Week 10

I think that web personlisation is a very useful tool that helps customers and users alike, feel more comfortable online and gain a more pleasurable experience when visiting said websites. Essential it would be akin to a customer walking into a shop, to find only the things that interest him/her, i.e. websites such as Amazon use this capability alot, when a user visits the website, Amazon presents products that the user would be interested in. Not only can amazon choose which products can be displayed, but websites alike to amazon, have the option of letting the customer decide which products will be displayed when they log onto the website. This will result in a more enjoyable visit (and possibly more profitable in the case of selling products orientated toward the customer).

One of the methods Amazon uses is ‘Collaborative Filtering’. Amazon recommends products to customers by categorizing products into groups and having a similarity drawn between them. When a customer searches for a product, they can veiw said products, but will also be shown what other products people have purchased after they purchased the very product the customer is searching for.

Maybe 9 times out of 10 the suggested product would be related to the product initially searched for, but sometimes an unrealted product could be shown.

Another method is content based filtering. Amazon also uses this method, i.e. a user will be shown products related to that of which they have previously purchased in the past. So if a customer has a history of buying horror novels, then amazon will, obviously, suggest the latest horror novels to the user. It will not only just interest the user, but will also help sales on Amazons side

 

Obviously there are advantages and disadvantages web personalization.

• Having a customized and personalized view of a website will obviously create a more productive session for the user

• The customized product placement toward the customer will result in higher sales

• Personalization is more effecient

 

Week 7

What is Cloud Computing?

Cloud computing is a term for anything that involves delivering hosted services over the Internet, or ‘Cloud’.

Cloud computing is a systems architecture internet model based development using computer technology. The use of cloud computing describes how a user to access computer technology services via the ‘cloud’ without actually kowledge of, or control of the technology on the other side of the ‘cloud’.

There are three categories in which these services can be defined;

Infrastructure-as-a-Service (IaaS)
This is the idea of using a technical infrastructure for your said application, essentially so that you don’t have to worry about what hardware you have direct access to.

Platform-as-a-Service (PaaS)
This is the idea that someone can provide the hardware (much like in IaaS) but also providing a range of software. This software could for example, be a database. They provide the Infrastructure and the Software.

Software-as-a-Service (Saas)
This is the idea of someone offering you the use of software, which you don’t own but pay for the rights of use. The user has no need for development or programming, but may need to configure and customize the ready made software. They provide the Infrastructure, Platform and Structure. Essentially, the full package.

Benefits of cloud computing

The primary benefit of cloud computing is the cost. The fact that you usually on pay for the services that are used, then essential, if you have little business, you only pay out a small cost, whereas on the other end of the spectrum, plenty of business will lead to higher running costs. This is a serious alternative to paying out a large single one off cost for a set software / service package.

If problems arise within the software/service, it is up to the provider to recitfy the problem, not the business that is currently using the service as a product.

Drawbacks of cloud computing

One drawback of cloud computing boils down to international laws and regulations, for instance; A service being offered through cloud computing in the UK, may comply 100% to UK law and regulations, whereas if a user in the USA decided to use this cloud computing service in America, then the same regulations set for for UK would not apply in USA.

Week 6

Using your chosen e-commerce company, analyse their strategy for management of the upstream and downstream supply chain.
Concepts that should be included, where appropriate, are as follows:

• Push vs pull supply models
• Vertical integration vs disintegration vs virtual integration
• Evidence of value networks
• Evidence of efficiencies in supply chain

Neopets are effectively providing a service to the customer. The service they provide is designed in house, at the neopets head quarters in USA. When a new service, or sub service, is available, all the Neopets customers (the users) can avail of it once it goes online.

In a similar way to how, say, PC World would have suppliers of components, and the component supplier would have parts suppliers, Neopets has a similar architecture within its system.

It does not source parts or components, but rather has in house designers continually working on and updating the servers and systems, in order to keep the service being provided, at the best it can be.

From the very basics, there would be a team of programming coders, all working for various Team Leaders. This could be compared to Suppliers working for Intermediaries. When this is all brought together, the service can be provided to the user.

Push v Pull

Neopets would use a mostly Push supply model. Although the users have some say in what services they would like to see implemented onto the website, it is ultimately up to the Neopets staff and team, as to what services they will provide. The coders will work within their own ability, and within technological limits. The customer will always want more, and better services, but they ultimately, the fact millions of users use the service that Neopets provides, is evidence enough to support the Push supply model at work.

