E-Commerce Assignment

[Name of Student]

[Name of University]
Table of Content

1 CASE STUDY: HomeStay ..................................................................................................... 4

1.1 SWOT Analysis and Feasibility of E-Commerce Portal .................................................. 4

1.1.1 Issue and Challenges ................................................................................................. 5

1.2 Feasibility of m-Commerce.............................................................................................. 7

1.2.1 Advantages of m-Commerce Platform ..................................................................... 7

1.3 Issues / Challenges ........................................................................................................... 7

1.4 Payment Methods for HomeStay ..................................................................................... 7

1.5 Security Problems in e-Commerce business and Counter Method ................................ 10

2 Case Study: The Furniture Store ........................................................................................... 11

2.1 Critical Success Factors of E-commerce Business ........................................................ 11

2.1.1 Costs of an online sales channel ............................................................................. 11

2.1.2 Technological Implementation ............................................................................... 12

2.1.3 Design and usability of the online store .................................................................. 12

2.1.4 Accessibility............................................................................................................ 13

2.1.5 Business/Profitability CSF ...................................................................................... 14

2.2 Successful Marketing Strategies for TFS ....................................................................... 15

2.2.1 Pay per click advertising ......................................................................................... 15

2.2.2 Social Media Marketing .......................................................................................... 15

2.2.3 Search Engine Optimization ................................................................................... 16

 2.2.4 Image Management ................................................................................................. 16

2.2.5 Video Marketing ..................................................................................................... 17

2.3 Advantages and Issues of m-Commerce for The Furniture Store’s business ................ 17

2.4 Security threats to The Furniture Store’s related to mobile devices .............................. 18

References ..................................................................................................................................... 21
1 CASE STUDY: HomeStay

1.1 SWOT Analysis and Feasibility of E-Commerce Portal

An e-commerce portal is a digital platform that host both owning business and its

customers to conduct business transactions and interactions instantly. They are aimed to facilitate

connected and intuitive business operations and improve service. This portal also allows

businesses to integrate and interact with their suppliers (Laudon and Traver, 2016).

The idea proposed in the case study is to develop an e-commerce business portal that

facilitates interaction between HomeStay, its customers, and its suppliers (friendly hosts) in Peru

and other nearby countries also. In order to assess the benefits and challenges of such an e-

commerce portal, this report first conducts an internal audit using the SWOT analysis tool of

HomeStay and then identifies benefits and challenges in terms of business, technological and

geographical perspectives.

Strengths Weaknesses

 Unique selling point  No e-commerce infrastructure

(comfortable stay, friendly, host,  Lack of knowledge and

authentic food, cultural integration) expertise in handling and managing e-

 High reputation (in terms of commerce portal

reliability and quality of service)  No suppliers/vendors in nearby

 Positive ratings by customers countries

(TripAdvisor)

 Knowledge and experience in

cultural tourism

 12 booking offices in Peru

Opportunities Threats

 Online booking and payment  Increase in competition

system (E-commerce platform)  Loss of vendors to competing

 Increasing demand for unique business

vacation experiences  Loss of customers to competing

 Increasing demand for cultural business

tourism  Low performance/Failure of E-

 Increasing demand from young commerce portal

age group

1.1.1 Issue and Challenges

Benefits Challenges/Issues

Business Perspectives e-Commerce platform HomeStay lacks

increase business efficiency. experiences expertise and

It increases customer infrastructure for an e-

satisfaction commerce platform and this is

It has much less the biggest challenge.

investment as compared to Investment is required for

establishing physical offices development, operations, and

Flexible and adaptive maintenance of platform.

to external environment

changes
 Technological Adoption of new The main problem is

Perspective technology eliminates time lack of technological skills

and geographical barrier and and experience.

enhances business reach to The main challenge is

more customers around the to attract visitors (online

world traffic) and potential

Digital payment customers to the platform

methods and online presence Showing inventory

is highly desirable by (homes for tourists, local

customers cuisine, etc.). This is an

More opportunities for important issue because

marketing and branding customers can be attracted by

purposes the way the portal displays

these aspects

Geographical E-commerce platform There are no

perspective enhances reach to customers significant geographical

from all around the world and barriers to e-commerce

specially connect the business platform, however, HomeStay

with young customers who are needs to ensure that the portal

more technology savvy and its servers are safe and

secure.
1.2 Feasibility of m-Commerce

1.2.1 Advantages of m-Commerce Platform

The most important benefit of m-commerce as compared to e-commerce is higher

convenience. Customers are able to connect with business without internet through mobile

network. Mobile phones are more personalised. M-commerce platform is more flexible because

it employs both online features and mobile features. M-commerce is relatively faster and

decrease time to order (Subramaniam and Nirman, 2016). Young consumers typically use social

media platforms through mobile phones and thus HomeStay can also enhance reach and

interaction and develop an online community for marketing purposes.

