The world of ecommerce can be a tricky one, and it is important to know how to go about making the switch to an online business. More and more business-owners are starting to open these online shops for people to purchase their products from. These online transactions are possible through virtual terminals, whereby a customer enter his or her credit/debt card information. After they do that, it is just a matter of processing the order and waiting for payment on the merchant’s end. One of the most important aspects of ecommerce is deciding which payment gateway you will select. Having a totally secure server to transfer data on is extremely important, as is who hosts the website that your store is on.
At first everything might seem a bit overwhelming, however it is important to stay focused and handle one thing at a time. You will want to begin by deciding who is going to be charged with the task of hosting your website. This is a very important decision to make for many reasons, most of all because you want your online store to run smoothly for customers. If the server your website is being hosted on is constantly down or lagging, then chances are you will deeply regret the choice you have made. When looking for someone to host your website, make sure to choose a package that includes plenty of data storage and bandwidth. It is even suggested that you get unlimited web hosting services for your e-store.
By doing this you will effectively get your store up and running, with no lag time for customers, so they will be able to continue shopping and “check out” as quickly as possible. Since your main goal is to service the customer, you will want a host that protects important financial information. The last thing you want is that information getting leaked and having to deal with angry customers. To keep your e-store online a success, the best thing that you can do is take the time to find the right host.
The gateway provider that you choose, or the business that handles all the credit/debit card transactions, will be the next thing you must decide. To have fast and smooth transactions for both you and your customers, it is imperative that you hire the right gateway provider. They will be the ones which allow you to accept all major credit cards from customers who online to your store and purchase the items you are selling. You will want both a web host and gateway provider that can give you the customer service you need, day or night. If you find that there is a snag in your service, you will want it corrected immediately.
eCommerce has forever revolutionized the way business is done. Retail has now a long way from the days of physical transactions that were time consuming and prone to errors.
However, eCommerce has unavoidably invited its share of trouble makers. As much as eCommerce simplifies transactions, it is occasionally plagued by serious concerns that jeopardize its security as a medium of exchanging money and information.
Major threats to present day eCommerce include
Breach of Security:
Money Thefts
eCommerce services are about transactions, and transactions are very largely driven by money. This attracts hackers, crackers and everyone with the knowledge of exploiting loopholes in a system. Once a kink in the armor is discovered, they feed the system(and users) with numerous bits of dubious information to extract confidential data(phishing). This is particularly dangerous as the data extracted may be that of credit card numbers, security passwords, transaction details etc.
Also, Payment gateways are vulnerable to interception by unethical users. Cleverly crafted strategies can sift a part or the entire amount being transferred from the user to the online vendor.
Identity thefts
Hackers often gain access to sensitive information like user accounts, user details, addresses, confidential personal information etc. It is a significant threat in view of the privileges one can avail with a false identity.
For instance, one can effortlessly login to an online shopping mart under a stolen identity and make purchases worth thousands of dollars. He/she can then have the order delivered to an address other than the one listed on the records. One can easily see how those orders could be received by the impostor without arousing suspicion. While the fraudsters gains, the original account holder continues to pay the price until the offender is nabbed.
Threats to the system
Viruses, worms, Trojans are very deceptive methods of stealing information. Unless a sound virus-protection strategy is used by the eCommere Solutions firm, these malicious agents can compromise the credibility of all eCommerce web solution services. Often planted by individuals for reasons known best to them alone, viruses breed within the systems and multiply at astonishing speeds. Unchecked, they can potentially cripple the entire system.
Solutions
There is but one solution to all issues that at times dent the security of eCommerce services. Strict vigil on malicious intruders.
Easier said than done? So is every preventive measure. However, with online transactions, progress in security has been overwhelming.
Authentication
Most notable are the advances in identification and elimination of non-genuine users. Ecommerce service designers now use multi-level identification protocols like security questions, encrypted passwords(Encryption), biometrics and others to confirm the identity of their customers. These steps have found wide favor all around due to their effectiveness in weeding out unwelcome access.
Intrusion Check
The issue of tackling viruses and their like has also seen rapid development with anti-virus vendors releasing strong anti-viruses. These are developed by expert programmers who are a notch above the hackers and crackers themselves.
Firewalls are another common way of implementing security measures. These programs restrict access to and from the system to pre-checked users/access points.
Educating Users
eCommerce is run primarily by users. Thus, eCommerce service providers have also turned to educating users about safe practices that make the entire operation trouble free. Recent issues like phishing have been tackled to a good extent by informing genuine users of the perils of publishing their confidential information to unauthorized information seekers.
Having led the eCommerce team at Sears Holdings Corp, I often reflect upon what helped us grow our online revenues from about $20 million in 1999 to almost $1 Billion in 2006? Although I do think that technology played a key role in that growth, it wasn’t the primary reason.
An incident during one of the Christmas seasons helped me answer this question. Christmas is the peak season in US for all retailers and majority of the online and B&M sales occur during this time frame. This is the time when kids hope that Santa will deliver all the toys that they wished for. The stakes are too high because one delayed shipment could mean a disappointed child who has been waiting for that toy for the entire year. So to set appropriate expectations, we added messaging on all our product pages telling the customers to place their orders before the cut off date to ensure Christmas delivery. However, few days before the Christmas Eve, our dashboards indicated that we would miss the Christmas shipment for about 300+ toy orders. We immediately formed a SWAT team and ensured that every single order was handled in a white glove fashion and shipped via overnight delivery. The team worked through the weekend to make this happen, and we certainly lost money on these orders. However we gained something really important – the trust of our customers.
