E commerce 2021 2022 business technology society, Global Edition, 17th edition Kenneth C Laudon Solu

E-commerce 2021–2022 business. technology. society., Global Ed, 17th ed By Kenneth C. Laudon

Email: Richard@qwconsultancy.com

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 1

The Revolution Is Just Beginning

case 1.1

The Impact of the Pandemic on E-commerce

watch the video at

https://www.youtube.com/watch?v=Vu_xzwh9Wpc

summary In this video, you will learn more about the impact of the Covid-19 pandemic on e-commerce. L: 5:34

case

The Covid-19 pandemic has had a tremendous impact on all aspects of life, including how business, including e-commerce, is conducted. In this video provided by Yahoo! Finance, Michele Romanov, the co-founder and chief executive officer of Clearbanc, discusses the e-commerce environment in the wake of the Covid-19 pandemic. Clearbanc is Canadian company that operates in Canada, the United States and the United Kingdom. Founded in 2015, Clearbanc (now named Clearco) provides capital to online retail e-commerce startups to enable them to expand their businesses. Through mid-2021, Clearco has raised over $700 million in capital itself and is currently valued at $2 billion.

Clearco has provided funding to over 5,500 companies, giving Romanov some direct insight into the impact of the pandemic on those companies. Romanov discusses a number of topics, including the growth of e-commerce from where it

continued .. ..

1.1: The Impact of the Pandemic on E-commerce

2

stood in March 2020, at the beginning of the pandemic, through December 2020; the future prospects for continued growth in e-commerce; and the impact the pandemic has had on advertising by small e-commerce companies.

video case questions

1. According to Romanov, what was unusual about the November 2020 “Black Friday” experience?

2. Does Romanov expect to see the same level of growth in e-commerce in the years to come?

3. How has advertising by smaller e-commerce companies changed in the wake of the pandemic?

. . . .

1.1: The Impact of the Pandemic on E-commerce

. . . .

3

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 1

The Revolution Is Just Beginning

case 1.2

The Growth of the On-Demand Economy

watch the video at

https://www.youtube.com/watch?v=2ZBfd66-LYU

summary As Uber and Airbnb continue to grow and showcase the strength of the on-demand economy, a slew of other companies have emerged offering practically any service or product you can think of on demand, using only an app. In this video, the co-founder of BloomThat, an on-demand flower delivery service, discusses his experience in this fast-changing new area of e-commerce. L: 6:14.

case

The growth of the on-demand economy is one of the most disruptive trends in e-commerce today. Ride service Uber and a slew of other companies providing similar on-demand, app-based services have risen to prominence in recent years

continued . . ..

1.2: The Growth of the On-Demand Economy

2

and many more of these companies are on the way. Room rental service Airbnb is perhaps the best known example of these companies apart from Uber. Others include Lyft, a competitor to Uber in on-demand transportation, Instacart, a grocery shopping service, Washio, a laundry service, and GreenPal, a lawn mowing service. There are companies offering on-demand services for medical marijuana delivery, dog walking, alcohol delivery, veterinarian visits, and many others. In this video, Matthew Schwab, co-founder of BloomThat, an on-demand flower delivery service, describes his views on the on-demand economy and how his business fits in.

Since 2010, these and similar firms have garnered over $26 billion in venture capital funding, and that number is only going to increase as smartphone users become more comfortable with using these types of services. Starting an on-demand service platform requires very little overhead—once these companies develop their app platforms, freelancers provide nearly all of the legwork. In general, these services focus on under-utilized assets, including cars, spare rooms, and the spare time of contract workers, and create efficiencies based on making use of these assets.

Many critics of these services worry that as the on-demand economy grows and more work becomes freelance and temporary, more secure, full-time jobs will shift to part-time, poorly paid jobs with no benefits. As stated in this video, 3.2 million people performed labor involved in on-demand delivery services in 2015, and that number is expected to more than double to 7.6 million by 2020. Also, many of these services, including Uber and Airbnb, have raised major regulatory issues that are still ongoing. Existing taxi services believe Uber needs to obey the rules and regulations put in place to govern the taxi industry, and landlords believe that Airbnb should be scrutinized more closely as well.

On-demand e-commerce is a subgenre of local e-commerce, which is focused on engaging consumers at their current geographic location. For the time being, many of these companies have struggled to find profitability, even Uber and Airbnb. But each of these companies is hoping to develop sufficient size and scale that they will become profitable over time. Uber and Airbnb are also hoping that the expenditures they incur on legal fees and changing regulations

continued

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

1.2: The Growth of the On-Demand Economy

3

will at some point decrease significantly, allowing the natural profitability of their business model to take over.

Many of the companies springing up in the on-demand economy are likely to die out if the problem they are “solving” simply isn’t important enough to consumers.

In Schwab’s opinion, many more people would send flowers if it were easier to do.

If he’s right, BloomThat has a bright future.

video case questions

1.

Why did BloomThat opt to partner with existing delivery services like UPS rather than use local deliverers or florists?

2. Compared to other on-demand companies, what type of regulatory hurdles does BloomThat face?

3. What level of delivery speed is most important to BloomThat customers, according to Schwab?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 2

E-commerce Business Models and Concepts

case 2.1

Glossier

watch the video at

https://www.youtube.com/watch?v=TxAOWaAsD3k

summary Direct-to-consumer beauty brand Glossier’s CEO Emily Weiss discusses her company at length in this interview. L: 6:03

case

Glossier is a beauty company founded in 2014 by Emily Weiss, a former fashion blogger and assistant at Vogue. In 2010, Weiss created her blog, Into The Gloss, to expose readers to the beauty regimens of some of the fashion industry’s most widely recognized people. The blog was successful enough that she subsequently decided to launch her own beauty company, Glossier, with just four different products and $1 million in venture capital. By just five years later, Glossier had raised $100 million in funding at a valuation of $1.2 billion and by 2020, had raised nearly $200 million in total to date.

At 33 years old, Weiss is part of the Millennial generation that is extremely comfortable with social media. Weiss herself has over 540,000 followers on Instagram, and Millennials and the Gen-Z generation comprise a significant portion of Glossier’s customer base. Glossier uses social media extensively to market its products, eschewing more traditional advertising formats, and the continued

. . ..

2.1: 

2

strategy has worked, with the company’s revenue jumping to around $160 million in 2019. The company has expanded far beyond its initial four products to full lines of skincare, makeup, body, and fragrance products. Glossier’s Instagram page has 2.7 million followers, and Into The Gloss remains active with an extremely engaged readership that records two million unique visitors per month.

Like many other startup companies like Dollar Shave Club and Warby Parker, Glossier also offers its customers extremely low prices thanks to its direct-toconsumer business model. The model enables the company to avoid the markups associated with placing their products in department stores and prominent beauty chains like Sephora. In the past, Glossier had opened just three physical locations (New York, Los Angeles, and London) and used pop-up shops to build brand awareness without the overhead costs required to maintain a retail space over the long term. However, in 2020, in the wake of the Covid-19 pandemic, it closed its physical stores to focus solely on its online channel.

Glossier also uses minimalist packaging and design features that keep costs low, though the company is looking into launching a line of higher-end products to compete with luxury beauty brands. Despite the company’s low price point, celebrities as prominent as Beyoncé have used Glossier products at events like the Grammys. Expect Glossier to continue growing and disrupting the beauty industry going forward.

1. What percentage of women does Weiss suggest buy new beauty products due to peer recommendations? Do these recommendations need to be faceto-face from a friend?

2. According to Weiss, what is the core value of Glossier as a company and how does this differ from traditional beauty brands?

3. What is the price range of Glossier’s product line and how does it compare to other beauty brands?

4. Does Glossier pay celebrities to endorse their products? Why or why not?

5. What does Weiss mean when she says that Glossier’s brand and brands of the future will be “co-created”?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 2

E-commerce Business Models and Concepts

case 2.2

Angel Investing

watch the video at

https://www.youtube.com/watch?v=ziO3L124M2I

summary Angel investors are a key to the growth of new companies. This video explores the differences between angel investing and venture capital. L: 4:52.

case

While angel investors for online startups are a hot topic today, angel investors have actually been key to economic development for much longer, and for all types of industries. In fact, without angel investors, few companies would make it past the startup stage and to the venture capital investment stage, let alone private equity or IPO funding. Companies that found early funding through angel investors include Home Depot, Microsoft, Amazon, and Best Buy. Although individual angel investments are far smaller than venture capital investments, angel investments overall contribute similar amounts to the economy as do venture capitalists. And the importance of startups to the economy can’t be overstated: Startup companies are key to job creation.

Angel investors do more than just provide cash. They are typically experienced business professionals and entrepreneurs, and also mentor a startup, serve as continued

. . ..

2.2: Angel Investing

2

board members or executives help develop relationships with venture capital firms, and more.

Today, angel investment has become a trend in the arena of individual investing; and angel groups and networks have formed to take a professional approach to startup investment. In an angel network, members work as a team in screening deals, valuating firms, and due diligence (research, reporting, firm assessments).

However, compared with individual investors, they are typically much slower to act, requiring more time to manage the investment process.

video case questions

1. What types of people are angel investors, and how are they different from venture capitalists?

2. What stage company does an angel investor typically invest in and how much do they typically invest, compared to venture capitalists?

3. Why is finding the right investors important for a startup company?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 3

E-commerce Infrastructure: The Internet, Web, and Mobile Platform

case 3.1

How Freshdesk Uses Amazon Web Services

watch the video at

https://www.youtube.com/watch?v=oZJJr7P7uNs

summary In this video, you will learn how Freshdesk, a startup company, used Amazon Web Services’ cloud services to build its online helpdesk platform. L: 2:50 case

Freshdesk is a cloud-based platform that offers Software as a Service (SaaS) solutions for common customer service functions, such as automated handling of customer support tickets, maintenance of community forums, live chat support and phone support, and an automatically updated knowledge base that converts common customer service responses into permanent articles. Businesses sign up for one of several payment plans depending on their budgets and needs, ranging from as low as $15 per month to pricier plans for businesses with more significant customer service demands.

Founded in 2010, Freshdesk has found a niche among companies requiring a customer support platform that could scale along with their growth. Along with competitors Zendesk and Salesforce.com’s Desk.com, Freshdesk has experienced rapid growth, reaching over 150,000 customers as of 2019. As an SaaS-based continued

. . ..

3.1: How Freshdesk Uses Amazon Web Services

2

platform, Freshdesk realized that it made more sense to move its own operations to the cloud than to invest heavily in its own in-house infrastructure. So while thousands of companies are now relying on Freshdesk for their customer service software, Freshdesk itself relies on Amazon Web Services (AWS) to house its software platform.

When Amazon revamped its retail computing infrastructure over the course of several years starting in 2003, it also had the idea to sell access to its virtual servers to other companies in need of computing power. Today, AWS has grown far beyond that initial idea, offering a full suite of remote computing services that are distributed across 11 geographical regions across the world to maximize availability and speed. AWS data and applications are stored redundantly in multiple regions to ensure uninterrupted uptime. The most well known AWS service is the Elastic Compute Cloud (EC2), which offers virtual computing power to customers to run their own computer applications. Customers pay by the hour for the computing power they use and select the geographical location that optimizes speed.

Amazon’s own flagship retail website is also housed on EC2 and is fully powered by other AWS services. AWS also includes products for databases, networking, security, analytics, mobile services, deployment and management, enterprise applications, and more.

When Freshdesk decided that it would use the cloud to power its software platform, it selected AWS over competing services like Google Compute Engine and Microsoft’s Windows Azure Virtual Machines. AWS appealed to Freshdesk because of its wide variety of services, its rapid scalability, and its pay-as-yougo payment plan. AWS Enterprise Support also helped Freshdesk minimize its costs further by picking the most efficient services for operating its platform. For Freshdesk, that meant Amazon Redshift database services and Amazon OpsWorks deployment and management services.

Amazon Redshift is one of Amazon’s data warehouse services. The primary selling points of Redshift are its scalability, its ability to seamlessly integrate with all of the major business intelligence tools needed to run queries on and analyze the data it contains, and its built-in encryption feature. Building a data warehouse is a challenging task, requiring expensive investment and in-house infrastructure and staff. Scaling the system to grow as the business grows is also challenging.

Freshdesk preferred to use Redshift for its data warehousing needs for these reasons. continued

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

3.1: How Freshdesk Uses Amazon Web Services

3

As with the rest of AWS’ offerings, payment for Redshift is pay-as-you-go, with options to commit to full years of service for a discount. There are also options for type of storage. Dense Storage (DW1) nodes allow for very large data warehouses using hard disk drives. Dense Computer (DW2) nodes allow for higher performance with large amounts of RAM and solid-state disks. DW1 nodes are more costeffective, but DW2 nodes are better for performance. Scaling is as easy as updating the number of nodes in your Redshift console.

Redshift houses Freshdesk’s data, but Amazon OpsWorks manages its software applications, the cornerstone of Freshdesk’s business. OpsWorks is an application management service that allows companies to use Amazon’s computing resources to deploy and run their applications. Coding and operating applications is a complicated, time-intensive task. OpsWorks minimizes the effort required for Freshdesk to maintain its customer service applications. With OpsWorks, Freshdesk can use Amazon’s application servers and databases, and use simple tools to manage application deployment, software configurations, software package installations, and database setups.

OpsWorks offers more convenience tool than other Amazon offerings like CloudFormation or EC2, at a cost of some customizability. But it also offers more customizability than Amazon’s Elastic Beanstalk service, which is intended to simplify the application deployment process as much as possible. Freshdesk opted for OpsWorks to maintain control of its applications, while allowing Amazon to manage many of the tasks relating to the operation and deployment of the applications. An increasing number of businesses are turning to remote computing services on the cloud to reap benefits like these.

video case questions

1. Why was Freshdesk a good candidate for remote computing services on the cloud?

2. What was Freshdesk’s experience working with AWS? 3. What made Amazon Redshift and OpsWorks good fits for Freshdesk?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 3

E-commerce Infrastructure: The Internet, Web, and Mobile Platform

case 3.2

ASOS Turns to Microsoft Azure and the Cloud

watch the video at summary

case

https://www.youtube.com/watch?v=PWjouW_Fmx4

More and more companies are turning to public cloud providers like Microsoft for their computing needs. See how one such company, online retailer ASOS, got results from switching to Microsoft Azure. L: 2:31

Many of the largest tech firms, including Google, Apple, Amazon, and Microsoft, have spent hundreds of millions of dollars to improve their information technology infrastructure. Now, these companies offer computing power to businesses of all shapes and sizes, from other Fortune 500 companies to small businesses looking to harness a small portion of the computing power of these tech giants.

Companies offering processing, storage, networking, and other computing resources to individual businesses or customers are said to offer ‘infrastructure as a service’ (IaaS), following in the footsteps of other models, such as software as a service (SaaS). Foremost among these companies is Amazon. Amazon Web Services (AWS) offers a variety of services that span all major functions of a business. Amazon’s Elastic Compute Cloud (EC2) is the most popular feature of continued

. . ..

3.2: ASOS Turns to Microsoft Azure and the Cloud

2

AWS. EC2 allows businesses to purchase exactly the amount of computing power that they need from Amazon. AWS’s Simple Storage Service allows businesses to store data using Amazon’s always-on network of data storage servers. Amazon also offers many analytical tools and services that perform simple business tasks, such as e-mail and database services. Microsoft Azure, featured in the video, is another widely used platform, with an array of similar capabilities for businesses.

For a smaller company, using the tech giants’ existing infrastructure and built-in business services is much easier than developing their own internal systems from scratch. More and more businesses are turning to Amazon, Microsoft, and its peers in the public cloud computing marketplace, cutting costs and improving scalability in the process. AWS is the dominant player in this area. It isn’t just small companies, either—Netflix relies heavily on AWS, as do other large organizations like Nike, Pfizer, and Airbnb. Microsoft Azure is in a commanding second place position.

Prominent organizations using Azure include Pearson, Ford, and NBC News.

Microsoft and Amazon have been competing fiercely to lower their prices. Microsoft Azure may be a better option for companies with significant investment in other Microsoft technology and services, whereas Amazon may better suit companies willing to take extra time and effort to create a setup that exactly corresponds to their computing needs. For most companies, both cloud providers are good choices, and in each case companies can look forward to having an experienced partner as they move to the cloud.

Since its launch in 2010, Microsoft Azure has grown rapidly. Azure’s services fall in three classes—infrastructure services, platform services, and software as a service. Azure’s infrastructure services include virtualization capability for both Windows and Linux operating systems as well as cloud data storage via Microsoft Azure StorSimple. Customers pay only for the computing power they need. Azure’s platform services allow users to develop and distribute apps for Android, iOS, and Windows that use the cloud. Lastly, Azure offers software as a service in several ways. Azure powers all of Microsoft’s Office 365 applications, which are cloudbased versions of Microsoft’s flagship Office series of programs. Azure also allows customers to run Windows Intune management software and Dynamics CRM software, among many other options.

continued

. t. . ..

3.2: ASOS Turns to Microsoft Azure and the Cloud

3

In this video, you’ll learn more about the experiences of ASOS, a major international online retailer, as it switched from a physical infrastructure to a cloud-based computing infrastructure using Microsoft Azure.

video case questions

1. Why did ASOS decide it needed to revamp its entire digital platform?

2. What issues did ASOS’s existing infrastructure present for ASOS? 3. What new functionalities does ASOS plan to implement using Azure in the future?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case case 3.3 watch the video at summary

case

Facebook’s Data Centers https://www.youtube.com/watch?v=_r97qdyQtIk

Businesses today run on the Internet, and the Internet runs on data centers.