Vertical Integration vs Vertical Disintegration vs Virtual Integration

Vertical Integration is the case where a business does most of the manufacturing (or coding) in house. Vertical Disintegration would be the opposite; the business would out source suppliers of manufacturing (or coding). Virtual Integration has the company relying totally on linked third parties.

I believe that Neopets is near 100% Vertical Integration. They employ a vast team of coders to build, work on, and maintain the service they provide.

They may on occasion however, employ outside sources in exceptional circumstances, such as sourcing new physical parts for the service; faster, more powerful servers, new software for the server, and other such things.

Evidence of value network

Value networks are a network of different resources which collaborate together to produce goods for a customer. Internal and External value networks exist. External would be a network of outside sources working together to provide a product for a company to pass onto customers, whereas an internal network would be a team of in house teams collaborating together to provide a product or service.

Neopets would obviously have an Internal Value Network, namely the team of coders that are employed to product and maintain the coding and servers used to provide the service to the customers.

Evidence of efficiencies in supply chain

Neopets would defiantly rate highly in efficiency, as 100% of the customers who come to, and use Neopets will be using the service that is being provided. Albeit, some users may only use some of the services, other users may use different areas. Though it can almost be guaranteed that 100% of the code being developed will be used by at least some of the  25 million + users.

Neopets can identify which areas are popular and require further development, and those which are less popular and require less man hours and resource dedication.

Week 5

The threat of substitute products

Neopets.com is a pretty unique business. It would be viewed as the dominant business of its kind, so the threat of other websites/businesses coming and stealing the limelight is minimal. However, the fact that Neopets.com is an internet based business, the difficulty in designing a similar type web business would be relatively simple. Neopets.com has itself established and really is the dominant business of its type.

The threat of the entry of new competitors

Like when mentioning the threat of substitute competitors, a new competitor would have to establish itself first to be of any competition at all, and thankfully for Neopets.com, being so dominant ensures little competition will arise. If a new web business similar to Neopets.com came along, the question is, ‘why would users change to this ‘new website”

The intensity of competitive rivalry

Due to the nature of Neopets.com, trying to compete with rivals by offering cheaper and cheaper products is not practical. Neopets.com is a free website to be part of, as are Neopets.com competitors. The only kind of competitive rivalry that would exsist, would be offering more and more for the users of each website. Neopets offers thousands of games, activities among other things. Again here, they are dominant at this.

The bargaining power of customers

Neopets.com is a free to join website. Those who operate the business, know to well, that if Neopets.com was to change to a paid website, numbers would drastically fall, (as how many 8-18 year olds would want to pay a monthly or yearly fee). Neopets.com know this, hence why it is a free website. They also take advantage of how customers want everything for free, or lots for nothing. Neopets can invest not through money, but by offering a free service, knowing that customers will definatly come to, and use the service. They incorporate advertising within the free service that they provide, and in comes the money.

The bargaining power of suppliers

Neopets.com’s only resource needed to operate the website and business would primarily be, man hours, and servers. The entire business operates from the servers they own and operate. They do not require a constant source of raw materials, this has Neopets.com at a real advantage

Week 4

Q.7 Look in detail at the terms and conditions for purchasing from your site. Are they reasonable? Comment on anything unusual or unreasonable that you find. What about returning goods? Describe the kinds of support provided by your site, for example, does it provide customer call back or does it give terms for returning goods. Do you think that it is better or worse than the competition? Explain your answer.

Purchasing products on Neopets.com is not the websites primary aim, it is more to do with customers ‘signing up for an account’. Terms and Conditions still apply.

The main theme on the Neopets.com terms and conditions is all about the user having fun, whilst being safe. They emphasize how the user should be safe, and web wise.

Q.8 Examine the registration process for your site, from the perspective of security. Is your data encrypted? What does this mean?

Although when signing up for a Neopets account, the user is not required to submit credit card details, security is still taken seriously. However, any information that Neopets collects is still valuable and highly sensitive material, including contact details for millions of under 18 children. According to the Privacy Policy on the Neopets.com website, they have put in place, the appropriate physical, electronic, and managerial procedures in order to protect the information they collect.

Phishing is a common technique fraudsters use in order to obtain details from a selected target, and young children, being young children are quite unaware at times, of such techniques being used against them. Neopets.com notifies users time and time again how they will never contact users asking for their passwords or any other details.

