IDSC Quiz 3: Weeks 5-6
Curation Subscription
seek to surprise and delight by providing new items or highly personalized experiences in categories such as apparel, beauty, and food
New Digital E-Commerce Technologies Continued
-Accessing this new physical digital data layer for customers to move seamlessly between real world and online -Online retailers therefore will have to begin thinking in more contextual terms -In combination its not hard to see how technologies like these will bring e-commerce infinitely closer to feeling alive and experiential -Just as many retailers in the big box channel have struggled in a post-internet world, it's reasonable to assume that even Amazon, eBay and other digital behemoths could find themselves being challenged by a new breed of competition--competition born out of a new generation of technologies
Mobile to Artificial Intelligence
-AdWords over the past several years have seen a mobile first strategy in play where google was seeking to protect its ad revenue as more users adopted smartphones -Google's CEO recently announced an important shift from mobile first to an AI first world Google -For some time now Google has sought to use analysis of historical ad data to better inform decisions -The power of Machine Learning can be used on large scale campaigns to improve ROI -Improved experience and insight such as the average time to convert report are aimed at helping advertisers understand how their ad programs fit with consumer behavior, which is often complex, involving multiple interactions and devices through time -Customized text ads. There are new options for creating text ads with customized text ads that update automatically with the information that you want your potential customers to know
How Does E-Commerce Work?
-Advertising -Web Hosting -Merchant interface -Product Catalog -Shopping Cart -Payment Processing -Shipping -Tax Calculation
Analysts Say Blame the Machines
-As the Dow Jones industrial average collapsed 700 points in 20 minutes last Monday afternoon, traders and analysts coalesced around an increasingly routine explanation: blame the machines -Lightning fast trading models, automated sell orders and an arsenal of sophisticated algorithms may not have driven every bit of misery in what became the biggest stock market drop in US history, but investors and market experts say they are likely to have made a crazy trading day that much crazier -The market is always "just one step away from massive volatility because of programmed trading, there's no way that investors can compete with a computer making 1000 trades a second -Algorithmic trading--proprietary computer programs that can be perform thousands of trades a second-- has become a reality for global markets. In a report last year that passive and algorithm driven "quantitative investing" accounted for about 60% of stock trades -US Treasury Secretary said Tuesday that algorithmic trading "definitely has an impact" in Monday's 1,175 point drop -But Monday's abrupt fall had many analysts remembering the 2010 "flash crash" another breakneck fall and rebound blamed on the chaos of unchecked automated trades
Types of E-Commerce
-B2B: think supply chain (for ex: parts sold to auto manufacturers) -B2C: Amazon, Best buy, etc. -C2C: Craigs list, payment systems like PayPal, Ebay auction -G2C (government to citizen): Taxes, car licenses, permits, etc. -M Commerce (mobile): conducting the transactions on a mobile device
What are the Multiple E-Commerce Models for Multiple Business Types?
-Brokerage -Advertiser -Merchant seller of goods and services model -Affiliate e-commerce business model -Manufacturer/ direct -Subscription
Cons of Cloud Computing
-Cloud computing means you buy services, so one-off, upfront capital costs become ongoing operating costs instead. That might work out much more expensive in the long run -You need a reliable, high speed, broadband internet connection functioning all the time -You have a far greater dependency on your service provider
What to the best E-commerce companies do?
-Creating a near frictionless buying experience: e-commerce companies are building lasting consumer brands by blurring the line between product and service -Building passionate communities: Amazon owns commodities, but best in class companies build competitive advantages by engaging with vibrant communities, creating customer loyalty -Blending content and commerce: other companies have reimagined the catalogue and turned it into a forum for customer experience, product and service resource -Offering a "try before you buy" experience -Top performing e-commerce companies excel at two things: 1. a product and brand experience that customers love and keep coming back 2. a focus on their KPIs (key performance indicators), particularly around customers acquisition, retention/churn and customer feedback
Merchant's Viewpoint of E-Commerce
-Creating and managing a product Catalog -Attracting potential customers -Taking orders from customers -Being notified when customers place orders -Accepting and processing customer payments -Charging appropriate tax -Calculating and charging shipping -Delivering products
What are the two ways to think of e-commerce?