Today, data centers might be more accurately called business centers.

Data centers drive nearly every aspect of many businesses, especially ones with a significant online presence like Facebook. But data centers are significant users of expensive electricity to cool their servers, and they make a significant contribution to pollution and global warming. Cloud data center operators are using a variety of new techniques to become more efficient in their use of electricity. L: 8:20

Consumers of technology constantly demand devices that are smaller, more efficient, and more powerful than the ones they have. But most consumers don’t understand the massive back-end infrastructure that powers their “front end” continued

. . ..

3.3: Facebook’s Data Centers

2

devices, like mobile phones, smartphones, tablets, and desktop computers.

Take, for example, smartphones and tablet computers. iPhones, Androids, BlackBerrys, iPads, and other tablets represent a trend in all forms of mobile technology towards smaller devices that perform an increasingly large number of functions. But every time a smartphone or tablet user connects to the Internet, places a call, or sends an instant message, it uses power not only on their phone, but at every step of the infrastructure used to perform that function. More often than not, data centers are intimately involved in any Internetbased communication.

In 2020, there were approximately 3 million data centers in the United States and around 7 million data centers of all sizes worldwide. The total number of data centers had been growing at around 15% a year but will likely begin to decline due to the growth of very large cloud mega-data centers. Because most data centers use air conditioning of one sort or another to keep operating temperatures of microprocessor chips within a safe range, they are significant contributors to pollution and global warming . Many data centers do not practice effective energy management and waste billions of kilowatt hours annually. The growth of cloud computing, in particular streaming of music, television, and movies, is expected to accelerate data center power consumption in the next ten years even as the number of data centers decline.

Data centers are growing not only in number, but also in sheer size. For instance, Facebook has a 1.1 million square-foot data center in Prineville, Oregon. The cost of running large data centers is a significant component of the overall IT budget of firms. There are two components to the energy cost of data centers: the cost of running the computers, and the cost of cooling them. For this reason, large-scale data center operators are seeking a variety of new ways to cool their servers.

Of all the Web sites in the world, Google and YouTube may get the most hits per day, but no site can top Facebook as far as raw traffic. Facebook is by far the “stickiest” of the top sites, meaning its users spend more time per visit there, so it’s reasonable to argue that no site has a greater need for a robust infrastructure than the social networking giant. With a mind-boggling 2.7 billion monthly active users as of 2020, Facebook faces computing demands that no other company has ever faced.

continued

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

3.3: Facebook’s Data Centers

3

To manage this demand, Facebook has 17 data centers around the world.

Facebook has chosen locations that allow it to use environmental factors (such as cooling water from rivers, and cooler northern climates) to reduce the costs of cooling computers and to minimize their carbon footprint. Each location consumes roughly 30 megawatts of electricity. To ensure 100% uptime of the flagship Facebook site, each site has backup power. For example, the Oregon location has 14 diesel generators capable of 3 megawatts apiece in case of a power generation.

video case questions

1. Why does Facebook’s data center specialist argue that “The Internet is not a cloud?”

2. What are some of the techniques Facebook uses to cool its data centers?

3. Facebook had 2.7 billion users as of 2020. If Facebook continues to employ engineers at the same rate as stated in the video, how many engineers does Facebook have?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case case 3.4 watch the video at summary watch the video at summary

watch the video at summary

Smart Speakers: Amazon Echo and Google Home https://www.youtube.com/watch?v=CYtb8RRj5r4

Amazon introduces Echo, its voicecontrolled digital assistant. L: 3:55 https://www.youtube.com/watch?v=W8mOcd-ICWw

Amazon illustrates the capabilities of the Amazon Echo Plus, a second generation Echo with smart home functionality. L: 1:00 https://www.youtube.com/watch?v=oy2y7rs2z64

Google shows how a family can use Google Home, its version of a voice-controlled digital assistant. L: 2:17 continued

. . ..

3.4: Smart Speakers: Amazon Echo and Google Home

case

2

Voice-controlled devices and utilities are growing more popular as smartphone and cloud technology become more robust. Amazon initially entered the fray with voice controls for its Amazon Fire TV technology.

Amazon’s Echo voice-controlled speaker and digital assistant (Alexa) raises the stakes even further. Echo was first released in 2015 to mixed but mostly positive reviews, which emphasized the future potential of the device. By 2017, the Amazon Echo had become the dominant voice-controlled device, with a 70% market share. In September 2017, Amazon introduced the Echo Plus, a version of the Echo that also has smart home functionality.

Echo is always on, and you can ask its digital assistant, Alexa, questions, have it play music, create a to-do list, or get the weather. Echo can also play a digest of the biggest news stories or play reports of specific issues that users ask to hear. The Alexa companion app allows you to customize settings, keep a record of your queries and the answers to those queries, and view the shopping and to-do list items that you’ve previously dictated to Echo. A developer’s kit allows developers to create Alexa apps (called Alexa Skills), which are likely to make it even more multi-functional in the future.

Echo was a move by Amazon to enter the voice-controlled technology space, but the Echo Plus also operates as a “smart home” appliance, which is another growing market. The Echo Plus functions as a “hub” that enables you to manage and connect with all of the smart appliances in your home in one centralized location.

It’s not clear how Amazon uses the information it gleans from users’ questions and commands, or whether there’s any capacity for storing things you say that aren’t directed at Echo itself. From Amazon’s perspective, the Echo is an invaluable new tool for learning more about its customers, with an ability to generate heaps of granular data about the routines and preferences of each individual user. On the other hand, privacy advocates have ample reason to be concerned about a device that can quickly transmit your every word to the cloud, where it can be stored along with the rest of Amazon’s trove of your personal information and used to make product

continued

. t. . ..

3.4: Smart Speakers: Amazon Echo and Google Home

3

recommendations and generate marketing materials. However, Amazon notes that any users uncomfortable with the collection of their data can simply go into their “History” using their Alexa app, and delete queries either individually or in bulk, which will also delete the information from Amazon’s servers.

Google introduced its entry into the smart speaker marketplace, which is named Google Home, in late 2016. Google Home uses an intelligent digital assistant that it calls Google Assistant (Google’s version of Amazon Alexa) and provides similar functionality to Amazon Echo and Alexa, including the ability to play music, control home devices, and provide information in response to verbal requests. Subsequent versions include the Google Home Mini, Google Home Max, and Google Home Hub. Although neither Amazon nor Google officially report sales of the Echo or Google Home, analysts believe that Amazon still maintains a dominant position in the smart speaker device market, although Google Home is beginning to make inroads. Apple has also entered the fray with its HomePod device, and other competitors such as Samsung and Facebook are also looming. At this point, there is no telling which device will emerge as the ultimate winner, ore even whether smart speakers will become even more of a staple in homes across the country than they already are. However, given the resources that Amazon, Google, and Apple have committed to the effort, its likely that they will become a part of everyday life in the future.

video case questions

1. What functionality does the first-generation Amazon Echo display during the video that introduced it?

2. What kind of technology does Amazon Echo use?

3. What might be some privacy concerns involving Echo? Are these well founded? Why or why not?

4. Why was releasing a developers’ kit for Echo important for Amazon to keep pace with services offered by Apple, Google, and Microsoft?

5. What are some of the smart home devices that Echo Plus can control?

6. What functionality does Google Home display during the video?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 4

Building an E-commerce Presence: Websites, Mobile Sites, and Apps

case 4.1

E-commerce Platforms: Salesforce Commerce Cloud

watch the video at summary

watch the video at summary

case

https://www.youtube.com/watch?v=6YPdqfBZoYo

PetSmart, an omni-channel retailer of pet products, discusses its experience using Salesforce Commerce Cloud. L: 3:08 https://www.youtube.com/watch?v=8rGesr2TviI

Rituals, a Dutch-based cosmetics company, discusses its experience using Salesforce Commerce Cloud. L: 2:22 In 2016, Salesforce.com, a cloud-based software company originally focused on customer relationship management, acquired Demandware, an e-commerce platform provider, for $2.8 billion and rebranded it as Salesforce Commerce Cloud. Salesforce Commerce Cloud is a highly scalable, hosted SaaS (software continued

. . ..

.1: 

2

as a service) omni-channel e-commerce platform. Some of Salesforce Commerce Cloud’s strengths include its scalability, omni-channel capabilities (enabling merchants to unify e-commerce, order management and offline store operations), advanced merchandising functionality, including the ability to manage multiple product catalogs and complex product data, 1:1 level personalization functionality via its Einstein personalization engine, built in A/B testing capabilities, localization capabilities (including multi-language, multi-currency, and multi-store capabilities), and machine learning abilities.

As a SaaS solution, technology issues such as server maintenance, software updates, and other associated services are handled by Salesforce, rather than the merchant itself.

Companies using Salesforce Commerce Cloud, in addition to PetSmart and Rituals, include Adidas, the GAP, Brooks Brothers, GoPro, Converse, Godiva, New Balance, L’Oreal, among others.

Competitors include Magento Commerce (owned by Adobe), SAP Hybris, Oracle Commerce, Sitecore, Intershop, and Elastic Path, among others.

video case questions

1. Why did PetSmart switch to Salesforce Commerce Cloud?

2. PetSmart implemented Salesforce Commerce Cloud just prior to “Black Friday.” Why was this of concern to PetSmart?

3. What are the challenges that Rituals faces in translating its brand to the online channel?

4. How does Salesforce help Rituals meet these challenges

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 4

Building an E-commerce Presence: Websites, Mobile Sites, and Apps

case 4.2

National Kidney Registry Turns to Rackspace for Managed Hosting

watch the video at

https://www.youtube.com/watch?v=A6vvQLHylQc

summary For many organizations like the National Kidney Registry, outsourcing their site hosting and data storage tasks to a cloud provider is a better option than handling it themselves. In this video, you’ll learn about how Rackspace helped them fulfill this need. L: 1:34 case

For small and medium-sized businesses, outsourcing computing-intensive tasks like website hosting has always been an appealing option. Taking this approach allows those businesses to focus on their core competencies while other companies with site hosting and data storage expertise handle those tasks for them. In the past, outsourcing was too expensive for all but the largest companies, but options for site hosting and data management have never been more plentiful, thanks to the growth in, and reduced costs of, cloud computing. Prices range from a few dollars a month for very basic needs to hundreds of thousands of dollars per month for businesses with greater site traffic or data storage requirements. continued

. . ..

4.2: NaTioNal KidNey RegisTRy TuRNs To RacKspace

2

The largest cloud computing providers are Amazon, Microsoft, IBM, and Google, all of which have the size and deep pockets to achieve economies of scale with their cloud platforms. These companies offer full arrays of cloud services for businesses, including website hosting. However, there are many smaller companies that specialize in specific areas of cloud computing, such as Rackspace. Founded in 1998 as an Internet service provider, Rackspace has become one of the largest website hosting companies in the U.S., and is competitive even with Amazon in its area of expertise, hosted private clouds or infrastructure as a service (IaaS). Rackspace routinely ranks among the top on lists of best companies to work for and is renowned for its commitment to highquality customer support, which it calls Fanatical Support.

Private clouds serve individual organizations, as opposed to public clouds, which rent space to large numbers of organizations simultaneously and offer less customizability. Rackspace offers dedicated servers, databases, storage capacity, and networking tools in a single-tenant, private environment. The security options for private clouds are also more appealing to organizations that prefer to have more direct control over their data and to use firewalls and other measures to limit the number of people who can access the organization’s data.

The National Kidney Registry (NKR) is an example of a company with unique security concerns who turned to Rackspace for its site hosting and data storage needs. The NKR is the largest paired exchange program for organ donors in the United States, connecting pairs of donors who would otherwise be incompatible because of differences in blood type or antibody. The NKR uses complex algorithms to determine potential matches, which may involve as many as 30 donors and recipients to find a swap that will lead to a successful match for all of the recipients. To date, the NKR has facilitated over 3,000 transplants.

video case questions

1. Why does the NKR outsource its data infrastructure and site hosting to Rackspace?

2. Which components of the NKR’s infrastructure is Rackspace responsible for managing?

3. What concerns do the hospitals have regarding the data housed by Rackspace?

4. How does Rackspace ease security concerns for donors, recipients, and participating hospitals?

. t. . ..

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 4

Building an E-commerce Presence: Websites, Mobile Sites, and Apps

case 4.3

Building a Mobile App

watch the video at summary

watch the video at summary

case

https://www.youtube.com/watch?v=fq4N0hgOWzU;

Flutter is Google’s open source mobile user interface (UI) framework/toolkit that enables developers to create native applications for both iOS and Android devices. This video provides an introduction to Flutter. L: 1:52 https://www.youtube.com/watch?v=kfd-oLypqFI

This video looks at how Posse, a New York development team, used Flutter to create a mobile app for the popular Broadway show, Hamilton. L: 2:36 In December 2018, Google announced that Flutter version 1.0, its open source

continued . . ..

.3:

2

framework/toolkit for developing mobile apps for both iOS and Android devices, was now officially available. During the time that Flutter was in beta development, a number of companies, including Alibaba, Groupon, Tencent, and others, used it, as well as developers of the Hamilton app, as discussed in the second video.

Flutter is based on Dart, Google’s in-house programming language and also uses a number of other Google technologies and ideas, including Google Material Design, its design language, and a rendering engine based on the Skia Graphics Library, used by Chrome. Google believes that Flutter will help developers overcome the traditional limitations of cross-platform approaches by enabling a “code once” environment. By using Google’s Material Design and an external widget catalog, Flutter enables developers to easily create user interfaces that match the design and brand experience desired for the mobile app.

There are a number of other cross-platform development environments available for mobile apps, including Microsoft’s Xamarin, Facebook’s React Native, Corona SKD, JQuery Mobile, and Iconic, among others.

video case questions

1. How is Flutter able to be used to create native applications for both iOS and Android devices?

2. What does stateful “hot reload” functionality allow?

3. How long did it take to develop the Hamilton app?

4. What is some of the functionality offered by the Hamilton app?

5. What were some of the advantages to using Flutter?

. t. . ..

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 5

E-commerce Security and Payment Systems

case 5.1

Cyberwar

watch the video at summary

watch the video at summary

https://www.youtube.com/watch?v=MXWyQZ-2qB8

These videos explore the ever-more concerning issue of cyberwarfare, the subject of Chapter 5’s opening case.

The first video, from CNBC, focuses on how governments can defend against cyberattacks, highlighting the notorious cyberwar attack on Estonia and the steps the Estonian government has taken to prevent new attacks. L: 4.44 https://www.youtube.com/watch?v=1_WMxJgafTM

The second video, from PBS, focuses on U.S. cyberwarfare deterrence operations.

L: 6:12

continued . . ..

5.1:

2

case

In recent years, cyberwar has left the realm of science fiction and has become the cold, hard reality of the modern age. Every statistic having to do with the increase in frequency and size of cyberattacks is on the rise. In 2016, the much-publicized intrusion into the United States presidential election became one of the most influential cyberattacks to date, and the WannaCry worm’s spread throughout government agencies in the United States, Great Britain, Europe, and Asia proved that most organizations lack the necessary cybersecurity to guard against cutting-edge malware. Hackers continue to target private companies as well, including credit reporting agency Equifax in 2018, leading to the release of the personal data of 148 million U.S. consumers. But unlike past examples of warfare, the online battlefield doesn’t just belong to the strongest nations, although the U.S., China, and Russia are all actively engaged in both offensive and defensive cyberwar efforts.

As described in the first video, Estonia was the victim of a coordinated cyberattack in 2007 that brought the heavily-digital country to its knees. As a result, the country is now boasts one of the most comprehensive cybersecurity programs of any nation, despite its tiny size. Other smaller nations such as North Korea also have built powerful cyber capabilities, which was on display when Sony was hacked in response to their provocative movie The Interview, whose eventual release was delayed and number of screenings dramatically reduced.

Between bot networks, DDoS attacks, Trojans, phishing, ransomware, data theft, identity theft, credit card fraud, and spyware, there’s no shortage of ways for cybercriminals to make an impact online. However, the difference between these types of attacks, which can be extremely annoying to the victims and have major implications for e-commerce, and the next wave of cyberattacks, which have the potential to damage or destroy important components of national infrastructure as in Estonia, is significant. Restoring a stolen identity is annoying, as anybody who’s had to do it understands. Canceling or interfering with a movie release has dire implications for creative expression. But attacks to systems such as self-driving car guidance systems, airplanes, or municipal power and water supplies, all of which are increasingly becoming computerized and automated, could have much more serious consequences, including loss of life.

The Stuxnet worm, which destroyed thousands of Iranian nuclear centrifuges in an effort by the U.S. and Israel to cripple Iran’s nuclear program, was an example of this type of attack in action. While it was successful in this regard, it was also

. t. . ..

5.1:

3 a proof of concept of this type of attack, and similar attacks have been made against industrial control modules, computer systems, and networks. Furthermore, the world has continued to move towards the Internet of Things, where everyday objects such as TVs, thermostats, appliances, cars, and other equipment gain the ability to connect to the Internet and share information. The potential applications of these technologies to improve our lives are limitless, but the Internet of Things also creates a whole new area of attack for potential cybercriminals.

