Build a business, not a website essay

In the present paper I am going to discuss e-business of the art organization ArtStar. I will discuss the key objectives for organization developing an e-business strategy and the factors that may act as barriers or drivers. I am going to draw attention to the successful e-business strategy of ArtStar, and advantages or disadvantages of this strategy.

“Build a business, not a website.”

Even though every project is unique, most companies, organizations and project types share many common aims, components, objectives, standards and best-practices. For instance, I would like to discuss a well-known art organization ArtStar.

Chrissy Crawford started her art advisory company in New York City in 2006 and worked mainly with galleries, and private clients concentrating on modern art. She also had a passion for introducing talented artists to new collectors. When the recession occurred, in 2008, too many art lovers were faced with lessen budgets, but their love for art remained the same. Chrissy realized that art lovers needed a method to find and purchase amazing masterpieces without having to hire some art advisors or spend their entire art budget on a single piece. It was the point when ArtStar was born. At ArtStar people are committed to opening the world of modern art to all fans regardless of the budget and knowledge. And there is no better method to reach a larger audience than by means of Web marketplace. That is why ArtStar decided to create a sophisticated Internet site, one that would sufficiently show and frame the best pieces, and would support the tie between artists and their art lovers.

After gathering a team of workers and finding the most gifted artists, the company continued to make an online marketplace where talented people could show their work for collectors to browse and purchase. With a couple of distinct target audiences “adult art lovers” and “the enthused children,” the organization wished two separate store fronts. The challenge: a well functioning marketplace, like the one the organization had in mind, required an Internet page that was very complex and at the same time user friendly. That is when the experienced organization Ecommerce Partners entered the picture.

To ensure ArtStar would correspond to all the requirements and evolve to become a successful e-business, Ecommerce Partners began to develop the site’s strategic foundation leveraging 2 of its key approaches. E-commerce requirement specifications covered complete research and strategy, planning and provided all required guidelines for a successful e-commerce webpage. SEO development component concentrated on present and predictable search engine requirements. Then it was the time to create the site. The Web page feature divided custom functionality for artists, and art lovers and a host of extra add-ons, counting modern wish list, a gift registry, a blog, gift certificates and many landing pages for dissimilar artwork sorts (Ecommerce Strategy. Build a business, not a website).

This company had certain objectives in its e-business. It made a website due to the promotional purposes (to introduce the company, it products and services); for external business integration (electronic contact with customers, artists, and partners); for integrated e-business; for internal integration of current business processes; e-commerce (selling over Internet, better before and after sales customer contact).

To date, the adoption of the Internet amongst retailers has been characterized by a high degree of unpredictability (Neil F. Doherty, Fiona Ellis-Chadwick, 2009). There are many factors that have a noteworthy impact on the level and extent to which retailers utilize the Web as a channel to market. For instance, the Internet’s capacity to deliver physical economic gains; the relative benefits of trading online; the fit between organization product and target market and the suitability of a organization’s knowledge and resources have all been found to influence adoption  levels.

Barriers to Market Entry

Barriers to successful e-commerce include many factors that restrict the capability of new organizations to enter and start working in a given industry. For instance, an industry may want new companies to make huge financial investments in equipment, or present companies may have earned strong loyalties from the clients that may be hard for new companies to overcome. The easiness of entry into some market sphere is one aspect of analysis; the others involve the power held by suppliers and customers, the nature of competition, and the degree to which comparable goods or services may act as substitutes for those provided by the business. It is critical for small business owners to remember all of these industry factors to compete successfully and make perfect strategic decisions. “Understanding your industry and anticipating probable trends provides you with the knowledge you require to react and control part of the industry” (Kenneth J. Cook, 1995). The ease of entry into certain industry is vital as it determines the probability that a firm will face new competitors.

In his work, Michael E. Porter described 6 main sources of barriers (Michael E. Porter, 1998):

Economies of scale. This barrier takes place when the unit cost of products (in this case masterpieces) lessens at the same time when production volume increases. When competitors have reached economies of scale, it acts as an obstacle by forcing fresh firms to fight. Luckily, the sphere of art does not suffer from this obstacle as masterpieces can not be called prime necessities.

Product differentiation. In many spheres, old and experienced competitors enjoy customer loyalty and brand identification. So, new organizations have to spend time and more money to differentiate their goods and overcome these difficulties.

Capital requirements. Another obstacle occurs when new firms are required to invest huge financial resources to compete in the present industry.

Switching costs. It refers to one-time cost that is incurred by a consumer in a result of switching from one product of the supplier to another’s. Some cases include retraining stuff, purchasing additional equipment, technical assistance, and redesigning products.

Access to channels of distribution. Present competitors control all possible channels of distribution through long-standing ties. So, new companies usually have to provide incentives in the form of discounts, promotions and advertising.

Government policy. Government may limit new organizations from entering Internet markets through licensing requirements, limits on access to some materials, pollution standards and so on.

ArtStar managed to overcome the majority of barriers successfully as it was one of the first world’s Internet art portals. So, it did not have many troubles with beginning its e-business. The site combined art-related content and powerful search functionality for: artists, artworks, services, Internet shopping, a library, and a utility section. Today ArtStar has something for everybody, from the art collector to the amateur enthusiast.

Barriers to market entry may alter over time. So, entry barriers should never be considered insuperable obstacles. While the Internet page is very youthful, it already astonishes visitors with sophisticated appearance and functionality. ArtStar’s ecommerce capabilities, active content update, and improved visibility are the key components that guarantee success of e-business.