1.3 Issues / Challenges

The main challenge observed in m-commerce platforms is low operational performance

of platforms. The processing features of mobile phones are different and therefore customer

experience is also dependent upon their own smartphones. The accessibility to platform is

compromised in areas where there is low mobile coverage. The content of marketing and

advertisement messages is limited as compared e-commerce platforms. The connectivity to

internet also affects user experience. M-commerce is less secure as compared to personal

computers and other devices (Tan, et al., 2017).

1.4 Payment Methods for HomeStay

In response to fast increase e-commerce, several businesses have developed that offer

payment handling services. These are typically called money merchants. This report

recommends that among various payment platforms, HomeStay should use one or both of the

following payment services. Following discussion presents critical discussion of the two
payment methods and compared advantages and features as well as disadvantages (Markovich,

Achwal, and Queathem, 2017).

The two payment methods recommended are PayPal and Stripe. These are popular tools

that businesses can use to process online payments on their e-commerce platforms. Among

plethora of various services, PayPal is considered to be one of the industry leaders and highly

reliable and high quality service. Stripe also developed a significant brand and developed loyal

customers, but still is not as popular as PayPal. It is important for HomeStay management to

consider the fact that neither Stripe nor PayPal offers cheapest services, therefore, if HomeStay is

looking only for basic payment processor with lowest fee then developing own merchant account

is better option. These merchant accounts only offer basic features and the cost is relatively less

(Khan, et al., 2017).However, services like PayPal and Stripe offer more flexibility and various

other features.

The core service offering of PayPal is payment processing. It allows any customer to

send payment to any merchant registered through Paypal balance or a credit card. PayPal also

provides a variety of supplement services to registered merchants. There are three service plans

in PayPal (Johnson, 2018)

1. Checkout: it is a supplemental option that HomeStay may add to the

payments page if the management is willing to payments through credit cards or any

other ecommerce platform (Berron, 2018).

2. Payments Standard: for new entrants in e-commerce, PayPal Standard is a

very effective processor. HomeStay can develop its own payment buttons and which can

be integrated into its portal and enable shopping cart feature of PayPal on its own E-

commerce platform. This option does not require technical knowledge (Fabregas, 2018).
 3. Payments Pro: is the third service which offers standard PayPal features

and a checkout page hosted by a virtual terminal. This service costs monthly fee and

processing costs. Customers are thus able to stay on HomeStay webpage while making

purchase and do not need to re-route to website of PayPal (Brame, 2019).

In case if HomeStay decides to conduct personal selling strategy, PayPal facilitates by

integrating various leading POS systems. This feature has a flat-rate pricing strategy which is

predictable (Berron, 2018).

In comparison, Stripe does not offer service plans. HomeStay can access payment

processing features of Stripe while choosing various tools and features that are suitable for

business purposes. The cost of the service increase if HomeStay decides to subscribe additional

features (Fabregas, 2018).

The online payment tools offered by Stripe include the following:

1. Credit card support as well as localized payment methods (Fabregas,

2018)

2. It supports online checkouts and in-app checkouts

3. There is a embeddable default form and HomeStay can also build its own

from scratch through built-in features (Berron, 2018).

4. Stripe also offers invoicing, subscription tools, & recurring billing

However, invoicing, recurring billing, and subscription tools incur additional costs.

Furthermore, Stripe also offers point of sale app to facilitate m-commerce platform. However,

these are not ready-to-go mPOS or POS (Fabregas, 2018).

1.5 Security Problems in e-Commerce business and Counter Method

There are various security issues indicated by researchers regarding e-commerce

platforms. These are related to security of e-commerce assets from access and use or stolen by

unauthorised users. The primary security issue is privacy. It refers to keeping information

provided by customers and business information confidential from unauthorised users. Due to

identity theft and credit card frauds, privacy has become an important issue for consumers and

businesses. There are also other security issues which include authentication, integrity, and non-

repudiation. It is important for HomeStay to effectively deal with these issues. Data integrity

issue refers to making sure that data being exchanged is correct and consistent. Typically,

authentication feature is used to protect privacy of consumers and businesses during online

payments and transactions. The idea of non-repudiation refers to concept that none of the parties

dispute regarding the occurrence of a transaction (Ahmad and Alam, 2016).

