essential to understand some of the basic about website.
Organised by function, a website may fall into one of these catalogue (Yuan, 2005) * A personal website, e. g. blogging * A commercial website, e. g. company website, such as Microsoft, Apple * A government website, e. g. NASA website, City Council website * A nonprofit organisation website, Greenpeace, or RedCross website According to this catalogue, Oki-ni is a commercial website. Another terms that need to understand is Electronic commerce, or commonly known as E-commerce. There are many different definition of E-commerce from different perspectives in different discipline.
Mamta (2005) summarised that E-commerce is the process of buying and selling or exchanging of products, services and information via telecommunication and computer networks including Internet. Mamta (2005) further generalised that based on the types of parties (business, consumer, etc) involved, E-commerce may be of the following types: * Business-to-Business (B2B) * Bsuiness-to-Consumer (B2C) * Consumer-to-Consumer (C2C) * Consumer-to-Business (C2B) * Intrabusiness Based on that definition, Oki-ni is a B2C type of E-commerce, different from other B2C website, the Britain based company focused on high-end menswear.
The name originated from a Japanese dialect, means ‘Hello’, Oki-ni was created to work with established brands and progressive designers, to offer innovative products to knowledgeable fashion consumers. In another words, Oki-ni sells more than clothing, but a life-style. The company also collaborated with other fashion brands such as Paul Smith, Adidas, to produce unique pieces. This paper will focus itself on evaluating the use and implementation of digital information system on the chosen website, applications on the website will be paid extra attention and thoroughly analyse, such as inventory system, newsletter, multimedia applications.
Furthermore, the OVP (Online Value Proposition), Online revenue models and other factors will be critically reviewed. Using researcher’s extensive knowledge, the concept and application of CRM on the website will be analyse. Lastly, researcher will proposed some recommendations to improve the website followed by the digital business strategy. Analyse of The Website For E-commerce site, the primary purpose is to sell. However, most online retailers fell to the wrong direction when even building their website.
They spent heavily on how to attract more visitors to the site and simply forgot what is the point if the consumer visited the site but not buying anything. There may be many factors that contribute and affecting consumers’ buying behavior, but the inappropriate implementation of information system is more often seen in business operation. Customer cannot locate the item they want, or found themselves cannot checkout with the system, modern information technology brings a great convenient, however, sometimes it can be chaos without properly used.
For an enterprise, it is critically important to aware its organisational goals and objectives as well as the implementation of information system. (Mehdi, 2006) For the company of Oki-ni, the website serve the purpose of sales and providing customer service. Thus, the inventory information and customer information are vital to the company’s lifeline. Furthermore, to provide an enhanced online shopping experience, the supply chain management, online information security, and multimedia interactive applications are equally important. Inventory Management
When running an E-commerce, it is very easy to get caught up in other aspects and neglect the importance of inventory management. Ritendra (2008) emphasis that its crucial to run inventory management effectively for the business to be profitably. For Oki-ni, there are thousands of items and new items in stock everyday, how to manage it efficiently become vital to the company, what’s more, it has two layers of meaning. Firstly, for the staff, effective inventory system should allow them to locate specific item easily, and overview the whole inventory to see which items are running low on stock, and which are the best selling.
Secondly, for customer, the inventory system should provide an easy accessible. Oki-ni website provide a simply and minimalism searching interface for the customer, customer can search the items they looking for by their preferable method, such as, using keywords, sort it by color, price range, sizing, or different part of garment, or using alphabet-order brand list. On the top page of Oki-ni site, customer can easily find new arrivals or discount information. Customer Information Comparing with tradition in-store shopping, online retailer has the advantage on tracking, storing and anaylsing customer data.
Oki-ni gathering customer information by encouraging customer registered with their e-mail address. By using these e-mail addresses with the concerns of customer, Oki-ni sends out newsletters to customer. Newsletters are an effective way to build goodwill and keep in touch with potential customer (Janice, 2004). Customer received promotion, new arrivals and other information from the website. When comes to place order, for security and privacy concern, the company only takes the minimum information that required for delivering, such as address, telephone number.
Internet is an ever-changing, competitive-intensive environment, the recently raise of new social network drew a lot attention. As a company aiming itself not only sales, but to promote a lifestyle, Oki-ni has extended its content to other different social-network, such as Facebook, Google+, and Twitter, customer can find sales information, new product on these social network. Also, Oki-ni can gather customer information on other platforms, it’s a win-win situations. Multimedia Interactive
One of the major advantages of E-commerce comparing traditional retailing is convenience; customer can search for product and compare it, finally checkout in a short amount of time by just clicking the mouse, however, E-commerce has deprived its users of the reality (Vincent & Franck, 2004). Material color, texture, tactile impression, those physical details cannot be display or feel by the two-dimensional images and texts on a computer screen. Most people have on-line shopping experiences have those situations that sometimes the products they received are different from their expectations.
In order to provide better shopping experiences, Oki-ni provide an enhanced multimedia interface. In every product description page, the website provides high-resolution photos of the products, customer can click zoom-in to see the details of the texture, and a short video to demonstrate the product. For music product, such as CD, preview services are provided. Critical Review In this part, the website’s OVP (Online Value Proposition), ORM (Online Revenue Model) and target audience will be critically reviewed. Online Value Proposition What’s the Online Value Proposition?
It is a statement of the benefits of e-commerce services that ideally should not be available in competitor offerings of offline offerings (David, 2006). Michael & Susan (2012) further states that in an E-commerce context the differential advantage and positioning can be clarified and communicated by developing an online value proposition. Simply speaking, OVP is the USP of the brand or the website, a strong OVP is a crucial way to attract new visitors into the site and decided to stay or leave, the decisions often made in minutes or even in seconds.
