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Functionalities of online shops

20-05-2011, Category E-commerce

This article is a continuation of another one on a similar subject: “How much is an online shop and how long does it take to implement it?

Every online shop has a basic group of functionalities which mark the e-commerce website out from other websites of another type. However, trading processes can be handled in different ways and a shop may perform more business functions than just taking orders. In order to decide what the e-commerce website we are developing should include, first we should know the options.

e-commerce features

Basic functionalities

The core of an online shop are the product catalogue and the cart. The users browse products which are grouped in categories and add the desired ones to the cart. Next there is the transaction handling, which in its simplest form consists in the order being sent via e-mail to the seller, but most often it takes the whole buying process through separate order statuses.

In the catalogue, products can be promoted in various ways: by special price offers (the “old price” is crossed through and there is a “new price” next to it), new products module, bestsellers module, banner modules, displaying a “see also” module in the product details (“customers who bought this item also bought”).

Navigation in the catalogue and the finding of products is certainly facilitated by the search engine. A simple one will search the catalogue for any entered keyword and an advanced one will let you define selected criteria, e.g. price range.

While placing an order, the client selects one of delivery methods (mail, courier, in-store pickup) and payment methods (cash on delivery, bank transfer, credit card).

Advanced functionalities

An element which is a both basic and advanced functionality is the online payment service, i.e. integration with a selected operator handling credit cards and instant bank transfers. I decided, however, to put payments in advanced functionalities because contrary to appearances, not all shops where you can place online orders have an online payment service.

An interesting tool which makes it easier to use the catalogue is the product comparison tool, which enables you to select a few different products and then see them and their most important features on one screen, most often in a comparative table.

For sales stimulation – and especially when it comes to any promotions – it is necessary to have discount service. These can be individual discounts (specified for each client individually) or group discounts (given to all users who meet given criteria; useful with wholesale selling). They can also be in the form of vouchers that are, of course, distributed outside the shop itself or even outside the Internet. There can be cash amounts and percentage discounts and they can be given after quantity or cash amount thresholds (and sometimes time threshold, in the case of regular clients) are crossed.

A newsletter and automatic notifications of new products and special offers in selected catalogue categories can help you maintain regular contact with your clients.

An online shop can also perform part of the accounting tasks and in particular issue invoices/receipts.

When it comes to making clients attached to your shop and to up-selling, a loyalty program is indispensible. An online shop may have a functionality that handles such a loyalty program in that it allows its clients to collect points while doing shopping and then to “buy” prizes for the points.

On the other hand, an Internet partner program may significantly increase sales by obtaining traffic from other www sites, in return for which, their operators are rewarded with a commission on the purchases made by redirected users. The functionality handling such a program is responsible for both assigning users to partners and calculating the commission, amounts to be paid etc.

Integration with other servers

An effective online shop is not able to function without cooperating with external applications. Most e-commerce type websites are at least integrated with an online payment system.
Leading payment operators:
www.authorize.net
www.checkfree.com
www.moneybookers.com
www.paypal.com

Integration consists in connecting a shop with another server in such a way that they are able to communicate directly and automatically without the participation of an administrator. It is thanks to that that price comparison sites (e.g. bizrate.com, pricegrabber.com, shopping.com, shopzilla.com) display up-to-date information about the products offered by the shops they cooperate with.

Apart from comparison sites, a vital source of extra traffic in the shop may be participation in eBay Stores, which means taking advantage of a great popularity of the largest auction system in the world. Of course, such cooperation with a comparison site or eBay costs and it costs quite a lot. Anyway, the expense brings profits in the majority of cases.

Integration with courier companies’ systems helps streamline logistics. In such a case, a courier is hired right after the order is confirmed in the shop without the participation of the shop administrator.

Another type of integration is connecting the online shop with a storehouse accounting system. That is practically indispensible when the number of orders is large and for sure facilitates work in any other case. In an integrated shop, stock levels are imported from the storehouse accounting system and orders are exported there. The level of such integration may be different, i.e. the issuing of invoices may, for instance, be handled either by the shop or by the accounting software.

Vital elements

Choosing functionalities is one thing, developing them (even the basic ones) properly is another. That is why it is important to make yourself sure before choosing a solution that the shop has certain key possibilities:

  • product variants – if there are different versions – say, colours or sizes – of one product there is no point in displaying each combination of features as a separate item on the product list but it should be possible to choose product variants in the product card (where the details of a selected product can be seen);
  • definable features and feature values – a closed list of product features to a large extent limits the potential of a shop; in a good shop you can define on your own both the features themselves (e.g. colour, size) and their values (red, black etc.);
  • defining the content of e-mail communications and notifications – it is not uncommon knowledge that clients expect a very individual approach; additionally, the style of communications must be adapted to the target group, which means that such a thing as standard communications or notifications should not exist at all;
  • different sales tax rates – at a given time, a shop may sell only 10%-rate products but after a few months it may be suddenly necessary to include another sales tax product range in the offer;
  • tying delivery costs to the weight of the products from the cart – an online payment requires that a final value of the order is defined the moment the order is placed; after all, the delivery costs cannot be calculated against each item because, for example, a delivery of 5 sets of ping-pong balls is not in fact more expansive than a delivery of 1 set;
  • when you plan to sell abroad: additional languages and currencies – seems obvious, but, for example, exchange rates are not always imported from online news programs and entering exchange rates every day on your own is an unnecessary waste of time;
  • sales statistics – information on the users that is delivered by providers of traffic monitoring services (e.g. Google Analytics) is just a tip of an iceberg; in order to effectively plan your sales (prices, promotions, catalogue structure etc.) you need statistical information on the sales in the shop, i.e. how popular particular products and categories are, what the average cart value is, how productive different user groups are etc.; all that information should be located in CMS (administration panel) of the shop.

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