-Customers viewpoint -Merchants viewpoint
Customers Viewpoint of E-Commerce
-E-commerce is all about finding and ordering the right products *where can I find what I want? *would others recommend it? *how much does it cost? *how do i order it? *how and when will it arrive?
Men and Women Gravitate to Different Types of Subscription
-E-commerce subscribers tend to be younger urbanites with money -These subscriptions particularly appeal to women, who account for 60% of them. Women are more likely to subscribe to beauty and apparel services -Men are more likely to have three or more active subscriptions. Men, are much more likely to gravitate to razors, video-gaming gear, collectibles, and meal kit or food delivery services -There are three broad types of subscriptions:replenishment, curation, and access
Challenges in E-Commerce
-Getting traffic to come to the website -Creating customer loyalty -Differentiating from competitors -getting customers to actually buy -Integrating websites with operational information systems (ERP), fulfillment (external), customer service (CRM)
Pros of cloud computing
-If your business is selling books or repairing shoes, why get involved in the nitty gritty of buying and maintaining a complex computer system? -if you run an insurance office, do you really want your sales agents wasting time running anti-virus, upgrading software, or worrying about hard-drive crashes? -Do you really want to worry about keeping all of your software updated?
Amazon Key Hacked?
-Just how secure is Amazon Key, the company's smart door lock? -Amazon says its very secure. But for the second time since Key first launched, the company has fixed a flaw that could bypass the lock mechanism -Amazon key is a regular door lock with a twist: Amazon delivery drivers can unlock your door, place a parcel inside, and lock the door again, all while being recorded and streamed to your phone by the corresponding Amazon Cloud Cam -Its part of an effort to save your parcels from being stolen -It's the smart lock that the security researcher, who identified himself only as MG, claims he can bust open with a few dollars with of equipment: a raspberry Pi microcomputer, a battery, and a wireless dongle -In his video, he's shown opening an Amazon Key equipped door after a delivery driver leaves a parcel and closes the door behind him -The hack effectively blocks the bolt from locking once it's opened, allowing the hacker to later walk right into the victims home -I posed the proof of concept video with technical details redacted, said MG -There was a window of time I didn't hear back for about half a day, meanwhile Amazon Public relations started talking about the attack and saying it was a non issue he added. Annoying... but I promised amazon that I would withhold technical details until they releases a fix
The Business Attraction to e-commerce
-Lower transaction costs -Configure products and price -Potential for larger sales -Integration into enterprise systems (CRM,ERP,SCM) -Larger customer base-global -Searchable large catalogs
Autonomous "Uninhabited" Vehicles
-Military applications of narrow AI are already close to bringing about another revolution -Autonomous systems will draw on the machine deep learning to operate "At the speed of light" where humans cannot respond fast enough to events like cyber attacks, missiles flying at hypersonic speed or electronic warfare -AI will also become ever more important in big-data analytics. Military analysts are currently overwhelmed by the amount of data, especially video, being generated by surveillance drones and the monitoring of social-media posts by terrorist groups -The Pentagon, has set up an algorithmic warfare team to consider how AI can help hunt Islamic State fighters in Syria and mobile missile launchers in North Korea -Cyber warefare, in particular, is likely to become a contest between algorithms as AI systems look for network vulnerabilities to attack, and counter-autonomy software learns from attacks to design the best response -"Ten years from now, if the first through a breach isn't a fracking robot, shame on us" -Autonomous "uninhabited" vehicles, whether in the air, on the ground, or under the sea, offer many advantages over their manned equivalents -Apart from saving money on staff, they can often be bolder and more persistent than humans because they do not get tired, frightened, bored, or angry. They are also likely to be cheaper and smaller than manned versions because they do not have to protect people from enemy attacks, so they can be deployed in greater numbers and in more dangerous situations
Benefits to Open Source Software