The second video focuses on U.S. cyberwarfare deterrence operations, more specifically U.S. military efforts to infiltrate the power grid, and the potential issues and consequences surrounding such operations.

video case questions

1. What was the reason for the cyberattacks made against Estonia in 2017?

2. How has cooperation with other nations helped Estonia improve its ability to respond to cyberattacks?

3. How long has the United States been dedicating resources to understanding the cyber vulnerabilities of other nations?

4. In what way is the current cybersecurity environment like the Wild West?

5. What can be an unintended consequence of executing a cyberattack, such as the United States’ use of Stuxnet against the Iranian nuclear program?

6. According to John Yang, how important is Cybercommand to U.S. military power?

. t. . ..

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 5

E-commerce Security and Payment Systems

case 5.2

Understanding Bitcoin

watch the video at

https://www.youtube.com/watch?v=cRxL2GKDU5E

summary This video, from the British Broadcasting Corporation (BBC), discusses the concepts behind Bitcoin and explains how Bitcoin mining works. L: 7:05 case

Bitcoin, the most prominent example of cryptocurrency presently in use, has grown from a valueless asset in 2008 into a flourishing currency with a market capitalization in the hundreds of billions of dollars. As the video describes, Bitcoin is fully decentralized and controlled with a distributed ledger, as opposed to any type of central banking authority. Proponents of Bitcoin believe that it is the currency of the future, but proponents and detractors alike agree that the blockchain technology that powers the ledger has wide-ranging potential even beyond Bitcoin. Blockchain technology is being explored in a variety of fields that involve transactions between multiple parties.

Although Bitcoin is touted for its security with respect to the blockchain, the storage services that allow Bitcoin users to maintain digital wallets and online exchanges dedicated to cryptocurrency trading are have proven themselves to be anything but. In 2014, the Mt. Gox Bitcoin exchange was hacked, leading to losses of $473 million worth of BitcoinI. In subsequent years, hacks continued unabated, including a hack of Japanese exchange Coincheck that totaled losses continued

. . ..

5.2: Understanding Bitcoin

2

of $534 million. Continued hacks have undermined confidence in Bitcoin as a currency for some. A scandal involving the digital coin Tether, which alleges that Tether was used to manipulate and increase the price of Bitcoin, cast further doubt over Bitcoin.

Bitcoin has also struggled to find regulatory footing with governments worldwide.

Many countries have understandably been unwilling to sanction a currency without a central banking authority, feeling that it undermines their existing banking authorities’ ability to properly regulate currency. Bitcoin supporters have been hopeful that more countries would begin to embrace the currency, but after China forbade all Bitcoin exchanges from operating within the country, the U.S. Securities and Exchange Commission refused in 2018 to approve a bitcoin exchange-traded fund.

Since the video was filmed, the value of Bitcoin has fluctuated widely, dropping from $20,000 per coin in December 2017, to a low of about $3,200 in December 2018, to about $7,300 in December 2019, and then in the wake of the Covid-19, rising to again to over $30,000 per coin by the end of 2020. Whether this is just another “bubble” remains to be seen.

video case questions

1. How many transactions does a block contain in the Bitcoin blockchain?

2. What does the effect of having more computers running mining software have on the security of the Bitcoin network?

3. How does Bitcoin’s carbon footprint compare to our existing financial system’s carbon footprint?

4. How many Bitcoins can be generated and when will all of the Bitcoins be generated?

. t. . ..

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 6

E-commerce Marketing and Advertising Concepts

case 6.1

To AdBlock or Not to AdBlock

watch the video at

https://www.youtube.com/watch?v=BnlVTNjeWrg

summary

case

Ad blockers provide an advertising-free Internet experience for users, but at what cost? This video explores the issue from the points of view of advertisers, content providers, and individual users. L: 10:24

The rise of ad blockers has begun to make a dent in the advertising revenue earned by content creators and providers. Ad blockers identify and eliminate content based on its IP address, functioning much like a firewall. The most common ad blocker, AdBlock Plus, is offered as an extension to all major web browsers, and about 30% of Internet users currently use an ad blocker. AdBlock is free to use in its basic iteration, extremely simple, and highly effective, making it an online advertiser’s worst nightmare.

Ad blockers often make websites look nicer and more streamlined while reducing battery usage and data consumption. They also stop the tracking cookies that many Internet users find distasteful—advertisers use these to keep comprehensive information on you and your activities online. These are the continued

. . ..

6.1: To AdBlock or NoT To AdBlock

2

benefits to web users. The drawbacks? If too many people use ad blockers, your favorite sites on the Internet won’t be able to provide the free content you enjoy most.

Many websites have begun making direct appeals to visitors to turn off their ad blockers, including Wired, The Guardian, and OKCupid. Others have dramatically altered the types of advertising they are willing to accept. However, the perception of advertising as an unwanted and unnecessary intrusion does not help these sites to change the way their visitors view ads.

Content consumers often forget that the free content they enjoy is actually paid for by advertising dollars. However, we haven’t explicitly agreed to this arrangement, or even been asked about it. Viewing advertising that doesn’t pertain to your interests feels like work during moments that are supposed to be leisure time, and most people bristle at the imposition. As the video describes, advertisers hope that the ads you view will be about things you’d like to know more about, but it more often feels like ads are about things you aren’t interested in and that the advertisers want you to like against your will.

video case questions

1. What is the “ethical ad blocker” described in the video?

2. Why are algorithmic advertising technologies increasingly important to advertisers?

3. Where do you stand on the use of ad blockers?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 6

E-commerce Marketing and Advertising Concepts

case 6.2

Pandora’s Recommendation System

watch the video at summary

case

https://www.youtube.com/watch?v=PgjjAyv567Q

In the increasingly crowded field of streaming music services, Pandora stands out from the pack with a unique recommender system that emphasizes quality over popularity. L: 4:06

Pandora is a music streaming service now owned by SiriusXM with around 63 million active listeners and around 6 million paid subscribers. Other online music streaming services such as Spotify, Apple Music, and Amazon Prime Music offer larger selections of music than Pandora does, and Spotify uses a similar freemium business model. Pandora sets itself apart with its recommendation system and its reliance on the Music Genome Project. In most recommendation systems, your browsing and purchasing data is used to generate selections you might like, such as consumer goods on Amazon or movies and TV shows on Netflix. These sites match your patterns to their internal databases to find the subset of other continued

. . ..

6.2: PandoRa’S Recommendation SyStem

2

customers similar to you. If that subset of customers tends to like a product or a show that you haven’t seen before, it’ll be recommended to you. These systems tend to reward popular products and movies, because these items show up more often on most customers’ lists.

On Pandora, you type in a song or artist to create a radio station, and by giving a thumbs up or thumbs down to the tracks you hear (or by skipping tracks), you provide Pandora with valuable information on which tracks you like. That’s where the Music Genome Project comes in. Pandora calls itself the “custodian” of the project, and is the sole developer and proprietor of the technology, though at one point it licensed the technology to other entities. With sufficient data about your musical preferences, Pandora begins playing music that features similar attributes to tracks you’ve thumbed-up and avoids music with features you’ve thumbed­ down or skipped. In this way, Pandora is much less about finding popular selections that everybody else likes, and more about finding selections that you specifically will like on their musical merits. Tim Westergren describes one of the guiding principles behind Pandora as finding a way to help the underdog in an industry where attention is concentrated among a small number of hugely popular artists. Its recommendation system does an excellent job of this without compromising users’ listening experience. In side-by-side comparisons of online music streaming services, Pandora’s reputation is one of musical exploration—it’s the site to choose if you’re looking for new music and aren’t sure where to turn.

video case questions

1. What sets Pandora’s recommendation system apart from other sites like Amazon and Netflix?

2. According to the video, how many stations does Pandora allow you to create?

3. What is the Music Genome Project? How is the musical “genome” mapped?

4. Why is Pandora a good example of the success of the “Long Tail” on the Web?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 6

E-commerce Marketing and Advertising Concepts

case 6.3

Verizon Media

watch the videos at

https://www.youtube.com/watch?v=oqjNpeTQY6Y L: 6:12 https://www.youtube.com/watch?v=TFFiXMk6Wro L: 3:15 https://www.youtube.com/watch?v=mx7rYhUe2VA L: 2:17

summary

These three videos explore the efforts of Verizon Media (formerly Oath) to become a significant force in the online advertising ecosystem. Verizon Media operates a demand-side platform (DSP) for selling ads, which allows buyers of digital ads to use one unified interface to manage multiple accounts.

In these videos, you’ll learn about Verizon Media’s goals with respect to how they run their DSPs and other platforms, and how a typical client like Hulu works with them to advertise their brand. continued

. . ..

6.3:

2

case

When telecommunications giant Verizon purchased AOL in 2015 for $4.4 billion, the move reflected Verizon’s desire to develop new growth streams with many mobile markets reaching saturation points. Once one of the most prominent tech companies in the world, AOL’s fortunes had greatly diminished along with the demise of dial-up internet, but in its attempts to pivot away from dial-up, AOL built a diverse stable of content offerings and an array of advertising services, especially for video content. Verizon’s aim was to become a digital advertiser and content platform.

In 2017, Verizon continued down this path, purchasing Yahoo for $4.48 billion.

Much like AOL, Yahoo was fueled primarily by its advertising business, but also boasted a portfolio of popular web content. Yahoo had at one point achieved a market value of $125 billion, so just as with AOL, Verizon was buying at a steep discount. Verizon then announced that it would be merging the operations of its two acquisitions into a combined entity it initially entitled Oath, in reference to the company’s ‘oath’ to focus on digital media and advertising. Verizon hoped that the increased scale created by the combination of Yahoo and AOL would lead to increases in advertising revenue that would establish Oath as a strong alternative to Google and Facebook in digital advertising, with the company’s highly profitable wireless business backing attempts at future growth.

In late 2018, Verizon rebranded Oath to Verizon Media and wrote down the value of the company by nearly five billion dollars, signaling that the revenue increases it was hoping to achieve in digital advertising had not materialized. Verizon Media continues to be further challenged in the wake of the Covid-19 pandemic, and in 2020, its share of the online advertising market dropped to just over 2%.

video case questions

1. In which three ways is trust foundational to Verizon Media?

2. What are the platforms that Verizon Media sought to consolidate?

3. Which metrics best indicate the success of advertising for a company like Hulu?

4. How does Hulu determine what ads work best and who do advertise to?

continued

. t. . ..

6.3:

3

5. What makes mobile devices an especially effective platform for Oath and other similar companies to deliver advertising?

. t. . ..

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 7 case 7.1 watch the video at summary

watch the video at summary

case

Social, Mobile, and Local Marketing Pinterest https://www.youtube.com/watch?v=7knUves_008

These videos feature examples of the ways businesses, large and small, are using Pinterest. This video features a large and very well-known business, Home Depot.

L: 1:38 https://www.youtube.com/watch?v=ksbKU7lRrZI

This video features Jonas Paul, a small startup focused on children’s eyewear.

L: 1:43 Pinterest is a rapidly growing social network that allows users to “pin” pictures to their own online board, creating a highly interactive and social online scrapbook.

The site offers a wide array of content categories, including fashion, animals, art, cars, and food. Pinterest is one of the fastest growing sites in the history of the Web and has quickly become a staple of marketing campaigns for companies continued

. . ..

7.1: Pinterest

2

with products that can be represented visually. In 2012, Pinterest had just 10,000 users, but in 2020, it had over 440 million users.

Because Pinterest users are specifically hoping to generate ideas about things to buy, companies with large advertising budgets have all flocked to Pinterest to tap into this valuable audience. One company that has been on the forefront of Pinterest marketing is Home Depot, the largest home improvement retailer in the United States. Home Depot primarily offers products that are visual in nature, making the company an excellent fit for Pinterest. However, many of Home Depot’s products show homes and gardens after a home improvement project has been finished; customers often want to see the transformation from “before” to “after.”

To that end, Home Depot has taken advantage of some of Pinterest’s newer pin formats, including Built-In Pins, which can contain media such as 30-second time lapse videos, fully three-dimensional images that allow Pinterest users to look “inside” a room, and the ability to identify individual items within a room that they might like to buy. Home Depot has also experimented with other forms of augmented reality, including the ability to artificially place items within a room in your house, such as a Christmas tree, just to see how it might look. The ads much more effectively capture the process of renovating a room or otherwise upgrading a home than traditional still images.

Pinterest is also a hugely valuable resource for smaller companies hoping to jumpstart their growth. The subject of the first video, Jonas Paul Eyewear, is a children’s eyewear company founded in 2013 by Ben and Laura Harrison and named after the couple’s son, Jonas. They founded the company when they struggled to find fashionable eyeglasses for Jonas, who was born legally blind and now has minimal vision capability after many surgeries. Jonas Paul Eyewear has grown rapidly since then, forging a successful partnership with Walmart to place their products in stores, but the company does much of its business online.

Eyeglasses are an excellent candidate for a visual search platform like Pinterest, and Jonas Paul considers Pinterest to be a core component of its marketing efforts.in a particular area.

video case questions

1. How many unique Built-in Pins did Home Depot create as part of its Pinterest marketing efforts? continued

. t. . ..

7.1: Pinterest

3

2. How many views and clicks to site did Home Depot’s 360-degree pins generate?

3. What is Jonas Paul’s customer demographic and what is this demographic looking for on Pinterest?

4. How does Jonas Paul’s order value generated by Pinterest traffic compare to order value generated by other marketing platforms?

. t. . ..

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 7

Social, Mobile, and Local Marketing

case 7.2

The Full Value of Mobile Marketing

watch the video at summary

case

https://www.youtube.com/watch?v=6vG0feZbj8Q

Determining return on investment for marketing campaigns has gotten tougher with the advent of multi-channel marketing and the rise of the mobile platform. Adidas and iProspect have teamed up to determine where their marketing efforts are most effective. L: 2:15

As consumers continue to move more of their media consumption and computing tasks to mobile devices, marketers have followed, devising an array of methods to extend their branding and marketing efforts to the mobile platform. These include many different types of in-app advertising and mobile search advertising. This shift towards mobile has required both brands and the advertising and analytics companies they work with to analyze the impact of their mobile marketing in a different way from other marketing channels. The better companies understand continued

. . ..

7.2: The Full Value oF Mobile MarkeTing

2

the impacts of their mobile marketing, the more return on investment they can expect to see from their marketing campaigns.

When the only way to access a website was using a desktop computer, using a less granular approach to assess the viability of a marketing campaign made more sense. Now, however, consumers not only can access the same website on different platforms, but two customers can reach the same site in very different ways. In this video, global sporting goods giant Adidas describes its experiences working with digital performance marketing agency iProspect to better understand the value of its mobile marketing efforts.

With clients ranging from GM, Hilton Hotels, Neiman Marcus, and T-Mobile, iProspect is familiar with marketing initiatives in very different industries. The company specializes in search engine optimization, paid search, display ads, and other social and mobile marketing techniques, while placing an emphasis on delivering measurable return on investment. For a business like Adidas, which relies on bricks-and-mortar outlets, mobile marketing that drives customers to a physical location nearby is critical. The video describes how iProspect focused on Adidas’s mobile store locator to determine its effectiveness as a mobile marketing tool.

Determining the precise number of customers originating from mobile marketing efforts over a given period of time is difficult. To try and solve this problem, iProspect analyzed the effect of advertisements featuring a store locator using Adidas’ internal data. They accurately estimated of the percentage of store locator clicks that resulted in in-store traffic and the value of their eventual purchases. They then incrementally increased these amounts, because potential customers who clicked on the store locator already display a higher level of intent to make a purchase.

Different types of businesses might see different returns on the same type of advertising campaigns. It’s up to each individual business to accurately determine the type of mobile advertising that best drives their business.

video case questions

1. Of the mobile users who clicked on the store locator, what fraction did iProspect estimate entered a physical store?

2. What did iProspect determine to be the worth of each individual store locator click? What implications did this have for return on investment?

3. Why did iProspect increase the average order value per visit from its initial amount? What were the amounts?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 7

Social, Mobile, and Local Marketing

case 7.3

Yelp

watch the video at summary

watch the video at summary

case

https://www.youtube.com/watch?v=96bHyjJXhmc

Many local businesses use online business directory Yelp, which specialized in usercontributed reviews, to build their brand and drive customer acquisition. This video features climbing gym, SenderOne Climbing. L: 2:51 https://www.youtube.com/watch?v=9wedakbeet4

This video features a Los Angeles-based portrait photography studio, The Pod Photography. L: 2:11 Founded in 2004, Yelp is an online business directory specializing in usercontributed reviews of local businesses. As of the third quarter of 2020, the site had over 220 million cumulative reviews of restaurants, retail outlets, home

continued . . ..

7.3: Yelp 2

services, beauty and fitness-based businesses, and many other types of businesses. Yelp currently has about 32 million unique mobile app users and over 60 million desktop visitors per month. Yelp’s users skew towards college graduates and higher income individuals in major metropolitan areas, making the website an attractive marketing platform for local businesses in these areas, but Yelp has grown to become an important marketing platform for all types of businesses throughout the country. Yelp competes with TripAdvisor, Foursquare, and Google Maps’ review feature in customer reviews.

Approximately half the reviews (51%) on Yelp are five stars, the maximum possible rating, with a much lower number of one-star reviews (17%). For businesses, obtaining high Yelp reviews has been shown to be directly correlated with improved sales, but not every business has a positive experience with Yelp.

For years, Yelp has been fighting an ongoing battle against fake reviews, or ‘astroturfing.’ Many businesses have sought to artificially inflate their rating by paying services that provide phony reviews praising their business, and others have attempted to damage the ratings of their competitors with unsubstantiated one-star reviews. Astroturfing has gradually risen as an overall percentage of Yelp reviews over time, and represents a major threat to the company’s business model, which relies on trust in the authenticity of reviews.

