E-Commerce

1
E-Commerce

• Hai Hoang
• 4/25/2005

2
Outline

• Definition
• Why use E-commerce?
• Current State of E-Commerce
• Barriers in Adopting E-Commerce
• Motivations for CBR
• Using CBR to Provide Intelligent Support
• Why database search is not good enough?
• Phases of Sales in E-commerce
• Demo
• Conclusion

3
Definition

• E-Commerce typically refers to the exchange of
• 1) information
• 2) goods
• 3) and services
• Through electronic networks

4
Why use E-commerce?

• Can be summarized as providing incentives
• Incentives
• Browse catalogs without leaving house or office
  (convenience)
• Shop anytime, anywhere
• Compare prices from different vendors (variety)
• Cheaper prices
• Direct from supplier without 3rd parties
• No Tax if store is out of state
• Oops, all from the customers perspective, -
  sellers also benefit from e-commerce too

5
Why use E-Commerce?

• Seller
• World-wide customers
• No need for a physical store
• Cheaper to setup a store
• Maintenance cost?
• (packaging cost? Example software)
• Hire less workers
• And a lot more depending on the business

6
Current State of E-Commerce

• Online sales represent 5.4 of all retail sales
  in 2004
• By 2008, it has been estimated to only reach
  about 10.
• With all the incentives listed on the previous
  two slides
• Why is it only a small percentage of all retail
  sales?

7
Barriers in Adopting E-Commerce

• What kind of barriers?
• Tannenbaum summarizes into 3 words
• Confidence security, privacy, liability
• Convenience easy of access, use, purchase, and
  get support
• Content variety of products and services
• Which one can CBR help to overcome?
• Make the it more convenient

8
Motivations for CBR

• On the Internet, companies only have computers
  to represent them.
• They better be intelligent computers.
• Chuck William, CEO Brightware

• The answer CBR???

9
Motivations for CBR (cont.)

• Dell I want a gaming computer that could support
  the latest game, ie Half-Life 2
• Preferred System Configuration
• 2.4 GHz Processor 512MB RAM DirectX 9 capable
  graphics card 256mbWindows 2000/XP/ME/98
  Internet Connection
• Example Dell fails to provide the sale support
  (show example at dell.com)

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Using CBR to Provide Intelligent Support

• How can we use CBR?
• search, select, and support.
• Refine searching capabilities
• Traditional database queries is not powerful
  enough
• Reduce required domain knowledge
• Therefore, reduce customer support staff

11
Why database search is not good enough?

• Whats wrong with a huge database with a search
  database search engine on top of it?
• Too many results
• Provided that the search engine is good. It
  could narrow down the search for you very well.
  What else could be wrong?
• It fails to provide sales support (tailored
  recommendations)
• Remember the Dell example???

12
Phases of Sales in E-commerce

• 3 phases of sales
• Pre-sales
• Sales
• After-sales
• All 3 could use CBR to provide support

13
Pre-sales

• Customer has an idea of what he wants to buy
• Customer attains information about products and
  services
• Traditional way is electronic catalogs and
  databases

14
Pre-sales presenting products

• Index Ontologies
• Amazon.com

• Requirements based
• Expedia.com

15
Pre-sales Misses

• With index onthologies
• Too many results
• Specific speaker might be listed in a different
  category
• With requirements based
• Typos
• What if there is a date close by the one
  specified?
• What about close by airports?
• Special deal for the specific destination?

16
Pre-sales Misses example

• Example at expedia.com
• (Flight search)
• (Last minute packages)

17
Pre-sales CBR example

• Analog Devices
• Travel Agency
• Last Minute Deals (no implementation yet)
• (DietoRecs)
• (Nut King)

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Analog Devices Example

• Analog Devices makes electronic parts
• Most of the calls to their support number is
  because they cant find the desired parts by
  looking in the catalog.
• Solution create an online store that allows
  engineers to find desired parts based on
  functionality using CBR

19
Analog Devices Example

• A case is represented with 40 parameters (String,
  integer, symbols)
• Type, input/output voltage, size
• Parameters are divided into a few categories
• System creates a query based on these parameters,
  using a few or all
• www.analog.com for example of UI
• (Note the priority checkbox)

20
AD Similarities (discrete)

• similarities are calculated by applying local
  similarity measures.
• Note table is asymmetric

21
AD Similarities (continuous)

• Represented as a function instead of a table
• Anything greater than query, 1, otherwise, its
  from 0 to .5

22
Travel Agency

• Interactive
• Expedia, Orbitz, Hotwire
• Nut King, DieToRecs (CBR)
• Interactive Last Minute Deals
• Somewhat available at those sites mentioned above
• CBR to recommend close matches

23
Travel Agency (cont.)

• Last minute deals are sold as-is
• Used to be distributed with flyers
• Up to 200,000 deals sold in peak season
• could be represents as cases
• When user search for a destination, recommend
  similar deals

24
Travel Agency (CBR impl.)

• Treat deals as cases with attributes
• Recommend deals with intelligence using CBR

Search 1.) January 2.) Blue Mountain 3.) Skiing,
Hotel 4.) 1 day 5.) 50 - 100
Response 1.) January 2.) Bears Creek 3.)
Skiing, Hotel 4.) 1 day 5.) 89
No match at Blue Mountain
Suggest closest case
25
Sales Phase
CBR
26
Sales (CBR Cycle)

• Might have to go through the cycle a few times
  before user accepts the proposed product.
• Each time users evaluation refines the demand
• Retain phase must not take place because a
  successful sale does not lead to a new product in
  the product base

27
Negotiation During Sales

• During the negotiation process, the buyer and
  seller refine the problem description and the
  product description to solve the customers
  problem
• The seller should help the customer to make a
  decision not tell them when their requirements
  are fullfilled

28
CBR in Negotiation

• Active or Passive Sales Agent
• Active suggest a particular modification of a
  demand to the user
• Passive Offer possible modifications to the
  user, the user pick what to modify
• Modification of the Demands vs the Products
• Ex free gifts or configurable products

29
Sales

• Over or Under specification of customers demands
• Need to relax the demands
• Can see this at Nut King and DieToRecs

30
After the Sales

• Support
• CBR in online help systems
• HP, Gateway, Dell, and 3com have been using CBR
  in their online support system
• The reason? Call-avoidance

31
Demo

• DieToRecs
• http//eu-project.hgb.tiscover.at/dialogservlet
• Nut King
• http//itr.itc.it8080/dev/jsp/language.do?action
  english

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Conclusions

• E-Commerce is still only a small portion of the
  retail market there is a lot of potential for
  growth
• CBR can be used with all 3 phases of the sales.
• Help to narrow down the search result
• Make intelligent suggestions
• Make online system behave more like human sales
  agents
• Provide intelligent support

33
References

• Intelligent Sales Support with CBR. Wolfgang
  Wilke, Mario Lenz, Stefan Wess
• Experience Management for Electronic Ecommerce.
• Francesco Ricci http//ectrl.itc.it/home/home_peo
  ple/ricci/ (last visited April 20, 2005)
• (online e-commerce stat) http//retailindustry.abo
  ut.com/od/seg_internet/a/bl_nrf052504.htm
• (online shopping benefits)
• http//wiki.media-culture.org.au/index.php/Online
  _Shopping_-_Benefits_for_Buyers
• (half-life 2 spec)
• http//www.ultimate-gamer.com/halflife2/hl2.htm
• (DieToRecs)
• http//eu-project.hgb.tiscover.at/dialogservlet
• (Nut King) http//itr.itc.it8080/dev/jsp/language
  .do?actionenglish