According to Gorla, Chiravuri, and Chinta, (2017), security risks remain despite

development of various security mechanisms, however, the need for security features remains

undoubful regardless of their effectiveness. There are numerous security mechanisms and some

of which are described as followed:

 Authentication: This feature ensures that users’ credentials are verified before they

access the system or information. This feature is for HomeStay employees only and customers

do not have to authenticate while accessing the e-commerce platform and website (Khandekar, et

al., 2016).

 Authorization: refers to allocate and manipulate assets and resources in desired specific

ways and only authorised personnel is able to access the system and information. This feature
will help HomeStay to prevent privacy issues and prevent unauthorised users to access customer

data such as credit card information (Vakeel, et al., 2017).

 Encryption: is a technique to hide information into codes while sending and decode the

same when receiving. Encryption prevents hackers and spying software to steal information

during online transactions (Saleem, et al., 2019).

 Integrity: refers to prevention modification data

 Nonrepudiation: prevention against any one party from reneging on an agreement after

the fact (ibid)

 Availability: prevention against data delays or removal (ibid)

2 Case Study: The Furniture Store

2.1 Critical Success Factors of E-commerce Business

Following are some of commonly cited CSF in literature for e-commerce platform for

The Furniture Store.

2.1.1 Costs of an online sales channel

Majority of the literature shows that there are numerous benefits of developing and

operating an e-commerce channel. The e-commerce platform serves as an alternate to traditional

sales and distribution channel, i.e. brick and mortar stores. However, a virtual store is completely

different than a physical store. Customers are unable to have face to face interaction with store

staff and examine the product physically. Therefore, e-commerce stores have different dynamics.

Like physical store, one of the success factors of online store is the cost factor. There is a variety

of costs incurred during development of an e-commerce platform (Zhang, et al., 2017).

 For The Furniture Store (TFS), there are various methods to make investment. The first is

to develop its own online platform by acquiring relevant hardware and software and having a

dedicated personnel to manage smooth operations. The second option for TFS is to outsource the

online store and hire a specialised and expert firm who can handle all the issues of online

retailing for TFS. The third option is to use a cloud computing based online e-commerce

solution. It is similar to outsourcing but the underlying technology is different along with varying

degrees of operating features. The general principle is that TFS managers must decide which

among aforementioned alternates minimise cost and maximises benefits for the business.

2.1.2 Technological Implementation

In case of TFS, it has been observed that there has been a decline in sales of furniture,

despite the facts that the business has loyal customer base and high quality products as well as a

huge physical store. Therefore it is but natural that adopting new technology, i.e., e-commerce

which opens up new channels of sales and access to new markets and new customers is

strategically aligned with the business needs (Peltola, Vainio, and Nieminen, 2015).

Furthermore, e-commerce platform is also suitable for TFS because it has huge potential

to conduct marketing and branding of the company. The virtual space is unlimited to showcase

products and pro0vide product descriptions and explain features. All these factor indicate that

technology is suitable for TFS. Therefore effective implementation of e-commerce is essential

sucesss factors. If e-commerce platform provides aforementioned benefits than implementation

of technology is successful (Vongsraluang and Bhatiasevi, 2017).

2.1.3 Design and usability of the online store

It is a key factor for the "acceptance" of the store by the customer. In this sense, there are

a number of relevant aspects that YFS must take into account (Imran, et al., 2018):
 1. TFS must ensure that adequate monetary and non-monetary ersources are dedicated for

the development and design of online store. The design should be strategic to successfully

increase brand name and showing products (Huang, 2019).

2. TFS must have objectives for each page that configures the complete site (corporate

information, sectoral information, form or online sale). The idea is to have an effective online

store that caters the information needs of all stakeholders and users (Nilsson, 2018).

3. TFS must also ensure that an adequate web structure is there underlying the design of

the online store. The primary aspect of structure is the definition of layouts (templates) /

wireframes (scheme of hierarchization of contents visually distributed and a schematization of

the interface, characterized by simplicity). The second aspect is the map of the web .

Furthermore, navigational ease and convenience are also considered to be important aspects of

website success. The usability of online store is also related with structure. TFS should ensure

that the online store is designed from customers’ perspective, specifically meeting the needs and

expectations of target consumers (Axelsson, 2017).

4. Aesthetics of the store are related functional utility, greater or lesser depending on the

type of product, but it is not the most important when it comes to consistently selling an online

product. The aesthetic of the online store also affect customer experience and satisfaction (Kaur

and Gupta, 2017).