However, Yelp has continued to use machine learning and algorithmic approaches to identify and eliminate phony reviews as efficiently as possible, and the site remains a critically important tool for small businesses to grow their customer bases. Yelp makes the majority of its revenue when local businesses run advertising campaigns on their site promoting their business when potential customers search for certain keywords. Yelp boasts an impressive returnon-investment for advertising dollars spent on their platform, as Yelp users are already highly motivated to purchase a certain product or service when they perform searches. Businesses can also pay to remove competitors’ advertisements from their own business pages on the site and to add a variety of extra features, including a photo slideshow of the business, videos, and a ‘call to action’ button where businesses can offer customers a quote or other opportunities for engagement.

Although businesses often have a love-hate relationship with Yelp, it’s clear that the site has become a core component of social, mobile, and local marketing budgets for all types of local businesses and learning to harness the site for the continued

. t. . ..

7.3: Yelp 3

value it can provide is the best course of action for small business owners. Two examples of the many businesses that have done just that are climbing gym Sender One Climbing and pet supply retailer Healthy Spot, featured in this case’s videos.

video case questions

1. According to Sender One, who are the best ambassadors for a business?

2. When Sender One was launched, what advertising platforms did it target and why?

3. In what ways has Yelp helped The Pod Photography grow its business?

4. What is Erika’s advice to new business owners with respect to customer reviews?

5. According to the video, what percentage of consumers using Yelp make a purchase after using the platform?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 8

Ethical, Social, and Political Issues in E-commerce

case 8.1

The Right to Be Forgotten

watch the video at summary

case

https://www.youtube.com/watch?v=CD37vwUD8Us

This video complements the Chapter 8 opening case on the Right to Be Forgotten.

L: 13.22. Note: The portion of the video that discusses the Right to Be Forgotten ends at 8:14.

In this video, Mike Rugnetta, the host of the PBS web series Idea Channel, undertakes an entertaining, yet also insightful examination of the Right to Be Forgotten. Rugnetta reviews the current state of affairs with respect to the still evolving Right to Be Forgotten as of the date of publication of the video (February 2015), He reviews the case filed by Mario Costeja Gonzalez, which led to establishment of the Right to Be Forgotten by the European Court of Justice. He places the Right in the context of previous European law and history. He also discusses the current limitation of the Right to Be Forgotten to just Europe and the implications of adopting such a Right on a global basis. Rugnetta proposes that the Right to Be Forgotten can be re-conceptualized as the “right to be

continued . . ..

8.1: The RighT To Be FoRgoTTen

2

different from oneself” as suggested by Norberto Nuno Gomes de Andrade. He finishes with some speculation about why some people habitually post and then quickly delete those posts on social media, and notes the way developers have responded to this behavior.

video case questions

1.

What is the Right of Oblivion and how does it differ from the Right to Be Forgotten?

2. According to Dr. Victor Mayer-Schoenberger, how has past history in Europe impacted current European attitudes toward personal privacy?

3. What are the concerns about the potential adoption of the Right to Be Forgotten on a worldwide basis?

4. What are some of the apps that the video notes are premised on the notion of impermanence and anonymity?

. t. . ..

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 8

Ethical, Social, and Political Issues in E-commerce

case 8.2

Facebook Privacy

watch the video at summary

case

https://www.youtube.com/watch?v=Ajrt_U_UrUQ

The business model of Facebook is to collect as much personal information on its users as is technically possible, and socially acceptable, and then to sell that information to advertisers in the form of targeted advertising on Facebook’s website, mobile site, and mobile apps, and on partner websites, who use the information to personalize ads. This video provides some suggestions for how users can gain greater control over their personal information that they have placed on their Facebook pages.

L: 3:13.

Mark Zuckerberg, the founder of Facebook, once proclaimed in an interview that the “age of privacy” had to come to an end. According to Zuckerberg, social norms had changed and people were no longer worried about sharing their personal continued

. . ..

8.2: Facebook Privacy

2

information with friends, friends of friends, or even the entire Web. This view is in accordance with Facebook’s broader goal, which is, according to Zuckerberg, to make the world a more open and connected place. Many Facebook features are premised on this position. Supporters of Zuckerberg’s viewpoint believe the 21st century is an age of “information exhibitionism,” a new era of openness and transparency.

Although Facebook started out at Harvard and other campuses with a simple privacy policy of not giving anyone except friends access to your profile, this quickly changed as its founder Mark Zuckerberg realized the revenue-generating potential of a social networking site open to the public.

Facebook has a long history of invading the personal privacy of its users. In fact, the very foundation of Facebook’s business model is to sell the personal information of its users to advertisers. In essence, Facebook is like any broadcast or cable television service that uses entertainment to attract large audiences, and then once those audiences are in place, to sell air time to advertisers in 30- to 60-second blocks. Of course, television broadcasters do not have much if any personal information on their users, and in that sense are much less of a privacy threat. Facebook, currently with over 2 billion users worldwide, clearly attracts a huge audience.

In late 2017 and 2018, concerns about Facebook and privacy invasion came to the fore with the Cambridge Analytica scandal mentioned in the video. In March 2018, Facebook announced changes to its privacy settings, which are discussed in the video.

video case questions

1. Do people who use Facebook have a legitimate claim to privacy when they themselves are posting information about themselves?

2. Why did Facebook announce changes to its privacy settings in March 2018?

3. What changes to privacy settings did Facebook announce?

4. How will changing your settings on Facebook help protect your privacy?

. t. . ..

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 8

Ethical, Social, and Political Issues in E-commerce

case 8.3

What Net Neutrality Means for You

watch the video at summary

https://www.youtube.com/watch?v=2psly3euy78

Net neutrality refers to the idea that Internet service providers (ISPs), should treat all data on the Internet in the same manner, and not discriminate or price differentially based on content, protocol, platform, hardware, or application. ISPs have long opposed the idea of net neutrality. In 2015, the FCC issued regulations that mandated net neutrality. However, the Trump administration opposed the regulations and in December 2017, the FCC voted to repeal them. Since then, a variety of lawsuits have been filed, including by a number of state attorneys general, in an effort to halt the repeal, as well as actions at the state level and in Congress. L: 3:06

continued . . ..

8.3: What Net NeutralitY MeaNs for You

watch the video at summary

case

2

https://www.youtube.com/watch?v=ltzy5vRmN8Q

This video, from Burger King, takes a humorous look at what would happen if Burger King did not apply the concepts behind net neutrality to its customers. L: 2:50

Net neutrality is the idea that Internet service providers (ISPs) like Comcast, Charter, Verizon, and AT&T, must allow customers equal access to content and applications, regardless of the source or nature of the content. ISPs may not discriminate against any content, or types of files, by refusing to transmit these files, or charging more for these files and content. For some, it also means that everyone will be charged the same flat fee regardless of how much bandwidth they consume. This means that people who download very large video files pay no more for this service than people who just send emails.

Under net neutrality, most Internet traffic is treated equally (or “neutrally”) by ISPs in the sense that all activities—word processing, e-mailing, video downloading, music and video files, etc.—are charged the same flat rate regardless of how much bandwidth is used. Someone who streams a Netflix movie each day to his or her computer pays no more for Internet service than someone who uses the Internet for e-mail and web surfing. This is not true for the cell phone system, where there are many different data plans, and the more bandwidth you use, the higher the charges .

However, ISPs would like to be able to charge differentiated prices based on the amount of bandwidth consumed by content being delivered over the Internet. The carriers claim they need to introduce differential pricing in order to properly manage and finance their networks.

Plans to ration bandwidth are controversial. For instance, in 2007, Comcast, the largest ISP in the United States, began to slow down traffic and specific websites

continued

. t. . ..

8.3: What Net NeutralitY MeaNs for You

3

using the BitTorrent protocol not because the content was pirated, but because these video users were consuming huge chunks of the Comcast network capacity during peak load times. Comcast claimed its policy was a legitimate effort to manage capacity. In 2008, the Federal Communications Commission (FCC) disagreed and ordered Comcast to stop discriminating against certain websites.

Comcast filed suit and in 2010, a federal appeals court ruled against the FCC and for Comcast, arguing that Comcast had the right to manage its own network, including charging some users more for bandwidth or slowing down certain traffic such as BitTorrent files.

In 2009, the FCC began developing a national broadband strategy. In 2010, the FCC approved “compromise” net neutrality rules. The rules forced ISPs to be transparent about how they handle network congestion, prohibited them from blocking traffic such as BitTorrent or Skype protocols on wired networks, and outlawed “unreasonable” discrimination on such networks. The regulations did not cover wireless cellular networks, nor did they prohibit “paid prioritization,” in which broadband companies could enable premium customers to have access to higher-speed, higher-priced “fast lanes.” In 2011, Verizon sued the FCC to stop its net neutrality rules from going into effect. In January 2014, a federal appeals court threw out the FCC regulations on blocking and price discrimination, but allowed the FCC to have some jurisdiction over Internet providers, and also upheld transparency rules (e.g., ISPs are required to make public their network management practices).

In May 2014, the FCC issued new proposed regulations that would reinstitute the no-blocking rule, with certain changes to conform to the federal appeals court decision, bar commercially unreasonable actions from threatening Internet openness, and enhance the transparency rule that it had previously adopted. In February 2015, these proposed regulations were adopted. As noted above, the Trump administration opposed the regulations and in December 2017, the FCC voted to repeal them. Since then, a variety of lawsuits have been filed, including by a number of state attorneys general, in an effort to halt the repeal, as well as actions at the state level and in Congress.

In the end, net neutrality is about distributing the costs of building high speed broadband Internet networks. Companies like YouTube and Netflix, very heavy users of Internet bandwidth, want no price rationing, caps, metering, or toll pricing in order to maximize their revenues. One price fits all. ISPs and landline carriers of the Internet want to charge heavy bandwidth users more than light users, in order to maximize their revenues.

. t. . ..

8.3: What Net NeutralitY MeaNs for You

video case questions

4

1. Are you in favor of network neutrality going forward? Why or why not?

2. What is the problem with ISPs, which are private business firms, charging whatever they want to charge and that the market will bear?

3. Major cities of the world have adopted “congestion pricing” in which cars pay a toll to enter the core of the city during daylight hours. Congestion pricing is also used to regulate demand by businesses for electricity. During the day when electricity is in high demand, many businesses pay a “demand” fee in addition to the regular charge for electricity. Why is the Internet any different?

4. If your business model depended for its success on millions of people being able to inexpensively stream videos on demand (like YouTube or Netflix), would you be in favor of net neutrality or against it?

5. How does Burger King explain the concept of net neutrality?

. t. . ..

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 9

Online Retail and Services

case 9.1

Walmart Takes On Amazon

watch the videos at

summary

https://www.youtube.com/watch?v=WxQXvmnfCaw L: 2:58 https://www.youtube.com/watch?v=gdkZRpyw_FY L: 6:47

In what promises to be the retail battle of the decade, Walmart and Amazon are going head-to-head for the retail consumer dollar. Walmart brings to the fray the largest physical retail presence in the United States, with over 5,200 stores. But for many years, it lacked a powerful online presence. Amazon brings to the fray the largest online retail presence in the United States, but until recently Amazon lacked a physical footprint in retail commerce.

Walmart is moving towards an omni-channel approach that combines online and offline retail, while Amazon is emphasizing same-day delivery, local drop-off boxes, and may well introduce local physical stores in the future, especially with its purchase of Whole Foods in 2017. The videos for this video case provide further information on Walmart’s strategy for developing a competitive online presence.

continued

. . ..

9.1: WAlmArT TAkes On AmAzOn

case

2

Traditional retail in the United States, the kind you find at the malls, and urban department stores, is in trouble. The revenues of very large retailers such as Walmart, Macy’s, Kohls, Sears, and Nordstrom from retail sales at physical locations have all been relatively flat for many years.. Over the last few years, Target, Macy’s, Sears, JCPenny, and others have closed hundreds of stores.

The much bigger threat to traditional retail is coming from online retail, mostly Amazon, which has gobbled up the lion’s share of online retail and continues to grow at astounding rates. Apparel and electronics are among the most frequently purchased items for online retailers, so traditional retailers and the online giant all compete selling the same goods.

Traditional retailers have spent more than $1 billion in the last decade trying to become online retailers and meeting consumers wherever they want to buy: online or at a physical store. It’s called an “omni-channel” strategy: using multiple channels like physical stores and the Web and mobile apps to sell products. Many traditional large retailers such as Walmart, Macy’s, and Costco, have wound up in the top ten online retail rankings. But so far the omni-channel strategy has not been especially successful in keeping up with Amazon’s growth.

In what promises to be the online battle of the decade, the two biggest players, the heavy weights, Walmart and Amazon, are going head-to-head for the consumer dollar. In a broader sense, it’s the online-business model versus the physical- department-store business model that was invented by Macy’s in 1870.

But to be fair to the traditional retailers who have developed their online and mobile sales channel, it’s more accurate to say it’s the omni-channel model versus the pure-online digital model of Amazon.

Walmart’s revenues for fiscal 2020 (ending January 31, 2020) were about $525 billion, the highest of any American company, and it had net income for the year of about $15 billion. E-commerce revenues grew by almost 40% and reportedly totaled around $28 billion, lifting Walmart into the number 3 online retail spot behind Amazon and eBay. In 2016, Walmart bought startup Jet.com, a small but fast-growing Amazon competitor, and since then it has invested billions on various digital initiatives. Those efforts have had a significant impact, boosting its e-commerce revenues, a trend that Walmart expects to continue. But Walmart’s online business still has a long way to go in challenging Amazon.

continued

. t. . ..

9.1: WAlmArT TAkes On AmAzOn

video case questions

1. Why did Walmart acquire Jet.com?

2. How does Jet.com’s fulfillment process work?

3. Is Walmart’s increase in market share coming at Amazon’s expense?

4. What are some of the omni-channel efforts Walmart is employing?

5. What competitive advantages does Walmart have vis-a-vis Amazon?

6. Are the stock analysts in the second video positive or negative about Walmart’s long-term prospects?

. t. . ..

3

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 9

Online Retail and Services

case 9.2

Etsy: A Marketplace and a Community

watch the video at summary

case

https://www.youtube.com/watch?v=lALzP8OqhnQ

Etsy is an online marketplace for handmade items and art and craft supplies and strives to build a sense of community among buyers and sellers. L=2:00.

Etsy is more than a marketplace: it’s a community of artists, creators, collectors, thinkers and doers. This e-commerce Web site focuses on handmade or vintage items as well as art and craft supplies, including art, photography, clothing, jewelry, edibles, bath & beauty products, quilts, knick-knacks, and toys. The site follows in the tradition of open craft fairs, giving sellers personal storefronts where they list their goods for a fee of $0.20 plus a transaction fee (sales commission) of 5% for each item. Etsy has been described as “a crafty cross between Amazon and eBay,” “your grandma’s basement,” and as “one of the largest, most chaotic flea markets the world has ever known.”

Etsy says its mission is to empower people to change the way the global economy works, to bring heart to commerce, and make the world more fair, more sustainable, and more fun.

continued . . ..

9.2: Etsy: A MArkEtplACE And A CoMMunity

2

Etsy is headquartered in Brooklyn, New York, and also has offices in Hudson, New York, and San Francisco, California, as well as international offices in Berlin, Dublin, London, Melbourne, Paris, and Toronto. The Hudson, New York location is an old cannonball factory housing Etsy’s call center and Web site design facilities.

Etsy’s head office in Brooklyn houses the company’s technology, customer support, public relations, business, and communications teams as well as “Etsy Labs,” where employees can experiment with handmade projects themselves. It also features a Monday craft night where Etsy Labs is open to the public.

As of 2020, Etsy had over 45 million active buyers. Over 2.7 million active shops sell on Etsy, and gross merchandise sales on its platform in 2019 were around $5 billion.

Etsy offers multiple options for paying for items, including credit card, money order, and PayPal. Very few of these sellers make a living solely through Etsy, but according to an Etsy’s Seller Survey, 76% of sellers in the US consider their Etsy store to be a business, and a third of respondents said they were focusing on their Etsy store as their primary job.

Etsy requires that all new products listed on the site be made by the people selling them—the use of mass production is prohibited. Etsy has made it possible for a lot of small businesses to get off the ground. According to Etsy, about 30% of Etsy entrepreneurs sell creative goods as their sole occupation, while around 45% use their earnings to cover household expense.

Meanwhile, the site has been adding features at a furious pace. For instance, Etsy now provides social networking functions similar to those of Facebook that allow users to make friends with other Etsy members and keep track of their friends’ favorite shops and purchases. There’s also a gift service, which looks at the Facebook profiles of your friends and suggests items they might like, and something called Taste Test, which asks you to rate a smattering of random items and then suggests things to buy. You are invited, of course, to share the recommendations with your friends on Facebook and Twitter and with other Etsy members.