From the Neopets.com privacy policy:
” WE DO NOT SEND EMAILS ASKING YOU TO PROVIDE OR CONFIRM SENSITIVE PERSONAL INFORMATION OR YOUR USERNAME OR PASSWORD! If you receive such email communication, please forward it immediately to the Site’s Privacy Administrator at Privacy.Neopets@Neopets.com and then immediately delete the fraudulent email from your computer.”

Q.9 Does the site use cookies? Find out what cookies are, and explain how cookies are used in, for example, your site.

Cookies are small files which are stored on a users computer. They basically hold a small amount of data in relation to the website they belong. They allow the website to gather details in order to deliver a page that contains information that the user will find relevant at a later date.

From the Neopets website,

“Neopets.com uses a software technology called “cookies.” Cookies are small text files that we and certain third parties place in visitors’ computer browsers to store their preferences. Cookies, by themselves, do not tell us your e-mail address or other personally identifiable information unless you choose to provide this information to us by, for example, registering at our site. However, once you choose to furnish the site with personally identifiable information, this information may be linked to the data stored in the cookie.“

We can see that Neopets does use cookies, and understandably we could guess were the cookies come into play, such as when browsing for items, which games the user plays the most etc, the sections of the website that the user uses most often, will be displayed on the main home page for quick ease of access.

Week 3

Q4:

Neopets, being an online Virtual raise your own pet World, is in such a defined category. It does not covered a wide range, like that of a fashion retailer (mens, womens, childrens clothing), but rather, a more specific target. There are not too many websites like Neopets, but those that do exist, pose great competition due to the niche category that it serves.

It appears that Neopets.com main competitors are;

Club Penguin – A Disney owned website – founded in 2005, bought by Disney for $700 Million, in August 2007. Has annual revenue of appros £70 Million.
WebKinz – Founded in 2005, employs over 8,000 people. Has an estimated annual revenue of $750 million.

Using Google Trends, we can see how the searchs for the 3 websites, and the visits to the  3 websites varies.

 

We can see in the above diagram how, the searches for Neopets (Blue) is well established prior to 2004. We can also see how Webkinz (red) is established in 2005, noting how at around Christmas time, likely due to marketing, Webkinz search volume rises dramatically. Club Penguin (yellow), also established in 2005, does not take off, in terms of search volumes, as much as WebKinz does, but still competes with Neopets after about 2 years.

 

Now looking at the actual Visitor Statistics (again, using Google Trends), we can see how in the Jan-April 2008 period, Webkinz (red) peaks with around 1 million visitors per day, compared to Club Penguins (yellow), 500,000 visitors per day, while, at this stage, Neopets daily visitors is just under 500,000 a day.

We can observe how from about August 2008, all three websites starts to see a decline in Daily Visitors (although, Neopets was already on the decline from about mid 2006, (according to the search volumes above)

Q5:

Although Neopets is primarily a Virtual Online World, you can still purchase Merchandise. I will however look at the step by step processes required in order to both, sign up for a membership on Neopets, and to purchase merchandise.

Signing up;
step 1: go to http://www.neopets.com
step 2: click on the large, ‘sign up now’ banner on the left hand side
step 3: create a username and password, and agree to the privacy policy, click next
step 4: fill in your personal details, click next
step 5: enter your email address, click next
step 6: you are then asked to create your own virtual neopet
step 7: you are ready to go

Purchasing Merchandise
step 1: go to http://www.neopets.com
step 2: hover over the shops menu, and click ‘merchandise’ on the drop down menu
step 3: click on ‘buy from Target’, this will direct you to the Target website
step 4: here, you will have to go through a similar process of signing up for an account, registering, then purchasing your product
step 5: after payment, the product will be delivered to your house

Q6:

Due to the fact that Neopets earns its money, not through merchandise, or selling products, but rather, through users actually visiting the website, and viewing advertisements, I believe the best new route for Neopets would be through the mobile media.

Almost the entire user database registered to Neopets will own an mobile phone, and it is becoming increasingly common for users to use the internet via their mobile phones. It would only make sense for Neopets to expand to the mobile phone interface.

Kids could do most things they could normally do on their PC, but use their mobile phones instead.

Week 2

Neopets is an extremely popular virtual pet website / online game community. It was launched on 15 November 1999 by Adam Powell and Donna Williams.

What is Neopets?

 Neopets is basically an online world based around virtual pets, all contained within the virtual world of Neopia. 5 years after its launch in 1999, it was bought for US$160 million by Viacom, and now finishing it’s 10^th year running, its revenue is more than US$30 million per year.

