Example research essay topic: Analysis Of E-commerce And Keys For Succesful Companies – 1,228 words

The number of American households shopping on the
Internet is increasing every month. In the month
of February, 13.5 million households shopped
online compared to 13.3 million in January. Per
person spending increased from $228 in January to
$308 in February (Enos, 2001). Old Economy
companies have taken notice and are moving quickly
to embrace this new sales channel. These companies
realize that the use of the Web will help to cut
costs, find new customers and keep the ones they
have (Schoen, 2001). A recent survey by
InformationWeek Research found that 65% of
respondents say the percentage of their companies
total revenue being generated by E-business grew
in the past twelve months (Murphy & Heun,
2001).

Developing a company web site can be
expensive. A small site with 25 pages can cost
more than $200,000 and larger sites with hundreds
of pages can easily exceed a total of $1 million
(Jarvis, 2001). This does not even include costs
to handle customer service, product fulfillment,
marketing, transaction security, payment services,
and site maintenance. To save money, many of these
companies are outsourcing their E-business
activities to New Economy companies called
Commerce Service Providers (CSP). One particular
CSP that I feel is the leader at helping companies
grow online sales is called Digital River based in
Eden Prairie, Minnesota. This term paper will show
how Digital River is so effective in helping Old
Economy companies market and sell their products
over the Internet.

DIGITAL RIVER SERVICES Defining
what a CSP does is becoming more difficult as
these companies continue to add to their offerings
and change their scope. A general definition of a
CSP is a vendor that supplies the system and
services to establish the infrastructure for
E-businesses. This can include processing secure
transactions; collecting payments and issuing
e-mail receipts; managing customer relationships;
and fulfillment processes (Nesdore, 2001). Digital
River is one of the best examples of a CSP who has
extended its reach. To gain an understanding of
what services Digital River offers, I have
included the following paragraph from Digital
Rivers web site. Digital River, Inc.

is a Commerce
Service Provider, providing over 8,000 companies
with e-commerce solutions. The Companys
front-to-back E-commerce services include site
development and hosting, order and transaction
management, system integration, fraud screening,
product fulfillment, e-marketing and customer
serviceThe Company was incorporated in 1994 and
conducted its first online sale through a clients
Web store in August 1996. Digital Rivers
proprietary commerce network server (CNS)
technology serves as the platform for the Companys
solutions. The CNS incorporates custom software
applications that enable Web store authoring,
electronic software delivery, fraud prevention,
export control, merchandising programs, and online
registration, and features a database of more than
100,000 software and digital
products(DigitalRiver.com, 2001). As one can see,
Digital River offers many E-business services. I
will discuss two specific Digital River services
that help grow a companys online sales: digital
and physical fulfillment services; and
merchandising and analytical marketing services.

I
will also discuss how Digital River is handling
increased public concerns about privacy issues
with online shopping. DIGITAL AND PHYSICAL
FULFILLMENT Online product fulfillment costs tend
to be large and will create major cash flow
headaches to those companies who have not already
built the infrastructure nor have a core
competency in this area (Mahoney, 2001). Digital
River has spent millions of dollars over the past
few years building such an infrastructure. Digital
River simply rents out the use of and the
expertise in operating this advanced
infrastructure for a fee much lower than what a
company would spend using an internal IT
department. The burden and cost of constantly
upgrading the system is on Digital River. If the
company decides to end its E-commerce activities,
they can walk away without having spent a large
amount of up front money.

PRODUCT FULFILLMENT
Digital River handles the entire product
fulfillment cycle. They streamline the interaction
among a companys manufacturers, distributors,
resellers, dealers, and retailers into entirely
online processes and will manage any third party
fulfillment providers. They also have the ability
to meet all customers unique needs with pick, pack
and ship functionality or bulk shipping if
desired. This whole process adds to the quality of
service that companies must offer their customers.
PRODUCT RETURNS Synonymous with product
fulfillment is the handling of returned products.
A key to customer retention is customer service
(Mahoney, 2001). The ability to easily return an
unwanted product is part of the entire customer
service experience. In my own personal experience
of online shopping, I find it difficult to
understand the return policies of Web sites.

For
the return policies I do understand, I find the
procedures complex. On the other end, companies
find it difficult to manage product returns.
Digital River simplifies this process by a system
that provides a returns information sheet to
customers via a serverbased Java servlet, which
approves or rejects returns based on manufacturer
information. The system can provide a shipping
label and bar code to ship materials back to a
receiving port, which scans the code to log the
return (Nelson, 2000). As one can see, this
managed returns system is a value-added service
that companies desire to identify to their
products. DIGITAL DOWNLOADS Digital River has made
its name on being the largest provider of software
downloads over the Internet. Digital delivery
eliminates many of the costs that exist in the
physical distribution chain, such as
manufacturing, packaging, shipping, warehousing,
and inventory costs.

These reduced costs increase
margins for the software publishers and online
retailers. Digital downloads also solves the shelf
space problem which can constrain product
availability and sales. The adoption of broadbrand
technologies such as fiber optics, cable, DSL, T1
lines, satellite and wireless will increase the
market size of users of digital downloads. Today
ten percent of all Internet users utilize
broadband technology and this number is growing at
a robust rate (Gosselin, 2001). The cost savings
of digital downloads is one most companies will
look to use in the future as broadband usage
reaches critical mass. E-MARKETING The rise of the
Internet has resulted in the largest paradigm
shift in marketing since direct marketing
one-upped mass marketing in the 1970s and 1980s
(Wilson, 2001).

The Internet shifts control from
the marketer to the consumer. Internet users
choose what they want to see and how long they
will see it. New technologies capture data on
consumer preferences and habits in order to build
profiles of individuals. That allows marketers to
serve up the right product at the right time to
the right person, instead of forcing the consumer
to surf through a site to find items of interest
(Wilson, 2001). This results in marketers moving
from push marketing to pull marketing. Digital
River offers an expertise in Internet marketing
that helps companies address this problem.

DIGITAL
RIVERS E-MARKETING SERVICES The E-Marketing
service of Digital River helps their clients
manage the risks associated with E-commerce.
Manufacturers are good at making products but are
lousy at most forms of E-commerce (Leibs, 2000).
Digital River helps manufacturers and software
developers to develop online sales plans, then
build, and execute programs that meet agreed upon
growth objectives. Typically, clients using
Digital Rivers E-Marketing Services show increases
in revenue up to four times over non-users of the
services (Business Wire, 2001). To get the best
results, Digital River recommends that companies
combine offline-marketing tactics with a variety
of online tactics. Some of the online tactics
Digital River has an expertise in and how they
help companys online businesses will be discussed.
….

Research essay sample on Analysis Of E commerce And Keys For Succesful Companies