2.1.4 Accessibility

It can be defined as the ability to access a website and its contents, regardless of a user's

disability or its context of use (devices, etc.). TFS needs to make sure that the online store is

adaptive to the unique needs of different segments. the idea is to ensure that all types of users are

able to access the website and feel similar eases and convenience as others. Furthermore, it is
also important to ensure that the website content and presentation is not offensive to target

audience and do not violate social or cultural norms and ethical principles. Accessibility in

technological context refers to the ability of the platform to be accessed smoothly by all types of

devices which include personal computers, personal mobile phones, tablets, and other devices.

TFS needs to ensure that the online store is responsive to the differences in the features and

configurations of devices being used by target audience (Maat and Konings, 2018).

2.1.5 Business/Profitability CSF

• CR or Conversion Rate: percentage of visits to the online store converted into sales

(Sohn and Chung, 2016).

• CTR or Click Through Rate or percentage of clicks or visits received by an action or

campaign (Vongsraluang and Bhatiasevi, 2017).

• Acquisition cost per lead: annual marketing budget or cost of a campaign / number of

leads achieved(Huang, 2019)

• Acquisition cost per client: annual marketing budget or cost of a campaign / number of

customers achieved (Nilsson, 2018)

• Profitability per client: Average revenue per client (Peltola, Vainio, and Nieminen,

2015).

• Profitability by channel: analysis of the profitability obtained by additional channels to

the online store. Example, campaigns on BuyVip, Amazon, eBay, etc. It includes the

measurement of affiliate campaigns in known networks and / or adhoc campaigns with selected

affiliates (Zhang, et al., 2017).

 • ROI: comparative analysis of the results obtained in the different contracting schemes:

CPM / CPC / CPL / CPA (Vongsraluang and Bhatiasevi, 2017).

2.2 Successful Marketing Strategies for TFS

2.2.1 Pay per click advertising

TFS would also be interested in promoting furniture designs for those who offer huge

discounts or who are presenting new furniture designs in the regional market. In any case,

Google Display and Search Advertising would be a good way to spread the message of your

company and leave a fingerprint. One tip for you if you are considering using this option is to

show it separately and search for campaigns on the network. This will reduce the cost per click.

In addition, starting a Google Adwords campaign will also help you choose the keywords for the

organic search engine optimization campaign, as you can use them in content writing (Sinha, et

al., 2016).

2.2.2 Social Media Marketing

Consider the example of IKEA. The brilliance of IKEA's digital marketing strategy in

taking full advantage of Social Networks has helped its brand to grow. IKEA knows its

customers and knows where to find them and how to increase reach and interaction with the

brand. IKEA uses to the maximum the potential of each social network, creating personalized

campaigns to the details of each one. In case of Facebook, IKEA has separate pages for each of

the markets in which it operates, and the Spanish page attracts more than 26,000,000 fans. The

Facebook content strategies of all IKEA local pages are similar and consist of daily publications,

usually with a short video or an attractive image of a room equipped with IKEA furniture. Often,

updates include links to your website, they can also include questions, link photo albums and
publish YouTube videos. The IKEA marketing team runs promotions to reward their fans and

generate additional content. For example, in the United Kingdom, the retailer organized a

slumber party at its Essex store in response to a group of Facebook followers called "'I wanna

have a sleepover in Ikea." Almost 100,000 people joined the group, and IKEA gave 100 of them

the opportunity to spend a night in the store (Pane Haden, et al., 2016).

2.2.3 Search Engine Optimization

A superior location in the search engines can give you many more customers and increase

your sales a lot. But the competition in Google increases every day and on top of that Google is

getting smarter and changes all the time to make sure that the best content is always presented at

the top. A clear example that SEO (search engine positioning) is not at odds with creativity and

originality is the marketing strategy of IKEA. IKEA has surprised everyone with its new

positioning campaign in which it has used a key concept: "there are products that solve all our

problems". The Akestam Holst was the mastermind that has renamed various products to

increase sales with the help of SEO positioning, and some items, such as a sofa bed has become

"my partner snores all night", a stuffed dog in "my father has allergies to animals with hair "and

scissors in "my son plays too much video games", which are some of the most sought after

problems in Google (Franssen, et al., 2016).

2.2.4 Image Management

The first thing to keep in mind is that TFS’ web store must be fully operational from

mobile phones and computers. The use of flash images or content that take a long time to load on

the smartphone is no longer understood. It is recommended that TFS use, for starters, e-

commerce platforms such as Shopify or Prestashop. Shopify is recommend for its ease of use and

integration with other tools from Google, Facebook and Mailchimp.