-Open source software is "free" or significantly lower cost compared to a software vendor -Reduced costs of "vendor churn" where vendors require users to migrate to anew version -Open source doesn't require additional licenses as an organization grows -"...it was simply the best technology available" -Security--"given enough eyeballs, all bugs are shallow" -Developers make what their organizations want, not what the vendor thinks they want -Interoperability--open source software is much better at adhering to open standards
Techniques and Strategies E-Commerce Trends in 2018: Reach
-Paid media (AdWords and social media) -It is important to use social media, as with any paid media, to reach your audience where they are -However in a recent e-commerce benchmarks report, it found that under half (43%) of companies with online stores report seeing significant traffic from social media -Social media engagement over time has increased to 2 hours and 15 minutes with 28% of 16-64 year olds saying they use social media to research/ find products to buy -Having a defined paid social strategy to promote your products or services is vital to raising brand awareness and integrating this with social platforms like instagram and snapchat can convince your target audience to act and click through to your product landing page
SaaS Examples:
-Salesforce -Office 365 -Box -DocuSign -Google Apps -Slack -Zendeski -Amazon Web Services -Concur -Dropbox
Open Source is the Future of Software
-Software as a commodity: the value derived is from the utilization by the organization -Businesses, governments, etc. have learned that collaboration results in really good software that everybody can use -People have stopped asking "whether" they should use open source software, and they're asking, "how should we use" open source software -Open source has simply become a means to an end--it lowers economies of scale for software and in doing so, is prompting more innovative business models -The software giants of yesteryear--oracle, microsoft, and SAP to name a few-- will remain, but don't expect to see a new generation follow on their heels
What are the three layers to cloud computing?
-Software-as-a-service (SaaS) -Platform-as-a-service (PaaS) -Infrastructure-as-a-service (Iaas)
Potential forSystematic Risk
-Some algorithms use their mathematical speed to exploit tiny fluctuations in price, buying and reselling within a fraction of a second. Others attempt to predict how markets will move by analyzing a torrent of data points, including news releases and the wording of politicians speeches -Algorithmic trading does not just ding the broader indexes, but it also affects individual companies. One analyst pointed to the stock prices for McDonalds's and Johnson and Johnson-- two very different companies that both nevertheless showed the same sudden, violent dip -The computers react to evidence exponentially faster than any human-- think millionths of a second, instead of minutes-- and can move en masse, trading at high volumes around the world -That makes them potentially more dangerous: A group of financial chiefs from seven countries wrote in 2015 that algorithmic trading has "caused significant volatility and market disruption and that its growing complexity has increased the potential for systematic risk over very short periods -Few analysts expect this new reality of high speed, high data trades will change, save for a crackdown from government regulators -Stock exchanges make money from fast paced trading by selling access to by-the-microsecond data feeds of market activity. The Nasdaq exchange made $156 million, or a quarter of its revenue, in the most recent quarter from information services" including selling trading data -But critics-- including those named "flash boys", Michael Lewis' 2014 book on high-frequency trades say that computerized trading can end up rigging the markets in favor of super-fast trading firms at the expense of everyone else
Subscription Box: New Research On E-Commerce Consumers
-Subscription e-commerce, led by start ups such as Dollar Shave Club, Blue Apron, and Stitch Fix personal styling, is a fast growing new way of buying online -Research shows that 15 percent of online shoppers have signed up for one or more subscriptions to receive products on a recurring basis -Subscription e-commerce services offer these consumers--often younger, affluent urbanists-- a convenient, personalized, and often lower cost way to buy what the want and need -Churn rates are high however and consumers quickly cancel services that don't deliver superior end-to-end experiences -The subscription e-commerce market has grown by more than 100% a year over the past five years -Startup have launched these businesses in a wide range of categories including wine, child and baby items, contact lenses, cosmetics, meal kits, pet food, razors, clothing, video games, etc. -This strong growth has attracted established consumer brand manufacturers and retailers