Etsy’s founder and former CEO Rob Kalin hopes that these moves will make it easier for buyers to discover new products, but he also sees the new emphasis on social networking as part of a deepening of Etsy’s mission that goes beyond continued

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

9.2: Etsy: A MArkEtplACE And A CoMMunity

3

buying and selling. Etsy is also committed to its core values of craftsmanship, transparency, and responsibility. In 2016, Etsy became the first U.S. company to change its standing to a Certified B Corporation after going public in 2015. B Corporation certification requires the company to maintain a high level of social and environmental sustainability as well as transparency to the public with every aspect of their business.

video case questions

1. What is Etsy’s business model and revenue model?

2. How important is “community” at Etsy? Visit Etsy’s website and describe its community-building features.

3. Visit the Help Center page on Etsy’s website and do a search on SEO to learn about search engine optimization. What tips does Etsy offer to sellers about this topic?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 10

Online Content and Media

case 10.1

YouTube: Secrets of Successful YouTube Content Creators

watch the video at summary

case

https://www.youtube.com/watch?v=6R6UO_a34FM

Content creators on YouTube have more options than ever before to establish a thriving channel and attract subscribers.

YouTuber Matt Koval describes the ten fundamentals that nearly all top YouTube content creators have mastered to find success. L: 20:04

Today’s digital media companies are locked in an arms race to generate original, high-quality content that can only be seen on their proprietary platforms. Netflix, Amazon, and Hulu have all been developing their own TV shows to lure users to their services, for example. Although most people don’t think of it in the same way as those sites, YouTube is no different. For much of its existence, YouTube has been synonymous with “home videos” and other less professional offerings. More recently, YouTube has struck agreements with other media companies to offer paid streams of television shows and movies. However, many completely original, high-quality content creators on YouTube have developed fan bases consisting of continued

. . ..

10.1: SeCreTS of SuCCeSSful YouTube ConTenT CreaTorS

2

millions of subscribers, forging lucrative careers for themselves in the process.

YouTubers earn money primarily from the advertising associated with their videos.

However, these numbers are deceptively large. Becoming a YouTube Partner allows content creators to earn 55% of the ad revenue generated by their videos, which means that high-flying YouTube stars keep only a little more than half of their sizable earnings right from the get-go, even before taxes.

Even so, there are now plenty of content creators making a living simply by posting videos to YouTube, and once users have built a brand, they can monetize it in many other ways beyond YouTube, such as live events or concerts for musicians or comedians, TV appearances, product lines, and so on. YouTube wants these users to be successful, since it enriches their platform as a source for original content on practically any topic of interest to people. In 2014, YouTube launched its YouTube Red service, which offers original, premium content to paying subscribers and allows users to watch videos on YouTube without advertisements. YouTube hopes that YouTube Red will allow it to compete more directly with Netflix, Amazon, Hulu, and other similar platforms.

In this video, Matt Koval, a YouTuber with well over 100,000 subscribers of his own, breaks down some of the important components of a successful YouTube channel. He lists “ten fundamentals” of the top YouTube creators, and describes each of them in turn. The top creators on YouTube have all mastered the platform and understand how to balance engaging content, the unique relationship creators can have with fans, and using technology like analytics and optimization to improve channel performance.

video case questions

1. What are Koval’s “ten fundamentals” of top YouTube creators?

2. List some ways that YouTube content differs from traditional TV and movie content using the ten fundamentals.

3. What three levels of targeting does Koval describe and how are they different?

4. What is the difference between “trending topics” and “evergreen topics?”

Which fundamental deals with these ideas?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 10

Online Content and Media

case 10.2

Vox Media

watch the video at

https://www.youtube.com/watch?v=88Em_5A265U

summary

watch the video at summary

case

In this video, James Bankoff, Chief Executive Officer and Chairman of Vox Media, discusses Vox Media’s approach to digital media. L: 6.29 https://www.youtube.com/watch?v=PQnhigbI4g4

In this video, learn more about Vox Media’s news site, Vox.com. L: 2:43 The problem of developing engaging online content that serves the interests of readers, journalists, and advertisers alike has persisted since the explosion of the Web in the 1990s. Information may want to be free, but high quality journalism also wants to be compensated. Although modern media companies have learned valuable lessons about how to create high quality, profitable online content, the industry still has more to learn about how to create content better suited for the capabilities of the Web. One company, Vox Media, is hoping to develop answers to these problems and to other important challenges in online journalism.

continued . . ..

10.2: Vox Media

2

Founded in 2003, Vox Media is a digital media company that manages a set of editorial brands focusing on major content categories like sports (SB Nation), technology (The Verge), gaming (Polygon), and real estate (Curbed). Vox Media hopes to become a purely online version of media companies like Conde Nast, Time Inc., and Disney. Vox Media consists of hundreds of different sites, such as those part of the SB Nation brand which are focused on individual professional sports teams, all of which are built on its proprietary Chorus digital publishing platform. Vox Media also launched a news and politics site under its flagship domain, Vox.com, in 2014.

Vox.com plans to use the persistence of the Web and freedom from the space restrictions of traditional print media to cover the news more effectively and engagingly. In traditional print media, there are space constraints for every article, and each inch of column space is precious. Space online is more abundant, and the editorial compromises required to get the most information possible into a fixed space are no longer necessary. Vox hopes to avoid oversimplifying a complicated topic or omitting any details except the most pertinent.

Not only that, but the Web makes it much easier to find older material or to search within archives. Most home pages emphasize only the newest developments. In print media, each day’s news is forgotten, as staff and management continually focus on the next day’s content. But on the Web, this doesn’t need to happen.

Topics can build organically, and journalists can focus on new developments instead of repeatedly explaining the same concepts each day. In this way, the Web is “persistent” in a way that print media is not; the previous day’s content is still readily available, and the next day’s content can build on it, enriching coverage and reducing journalists’ workloads.

Sites like Wikipedia use the persistence of the Web to great effect, as articles continue to build over time, retaining information that is still relevant while updating information that has become outdated. But very few online news outlets take advantage of the persistence of the Web. Vox envisions this type of approach to covering the news. In the past, many of the most important topics in the news have been troublesome for media companies because they’re distasteful, difficult to understand, and difficult to cover. If Vox reaches those lofty goals, it will likely be because of unique features like the card stack. Card stacks are modular topic resources that are updated to reflect the most recent developments in a particular area. For example, there are card stacks for Bitcoin, where each continued

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

10.2: Vox Media

3

card discusses one specific element of the topic, such as “How do people get bitcoins?” and “Does Bitcoin have a security problem?” For complicated topics with a lot of jargon or subordinate topics that need to be frequently explained, card stacks are a perfect companion to relevant news articles. Highlighted text within these articles indicates when a card can better explain a phrase or a topic.

Card stacks have some things in common with Wikipedia, including persistence and contemporariness. However, card stacks are focused on explaining topics fully and clearly, whereas Wikipedia is more interested in defining topics. Card stacks are also edited by individual expert journalists working for Vox, not by other readers. A change log exists that shows how each card stack has been updated over time.

video case questions

1. How does James Bankoff, Chief Executive Officer and Chairman of Vox, describe Vox Media?

2. What does Bankoff say Vox Media’s approach is to digital media?

3. What does Bankoff think about the issue of trust and quality with respect to online content as it relates to Vox Media?

4. According to Bankoff, how does Vox Media intend to grow?

5. What is the difference between Vox Media and Vox (Vox.com)?

6. What does Matthew Yglesias say that he is hoping to achieve at Vox.com?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 10

Online Content and Media

case 10.3

ESPN: Sports Broadcasting Evolves

watch the video at summary

case

https://www.youtube.com/watch?v=zv7q1Wx_QHw

ESPN is the world’s largest cable television sports programming network. In addition, it is the Web’s most popular online source for sports results, content, and commentary.

L: 7:18

ESPN is a global cable television network and media company with headquarters in Bristol, Connecticut. Founded in 1979, ESPN grew along with the cable television industry to become a mainstay of American popular culture. After a series of investments by Hearst Publications and ABC (the American Broadcasting Network), 80% of ESPN finally ended up in the hands of entertainment giant The Walt Disney Company, and 20% with the Hearst Corporation, a 100-year-old media company based largely on newspaper and magazine businesses. ESPN focuses on sports programming including live and pre-taped event telecasts, sports talk shows, and other original programming. While originally a cable television network, ESPN has since expanded aggressively to the Internet as well as radio and print magazines.

continued . . ..

10.3: ESPN: SPortS BroadcaStiNg EvolvES

2

ESPN is actually a family of sports networks and individual shows. There are nine 24-hour domestic television sports networks: ESPN, ESPN2, ESPNEWS, ESPN Classic, ESPN Deportes (a Spanish language network), ESPNU (a network devoted to college sports), and the regionally focused Longhorn Network (a network dedicated to The University of Texas athletics), SEC Network (focused on Southeastern Athletic Conference sports) and the ACC Network (focused on Atlantic Coast Conference sports). ESPN also operates five high-definition television simulcast services: ESPN HD, ESPN2 HD, ESPNEWS HD, ESPNU HD, and ESPN Deportes HD. ESPN programs the sports schedule on the ABC Television Network, which is branded ESPN on ABC. ESPN International has ownership interests in 26 television networks that reach households in 61 countries and territories across seven continents. In addition to its media outlets, ESPN is well-known for its ownership of the rights to various professional and college sports programming.

On the Internet, ESPN owns ESPN.com, which delivers comprehensive sports programming news, information, and video. ESPN3 is a broadband service that delivers thousands of live events. Other sites include espnW, ESPNRadio, ESPNDeportes, ESPNFC, ESPNCricinfo, ESPNScrum, ESPNFL, and a variety of market-specific sites. In 2018, ESPN launched ESPN+, a streaming subscription service as part of a redesigned ESPN app, that offers live events, original content, and on-demand programming for a monthly subscription fee. ESPN+ can also be accessed via the ESPN.com website.

In 2019, ESPN Digital Media had over 95 million unique U.S. users per month who spent an average of 5.9 billion minutes a month using ESPN’s digital properties each month. In terms of reach, ESPN is the industry leader in terms of unique visitors to, and minutes watched on, its mobile website and mobile apps.

ESPN has also had to change core programming elements such as SportsCenter to fit the new digitally-dominated landscape. ESPN’s new SportsCenter set has 114 monitors compared to the older one’s 15, nearly 10,000 square feet of space, 1,100 miles of fiber optic cable, and the ability to accommodate emerging technologies that may arise. The trouble for ESPN is that even the most cutting-edge TV studio may not be enough to draw viewers, and the most comprehensive network of national and regional sports networks may no longer be ESPN’s greatest strength. More users are accessing ESPN content via mobile devices at the expense of TV, and services that allow users to avoid traditional continued

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

10.3: ESPN: SPortS BroadcaStiNg EvolvES

3

cable packages that contain ESPN are proliferating. Typical sports fans are now interested in fantasy football and getting their sports news the instant it happens, not hours later. Still, ESPN has committed itself to embracing change, and maintains a dominant presence on mobile. Its media personalities are all extremely active on Twitter. If users should become interested in 3D technology, virtual reality, or something totally unforeseen, ESPN hopes that it’s taken the necessary steps to be at the cutting edge for years to come.

video case questions

1. How has ESPN handled the rise of Twitter? How has it incorporated Twitter into SportsCenter?

2. What has ESPN, originally a cable-only service, done to adjust to the rise in users canceling their cable subscriptions in favor of unbundling services?

3. What is the most important show on ESPN? What has ESPN done to upgrade it?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 10

Online Content and Media

case 10.1

Disney+

watch the video at summary

case

https://www.youtube.com/watch?v=T18BtHW­ BDc&t=31s

As streaming services continue to replace traditional television viewing, traditional content creators like Disney, HBO, and Comcast NBCUniversal, as well as tech giant Apple, have begun to launch their own proprietary services to compete with Netflix.

L: 10:12

For years, online content streaming services have been growing at the expense of traditional television viewing. While overall media consumption hours have remained steady, the use of Internet-connected devices and smart TVs to view streaming content is rising rapidly, while time spent viewing live TV continues to drop, according to Nielsen. In 2020, there were more subscribers of video streaming services than viewers with a cable connection. Netflix has long been the king of streaming services, with more than 195 million subscribers worldwide as of the third quarter of 2020, and thousands of hours of streaming content, including hundreds of original shows developed exclusively for its own platform. continued

. . ..

10.1:

2

However, Netflix’s continued dominance in the content streaming market is far from assured. It has encountered resistance from third-party content creators, who have begun to demand increasingly large fees for the rights to license their content. Netflix has also sought to offset the rising costs of both licensing and developing its own content by raising the price of its most commonly used subscription plan. After the company’s fifth price increase within the last five years in 2019, Netflix experienced the first decrease in the number of its US subscribers since 2011. This resulted in a tumble in its stock price as investors fretted that the company might finally have pushed its prices too high.

Another significant threat to Netflix’s ongoing dominance is the increasing number of competing streaming services launched in recent years, including Hulu and Amazon Prime Video. Still, Hulu has roughly 35 million total subscribers, a far cry from Netflix’s 195 million. Perhaps more troubling for Netflix is the rise of content creators pulling their content off Netflix’s platform and moving it to their own proprietary services. This is what Disney has done with the creation of its Disney+ streaming service. Disney joined other companies who have already launched similar services, such as Time Warner’s HBO GO for HBO content, CBS All Access, and Comcast’s Xfinity streaming service. These services have also been joined by HBO’s new service HBO Max, and Comcast NBCUniversal’s Peacock).

INetflix’s decision to develop an increasing amount of its own content makes more sense in light of this trend. Disney in particular boasts an incredibly diverse array of television and movie franchises, and the departure of that content from Netflix and other platforms will be a significant loss for Netflix subscribers. From Disney’s perspective, convincing Netflix subscribers to abandon that platform for Disney+ is somewhat unlikely; but they may be able to convince many viewers to subscribe to both services concurrently. In the future, as more companies create their own streaming platforms, most content consumers will be forced to make tough choices about which services they subscribe to.

video case questions

1. Which of the new services has the best chance of being successful, and why?

2. What does cable still offer that streaming services do not?

3. What kind of approach is NBCUniversal taking?

4. What kind of content will HBO Max offer?

5. What will be the initial price of a yearly or monthly subscription to Disney+?.

. t. . ..

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 11

Social Networks, Auctions, and Portals

case 11.1

Instagram

watch the video at

https://www.youtube.com/watch?v=oCoNVzWhweU

summary Instagram offers a rich social networking experience for its users, but also provides unprecedented new opportunities for advertisers to connect with young people. See how three major brands are doing just that.

L: 7:55 case

Facebook turned heads and raised eyebrows with its purchase of Instagram for a whopping $1 billion in 2012. Few question the logic of the acquisition today. At the time, Instagram only had 30 million active users, but that number has grown explosively to over 1 billion, at a time when Facebook’s own growth has stagnated and its popularity with younger people has waned. Instagram’s core business is still as a social network, making the two companies a logical fit, but Instagram’s unique image-driven format makes it a unique experience both for users as well as advertisers, who are seizing the opportunity to extend their marketing and branding efforts in creative and appealing ways.

Instagram has overtaken Facebook and Twitter as the most popular social network for teens and the coveted millennial demographic, with about one-third of continued

. . ..

11.1: Instagram

2

teenagers in the United States citing it as their most important social network.

Two-thirds of Instagram users are female, and Instagram users tend to be urban and college-educated. The premise is simple—users take photos or short videos that are immediately visible to friends, applying filters and other techniques to make them more visually appealing as well as text and hashtags.

Just like Facebook, Instagram posts allow other users to ‘like’ them. Instagram’s interface is clean, simplistic, and most importantly extremely fast.

In many ways, Instagram is more suitable to mobile social networking than Facebook itself—while on the go, it’s easier to view and engage with an image than it is with the blocks of text that often appear on Facebook, where the many different types of content make for a less streamlined experience. The world’s ongoing shift from desktop to mobile is excellent news for Instagram.

Advertisers have long understood the power of evocative images, and Instagram is doing its best to offer them a multitude of ways to use these types of images to connect with its user base. Instagram began selling advertising in 2013 and its ad revenues have grown so rapidly that they reached over $12 billion in 2019.

Instagram’s $1 billion price tag looks awfully cheap in hindsight.

Instagram offers direct-response advertisements that take users to a specified link when they tap or click the ad, as well as more interactive advertisements that allow users to customize a product without leaving Instagram. Some advertisements are images, some are videos, and others are a bit of both— known as “cinemagraphs,” these advertisements are essentially high quality versions of .gif files. Newer products like Carousel, which is featured in the video, allow brands to offer even more information to Instagram users who engage with advertising. By swiping left on Carousel ads, users can view a series of images in sequence as opposed to one individual ad. One Carousel ad might show off multiple features of a product, while another might tell a story or show a transition, such as multiple ingredients becoming a full meal. Instagram’s challenge is to introduce these ads without diluting the social networking experience its increasingly large user base has come to love.

video case questions

1.

Why is it useful to have an Instagram Business profile?

2. What some ways a business can use Instagram Live?

3. What is a Shoppable Instagram Gallery?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 11

Social Networks, Auctions, and Portals

case 11.2

Small Businesses Find a Home on eBay

watch the video at summary

case

https://www.youtube.com/watch?v=1EDel2lpUKU

As more businesses look to the Internet as a way to reach more customers and boost sales, sites like eBay have sought to provide ways to allow small businesses to set up storefronts with minimal fuss. In this video, the family that runs one such business, StreetSounds NYC, describes its experiences with eBay. You can find other examples of these types of businesses on eBay’s YouTube channel, such as a video on BDH Bikes, referred to in the case. L: 2:13 As more of online retailing moves away from auctions and towards fixed-price retailing of all shapes and sizes, eBay has followed suit. While eBay continues to generate significant revenue from auctions and maintains its status as the continued

. t. . ..