Key Issues in Implementing E-commerce Strategy

Every site wants to sell, but too few may become successful. The approach of Ecommerce Partners differs from most other agencies. The value they deliver to the clients may be estimated in business terms, including superior Return on Investment, increased revenue and larger traffic.

The first step the ArtStar and Ecommerce Partners made was an attempt to understand the product, the industry, value proposition, the target audiences and the competitive environment. First of all it is very important to make sure that the company has a market and there are people who will purchase online. This was done with the help of concentrated research, collection of information and analysis. Another step was the deciding how to satisfy all the requirements of target audience with the help of use of dissimilar persons by user segment. This guaranteed the huge range of traffic and exchange. Lastly the company created a blueprint and roadmap that outline the project and the execution methods.

The shopping experience should be integrated.  Consumers can purchase easily if their personal information and purchase history is stored for following purchases. ArtStar adapted the shopping process to some certain needs of its business. This completely reduces the shopping cart abandonment rate.

Content must be updated frequently. ArtStar optimized the administration for access by different users, including artists, buyers, printers, and framers. Artists, for instance, may upload own works’ pictures, post and edit biographies, and track sales statistics. Consequently, ArtStar has less administrative nervous tension, and customer service is considerably accelerated.

The purchase process should be extremely easy to use. So, only 13 months after the first public launch, ArtStar has been totally redesigned and has materialized as the world’s first true Internet portal concentrated only on the highly worthwhile, global art (Artstar.com Becomes the World’s First True ArtPortal Completely Redesigned to Focus on RevenueGeneration). The ArtStar technical infrastructure has been rebuilt with other software to facilitate more efficient updates of the webpage. This resulted in improved search results. Additionally, this has allowed for dynamically updated pages that may display information changes immediately. Particularly, newly developed software really reduces the expense of managing, updating and maintaining both content and offerings on the website.

Most importantly, ArtStar hosts three separate channels designed to maximize revenue potential and every channel consists of many revenue streams. Web site has a channel, loaded with content and search features. The second channel is created for artists. It lets them to exploit the vast resources of ArtStar to educate, profile, exhibit and sell their works. This channel has been made with business-to-consumer e-commerce in mind. The last channel is concentrated on the trade and can bring businesses together within the art industry by using site to facilitate B2B e-commerce.

Customer relationship management and personalization should be discussed. The Web suggests many chances for better understanding of customer’s behavior and for creating relationship with them.

It is very important for a company to purchase the appropriate software. There is no need to do the work internally, as there are many nice sorts of software for e-commerce. For instance, there is a dynamic tool so that photos of masterpieces posted constantly come into view in a combined gallery regardless of their size and shape.

A company should have a team. An e-commerce web site requires constant maintenance. Problems have to be fixed, new content should be issued and old one removed, and the Internet site must be constantly marketed.

If the company does not market, buyers won’t come. Creating up a web site is hard: nobody knows that you are there. The organization will need an insistent marketing campaign to reach the target audience. The perfect situation is a flawless integration with strategy of the offline business.

Advantages and Disadvantages of Marketing Strategy

With the advancing technologies that take place in business today, firms have to be prepared, and capable to adapt within constantly changing environment. Companies need to be capable to use various tools that technology may offer. As e-commerce has developed and continues to evolve, it is significant that any company, in any particular sphere of business, must base strategic planning around rapidly growing medium.

The ArtStar uses the strategy of remarketing. It allows marketers to convince a potential client, who previously visited the Web page but did not buy anything – to visit the page one more time, but this time to purchase. The major idea of this strategy is to transfer a simple visitor to a paying client, avoiding neglect of shopping cart.

The advantages of this strategy are as follows:

1. Noteworthy increase in profits due to the fact that the notion of revisiting is to finish a deal that was not completed before.
2. The strategy is really cost effective. It is cost effective as the Web business can reduce expenses for marketing advertisements, because businesses may simply do the follow-up marketing either with the help of email, calls, or, merely by utilizing the same ads – but with another pricing.
3. Online companies may also save time and money by doing follow-ups on certain customers only, like those who earlier tried to acquire something.
4. Creating modifiable price quotas is another benefit of e-commerce strategy. This is because if price lists are visible and available by the client, and if the company finds out that another Web site is reducing prices on the same goods – the firm may have a choice of reducing prices as well.

The disadvantages of the strategy are the following:

1. The organization can’t insure that e-commerce strategy might work on the client. Sometimes customers that abandoned shopping cart were never actually interested in products.
2. Remarketing does not concern Web pages that do not ask for email or other details from customer. This is particularly true with sites that include merely fundamental information about the firm and goods.
3. Privacy issues on browsers limit the success of remarketing campaigns, like in case when the person’s cookie is not set-up to obtain advertisements. Besides, e-mails sent to potential clients might be considered annoying spam, making the whole campaign ineffective.
4. On the consumer’s opinion, steady advertising that may be seen in a form of pop-up messages may be considered irritating and provide a very negative result.

The appropriate e-commerce strategy is an effective method to increase the business. This is likewise a perfect way of keeping existing clients updated – by informing them of new goods. And, it may be an excellent way of ensuring the long-lasting membership of customers and profits for the art organization. Obviously, ArtStar took into account all disadvantages and advantages of the strategy of remarketing, as according to recent analysis this organization became a very successful art service provider.