Safe Internet Shopping with Microsoft Merchant System

Personalizing Internet commerce

I can get on the Internet,tell a retail store that I want to buy a new pair of sneakers, and the storeknows what color I like when I get there. Yes, and you can create this kind ofpersonalized shopping experience for your customers with the Microsoft MerchantSystem. This new component of Microsoft's BackOffice, scheduled to be availablein the fourth quarter of 1996, is one of the Normandy suite of servers and willmake Internet shopping feasible.

Microsoft Merchant System lets retailers set up a complete store on theInternet to sell anything. The system can even host an electronic mall wherecustomers can visit and use their credit cards to buy from many retailers.

Customers can use any Web browser that supports Secure Sockets Layer (SSL)or Secure Electronic Transactions (SETs), such as Netscape Navigator orMicrosoft Internet Explorer (IE--for information about SSL and SET, see thesidebar, "Securing Commerce on the Web.") to come into the store,either from the Internet or an intranet. Merchant System lets you customize eachcustomer's shopping experience to suit individual tastes. So when a customeraccesses your store, you can have Merchant System build a customer profile todetermine buying patterns and other interests.

Imagine the experience from a customer's point of view: You visit an onlinestore, and Merchant System greets you with information about sale items you'reinterested in. The system knows about your preferences and spending habits--iteven knows your shoe size! This personal service makes you want to visit thatstore again.

Setting Up Your Store
Merchant System lets you,the merchant, install and configure a store without complicated or costly customapplication development. The system runs on Windows NT Server 3.51 or later anduses Internet Information Server (IIS) 1.0 or later. Your customers see yourstore as a series of standard Hypertext Markup Language (HTML) pages that theycan access from an SSL- or SET-capable Web browser to purchase goods andservices. With text, images, video, and audio, you can create a rich shoppingexperience for your customers. You can also add ActiveX and Java components toyour Merchant System page to further enhance the shopping experience. MerchantSystem includes sample starter stores to help you go on line quickly.

Customers can see and purchase merchandise from any Open DatabaseConnectivity (ODBC) datasource, such as a SQL Server, Sybase, or Oracledatabase. The database maintains all product, pricing, shipping, tax, andcustomer information. Merchant System generates Web pages dynamically to givethe shopper a customized experience. The system is both database- and tableschema-independent. This design lets you use an existing database, one ofMicrosoft's sample databases, or a new database that meets your needs. You caneven leverage your existing systems by accessing information from a legacydatabase. For example, by using SNA Server and an ODBC driver, you can accessexisting product and price information from an AS/400. Figure 1 shows a typicalMerchant System configuration.

Merchant System can link to your existing financial management system. Ifyou run on a SQL Server or other ODBC-compliant database, you can easily accessthe financial data. If your financial system is on a legacy system, you may needsome translation software, such as a DLL, to access this information.

You can set up Merchant System to use two databases--one for your storeinformation and one for your financial management information. However, if yourfinancial management database contains most of the information in your storedatabase, you can add any missing store information to the financial informationand use one integrated database to eliminate any overlapping information.

Shopping Online
Let's look at a typical shoppingexperience and what happens behind the scenes. Mary uses her favorite SSL- orSET-compatibleWeb browser to access an online sporting goods store. The catchyopening screen shows a video clip of a runner winning a marathon underneath asale banner that alerts Mary to a sale on running shoes. Mary clicks the saleinformation, and Merchant System accesses information in a SQL database togenerate a Web page that shows Mary the sale shoe's information and price.

Because, in a previous visit to the store, Mary showed an interest inrunning apparel, Merchant System finds this information in her customer profileand displays running shorts. Mary also sees that if she purchases both items,she can get a 20% discount. The system dynamically generates the promotion andsale information for the customer from the database. Mary decides to purchasethe two items and places them in an electronic shopping basket that holds herpurchases until she is ready to check out. She clicks back on the home page tolook for a runner's watch, but notices that she is late for a meeting and leavesthe store.

The next day, Mary comes back to the store. The items she put in hershopping basket are still there. Merchant System sees the items in her shoppingbasket, checks her customer profile, and asks whether she is interested inpurchasing the runner's socks that are on special for one day only. Mary looksat and buys a few pairs of socks.

Now she decides to check out and gets a prompt for payment method, shippingmethod, and shipping address. She picks a shipping company to deliver the itemsovernight and enters her credit card information and shipping address. Thesystem then calculates her purchase total. Because Mary lives in London and thestore is in New York, the system calculates the purchase price in poundssterling, adds value-added taxes (VAT) if needed, and calculates shipping costs.Mary sees the system's calculations and information and confirms the accuracy ofthe information by clicking Purchase Now.