2.2.5 Video Marketing

Although social networks such as Facebook allow both video and image content, yet

there is an increasing trend shown by consumers towards video marketing. The main benefit for

TFS to develop videos and upload them on YouTube and other similar networks is that TFS can

show the performance of its products in terms of comfort, and other features. Video marketing

also important because increasing customers are accessing video social networks to upload their

videos while using various products. This strategy also enhances customer engagement.

2.3 Advantages and Issues of m-Commerce for The Furniture Store’s business

The primary advantage of m-commerce for business in general and for TFS in particular

is that it enables marketers to reach customer individually in two way interaction

communication. In traditional marketing methods, marketers can only convey one sided

marketing message and have only one-way communication. Furthermore, marketers have to

develop messages targeted to groups and communities (Ismail, et al., 2017). On the other hand,

modern marketing principles recommend that modern consumers prefer personalised and

individual relationships with brands and businesses. They also prefer tow way communication as

they want to engage and contribute towards product development. M-commerce allows

marketers to develop personalised relationships. By gaining consent from customers, they can

gather personal information of consumer such as browsing history and purchase behaviour and

then analyse them to make decision making. Thus more personalised and individual relationship

marketing opportunities are available through m-commerce channel (Merrill, 2017).

Furthermore, another important benefit of m-commerce is that it allows marketers to

deliver the message more effectively and interactively with consumers. M-commerce allows
multimedia content which include graphics, videos, audios, etc. which are not provided in

traditional media such as newspapers, magazines, etc. (Turban, et al., 2018), Furthermore, m-

commerce allow unlimited capacity of data without any significant increase in cost which is a

highly profitable opportunity for marketers because in newspaper and magazines they have to

buy space and words for marketing purposes which constraints their ability to communicate

(Nisar and Prabhakar, 2017).

One of the primary issues of m-commerce that is particularly faced by the TFS is that

customers are unable to evaluate the product through touch and feeling. Furniture is best

marketed when customers are able to see them physically and touch and even possibly try them

to assess comfort and quality. In case of m-commerce this aspect cannot be achieved. Customers

have to physically visit the store if they are not satisfied by the content images, graphics, and

videos of the products. This creates a problem and affect decision making (Sohn and Chung,

2016).

Second issue that must be mentioned is rather a technical one. Since there is a variety of

mobile phone technologies and operating system, therefore m-commerce has to be able to adapt

and integrate and be universally accessible to all types of devices to be used. Since mobile phone

technologies are often updated and newer and better versions emerge in the market, therefore m-

commerce marketers have to constantly update their website, store, App, etc. to remain

accessible to consumers (Haque, 2016).

2.4 Security threats to The Furniture Store’s related to mobile devices

The most common security threat to TFS m-commerce platform is the possibility of a

hacker having unauthorised access to the system and stealing customer data from the database.

Customer data is a critical asset for TFS and unauthorised access not only affects its performance
but is likely to deter customers provided that the data is misused to detriment of consumers. It is

commonly recommended that businesses such as TFS use cloud computing to increase their

security and prevent hackers (Zhang, et al., 2017).

Another common threat facing m-commerce is virus that compromises the performance

of the platform. A virus is a computer program that compromise the integrity of the target

database and cause malfunctions. In such a case customers are unable to use the m-commerce

platform and customer experience is compromised. In order to further increase security and

protection from viruses, there is a wide variety of anti-viruses software and protection services

available in the market (Vongsraluang and Bhatiasevi, 2017).

Another common problem faced by m-commerce businesses is to facilitate customers in

making payments to the business. Customer experience is highly dependent upon how easily and

securely customers are able to pay business through mobile phones, using their credit cards, etc.

Typically there is a variety of payement services, however, PayPal is considered to be one of the

market leaders and cost effective service that can be used by TFS to ensure secure and easy

transactions from customers to business (Nilsson, 2018).

Identity theft is also a common threat that causes significant harm to customers and

businesses alike. This threat is realised when banking and personal information of customers

and/or business is stolen or copied by unauthorised users who further use them for fraudulent

acts. In order to prevent this threat TFS needs to ensure that they gain minimum customer

information. Furthermore, they must also educate customers to have adequate security measures

on their mobile phones to prevent hacking and identity theft. Furthermore, businesses also prefer

verification before making transaction such as verification through text message and email both.

This reduces the risk of identity theft (Ahmad and Alam, 2016).
 Another common threat is the theft of intellectual property. Since TFS has to present

designs and other features of all its products and anybody can access then and copy them,

therefore they are vulnerable to counterfeiting. For this issue it is recommended that TFS must

hire an excellent law firm to handle its intellectual property rights and design counterfeit

problems. TFS must also present disclaimer and warnings to all customers who access their

website regarding property and intellectual property rights (Saleem, et al., 2019).
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