Developing an OVP, involves: * Developing messages that reinforce core brand proposition and credibility * Communicate what a visitor can get from an online brand that other competitors can not offer or they cannot get offline (Micheal & Susan, 2012) Translate these theories into simply language, a good OVP should answer the questions ‘Why am I here? ’ ‘Does this site offer me what I need? ’ In the digital business environment, the competition is much fierce and intensive then ever before. How to stand out from the crowd in a matters of seconds when visitor first open the site become vital to success.
There a great numbers of online clothing retailer, from high-street brand, such as Topshop, ASOS, to luxury brand, e. g. Net-a-porter, Browns. Being good is not enough to win the competition, a good OVP is essential for Oki-ni to survive in the competition. More than ten years passed the establishment of Oki-ni, the website is still focusing on menswear, more specifically, they aiming to discover and break the most inspiring brands and products available, while hosting them in an rich, inspiring and innovative environment. The home page of Oki-ni featuring a simplicity style filled with inspiration contents.
Existing customer can easily find what they want in a few clicks; in the meanwhile the video and music can attract the attention of new customer. The website keep updating its FEATURES section with vibrant and forward-thinking videos and music. There is no differentiated of so call ‘high-street’ or ‘luxury’ on Oki-ni’s product, customer can find shorts cost 20 pounds to a coat valued a few hundreds. But there is one thing in common, all product were carefully selected. Featuring more than cloth, customer can also buy books, CDs on the website.
In order to keep a fresh look, Oki-ni redesign the website every six month, from layout to the content. To sum up, Oki-ni’s strong OVP is that they not only sell cloth, but the promote an innovation life-style. Online Revenue Model In the article, Business Models on the Web by professor Micheal Rappa (2006). He suggests that ‘business models are perhaps the most discussed and least understood aspect of the web. ’ In this regards, he summarised the business model into the following * Brokerage * Advertising * Informediary * Merchant * Manufacturer * Affiliate Community * Subscription * Utility The revenue model may be different in these business model, some website get paid by doing advertising, some website generated income by subscription. In the case of Oki-ni, the revenue model is easy to identify, the company produce service and sell it to customer. When the revenues from sales exceed the operational cost, then the company gets profit. Comparing to store retailer, the website is relatively easier to operate. No rent, less labor cost, means the website can provide a much more competitive price than physical store.
However, on the other hand, the maintaining of website post a great challenge to the company. Target Audience The company target a niche market of luxury product segment. Focusing on menswear only, the website sells a wide range of product from selective clothing line from Japan, Italy, to limited edition CDs. There is no particular age range on the Oki-ni’s customers, the company targeting a small group who required a innovated and forward-thinking life-style, and willing to the pay a premium price for that.
Customer Relationship Management The term of CRM (Customer Relationship Management) is now much more frequently seen in the E-commerce article, what’s CRM? The followings are different CRM definitions by scholars CRM involves various different elements, which includes customer-prospecting, relationship with customers; interact between customer and business, understanding customer expectations, empowerment, partnerships, and personalisation, and son on. (Fjermestad & Romano, 2006).
CRM is an enterprise approach to understanding and influencing behavior through meaningful communication in order to improve customer acquisition, customer retention, customer loyalty, and customer profitability. (Swift, 2006) So far, there is no universally accepted definition of CRM. It not a software or a service, it is an overall business strategy. Shanmugasundaram (n. d) identified that the three main components in CRM system, namely * Operational * Analytical * Collaborative Nowadays, not only global companies seeking helps from CRM, more and more SMEs (Small and Medium Size Enterprise) were implemented with CRMs.
Oki-ni is no exceptional, the company used the first hand data not only to promote its product, but to provide a better service. From time to time, Newsletters were sent to customer, the content of those newsletters were not just about product information. Featuring styling tips, or invitations to special events, the company always try to encourage customer come to visitor site. Recommendation Running an E-commerce is far more complicated than just setting up a website, other than the business and the customer, it involves many their parties, such as vendor, supply chain, banking.
Researcher found a rather interesting phenomenal when customer rated Oki-ni’s service, some customer give top rate on both delivery speed and money transaction. However, on the other hand, some customer extremely disappointed on their service quoted ‘the clothes arrived and were excellent although delivery is very slow’ (Ciao, 2007). The inconsistence performance may due to the delivery company and Oki-ni should try to avoid in the future. Moreover, there is more potential of the CRM waiting to be discovered. Oki-ni using CRM mainly on providing customer ervice and promoting products, CRM is much more than customer service, researcher suggest the company analyse the customer’s shopping behavior, such as what kind of brand they like the most, how frequently they shopped on the site, etc. to improve customer shopping experience. The company can also use the data to collaborative with other parties, such as bank, to improve online payment security, or delivery company, to improve performance. Lastly, the competition of digital business environment is much more intensive than ever before.
The OVP (Online Value Proposition) may be seems strong and unique at this moment, with successful of Oki-ni, more and more website will try to follow the same model. How to maintain the competitive edge is vital for the company’s future. Conclusion By discussing and critically reviewed the Oki-ni’s website, this paper take an insight into the digital business environment. In the Internet era, trading become much more easier, even individual can set up a website with the know-how and the equipment. However, the competition is much more intensive.
E-commerce is a complex term that involved many aspects, the terms and concepts researcher discussed in this paper barely scratch the surface. with the fast advancing technology, new issues now raised, such as legal issue and Internet security. Concepts of CRM, Online business model may need further investigation in the future. Reference: Ciao. (2007). Review of Oki-ni. com. Available from: http://www. ciao. co. uk/Reviews/Oki_Ni_com__5315436 [Accessed 10 Nov, 2012]. Fjermestad, Jerry, and Nicholas C. Romano. (2006) Electronic Customer Relationship Management. Armonk, NY: M.
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