Merchant System uses VeriFone's point-of-sale (vPOS) software to sendMary's credit card information to the merchant's financial institution forauthorization. The financial institution authorizes payment, and the merchantshows Mary a confirmation receipt and tracking number. Merchant System thenupdates the sporting goods store's inventory and customer information, based onMary's recent purchase.

Personalizing the Experience
As you can see fromMary's experience, a key piece of managing your store is giving your customers,especially frequent visitors, a reason to return to your site. In addition toconsidering special product promotions and sales, you can update your Web pagecontent often.

Merchant System makes the process of updating your pages easy. You canmodify your Web pages with any standard Web page development utility, includingMicrosoft's FrontPage, Adobe's PageMill, SoftQuad's HoTMetaL, Sausage Software'sHotDog, and good old Windows Notepad.

One caveat applies to creating Web pages for use with Merchant System:After you create or modify your pages with a development tool, you need to editthem in Notepad or some other text editor to develop the HTML code to implementyour database queries and tags. The sample stores and pages that Microsoftprovides with Merchant System can help guide you through this process.

Besides letting you create a unique shopping experience for your customers,Merchant System can also take over the management and administration of yourstore. The Merchant Utilities, which you access through a standard Web browser,let you create and maintain one or more stores. The Utilities include a set ofstarter stores; HTML templates to develop the look of your store or stores; andproduct, order, shopper, and promotion management tools.

The HTML templates let you show your customers product pages and orderforms and give customers querying capabilities. To add a promotional item forfrequent buyers or to add a product, simply point and click a few times in yourbrowser, and you're finished. You don't need a staff of database experts orprogrammers to set up these features.

Planning Transactions
One of the first questionsany Internet shopper asks is, "How can you guarantee that my credit cardinformation is secure?" Merchant System uses secure transactions to ensurecredit card confidentiality. The system supports SSL and will support SET whenthe computer banking industry finalizes the SET specification later this year.

At present, Merchant System accepts only credit card payments; however, itwill accept purchase orders and other payment methods in the future (Microsofthas not set a timetable for these payment alternatives). In addition, a newfeature, Microsoft Wallet, is integrated in Merchant System. The Wallet willhold virtual credit cards, shipping and billing information, personalcredentials, and digital signature (SET) information.

To take advantage of the Wallet features, users will need to use aWallet-enabled browser. All transactions between the Wallet-enabled browser andMerchant System will be encrypted, so the customer won't need to send creditcard information during a purchase. Each customer will have an encryptedcertificate that contains credit information. Merchant System will send thisinformation to the financial institution--the merchant's store will never seeit.

Ready, Set, Sell
IS managers can prepare toimplement Merchant System by learning about NT Server and IIS. All the good,common-sense practices of Internet access and Web publishing also apply toMerchant System. These practices include implementing security measures such asfirewalls and proxy servers.

If you have a Web site today, you can extend your knowledge to easily addMerchant System. IS managers will need to work with their databaseadministrators to understand what information they need to retrieve, how best topresent it to a customer, and how to integrate the database with MerchantSystem.

The system's sample databases, table schema, and queries can facilitatethis process. For example, you can use the sample queries to understand how toextract information from an existing database and to see how the table schema isset up. You can see what information Merchant System expects to insert into adatabase and how it retrieves information.

Because Merchant System uses any existing table schema or ODBC-compliantdatabase, you probably won't need to heavily modify your existing databaseinformation. Reviewing the existing database information now will facilitateMerchant's deployment later. Financial systems and databases that aren'tOBDC-compliant will need some cleanup and some translation software to preparethem for use with Merchant.

Merchant System follows Microsoft's strategy of helping companies buildbusiness systems easily, at a reasonable cost, without requiring a lot ofcustomization. Merchant System uses the third-generation, UNIX-based eShopproduct that Microsoft purchased and translated to run on NT. The market foronline shopping applications is very new, and only a few companies havecompeting products. For example, Open Market's products require extensivecustomization and don't support NT; Netscape's Merchant System platform alsodoes not support NT. You can find other solutions that target companies thatprovide electronic malls, but they are highly customized and very expensive.

Microsoft Merchant System pricing has not been set but will be comparableto other BackOffice products. Merchant System is scheduled to be available bythe time you read this.