Swarms of Robots
-Swarming will solve a big problem for America -The country currently depends on an ever decreasing number of extremely capable but extremely expensive multi-mission platforms which, if lost at the outset of a conflict, would be impossible to replace -By contrast, low-cost, expendable distributed platforms can be built in large numbers and controlled by relatively few humans. Tiny 3D printed drones, costing perhaps as little as a dollar each could be formed into "smaller clouds" -Underwater warfare will become ever more important in the future unmanned undersea vehicles will be able to carry out a wide range of difficult and dangerous missions, such as mine clearance or mine laying near an adversary's coast -It is certain that autonomous weapons systems will appear on the battlefield in the years ahead. What is less clear is whether America will be the first to deploy them. In july 2017 China produced its "next generation artificial intelligence development plan, which designated AI as the transformative technology underpinning future economic and military power
New Digital E-Commerce Technologies
-Tactile -Contextual -Augmented Reality -Virtual Reality
UK Unveils Extremism Blocking Tool
-The UK government has unveiled a tool it says can accurately detect jihadist content and block it from being viewed. -Home Secretary told the BBC she would not rule out forcing technology companies to use it by law. -Thousands of hours of content posted by the Islamic State group was run past the tool, in order to "train" it to automatically spot extremist material. -ASI Data Science said the software can be configured to detect 94% of IS video uploads. -Similar tools in the past have been heavily criticized by advocates of an "open" internet, saying such efforts can produce false positives - and that means content that is not particularly problematic ends up being taken down or blocked. -In Silicon Valley, the home secretary told the BBC the tool was made as a way to demonstrate that the government's demand for a clampdown on extremist activity was not unreasonable. -"It's a very convincing example of the fact that you can have the information you need to make sure this material doesn't go online in the first place." -"The technology is there. There are tools out there that can do exactly what we're asking for. -"But I remain convinced that the best way to take real action, to have the best outcomes, is to have an industry-led forum like the one we've got." -The Home Office estimates that between July and the end of 2017, extremist material appeared in almost 150 web services that had not been used for such propaganda before.
Open Data Examples
-The World Bank -Open Migration -Climate Time Machine -Information is Beautiful -Data USA
Unilever Threatens to Pull Ads
-Unilever said consumer trust in social media is now at a new low -"we cannot have an environment where our consumers don't trust what they see online, said unilevers chief marketing officer -He said it was in the interest of digital media firms to act before "advertisers stop advertising" -Companies could not continue to support an online advertising industry where extremist material, fake news, child exploitation, political manipulation, racism, and sexism were rife -"It is acutely clear from the groundswell of consumer voices over recent months that people are becoming increasingly concerned about the impact of digital on wellbeing, on democracy - and on truth itself." "This is not something that can brushed aside or ignored. " -Facebook and Google accounted for 73% of all digital advertising in the US in 2017. -In December, the European Commission warned the likes of Facebook, Google, YouTube, Twitter and other firms that it was considering legislation if self-regulation continued to fail. -For their part, in 2017 both Facebook and Google announced measures to improve the detection of illegal content. -Facebook said it was using artificial intelligence to spot images, videos and text related to terrorism, as well as clusters of fake accounts, while Google announced it would dedicate more than 10,000 staff to rooting out violent extremist content on YouTube in 2018. -"Facebook and Google's response to fake news, brand safety and content prompted by hate or extremism has been very slow, yes they are now addressing these problems, but they should have been quicker to put money into these things. -The efforts they're making are not enough at the moment to weed out these comments and content."