11.2: Small BuSineSSeS Find a Home on eBay

2

Web’s leading auction site, it has also become an online storefront for both large retailers and small businesses. Though eBay’s total revenue pales in comparison to Amazon’s, its profit margins put Amazon to shame, particularly when the income from Amazon Web Services (AWS) is removed from Amazon’s results. In 2019, eBay generated $2.5 billion in operating income on revenues of about $11 billion, while Amazon generated only $5.2 billion on revenue of $245 billion (not including AWS). eBay had an operating margin of 23.5% compared to Amazon’s 2.2% (again, not including AWS’s results).

The reason for eBay’s excellent profit margins is that it makes a commission on every transaction made on its site, whether it’s made through an auction or a fixed-price sale. Most of eBay’s expenditures go towards maintaining its e-commerce platform. However, in an effort to better compete against Amazon, the company is continuing to tinker with its business model. eBay announced changes in 2016 to help them jumpstart its flagging growth, including improving its ranking in Google search, and improving its proprietary search tool to provide more granular categories, such which items are newest and which are the best value. eBay is also focusing on courting small businesses, such as StreetSounds NYC, described in the video. Rocky Schiano, the owner of StreetSounds, founded the business as a CD store, and watched as CDs boomed and then subsequently faltered with the rise of digital music. Realizing he needed to change to survive, Schiano focused on selling musical instruments and other equipment. eBay allowed him to reach a wider audience. Today, StreetSounds has grown into a multi-million dollar business and has opened a music studio.

BDH Bikes, a Canadian bike shop located in Quebec, found that in the winter months, local sales were difficult to come by due to the extreme cold. By opening a storefront with eBay, owner Jean-Francois LaPointe found that he was able to avoid his winter sales malaise by selling to other areas. LaPointe reports that 85 percent of his sales are to the United States, a market he could never have reached without an e-commerce storefront. BDH Bikes used eBay Selling Manager Pro to develop their storefront and use analytical tools to boost their performance.

Selling Manager Pro allows small businesses like StreetSounds and BDH Bikes to automate a variety of tasks such as listing items and re-listing items that continued

. t. . ..

11.2: Small BuSineSSeS Find a Home on eBay

3

have not sold as well as providing customer feedback. It also allows businesses to create profit and loss reports and gauge the success rate of different products quickly. Seller Manager Pro also allows sellers to manage inventory and automatically adjust inventory based on demand. There is a free version of the tool, but Selling Manager Pro is a paid service with more features. For many businesses, it’s well worth the expense.

video case questions

1.

Visit StreetSounds’ eBay Storefront. What types of items do you see? Are there any auctions?

2. What is StreetSounds’ seller rating? How important is customer service to their success?

3. Look up Selling Manager Pro on eBay’s site. Compare the free and paid versions. If you were an seller, which version would you opt for?

. t. . ..

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 3

B2B E-commerce: Supply Chain Management and Collaborative Commerce

case 3.4

Elementum

watch the video at summary

watch the video at summary

watch the video at summary

https://www.youtube.com/watch?v=FMNMHNNwcKo

Elementum offers mobile, cloud-based supply chain management software. This video reviews its various products. L: 2:21 https://www.youtube.com/watch?v=aht4rmMeHn0

This video focuses on how Dyson, the U.K. manufacturing firm best known for its Dyson vacuum cleaners, uses Elementum. L: 2:24 https://www.youtube.com/watch?v=MsvUqshK8_0

This video focuses on Ken’s Foods, a U.S. food (sauces and dressings) supplier. L: 2:16 continued

. . ..

3.4: ElEmEntum

case

2

In 2012, Flextronics International Ltd. (Flex), one of the world’s largest contract manufacturers, spun off its expertise in supply chain management systems, forming a new company called Elementum which offers mobile, cloud-based software to a variety of customers (some of whom are already customers of Flex). To date, Elementum has raised nearly $200 million in several rounds of venture funding to build its software services business.

Coordinating the flow of goods among vendors and manufacturers is an inherently difficult task. A single manufacturer may have 100 primary suppliers, each of which has its own suppliers (tertiary suppliers), and so forth. The “supply chain” is very large collection of independent firms that do not share information systems, and often still rely on fax machines, email, and the telephone to coordinate the flow of parts and goods. The result is a kind of controlled chaos that is highly inefficient and error­ prone. The traditional solution for this problem was to have the primary product manufacturer, say a personal computer manufacturer, build its own proprietary, enterprise-wide supply chain management system, often purchased from a major software firm like SAP, Oracle, IBM, or HP, and then have all the suppliers tie into the primary firm’s system.

This approach has several problems, not least of which is that there are hundreds of primary manufacturers, each with its own proprietary supply chain system, forcing suppliers to learn many software systems. For instance, a supplier of wiring harnesses based in Malaysia may supply products to several hundred electronic component manufacturers, each with different supply chain systems. Moreover, the entire supply chain is usually not visible to the primary manufacturer, which cannot “see” the lower-level suppliers of components, just its largest suppliers. Many elements of the supply chain remain invisible. In addition, it’s nearly impossible for one primary manufacturer to understand how its purchasing decisions are effected by the decisions of other primary manufacturers. These kinds of systems do not operate in real-time but often rely on data that is weeks old.

continued

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

3.4: ElEmEntum

3

Finally, this traditional approach is poor at risk management, understanding the complexities of many different suppliers, in different parts of the world.

Elementum’s approach is very different because it relies on a cloud-based software-as-a-service model. All firms tie into one supply chain database system, regardless if they are primary manufacturers or component suppliers.

Manufacturers and supply chain management systems have lagged behind other areas such as customer relationship management (such as Salesforce. com), and work flow management (firms like Workday), in moving to cloud­ based SaaS models. Elementum’s software has three components: Transport, Exposure, and Perspective. Each is presented to users as a mobile app for tablets or smartphones. Transport offers visibility into existing shipments and offers predictive and rules-based alerts to notify managers of any potential delays.

Exposure is a supply chain risk management product that monitors various external content sources, and then based on an adverse event at a certain location, analyzes how suppliers, suppliers’ suppliers, and all actors in the supply chain might be affected. Perspective offers a mobile dashboard with a variety of graphics and charts showing how suppliers are performing. Rather than create hundreds of separate databases at primary manufacturers, Elementum’s goal is to build a single supply chain platform that leverages multiple data sources, and then to use common mobile apps to present the results to managers in a real time environment.

Dyson, the U.K. manufacturing firm best known for its Dyson vacuum cleaners and other household appliances, was one of Elementum’s early adopters. Dyson needs to keep track of two billion parts, 300 suppliers, and four factories in order to manufacture eight million appliances a year. Dyson built a research facility in Singapore that includes a room that displays real-time logistics and supply chain information, helping Dyson to maintain its complicated global supply chain.

video case questions

1. What are some of the unforeseen problems that can happen along the supply chain, according to Elementum?

2. What is an “issue”, as that term is used by Elementum’s platform?

3. How does Elementum help deal with underperforming shipping routes?

4. What does Dyson CEO Rowan mean when he says that in business, it’s not “the big that eat the small”? What saying does he suggest is more accurate?

5. What does Ken’s Foods Senior Director of Supply Chain say is the greatest benefit of using Elementum?

Copyright © 2022 Kenneth C. Laudon and Carol Guercio Traver. This work is protected by United States copyright laws and is provided solely for the use of instructors in teaching their courses and assessing student learning. Dissemination or sale of any part of this work in any form, including online, for any other purpose is not permitted. This work should not be made available to students except by instructors using the accompanying text in their classes. All recipients of this work are expected to abide by these restrictions and to honor its pedagogical purpose.

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

video case chapter 12

B2B E-commerce: Supply Chain Management and Collaborative Commerce

case 12.2

Century Martial Arts Streamlines with Sana Commerce

watch the video at summary

case

https://www.youtube.com/watch?v=1sxbPYZqEk&t=3s

B2B and B2C martial arts supplies distributor Mechan Groep needed help moving from a legacy system that was no longer working for them. Sana Commerce was the perfect fit. L: 2:53 As B2B e-commerce continues to grow, companies are placing more emphasis on upgrading their e-commerce infrastructure, taking many cues from B2C companies in the process. Streamlining their online stores and ensuring that potential customers can make purchases across a variety of channels has become just as important for B2B companies as it is for B2C companies. B2B e-commerce accounted for $7.5 trillion of the total $14.65 trillion in B2B trade in 2019, and B2B e-commerce is expected to increase to around $9.8 trillion by continued

. . ..

12.2: Century Martial Arts Streamlines with Sana Commerce 2

2024. For B2B e-commerce companies, there’s a lot at stake.

Sana Commerce is a B2B e-commerce software company founded in 2008 and headquartered in the Netherlands. Sana provides B2B enterprise multichannel e-commerce, which is integrated with ERP systems. This means that Sana allows its clients to initiate transactions from physical stores, online stores, mobile app stores, telephone sales, or any other method. A number of companies offer these types of services, but Sana is unique in that it integrates within already installed enterprise resource planning (ERP) systems.

Sana Commerce allows businesses to achieve better customer service, higher sales efficiency, and increased revenue. It’s compatible with many major ERP systems, including most versions of Microsoft Dynamics and SAP systems, and its Webshop is installed within that system, as opposed to functioning separately and interfacing with that system externally. This ensures that companies using Sana don’t have to make large investments in new ERP systems. Sana uses the pre-existing ERP’s business logic and information rather than forcing a complicated integration. Sana Commerce recently partnered with RSM, a leading reseller of Microsoft Dynamics software as an implementation partner, in order to be better able to serve its customers.

The video focuses on the experience of Century Martial Arts, a world leader in martial arts supplies and services, in working with Sana and RSM. Century Martial Arts sells over 11,000 products across both B2B and B2C business model.

Sana’s ability to offer an integrated solution for both B2B and B2C markets made it a good fit for Century Martial Art’s needs.

video case questions

1. What are some of the advantages of working with Sana Commerce and RSM that Century Martial Arts identifies in the video?

2. What improvements does the new Sana system have compared to the legacy system that it replaced?

3. What types of companies is Sana well suited for?

. t. . ..

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

Laudon/Traver E-commerce 2021 Video Case Questions and Answers Case 1.1: The Impact of the Pandemic on E-commerce 1. According to Romanov, what was unusual about the November 2020 “Black Friday” experience?

According to Romanov, what was unusual about the November 2020 “Black Friday” experience was the performance of small businesses. Small businesses (those doing less than $30,000 in revenue) connected to Clearco’s platform were up by 150%, indicating that more consumers are shopping local but just doing it online.

2. Does Romanov expect to see the same level of growth in e-commerce in the years to come?

According to Romanov, e-commerce grew from about 14% of all retail sales at the beginning of the pandemic to close to 30% by December 2020, something that was not expected to occur until by around 2030. As a result, it is foreseeable to forecast e-commerce getting to the point where it constitutes 50% of all retail sales in the future.

However, whether it will continue to grow at such a rapid pace is uncertain, and remains to be seen.

Systems

3. How has advertising by smaller e-commerce companies changed in the wake of the pandemic?

One change identified by Romanov has been an increase in usage of Google advertising compared to Facebook, in part due to the fact that more people during the pandemic were spending more time online, which Google advertising is able to track and leverage very efficiently. She also mentions the rise of TikTok as a new social media advertising platform for small new brands, particularly those aimed at young Gen Z customers.

Case 1.2: The Growth of the On-Demand Economy 1. Why did BloomThat opt to partner with existing delivery services like UPS rather than use local deliverers or florists?

BloomThat discovered that 60 percent of the time, customers don’t even see the delivery person. BloomThat decided that the floral quality was more important than the delivery experience and opted to use best-in-class delivery services instead.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

2. Compared to other on-demand companies, what type of regulatory hurdles does BloomThat face?

BloomThat has an advantage over companies like Uber in that it faces no significant regulatory hurdles to its business. That allows the company to focus entirely on the user experience.

3. What level of delivery speed is most important to BloomThat customers, according to Schwab?

Schwab notes that customers aren’t really interested in receiving flowers in 20 minutes or less. Food delivery service users are interested in receiving their food quickly. But BloomThat users simply want to receive their flowers on the same day as their order. BloomThat and many otheron-demand companies are likely to tweak their business models in light of what their consumers want and expect, potentially becoming more efficient in the process.

Case 2.1: Glossier 1. What percentage of women does Weiss suggest buy new beauty products due to peer recommendations? Do these recommendations need to be face-to-face from a friend?

Weiss suggests that 60% of women buy new products due to peer to peer recommendations. Increasingly, this can be someone they see on social media, not necessarily a close personal friend.

2. According to Weiss, what is the core value of Glossier as a company and how does this differ from traditional beauty brands?

Weiss indicates that a strong brand requires high quality products and a relatable set of values. She notes that the core value of Glossier is its inclusivity, which differs from traditional beauty retailers that are often focused around exclusivity, pricing products too expensively for most to afford or ostracizing those that are not the right weight, skin tone, or socioeconomic background for various products.

3. What is the price range of Glossier’s product line and how does it compare to other beauty brands?

Glossier products range from as low as $12 to a high of only $38, representing a steep discount compared to many bricks-and-mortar beauty brands.

4. Does Glossier pay celebrities to endorse their products? Why or why not?

Glossier does not pay celebrities to endorse their products, believing instead that social media has democratized the beauty industry significantly. Rather than relying on celebrities

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

and brand experts, many women in the age of social media prefer to listen to other women who more closely resemble them than celebrities.

5. What does Weiss mean when she says that Glossier’s brand and brands of the future will be “co-created”?

When Weiss refers to Glossier being co-created, she is referring to the especially close relationship between the brand and the customer, with customers having a significant role in shaping the product offerings, values, and advertising of the brand. As opposed to traditional brands, which are heavily reliant on celebrity endorsements, Glossier and other companies that depend heavily on social media will form a richer partnership with their customers.

Case 2.2: Angel Investing 1. What types of people are angel investors, and how are they different from venture capitalists?

They are typically individuals, often retired executives, CEOs, or people who have had successful companies, who are looking to invest time, experience and their own money in early stage companies. They typically don’t have to check with other people before making an investment and they often do not have specific expectations about how long it may take for them to get their money back. Venture capitalists typically are part of a firm rather than individual investors. They fund investments using money raised from other people (“limited partners”). Venture capitalists usually expect to get a return on their investment within a specific period of time.

Systems

2. What stage company does an angel investor typically invest in and how much do they typically invest, compared to venture capitalists?

Angel investors typically invest in early stage companies, often even before the company has revenue. Venture capitals typically invest further on in the growth of a company, after the company has some customers and some revenue. Angel investors typically invest between $5,000 to $50,000, while venture capitalists typically invest much higher amounts, into the millions.

3. Why is finding the right investors important for a startup company?

In addition to supplying funds, investors are important because the connections the investors have can open doors for the company and unlock growth potential.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

Case 3.1 How Freshdesk Uses Amazon Web Services 1. Why was Freshdesk a good candidate for remote computing services on the cloud?

Freshdesk is a SaaS customer service company, and already relies on the cloud to perform customer service functions for its clients. As the company grew, it decided to turn to Amazon Web Services to store its data and deploy and manage its customer service software platform.

2. What was Freshdesk’s experience working with AWS? Freshdesk originally signed up for AWS’s Enterprise Support. The experience was very positive. As noted in the video, it was the first time that Krishnenjit Roy, Freshdesk’s Director-IT Operations, felt that he was working with a company that was concerned about reducing Freshdesk’s cost and optimize efficiency.

3. What made Amazon Redshift and OpsWorks good fits for Freshdesk?

Redshift was a good choice of data warehouse for Freshdesk because of its scalability and integration with all of the major business intelligence tools on the market today. OpsWorks was the right blend of low cost and just enough customizability for Freshdesk, which wanted to deploy its own customer service applications, but was willing to use many of Amazon’s tools to deploy and maintain them.

Case 3.2: ASOS Turns to Microsoft Azure and the Cloud 1. Why did ASOS decide it needed to revamp its entire digital platform?

ASOS decided it needed to revamp its entire digital platform in order to be better able to scale, to enable it to change quickly and innovate for its customers, and also to provde globally consistent services.

2. What issues did ASOS’s existing infrastructure present for ASOS? ASOS’s legacy platform was hosted entirely in a single data center in the UK, and ws not designed with a “mobile first” perspective in mind.

3. What new functionalities does ASOS plan to implement using Azure in the future?

Some of the new functionalities mentioned include digital search, voice search, and different forms of customer interaction.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

Case 3.3: Facebook’s Data Centers 1. Why does Facebook’s data center specialist argue that “The Internet is not a cloud?”

The Internet and the Cloud are better described as a series of data centers that can share data, connected by miles of fiber-optic cable.

2. What are some of the techniques Facebook uses to cool its data centers?

Cool air from outside is used to regulate the internal temperature; mist distributed by sprinklers controls the humidity in the center, keeping the temperature more stable; and excess warm air is pushed out by fans.

3. Facebook had 2.7 billion users as of 2020. If Facebook continued to employ engineers at the same rate as stated in the video, how many engineers did Facebook have as of 2020?

2,700

Case 3.4: Smart Speakers: Amazon Echo and Google Home 1. What functionality does the first-generation Amazon Echo display during the video that introduced it?

In the video, Amazon Echo exhibits the following functionality: answering questions about the number of tablespoons in 3/4ths of a cup; the ability to hear you from anywhere in a room, creating and adding items to a shopping list, provide news, control lights, setting timers, creating a calendars, getting a traffic report, reordering from your Amazon shopping history, streaming music from Pandora, TuneIn, and iHeartRadio, and Prime Music, the ability to listen to audiobooks from Audible, telling jokes, learning how to decipher an accent, and getting a weather report.

