Agenda

• What is ecommerce
• Ecommerce history and development
• Ecommerce Models
• Ecommerce system
• KPI for ecommerce analysis

What is ecommerce

• Electronic commerce or internet commerce
• Buying and selling of services or goods online
• Transfer of money and data to execute these transactions electronically
• Sale of physical products through internet platform / apps
• Any commercial transaction that is facilitated through the internet

Ecommerce history and development

• First ever online sale: August 11, 1994 a man sold a CD by the band Sting to his friend through his website NetMarket, an American retail platform.
• Ecommerce has changed: how to promote, influence or attract customers, and sell products.
• Buyers see products with new perspectives and the way they shop is changing.
• Ecommerce is no longer limited to web platforms, lots shopping apps are introduced into ecommerce.

Ecommerce history and development

• Mobile shopping apps have become new marketplaces that are at customers’ fingertips: Taobao, eBay, Amazon, Costco, Walmart, uber, aliexpress.
• Mobile apps change to e-commerce:
  • New marketplaces
  • Mobile-friendly shopping
  • New horizons in advertising and marketing

Ecommerce History and development

• New marketplaces, new devices, new facility, new business operations.
• Amazon initiated online shopping in 2001, it has continued to innovate in the e-commerce market, even most recently with its drone delivery services.
• It is estimated that U.S. sales will reach around $434 billion for the year 2017.
• Global sales of retail ecommerce are projected to reach $27 trillion by 2020.
• It is estimated 27.2 percent of the world’s population shops online.

Ecommerce Model

• Four main types of ecommerce models of transaction between consumers and businesses.
  1. Business to Consumer (B2C): business sells a good or service to an individual consumer (e.g. You buy a computer from an online retailer).
  2. Business to Business (B2B): business sells a good or service to another business (e.g. IT business sells software service for other a telecom businesses to use).
  3. Consumer to Consumer (C2C): a consumer sells a good or service to another consumer (e.g. You sell your TV on eBay to another consumer).
  4. Consumer to Business (C2B): a consumer sells their own products or services to a business or organization (e.g. a photographer licenses their picture for a business to use).

Ecommerce System

• Three major components in the ecommerce system:
  1. People: provider staff (number of transactions, number of complaints, sales techniques score), user/buyer (member number, sales amt per transaction).
  2. Products: purchase, inventory sales, service, return, price.
  3. Marketplace: traffic, conversion, large volume ratio, market share, member participation, expansion rate, traffic rank.

Ecommerce System

• Three major components in the ecommerce system:
  • Product
  • Marketplace
  • People
  • Purchase, inventory sales, service …
  • Traffic, conversion, large volume ratio …
  • Provider staff
  • User
  • Buyer
  • …
  • Sales Analysis KPI

Ecommerce System

• Three major components in the ecommerce system:
  1. People: existing customers are steady, how to exquisite new customers.
  2. Products: how to improve the conversion rate for more product sales.
  3. Marketplace: traffic on home page and engagement on product detail page.
  • Traffic is the overall analysis of app, funnel is the analysis of the core path, user analysis is to figure out the pain point of the product.

KPI for Ecommerce Analysis

• Major KPIs in the ecommerce analysis:
  1. Webpage traffic.
  2. Conversion rate for sales.
  3. Customer values.
  4. Market place operation.
  5. Marketplace competition.
  6. Risk control.

KPI for Ecommerce Analysis

• AARRR metrics model: measurable process through which a visitor becomes a customer-understand customer behaviour.

KPI for Ecommerce Analysis

• AARRR metrics model:
  • Acquisition: attract and acquire visitors, the source of the traffic.
  • Bounce rate.
  • Click-through rate.
  • Customer acquisition cost.
  • Lead conversion rate.

KPI for Ecommerce Analysis

• AARRR metrics model:
  • Acquisition: attract and acquire visitors, the source of the traffic.

KPI for Ecommerce Analysis

• AARRR metrics model:
  • Activation: users make first interactions with online store, first step to conversion.
  • Sign up for newsletter or an email list.
  • Add products to shopping cart.
  • Browse some products or category pages.
  • Start the checkout procedure.

KPI for Ecommerce Analysis

• AARRR metrics model — Activation:
  • Customer conversion rate.
  • Drop-off rate.
  • Dwell time.

KPI for Ecommerce Analysis

• AARRR metrics model:
  • Retention: customers come back to website, product.
  • Churn rate.
  • Email open rate.
  • Login frequency.
  • Retention rate.

KPI for Ecommerce Analysis

• AARRR metrics model:
  • Retention: customers come back to website, product.

KPI for Ecommerce Analysis

• AARRR metrics model:
  • Revenue Metrics: Identify actual revenue targets for users, to understand whether result in profitable growth.

KPI for Ecommerce Analysis

• AARRR metrics model:
  • Revenue Metrics: Identify actual revenue targets for users, to understand whether result in profitable growth.
  • Customer lifetime value.
  • Expansion revenue.
  • Monthly recurring revenue.

KPI for Ecommerce Analysis

• AARRR metrics model:
  • Referral Metrics: Users introducing company or product to friends or coworkers.
  • It is most difficult metrics to track.
  • But some tools and campaigns can be use to track referrals.

KPI for Ecommerce Analysis

• AARRR metrics model:
  • Referral Metrics:
    • Net promoter score.
    • Purchase rate of referred customers.
    • Referral rate.