This leads me to what I think is the most important factor that is necessary in growing eCommerce in India – Trust. If we look at the Indian context, I feel that there is a general lack of trust between retailers and customers. Consumers don’t trust the retailers because they feel that they are either being over charged or that they wouldn’t be able to get appropriate level of customer service once the sale is complete. Retailers don’t trust the customers because they feel that the customers will take every opportunity to misuse the return or exchange policies. It is my opinion that this general lack of trust is the primary barrier that is impeding the growth of eCommerce within India. Here are some of the practical techniques that online retailers can employ to improve this level of trust and build an environment where customers feel safe in clicking that “Proceed to Checkout” button.
1. Customer Reviews
Today’s customers are putting less trust on website marketing messages and becoming more influenced by recommendations from other people. Customer’s trust for an online retailer will increase if the retailer offers an ability to let customers share their positive as well as negative reviews about products or vendors. The key is to not “moderate” the negative reviews because by allowing customers to post negative reviews, it will actually enhance the credibility of the retailer as well as other reviews. Obviously, any foul language needs to be moderated but any genuine issues with the products or vendors must be posted along with the positive reviews.
2. Clear shipping and delivery commitment
At the time of setting up products for sale, clear shipping and handling time must be associated with the product. This information should be displayed consistently on all product pages so that customer’s expectations around shipping timeline can be clearly set.
3. Analytics & Personalization
Although personalized product recommendations and content do not directly increase customer’s trust, they do demonstrate to the customer that the online retailer is making a good effort in understanding the customer’s individual needs and is acting upon them. This implicitly improves the comfort level that the retailer is not just looking to sell products but is making an honest attempt in building relationship with the customer.
4. Operational Reporting & Dashboards
Online retailers must invest in strong operational reports that provide alerts and metrics on orders that have a risk of missing the service level that was promised to the customers. If you have recently implemented an eCommerce platform, chances are that at times orders will get “stuck” in various states. Therefore, it is important to establish thresholds around how long should orders stay in various states (such as “Processing for Payment”, “Preparing for Shipment” etc.) and then build automated alerts when orders exceed these thresholds.
5. Vendor Penalties
In the Indian context, majority of the eCommerce sites work in a “drop-ship” model. This implies that the online retailer doesn’t physically stock the goods, and instead relies on external vendors to directly ship the merchandise to customer’s home. In this case, it is extremely critical to set clear SLAs on how long will it take the vendors to ship the orders. There should be financial penalties built into the contracts if the vendors miss the service levels. Also, there should be penalties if the vendors receive excessive negative reviews from customers.
6. Price Match Guarantee
A Price Match Guarantee (PMG) is a store policy which entitles a customer to a refund of the difference between the store’s asking price and a competitor’s price. It can not only help build trust with the customer, it can also help reduce price competition across online retailers. This may sound counter intuitive but it is one of the most discussed examples in “Game Theory” and it has actually helped retailers in US to avoid direct price wars. Take for example a firm like Circuit City that has a price match guarantee, which looks good to a consumer. But that guarantee really allows Circuit City to charge higher prices since competitors will be discouraged from setting a lower price that Circuit City only will match when it must.
7. Well trained call center
I recently called Airtel customer service to add Blackberry service to my cell phone. There was an issue with their automated messaging system that was directing me to a wrong group within Airtel. After calling 9 times, I gave up because every agent that I spoke to had the same scripted response that I should call back again and press option 2. The point I am making is that although it is important to train the call center agents around specific customer service issues, what is even more important is that the call center agents be trained to have good problem solving skills, and they should be empowered to own the problem resolution from end to end.
8. Fraud Protection
Not only should an online retailer ensure that the appropriate security certificates are setup to handle checkout related transactions, the sensitive customer and payment information should be stored in an encrypted format. The messaging on the site should clearly indicate that the checkout process is completely secure. In addition, there are third party Fraud detection services available that help flag potentially fraudulent transaction based upon credit card usage velocity and other parameters. These services would not only help reduce the credit card charge-backs for the retailers, but will also improve the sense of security and trust with customers.
9. Proactive, timely communication
Are we there yet? If you have gone on a long drive with kids, chances are that you have been asked this question. It is human nature to expect timely communication, especially when they are waiting for something that they have already paid for. The retailers should ensure that every single status update on the order generates an alert for the customer. Also, if the order waits in a specific state for a timeframe longer than what was promised to the customer, an email should be automatically sent to the customers to make them aware of the delay. If the delay is longer than a few days, customer should be contacted via phone and asked for approval for the delay or given an option to cancel the order.
10. Charge only after order shipment
Customers feel much more comfortable if they know that they will only get charged once the order ships. Currently, a lot of retailers charge the customer’s credit card immediately when customer places the order. However, they should consider authorizing the amount at the time of order and only charge the card once the order ships. This will also minimize any need to refund the amount back to the customer in case the order needs to be cancelled for any reason.
11. Self Service Capabilities
The more online self service capabilities (e.g. order cancellation, modifications) retailers can provide to the customers, it will not only help reduce the call center expense, but will also build more confidence with the customers. Customers will feel more in control because they wouldn’t have to spend 10 minutes with a call center agent to explain the issue – instead, they can directly resolve the issue online.
12. Real time inventory updates & safety stock
Retailers must invest in building automated capabilities that keep an up to date record of how much inventory is available for all their products. Products must immediately become unavailable for purchase from the site as soon as the inventory reaches below the safety stock. Canceling customer orders due to lack of inventory is a situation that all retailers must avoid because this not only frustrates the customers, it drops their confidence in the retailer’s ability to keep their promise.
eCommerce will see a significant growth in India. However, the chasm between the early adopters of eCommerce and the ones who are waiting can only be crossed by building a strong level of trust with our customers – and winning them, one customer at a time.