2. What kind of technology does Amazon Echo use?

Amazon Echo is connected to Alexa, a cloud-based voice service. It gets information from the cloud.

3. What might be some privacy concerns involving Echo? Are these well founded?

Why or why not?

Because Amazon stores and manages the data you generate when using Echo, they’ll be able to use that information for marketing and advertising efforts, which users might not feel comfortable with. Amazon claims it will be possible to delete queries from user histories.

Answers will vary over the legitimacy of privacy concerns. .

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

4. Why was releasing a developers’ kit for Echo important for Amazon to keep pace with services offered by Apple, Google, and Microsoft?

The voice-controlled utilities on these other platforms are likely to be supported by app developers. Apple has a long history of its devices gaining functionality via apps, for example.

For Echo to gain similar multi-purpose functionality, allowing developers to create apps was a must.

5. What are some of the smart home devices that Echo Plus can control?

The Echo Plus can control smart home devices such as light switches, light bulbs, and locks. It can also play music from a variety of sources, such as Apple Music, Pandora, SiriusXM, iHeart Radio, Spotify, and TuneIn. 6. What functionality does Google Home display during the video?

In the video, Google Home exhibits the following functionality: Acting as an alarm clock, setting up routines such as interfacing with a Nest thermometer to increase the temperature and start coffee brewing, providing a calendar, broadcasting information, providing reminders about events, playing music, providing directions, the ability to find a phone, and reading a audio book aloud.

Case 4.1: E-commerce Platforms: Salesforce Commerce Cloud 1. Why did PetSmart switch to Salesforce Commerce Cloud?

PetSmart, an omni-channel retailer of pet products, wanted its customer experience to be the same across all channels, and from a technology standpoint, believed it could move more quickly with fewer technology platforms. Also, its previous platform did not allow it to innovate as easily as it wanted. It also enabled it to create more personalized interactions with its customers, increasing customer loyalty. It also wanted a platform that could better handle volume and scalability.

2. PetSmart implemented Salesforce Commerce Cloud just prior to “Black Friday.”

Why was this of concern to PetSmart?

“Black Friday” and the holiday retail period is the time of year when most people are shopping and putting a lot of demand on online systems. Also, it was not only its web store that was being re-platformed; it was also introducing new capabilities, so there were a lot of different pieces that it had to implement before the holiday period.

3. What are the challenges that Rituals faces in translating its brand to the online channel?

Rituals is a cosmetics brand whose customers want to touch, smell, and feel their products.

Achieving this via the online channel is quite difficult. Rituals is also brand that is attempting .

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

to communicate a message of slowing down and turning bland routines into meaningful rituals; in many ways, this is at odds with using modern technology such as computers and smartphones to shop for goods.

4. How does Salesforce help Ritualsmeet these challenges?

Rituals works with Salesforce to combine customer information from both online engagement and offline activity at physical stores into a unified profile. This allows Rituals to market products more effectively to customers that are already familiar with them. The wealth of options Salesforce provides also allows the company to get creative with its marketing efforts.

Case 4.2 National Kidney Registry Turns to Rackspace for Managed Hosting 1. Why does the NKR outsource its data infrastructure and site hosting to Rackspace?

The NKR wanted to focus on its main mission of matching donors to recipients. The NKR’s time is best spent connecting donors and recipients, not managing its data infrastructure.

2. Which components of the NKR’s infrastructure is Rackspace responsible for managing?

The database of donors and recipients as well the website that front-ends that database and offers connectivity to all the transplant centers is managed by Rackspace.

3. What concerns do the hospitals have regarding the data housed by Rackspace?

Hospitals are very concerned about the privacy of the data on donors and recipients in the NKR’s database. Rackspace has a dedicated team ensuring that user data is protected to a high standard.

4. How does Rackspace ease security concerns for donors, recipients, and participating hospitals?

Rackspace is a large organization with a strong reputation and boasts security certificates that attest to its expertise in this area.

Case 4.3 Building a Mobile App 1. How is Flutter able to be used to create native applications for both iOS and Android devices?

Flutter uses a single code base that is compiled directly to the device’s central processing unit (CPU) and graphics processing unit (GPU) and can access platform application .

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

programming interfaces (APIs) and services. Flutter’s widgets enable Flutter apps to follow platform conventions and interface details for both iOS and Android apps.

2. What does stateful “hot reload” functionality allow?

Hot reload functionality allows developers to change code without losing the “state” of the app (i.e., without having to stop or restart the app).

3. Why did Hamilton’s producers create a mobile app?

They wanted something to make the show more accessible for its fans as it expanded the brand.

4. How long did it take to develop the Hamilton app?

Three months.

5. What is some of the functionality offered by the Hamilton app?

Fans can enter a daily lottery to buy a $10 ticket, buy merchandise through an e-commerce store, take selfies with the “Ham Cam” and get daily news and updates.

6. What were some of the advantages to using Flutter?

The fact that it is a single code base (for both Android and iOS) improved the team’s ability to deliver a consistent experience across platforms. The “hot reload” feature enabled the team to build more features in less time, enabling developers to make changes quickly and iterate them through the user interface without having to stop and restart the app.

Case 5.1: The Rise of Cyberwarfare 1. What was the reason for the cyberattacks made against Estonia in 2017?

Moving the Bronze Soldier of Tallinn war memorial to a nearby cemetery precipitated tensions between Russia and Estonia, and soon afterwards highly coordinated cyberattacks believed to originate from Russia began to ravage Estonian government and municipal systems.

2. How has cooperation with other nations helped Estonia improve its ability to respond to cyberattacks?

First, Estonia has relied on other countries to back up its data, such as Luxembourg, where it stores copies of its information. Next, Estonia has participated in NATO operations such as the Cooperative Cyber Defense System of Excellence, which allows member countries

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

to share techniques for defending against cyberattacks. The Tallinn Manual, named after Estonia’s capital, analyzes how to apply international law to cyber operations.

3. How long has the United States been dedicating resources to understanding the cyber vulnerabilities of other nations?

The U.S. Cyber Command has operated for roughly a decade, allocating billions of dollars to analyze things such as the power grid of other nations.

4. In what way is the current cybersecurity environment like the Wild West?

The current cyber environment resembles the Wild West in the sense that regulations have not caught up to the offensive capability of cybercriminals to do serious damage. For example, nuclear weapons have treaties and regulations regarding their development and use. Cyberattacks do not, and nations can and do disagree about what different types of cyber operations mean.

5. What can be an unintended consequence of executing a cyber attack, such as the United States’ use of Stuxnet against the Iranian nuclear program?

Once a cyberattack is made, the technique used can be repurposed by other countries. This means that cyberweapons can easily fall into the hands of people who countries would prefer not have them. Learning to defend from a cyberattack is just as important for the countries deploying it as for the ones on the receiving end.

6. According to John Yang, how important is Cybercommand to U.S. military power?

Extremely important, given the potential impacts of a cyberattack on the U.S. infrastructure.

Case 5.2: Understanding Bitcoin 1. How many transactions does a block contain in the Bitcoin blockchain?

Each block in the Bitcoin blockchain contains roughly two and a half thousand transactions.

2. What does the effect of having more computers running mining software have on the security of the Bitcoin network?

The more computers and computing power involved mining Bitcoin, the more secure the Bitcoin network is. This is because miners are also processing transactions, and the more miners that are active, the faster that transactions are verified and errors are detected.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

3. How does Bitcoin’s carbon footprint compare to our existing financial system’s carbon footprint?

Many estimates suggest that Bitcoin mining consumes as much energy worldwide as countries like Monaco and Ireland, and the computers used to mine coins are becoming increasingly powerful. However, the energy required to mint coins, power ATMs, and generate the paper required for traditional financial transactions are considerable as well.

4. How many Bitcoins can be generated and when will all of the Bitcoins be generated?

The Bitcoin source code only allows the creation of 21 million Bitcoin. All Bitcoins are estimated to be generated by the year 2140.

Case 6.1: To Ad Block or Not to Ad Block 1. What is the “ethical ad blocker” described in the video?

The ethical ad blocker blocks any site that is advertising supported completely, allowing “ethical” Internet content consumers to avoid any site that they do not feel comfortable viewing with advertising blocked. This way, these consumers can avoid freeloading and consuming content they have not “paid” for by viewing advertising.

2. Why are algorithmic advertising technologies increasingly important to advertisers?

Algorithmic advertising is intended to overcome the issue of increasing decentralization in the way content consumers get their content, whether it be news, TV, or anything else. In the past, advertisers could run comprehensive TV and print campaigns to generate interest in their products. Now, people consume content at all different times and out of sync from one another. Algorithmic advertising allows advertisers to distribute their messages across a variety of platforms in a highly targeted way.

3. Where do you stand on the use of ad blockers?

Answers will vary. Possible points or suggestions to improve the situation could include: changing the way advertising is perceived by individuals and calling more attention to its role in supporting content creation; improving the quality and relevance of advertising even further; or perhaps by making ad blocking a paid service that returns revenues to content creators, although free alternatives would continue to proliferate.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

Case 6.2 Pandora’s Recommendation System 1. What sets Pandora’s recommendation system apart from other sites like Amazon and Netflix?

Pandora’s system focuses more on the attributes of songs than your similarity to other users, without regard to their popularity. Amazon and Netflix compare your preferences with other users who like those same things in order to generate recommendations. This approach favors more popular selections.

2. According to the video, how many stations does Pandora allow you to create?

100 3. What is the Music Genome Project? How is the musical “genome” mapped?

The Music Genome Project is an attempt to classify music by a variety of attributes.

Pandora employs a team of 25 trained musicians to manually listen to individual songs and classify them by over 400 different attributes, such as melody, harmony, rhythm, and form.

4. Why is Pandora a good example of the success of the “Long Tail” on the Web? The “Long Tail” describes a distribution of a small group of events with very high amplitude and a much larger group of events with low amplitude. On Pandora, the Music Genome Project system gives listeners a chance to sample many songs and artists from the Long Tail of less popular artists that nevertheless may fit within their preferences perfectly.

Pandora is currently the market leader in online music streaming services, indicating that users enjoy the feeling of discovery associated with exploring the Long Tail of the music industry.

Case 6.3 Verizon Media 1. In which three ways is trust foundational to Verizon Media?

Trusted content, trusted data, and trusted platforms are the ways that Oath CRO John DeVine describes trust to be foundational to oath. Trusted content refers to “brand-safe” content that will not create any public relations headaches for advertisers. Trusted data refers to accurate, granular customer data advertisers can use to learn more about their customers. Trusted platform refers to the Oath DSP, which allows advertisers to measure the return on investment of their advertising campaigns themselves, rather than “grading their own homework,” as some advertisers have done in the past (such as Facebook overreporting the viewability and interaction rates of their video ads).

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

2. What are the platforms that Verizon Media sought to consolidate?

After the merger of AOL and Yahoo, the combined company had several advertising platforms to consolidate, including adap.tv, Brightroll, and Yahoo’s proprietary platform, Gemini. Oath used the Brightroll platform as its starting point and was working in features of its other platforms via cross-coding.

3. Which metrics best indicate the success of advertising for a company like Hulu?

The metrics that best indicate success of advertising campaigns for Hulu are brand familiarity and number of subscribers; Hulu finds that it does best focusing primarily on these two areas when advertising.

4. How does Hulu determine what ads work best and who do advertise to?

Hulu looks at their own subscribers, especially the “healthiest” (likely the subscribers who watch the most hours of content on the site). Then they try to understand more about who those subscribers are and what they like to watch, and then advertise to similar groups of people demographically, finding “look-alikes” and other similarities between current customers and potential future customers.

5. What makes mobile devices an especially effective platform for Oath and other similar companies to deliver advertising?

Smartphone users are constantly checking their phones and are interested in content when they want it, where they want it. If an advertiser can deliver the right content at the right time to these users, they can provide a “home run” of value, as Jeff Lucas states in the third video.

Case 7.1: Pinterest 1. How many unique Built-in Pins did Home Depot create as part of its Pinterest marketing efforts?

Home Depot created over 60 unique pins.

2. How many views and clicks to site did Home Depot’s 360-degree pins generate?

IThe 360-degree pins generated 36 million views and 350,000 clicks to site.

3. What is Jonas Paul’s customer demographic and what is this demographic looking for on Pinterest?

Jonas Paul’s customer demographic is mom and dads, who are searching on Pinterest for inspiration for their kids.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

4. How does Jonas Paul’s order value generated by Pinterest traffic compare to order value generated by other marketing platforms?

Jonas Paul’s order value is 65% higher when generated by Pinterest. The traffic is of a higher quality, since users are already searching for products with the intent to buy.

Case 7.2: The Full Value of Mobile Marketing 1. Of the mobile users who clicked on the store locator, what fraction did iProspect estimate entered a physical store? iProspect estimated that one in five store locator clicks led to a visit to the store.

2. What did iProspect determine to be the worth of each individual store locator click? What implications did this have for return on investment?

The worth of each store locator click was estimated to be $3.20, showing mobile advertising using a store locator to have a very strong return on investment.

3. Why did iProspect increase the average order value per visit from its initial amount? What were the amounts?

Because customers clicking on a store locator already have a demonstrated intent to buy, iProspect believed it was reasonable to assume a higher percentage of these customers would purchase goods. The increase was from $71 to $80 dollars per average order.

Case 7.3: Yelp 1. According to Sender One, who are the best ambassadors for a business?

The best ambassadors for a business are its customers - people who are not paid to talk about the business, but people who want to because they feel that strongly about the business.

2. When Sender One was launched, what advertising platforms did it target and why?

When Sender One was launched, it was a new business with no brand identity. The company felt it was important to reach out on every platform possible to establish a brand identity as a community-focused business that was less intimidating for newcomers, and Yelp was extremely important to that effort. Many people in Sender One’s location of Los Angeles used Yelp, so it was one of the many platforms the business used to attract new customers.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

3. In what ways has Yelp helped The Pod Photography grow its business?

Yelp enables The Pod Photography to easily reach consumers who are actively looking for its services. Yelp also enables The Pod Photography to curate the experience that its potential clients will get, for instance by enabling the upload of as many photos as desired to create a portfolio of its work. According to Erika Seress, the owner of The Pod Photography, the more focus she puts on curating The Pod Photography’s Yelp page, the better clients she gets from it 4. What is Erika’s advice to new business owners with respect to customer reviews?

Erika advises new business owners to respond to customer reviews, whether positive or negative, because people love to feel heard and acknowledged. According to Yelp, 89% of consumers read businesses’ responses to reviews.

5. According to Yelp, what percentage of consumers using Yelp make a purchase after using the platform?

According to Yelp, 92% of consumers using Yelp make a purchase after using the platform.

Video Case 8.1: The Right to Be Forgotten 1. What is the Right of Oblivion and how does it differ from the Right to Be Forgotten?

French and Italian law provide for a Right of Oblivion, under which convicts can block the printing of details regarding their misdeeds after they have paid their debt to society. The Right of Oblivion is much older than the Right to Be Forgotten and is not Internet-specific.

2. According to Dr. Victor Mayer-Schoenberger, how has past history in Europe impacted current European attitudes toward personal privacy?

Personal information collected innocently by European cities in the early 20th century was later used by the Nazis to track people down by religion and ethnicity. Europe’s past may have inspired a suspicion toward permanent comprehensive records, engendering a more careful attitude toward the collection and storage of personal data.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

3. What are the concerns about the potential adoption of the Right to Be Forgotten on a worldwide basis?

The first concern relates whether the Right to Be Forgotten encroaches on the freedom of speech.

The second concern, related to the first, is whether the Right to Be Forgotten may actually become an act of censorship. The third concern is that this may allow the rewriting of history.

4. What are some of the apps that the video notes are premised on the notion of impermanence and anonymity?

Apps mentioned in the video as being premised on the notion of impermanence and anonymity include Snapchat, Yik Yak, Secret, and Whisper.

Case 8.2: Facebook Privacy 1. Do people who use Facebook have a legitimate claim to privacy when they themselves are posting information about themselves?

People post personal information on Facebook in the belief that it will be shared only with their friends or those they choose. This belief is encouraged by Facebook through its public pronouncements on holding data private, but in practice, causing the information to be widely shared. At times in the past, the FTC has explicitly charged Facebook with misleading its users about the privacy of their Facebook information. Given all the instances of Facebook changing its information policies without informing users, and expanding its sharing of personal information, users would be wise not to join or to remove their profiles if they want to preserve their privacy. On the other hand, users who post information and make no effort to control its use, arguably do not have a claim to privacy any more than a speaker in a public forum can make a believable claim to privacy.

2. Why did Facebook announce changes to its privacy settings in March 2018?

It is likely that Facebook announced changes to its privacy settings in March 2018 in response to the Cambridge Analytica scandal, although it claimed they were in the works long before that scandal came to light.

3. What changes to its privacy settings did Facebook announce?

The changes to privacy settings do not include any new restrictions on which information Facebook can collect. Instead, they are intended to make it the privacy settings more intuitive and easier to navigate. Users will now be able to see all of their settings on a single screen rather than having to visit 20 separate screens. The redesign also includes a new Privacy Shortcuts menu and a new feature called Access Your Information, which will provide a more straightforward way to delete things you no longer want shared on Facebook. .

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

Case 8.3: What Net Neutrality Means for You 1. Are you in favor of network neutrality going forward? Why or why not?