 Users create an account, and can take care of a number of virtual pets, buying them various items such as food, clothes, toys and much more. The users buy these items using Neopia’s virtual currency, Neopoints. Neopoints can be earned in a variety of different ways; playing games, trading, winning contests, opening shops, or trading through the game’s virtual stock market.

Neopets Homepage

As previously stated, Neopets’ revenue is US$30 million per year. Neopets employ 150+ people in their office in Glendale, California.

In 2005, it was mentioned that there were 25,000,000 active users on the Neopets website. Of these, 40% were between the ages of 13-18, 20% were over 18 years old.

60% of the revenue made by Neopets, is made using immersive advertising. This would involve advertising using Items users can buy, adverts integrated in the hundreds of games that can be played, and in the Neopia Market Place.

In February 2008, comScore ranked Neopets as the stickiest kids entertainment site with the average user spending 2 hours 25 minutes per month on the website. This leads to advertisers paying big bucks for their brand to be included on the Neopets website.

Neopets state that 60% of their US$30million revenue comes from placement advertising and immersive advertising, where does the other 40% come from?

Neopets offer users a wide range of offline products such as soft toys, books, stickers etc. They retail at outlets such as Wal-Mart, Target and Limited Too and some online retailers. Each merchandise has a prize code which can be used on the website, this is Neopets plan to bring the online and offline worlds together. In 2005 neopets secured some film and video game deals.

Neopets Plushies

Week 1 – Internet Usage Statistics

For week 1 of my COM425 module (E-Commerce), I have been asked to research ‘Internet usage statistics in the United Kingdom’

Currently 18.3 million households (70%) in the UK have access to some form of Internet. This is an increase of just under 2 million (11%) households in the last year, and a 4 million, (28%) increase since 2006.

Although 70% of UK households have access to the internet, across the region it varies, for example, in London, 80% of households have access, compared to just 62% in Scotland.

90% of the households that have an internet connection, have a broadband connection, this has increased by 9% from 2008.

We can see in the graph below that as broadband continues to grow, other methods of internet connection (apart from mobile internet, which I will also discuss later) are dropping.

Internet Usage

According to InternetWorldStats.com, there are 48,755,000 internet users in the UK.

This is nothing however, when compared to China and the USA, (338,000,000 and 227,636,000 respectively).

What sets the UK apart from the likes of China is the Penetration Rate, (or the % of population with internet access). 79.8% of the UK population has access to some form of internet compared to only 25.3% of China’s population, despite the 338 million accesing the internet in the first place.

Social Networking

Along with the growth of Internet Usage in the UK, we can see similar growth in social networking websites.

16% of those with internet access are between 15-24 years old (about 7.8 million users), and for that age group, social networking websites are popular.

Social Networking Graph - Facebook (blue), Bebo (red), Myspace (orange)

The diagram above (created using Google Trends) compares Daily Unique Visitors to facebook.com, bebo.com and myspace.com.

We can see that for 2009, there are over 2 million unique visitors to facebook everyday.

Mobile Internet

Like most people, when thinking of accessing the internet, most people imagine the usual PC or Laptop, but more recently, a growing number of internet users are accessing the internet through their mobile phones.

During the 2nd and 3rd Quarters of 2008, 7.3 million people accessed the internet via their mobile phones.

The mobile internet audience is generally younger than PC/Laptop users. 25% of mobile internet users are between 15-24, compared to just 16% for PC users, we can assume that this is because high tech mobile phones that can access the internet, are more popular with 15-24 year olds.

While on the other end of the spectrum, 23% of PC/Laptop users are 55 or over, only 12% of the same group are mobile internet users.

Accessing the internet on the go via your mobile phone seems to be a growing trend, an increase of 25%, compared to just 3% increase for PC users from Quarter 2 to Quarter 3 of 2008.

All in all, from all the statistics discussed here, we can assume that growth in households obtaining access to the internet, particularly broadband, is slowing down, whereas Mobile internet access is on the increase.

Resources;

http://www.statistics.gov.uk/CCI/nugget.asp?ID=8
http://www.internetworldstats.com/stats4.htm
http://searchengineland.com/nielsen-uk-mobile-web-growing-8x-faster-than-pc-internet-15604
http://www.google.com/trends

http://searchengineland.com/nielsen-uk-mobile-web-growing-8x-faster-than-pc-internet-15604