Online Stores: System Architecture

"E-Commerce" is commonly viewed as "the sale and purchase of products and services over the internet, which includes the sharing of business information, maintaining business relationship, and conducting business transaction by way of Internet based technology" (Hsu, 2006). "Online retailing" can be defined a business model of e-commerce that uses Internet-based technologies to "facilitate efficient and effective shopping, purchasing and delivery of goods or service" Shopping is browsing and searching; purchasing is ordering and paying; delivery is post-sale service.

Several attempts in the literature have been made to depict the architecture of online stores. To analyze business-related Internet strategies, Anger (1997) developed a framework which divides business opportunities created by the Internet into four architectural spaces: the virtual information space (VIS), the virtual communication space (VCS), the virtual distribution space (VDS), and the virtual transaction space (VTS). Lieu and Barnett (2000) divided functions of e-commerce websites into three structural phrases of marketing activities: pre-order, online sales, and after sales. In Crowley's (1996) view, an Internet online transaction is generally consisting of five structural components: promotion, one-to-one contact, closing, transaction, and fulfillment. Taking a customer-oriented approach to commercial website design, Wan (2000) expanded and modified Rowley's component structure to focus on four core structural processes: promotion (advertising, brand identity), pricing (catalog), transaction (ordering, delivery, logistic, payment), and services (information search, advice). Finally, Yeung and Lu (2004) developed an analytical grid framework to address the functionality of commercial websites in general. The grid covers a multitude of websites functions across a wide range of electronic commerce activities including advertising, sales, customer service, distribution, financing, and market research. The grid also classifies website functions into four types: information, communication, downloading, and transaction.

In summary, a high-level system architecture of online stores can be categorized into the following modules:

  • Catalog: Customers are able to navigate product categories within a single or multiple levels of category structure. A list of products will appear depending on a customer's selections through such a product structure. Often the customers are given alternatives to filter products by name, brand, and/or price. The product description page offers the customers additional details of product information such as product review, product comparison, and price comparison. The search feature allows customers to type in the product description and/or item number in order to find the product without having to navigate though the product structure. After the customers type in their interested item/description, a list of relevant items will appear on a page.
  • Marketing: To increase Internet awareness and competitiveness, online stores are often designed and structured in a way to effectively pursue a Search Engine Optimization (SEO) campaign. As a common strategy of product promotion, new and bestselling products are organized and presented in a fashion to successfully attract visitor's attention. To retain existing customers, coupons or other incentive programs are integrated into the online stores' shopping workflow. Finally, customer's purchasing and browsing history can be collected and analyzed by the online stores data warehousing tools to support other niche-driven marketing campaigns.
  • Communication: Businesses use various media to communicate with their current and potential customers. Using the Internet technologies, online stores can extend a traditional market space to a powerful virtual community where economic agents can meet to exchange ideas and experiences, influence opinions, negotiate potential collaborations, lobby, and engage in relationships. Web applications such as RSS feed (e.g., new product announcements), discussion board (e.g., FAQ and Help desk), blog (e.g., customer testimonials), and others are being integrated into online stores for this purpose.
  • Transaction: Each visitor is assumed to be carrying a "shopping cart". Each item that a customer is interested in purchasing can be saved into the shopping cart. During the shopping process, the customer can maintain the shopping cart by deleting an item, increasing the purchased quantity of an item, or simply emptying the whole cart to start it over. Previously unfinished cart items can be saved by the online store and rendered to the corresponding customer for his/her next visit. The items in the cart are usually listed in a format including product number, product description, purchased quantity, unit price, sales tax, subtotal, and so. Once the shopping is done, the customer will proceed to the payment (.i.e. checkout) process where he/she supplies necessary information related to payment, shipping, and discount. If the online store is account-based, it will ask each customer to complete the payment process by creating a personal account or signing in by using an existing account. After the payment process is done, the online store will activate a series of billing actions before approving the transaction. Once the transaction is approved, the online store will send and order confirmation to the customers, close the shopping session, and archives the transaction. 
  • Fulfillment: Products sold online should ultimately be transferred to the buyer. There are two delivery modes. Most of the products can be delivered terrestrially, meaning that the product is physically carried through such means as air, sea, or ground transportation. To deliver products terrestrially, online stores need to provide the order data as well as shipping data to its shipping unit or the outside shippers such as UPS, Fedex, and many others. For some types of product, online stores can choose to distribute the products and their auxiliary products/services digitally through the Internet. For examples, software drivers, operations manuals, warrantee information, and so on can be pre-digitalized and offered to be downloaded at the customer's convenience.
  • Support: Depending on the strategies and policies of the online store's Customer Relation Management (CRM), online stores may allow the customers to maintain their account information and access to other business information such as order status, payment status, delivery schedule, and many others. Customers may also be able to request and process return and/or refund online.
  • Administration: Many advanced online stores allow the store owners to maintain their product catalog, product information, and promotion choices and policies online. For account-based stores, web administrators are able to deal with the authorization and maintenance of user accounts by granting login privileges, updating account profiles, resetting account passwords, activating/inactivating accounts, and unlocking accounts. Still many online stores are developed as an add-on module to a firm's legacy system. The business processes implemented on both ends need to be integrated and data generated separately needs to be consolidated.