Students can argue that the growth of the Internet, and continuing innovation in new products and services, requires that Internet bandwidth remains very inexpensive, and that ISPs do not impose any additional charges for selected users, or selected services (like Pandora, Netflix, or YouTube) but instead spread the cost over all users, essentially offering a single rate plan for all. Others could argue this is unfair, burdens the light users of the Internet, and is irrational in so far as the resource is not priced according to usage (like the telephone and wireless cellular systems, or like toll highways, and electric utilities).

2. What is the problem with ISPs, which are private business firms, charging whatever they want to charge and that the market will bear?

The FCC and industry critics argue that the ISPs (generally cable TV and telephone companies) are effective monopolies and there is no competition for their services in local service areas. Therefore markets do not work well, and consumer choice is non-existent.

Also, there are conflicts of interest: the very same ISPs that deliver Internet service, deliver telephone and television service. They may want to restrict Internet telephone service like Skype in order to force consumers to use their cell or land line service. They may want to restrict Netflix in order to build their own video streaming service.

3. Major cities of the world have adopted “congestion pricing” in which cars pay a toll to enter the core of the city during daylight hours. Congestion pricing is also used to regulate demand by businesses for electricity. During the day when electricity is in high demand, many businesses pay a “demand” fee in addition to the regular charge for electricity. Why is the Internet any different?

Some argue the Internet is different from highways or other physical assets and resources because supply is practically infinite, and the cost of adding another user whether a heavy user or light user is nearly zero. If resources are not constrained then why impose congestion pricing? Others argue that Internet bandwidth and resources are finite, and that there are real costs involved when adding millions of “heavy hitter” users. One cost is a slow down in the transmission of email, greater Internet latency, and potentially major “brown outs” of the Internet which in fact have occurred when usage peaks (say during presidential nomination ceremonies or the Super Bowl).

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

4. If your business model depended for its success on millions of people being able to stream videos on demand (like YouTube or Netflix), would you be in favor of net neutrality or against it?

At first glance the obvious answer is that you would support net neutrality because it means your customers (who are really heavy users of bandwidth) would not pay extra for consuming your video service. However, you would be running the risk that so many of your customers using your service all at once will result in declines in service and a clogging up of the Internet arteries. By allowing ISPs to charge more for heavy users, they might be willing to develop high bandwidth capacities for your users, making your service more reliable. In this light, Google has switched positions on net neutrality, at first a supporter, and now less supportive and even understanding of the need to develop “differentiated service” which costs more but is a lot faster.

5. How does Burger King explain the concept of net neutrality?

Burger King explains the concept of net neutrality by showing what would happen if it required that people pay higher prices in order to be served more quickly, as ISPs would like to do in the context of Internet service.

Case 9.1 Walmart Takes on Amazon 1. Why did Walmart acquire Jet.com?

Walmart acquired Jet.com in an effort to better compete with Amazon. Jet.com has a workforce with IT and online sales expertise (including Millennials and urbanites, an area where Walmart is weak), and an interesting business plan aimed at competing with Amazon. It is also is more nimble than Walmart and willing to experiment with interesting ideas, such as offering items at lower cost in exchange for using a debit card or forgoing the right to return an item.

2. How does Jet.com’s fulfillment process work?

Less than one-third of the orders actually ship from Jet.com’s own warehouses. Instead, Jet has over 2,000 partners, enabling it to route orders to the closest location, saving on shipping costs, enabling it to pass those savings along to consumers.

3. Is Walmart’s increase in market share coming at Amazon’s expense?

According to analysts, no. Instead, Walmart is taking market share from grocers and other general merchandisers.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

4. What are some of the omni-channel efforts Walmart is employing?

Some of the omni-channel efforts being employed by Walmart that are identified in the second video include curbside pickup, delivery, buy online/pickup in store, and automated pickup towers.

5. According to the second video, what competitive advantages does Walmart have?

Walmart’s competitive advantages include grocery/food/curbside delivery.

6. Are the stock analysts in the second video positive or negative about Walmart’s long-term prospects.

Both analysts are positive.

Case 9.2: Etsy: A Marketplace and a Community 1. What is Etsy’s business model and revenue model?

Etsy is a market creator with a transaction fee revenue model. There are no membership fees and sellers pay just 20 cents to list an item.

2. How important is “community” at Etsy? Visit Etsy’s website and describe its community-building features.

Community is extremely important at Etsy, both for promoting the sales process, for soliciting new ideas, and for bringing the company closer to its sellers and the public.

Each item listed includes a personal profile of the shop owner. Etsy’s website features a blog, a “featured seller” of the day, and special “community” section where website visitors can share ideas, attend an event in the area, join a streaming workshop, or watch an archived workshop. They can also connect by joining a team with other members of Etsy’s marketplace and community, in order to meet people with common interests, and collaborate.

3. Visit the Help page on Etsy’s website and do a search on SEO to learn about search engine optimization. What tips does Etsy offer to sellers about this topic?

Etsy’s Help section offers a variety of information about SEO. Best practices for improving Esty shop SEO include having a great product, selecting the best possible keywords, Shop title, Shop Section names, item titles and descriptions. It also suggests linking your Etsy shop to your personal blog and networking with other sites to get them to feature your listings.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

Case 10.1: YouTube: Secrets of Successful YouTube Content Creators 1. What are Koval’s “ten fundamentals” of top YouTube Creators.

The ten fundamentals of top YouTube Creators are shareability, conversation, interactivity, consistency, targeting, sustainability, discoverability, accessibility, collaboration, and inspiration.

2. List some ways that YouTube content differs from traditional TV and movie content using the ten fundamentals.

YouTube content differs from much traditional TV and movie content in its interactivity with the audience made possible by the online platform and specific features of YouTube. While most traditional TV content relies on shareability (telling your friends about your favorite show), consistency (knowing what type of show you’ll get week to week), and sustainability (a show that maintains quality and energy throughout its run), it’s rare to see a great deal of interactivity, with entire episodes of content being created from a single user’s comment or suggestions. Similarly, conversation, where content creators can talk directly to the audience, and even name individual users, is much more possible on YouTube than in traditional TV. Collaboration between different channels and content creators is also arguably more common on YouTube than on traditional TV shows, although some shows have featured cross-over episodes in the past.

3. What three levels of targeting does Koval describe and how are they different?

Koval describes breaking down targeting efforts by the channel level, the series level, and the individual video level. When creating a channel, creators need to target their intended audience right off the bat. Will the audience be gamers? Sports fans? Pop culture fans? Fashion and beauty enthusiasts? Targeting at the series level involves taking a particular subset or series within a larger channel and focusing on an audience for that specific series. And sometimes, an individual video will have a unique target compared to the other videos within a channel.

4. What is the difference between “trending topics” and “evergreen topics?” Which fundamental deals with these ideas?

The discoverability of a video is connected to whether topics in the video are trending or evergreen topics. Trending topics pertain to more recent events that are in the news currently, and are experiencing a major spike in user interest. The Oscars, the Super Bowl, a presidential election, and other sudden occurrences are trending topics. Creating a video

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

addressing these sorts of trending topics can help boost your channel. Evergreen topics are, like evergreen trees, persistent over time. A video showing how to tie a tie is a good example.

Video Case 10.2: Vox Media 1. How does James Bankoff, Chief Executive Officer and Chairman of Vox, describe Vox Media?

Bankoff describes Vox Media as a company that creates high-quality large media brands for a new generation of consumers that prefer to consume their content digitally. He likens Vox Media to magazine companies such as Time Inc. and Conde Nast, and cable companies like USA Networks, Disney and Comcast. Vox is similarly creating new media titles such as Verge, Vox and SB Nation in the same way, in a digital medium.

2. What does Bankoff say Vox Media’s approach is to digital media?

Bankoff notes that Vox Media takes a verticalized approach, with a number of individual brands, such as SBNation, which enables it to command more authority within the topic, rather than being another generalized portal. Each brand has a distinct voice, which he believes is critical.

3. What does Bankoff think about the issue of trust and quality with respect to online content as it relates to Vox Media?

Bankoff feels that all of Vox Media’s various brands must be rooted in quality and authority.

In the past, there was a period where a lot of web content could not be trusted and Vox is focused on bringing back that trust. In doing so, it enables “blue chip” advertisers to trust Vox Media, and therefore willing to spend to advertise on its sites.

4. According to Bankoff, how does Vox Media intend to grow?

It may acquire certain properties, but it primarily intends to grow by increasing traffic to its existing sites, and grow properties from the ground up, such as Vox.com, its general news site.

5. What is the difference between Vox Media and Vox (Vox.com)?

Vox Media is a content company that manages a portfolio of several hundred sites focusing on high quality content in specific vertical markets, including Vox.com. Vox.com is a news outlet covering current events and politics.

6. How does Matthew Yglesias say that he is hoping to achieve at Vox.com?

For Yglesias, success would be creating the single greatest resource available for people to understand the issues that are in the news.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

Case 10.3 ESPN: Sports Broadcasting Evolves 1. How has ESPN handled the rise of Twitter? How has it incorporated Twitter into SportsCenter?

A: ESPN has developed the capability to post to social sites like Twitter and Facebook in a few moments after the action takes place on its cable TV feeds. ESPN recognizes it has to provide sports center coverage to whatever devices and services their customers use.

ESPN has posted about 70 million items to various over-the-top (non-cable) outlets for video like Netflix, Snapchat, Twitter and Facebook.

2. What has ESPN, originally a cable-only service, done to adjust to the rise in users canceling their cable subscriptions in favor of unbundling services?

ESPN knows that cable cutting is growing, and viewers of its content are using alternative sources for sports news. It is trying to build an infrastructure that can deliver live sports content to wherever its customers are located (mobile apps) and whatever device or channel they are using. Delivering sports news anytime, anywhere, any platform.

3. What is the most important show on ESPN? What has ESPN done to upgrade it?

SportsCenter has always been the most important show on ESPN and in 2015 it got a major upgrade, a new 10,000 square foot studio in DC2, the newest and highest-tech building on ESPN’s campus in Bristol, Connecticut, featuring a huge collection of screens, cameras, and cables, designed to be live 18 hours a day and helping SportsCenter move at the speed of the Internet.

Case 10.4 Disney+ 1. Which of the new services has the best chance of being successful, and why?

Barry Diller believes Disney’s Disney+ does, because of its very popular content and the money and money and distribution that the Disney name is putting behind it.

2. What does cable still offer that streaming services do not?

Primarily, live news and live sports. Also, many consumers find it difficult to have to navigate multipe apps, and a cable bundle brings it all together. Cable providers are also at an advantage because they provide the Internet access that makes streaming possible.

3. What kind of approach is NBCUniversal taking?

NBCUniversal is taking a more cable-focused approach, which makes sense given that its parent company is cable company Comcast. NBCUniversal’s service will be free for Comcast’s cable subscribers. It will also be ad-supported. .

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

4. What kind of content will HBO Max offer?

HBO Max will feature content from a variety of assets owned by its parent company, AT&T and Warner Media. It will offer all of the programming already offered on HBO, all of the programming owned by Warner Brothers, and original programming as well.

5. What will be the initial price of a yearly or monthly subscription to Disney+?

The service cost $69.99 a year or $6.99 a month when the service first launched in November 2019. Disney also offered a bundle option that included Disney+, ESPN+ and advertising-supported Hulu, for an unspecified price.

Case 11.1 Instagram 1. Why is it useful to have an Instagram Business profile?

It enables you to monitor real-time metrics on the performance of posts and add additional content to your profile, such as a customer support number.

2. What are some ways a business can use Instagram Live?

Instagram Live is a good method to use for Question and Answer sessions, launches of new products or services, and important announcements.

3. What is a Shoppable Instagram Gallery?

A Shoppable Instagram Gallery is a page you can add to your website that includes all of the business’s Instagram posts. It includes clickable links that customers can use to buy products.

Case 11.2: Small Businesses Find a Home on eBay 1. Visit StreetSounds’ eBay Storefront. What types of items do you see? Are there any auctions?

Answers may vary, but StreetSounds is a fixed-price retailer without auctions.

2. What is StreetSounds’ seller rating? How important is customer service to their success?

As of this writing, StreetSounds had an amazing 100% positive seller rating, which clearly is why customers continue to come back.

3. Look up Selling Manager Pro on eBay’s site. Compare the free and paid versions.

If you were a seller, which version would you opt for?

Students answers will vary. .

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

Case 12.1 Elementum 1. What are some of the unforeseen problems that can happen along the supply chain, according to Elementum?

Elementum lists factory fires, shipping delays, part malfunctions, and demand spikes as four of the many things that can go wrong in the supply chain.

2. What is an ‘issue’, as that term is used within Elementum’s platform??

An ‘issue’ can be created when there’s a problem along the supply chain, and comments and updates regarding that problem are aggregated in one place under that issue. The issue can be tracked from all over the world, and all of the relevant personnel involved in resolving the issue can be brought together in one place.

3. How does Elementum help deal with underperforming shipping routes?

Elementum allows senior management to track the success of various shipping routes in the supply chain in real time, and when some are habitually underperforming, Elementum allows companies to shift production to more efficient routes. For example, Dyson switches its supply to other factories when one of them is suffering from an issue with a certain component.

4. What does Dyson CEO Rowan mean when he says that in business, it’s “not the big that eat the small?” What saying does he suggest is more accurate?

Rowan suggests that rather than the big eating the small, in today’s supply chain landscape, it’s “the fast that eat the slow.” Elementum enables businesses to adjust to issues with their supply chain with unprecedented speed.

5. What does Ken’s Foods Senior Director of Supply Chain say is the greatest benefit of using Elementum?

The greatest benefit is accountability, in terms of who “owns” the next step in terms of dealing with an issue when things do not go as planned. It also enables them to better determine the root cause of problems.

Case 12.2: Century Martial Arts Streamlines with Sana Commerce 1. What are some of the advantages of working with Sana Commerce and RSM that Century Martial Arts identifies in the video?

The fact that Sana and RSM partnered and provided a team approach, including with Century Martial Arts, was key to efficiently implementing the new solution within a tight time frame and on budget. .

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

2. What improvements does the new Sana system have compared to the legacy system that it replaced?

Century’s legacy systems were very restrictive and hampered its ability to grow. The new system has improved inventory accuracy and inventory levels and enables Century to better serve its customers. It offers Century enhanced flexibility and scalability.

3. What types of companies is Sana well suited for?

Answers may vary, but Sana is well suited for small to medium sized B2B e-commerce companies, who may lack the resources or expertise to create their own proprietary online platforms, as well as companies such as Century Martial Arts, that require a solution that integrates both B2B and B2C business models.

.

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

CHAPTER 1

THE REVOLUTION IS JUST BEGINNING The Impact of the Pandemic on E-commerce The Growth of the On-Demand Economy

CHAPTER 2

E-COMMERCE BUSINESS MODELS AND CONCEPTS Glossier Angel Investing

CHAPTER 3

E-COMMERCE INFRASTRUCTURE: THE INTERNET, WEB, AND MOBILE PLATFORM How Freshdesk Uses Amazon Web Services ASOS Turns to Microsoft Azure and the Cloud Facebook’s Data Centers Smart Speakers: Amazon Echo and Google Home

CHAPTER 4

BUILDING AN E-COMMERCE PRESENCE: WEB SITES, MOBILE SITES, AND APPS E-commerce Platforms: Salesforce Commerce Cloud National Kidney Registry Turns to Rackspace for Managed Hosting Building a Mobile App

CHAPTER 5

E-COMMERCE SECURITY AND PAYMENT SYSTEMS The Rise of Cyberwarfare Understanding Bitcoin

CHAPTER 6

E-COMMERCE MARKETING AND ADVERTISING CONCEPTS To Ad Block or Not to Ad Block Pandora’s Recommendation System Verizon Media

CHAPTER 7

SOCIAL, MOBILE, AND LOCAL MARKETING Pinterest The Full Value of Mobile Marketing Yelp

CHAPTER 8

ETHICAL, SOCIAL, AND POLITICAL ISSUES IN E-COMMERCE The Right to Be Forgotten Facebook Privacy What Net Neutrality Means for You

CHAPTER 9

ONLINE RETAIL AND SERVICES Walmart Takes on Amazon Etsy: A Marketplace and a Community

Case 1.1 Case 1.2

Case 2.1 Case 2.2

Case 3.1 Case 3.2 Case 3.3 Case 3.4

Case 4.1 Case 4.2 Case 4.3

Case 5.1 Case 5.2

Case 6.1 Case 6.2 Case 6.3

Case 7.1 Case 7.2 Case 73

Case 8.1 Case 8.2 Case 8.3

Case 9.1 Case 9.2

VIDEO CASES

E-commerce 2021: business. technology. society.

KENNETH C. LAUDON AND CAROL G. TRAVER

CHAPTER 10

ONLINE CONTENT AND MEDIA YouTube: Secrets of Successful Content Creators Vox Media ESPN: Sports Broadcasting Evolves Disney+

CHAPTER 11

SOCIAL NETWORKS, AUCTIONS, AND PORTALS Instagram Small Businesses Find a Home on eBay

CHAPTER 12

B2B E-COMMERCE: SUPPLY CHAIN MANAGEMENT AND COLLABORATIVE COMMERCE Elementum Century Martial Arts Streamlines with Sana Commerce

Case 10.1 Case 10.2 Case 10.3 Case 10.4

Case 11.1 Case 11.2

Case 12.1 Case 12.2