SaaS Benefits
-Usage is scalable -Software updates are automated and often free of charge -No additional hardware costs -No initial setup costs -Pay only for what you use -Access to state-of-the-art application -Cross device compatibility -Accessible from any location using a browser -Short time to deployment -Security -Performance -Availability
Brokerage
A site that creates an environment for transactions, driving business online
On-Demand, Content Shock, Micro-Moments
ACT-"on demand" commerce -up until recently, customers had to sometimes accept slow deliveries or simply go to a shop if they wanted something quickly-- but e-commerce has caught up. Today and in the future, getting items at speed, in real time, will be more practical -Described as the latest biggest investment trend, on-demand is all about giving customers what they want, when they want it. Food, consumer goods and online content such as TV programs and films are all taking advantage of the desire of wanting something in an instant CONVERT-- on the micro-moments of their customers' behaviors -micro-moment marketing-- in today's fast paced, technology-oriented world, consumers are overwhelmed with content. Be it through ads, offers, emails, texts, social media and everything else, the industry has reached a point of "content shock where consumers cannot consume much more content than they already have" -hence, the way brands devise their digital marketing strategy to capture their audiences attention, needs to change
Replenishment Subscription
Allow consumers to automate the purchase of commodity items, such as razors or diapers
Secure but Patched
Amazon's public relations response-- "safeguards are in place, our system monitors: 1. that the door is only open for a brief period of time 2. communication to the camera and lock is not interrupted and 3. that the door is securely relocked -However, amazon released updates for both iOS and Android apps to mitigate the attack -The attack works by placing a raspberry Pi inconspicuously nearby the lock to automatically search and scan the airwaves for an Amazon Cloud Cam -The camera is easy to spot because part of the network address can identify Amazon as the camera maker without requiring access to the wireless network -Once the delivery person arrives, the Raspberry Pi can detect an increase in the rate of wireless traffic sent over the air -That's when the hacker triggers a deauthentication attack which if timed correctly will interrupt the camera while the bolt in unlocking. Because the app can't process that error condition, the app will say the lock has been bolted even when it's still unlocked -The Raspberry Pi will then send a notification back to the attacker, who can then open the door and steal the delivered items and/or other property -MG confirmed Sunday that the app updates fixed his attack
Technology Changing the Nature of Warfare
Artificial intelligence, machine learning, robotics and big-data analytics. Together they will produce systems and weapons with varying degrees of autonomy, from being able to work under human supervision to "thinking" for themselves -The most decisive factor on the battlefield of the future may be the quality of each side's algorithms -Combat may speed up so much that humans can no longer keep up -"Hybrid warfare", for the first time, the human factors that have defined success in war, "will fear, decision-making and even the human spark of genius, may be less evident" -A report by the Pentagon's Defense Science Board in 2016 said that "to be autonomous, a system must have the capability to independently compose and select among different courses of action to accomplish goals based on its knowledge and understanding of the world itself, and the situation -What distinguishes autonomous systems from what may more accurately be described as computerized automatic systems is that they work things out as they go, making guesses about the best way to meet their targets based on data input from sensors -A distinction needs to be made between "narrow" AI, which allows a machine to carry out a specific task much better than a human could, and "general" AI, which has far broader applications. Narrow AI is already in wide use for civilian tasks such as search and translation, spam filters, autonomous vehicles, high frequency stock trading and chess playing computers. General AI may still be at least 20 years off
Augmented Reality
By simply saying "O.K Glass, scan this" the software immediately detects any digital data present in the field of vision. Once detected, it initiates that content and allows the user to interact with it
Virtual Reality
By using a relatively inexpensive virtual reality headset, shoppers can transport themselves to anywhere in the world or home, browsing and buying in a very natural, intuitive and highly experiential way
Tax Calculation
Calculating, collecting, and paying appropriate sales tax is another part of online store that need to consider. How tax is handled depends on the laws where business and customers are located -In the US, companies are only required to collect sales tax for orders shipped within the state company operates from (customers are responsible for paying sales tax in their home state otherwise) -In Europe, companies are responsible for collecting and paying value added tax (VAT) based off business location, customer's location, and type of product sold
Who has become the E-commerce Giant?
China
What is Cloud Computing?
Cloud computing refers to the delivery of computing resources over the internet -instead of keeping data on a company's own hardware or having to regularly update applications, services are provided over the internet, from another location, which stores company's data and/or applications
Infrastructure-as-a-service (IaaS)
Deployment platform that abstracts the infrastructure -network architects
What is Software-as-a-service (SaaS)
Describes any cloud service where users access software applications over the internet. The applications are hosted in "the cloud" -Google, Twitter, Facebook and Flicker are all examples of SaaS, with users able to access the services via any internet enabled devices -Enterprise users are able to use applications for a range of needs, including accounting and invoicing, tracking sales, planning, performance monitoring, and communication -SaaS is often referred to as software-on-demand and utilizing it similar to renting software rather than buying it -SaaS users subscribe to the software rather than purchase it
Platform-as-a-service (PaaS)
Developer platform that abstracts the infrastructure, OS, and middleware to driver developer productivity -applications developers
Advertising
Drawing customers to Web site is a critical part of any online store, and good software includes features to help with this task, such as making sure it shows up in the popular search engines
Software-as-a-service (SaaS)
Finished applications that you rent and customize -end users
Tactile
Touch is something we may soon widely replicate with technology. Researchers have been successfully mapping patterns of vibration in order to accurately simulate the feel of various materials, allowing users to sense, the unique tactility of different surfaces and textures
Merchant Seller of Goods and Services Model
Is the online version of a Brick & Mortor store. They accept online payment methods and ship the merchandise to the customer, or deliver the merchandise digitally
How does Cloud Computing Work?
It's managed, it's on demand, it's everything you need
Shopping Cart
Like the product catalog, how the shopping cart looks has an impact on customer perception. More importantly, however, how shopping cart works can make the difference between an abandoned or completed sale
Open Data
Making data that belongs to the public broadly accessible and usable by humans and machines, free of any constraints -represents an opportunity for the public sector to apply innovative thinking to a resource they already have in abundance data -the goal of open data is to take this valuable resource out of government database silos where it sits and put it into the hands of people who can unlock its value -"In the 70s, the release of weather data from the National Oceanic and Atmospheric Administration into the public domain changed scores of industries and even created a new one: the weather industry" -The release of GPS data in the 90s, which changed our lives and brought us all of the location services we can't live without today -In each case, entrepreneurs seized the opportunity to turn a new asset class of government-collected data into life-changing innovations
Shipping
Once the order is submitted, need to gather the products, prepare them for shipping, then send them to the customer. Software will need to calculate the various shipping and handling costs involved
Payment Processing
Online payment process; customers enter payment information, which gets forwarded to a payment gateway that validates the information and confirms available funds, then transfers the funds to merchant account
Product Catalog
Product catalog is what customers see, and how they find the products offered. The way pages are designed and how products are presented has impact on how customers perceive the site
Manufacturer/ Direct
Reach buyers directly and thereby compress the distribution channel
Affiliate E-Commerce Business Model
Redirect the customer from their own website to the product or service onto a partners website and if they make a purchase earn a commission
Open Source
Software in which the source code is available to the public for use and/or modification, i.e open -is a collaborative effort in which software programmers develop, improve and share the software code within a community of users -the internet provides the means to collaborate on open source -the linux operating systems was created using this collaborative approach
Merchant Interface
Strike a balance between fancy and simple. The merchant interface is kept as simple and straight forward as possible
Access Subscriptions
Subscribers pay a monthly fee to obtain lower prices or membership perks, primarily in apparel and food categories
E-Commerce
The buying and selling of goods and services, or the transmitting of funds or data, over the internet -these business transactions occur either as business to business, business to consumer, consumer to consumer, or consumer to business -E-commerce is the original big economic driver of the digital transformation
Web Hosting
The foundation is Web service hosting, including factors such as support, reliability, bandwidth, features, and cost
Advertiser
The main goal of the informer is to provide information that drives traffic, membership or both
Traditional Software vs. SaaS software
Traditional Software: -one-time fee -use on one computer -not available on mobile devices -free trial not available -installment required -some updates are automatic -less likely has supplemental apps -a new version requires a new purchase -mobile synchronizations requires additional software and often costly SaaS Software: -subscription fee -use on any computer via internet -available on many mobile devices -free trial often available -installment not required -all updates are automatic -most likely has supplemental apps -mobile synchronization may require additional software, often free
US Compared to China E-Commerce
US: -obsessive customer focus -traditional business online -e-commerce company China: -it's a lifestyle -job creation and domestic demand -helps other people sell things
Subscription
Users are charges fees based upon period of time
Contextual
Wearable, smart technologies like google glass in combination with location based augmented reality applications overlaid on the world around us