E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet, especially the World Wide Web. In practice, this term and a newer term, e-business, are often used interchangably. For online retail selling, the term e-tailing is sometimes used.
E-commerce can be divided into:
E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall"
The gathering and use of demographic data through Web contacts
Electronic Data Interchange (EDI), the business-to-business exchange of data
e-mail and fax and their use as media for reaching prospects and established customers (for example, with newsletters)
Business-to-business buying and selling
The security of business transactions
E-tailing or The Virtual Storefront and the Virtual MallAs a place for direct retail shopping, with its 24-hour availability, a global reach, the ability to interact and provide custom information and ordering, and multimedia prospects, the Web is rapidly becoming a multibillion dollar source of revenue for the world's businesses. A number of businesses already report considerable success. As early as the middle of 1997, Dell Computers reported orders of a million dollars a day. By early 1999, projected e-commerce revenues for business were in the billions of dollars and the stocks of companies deemed most adept at e-commerce were skyrocketing. Although many so-called dotcom retailers disappeared in the economic shakeout of 2000, Web retailing at sites such as Amazon.com, CDNow.com, and CompudataOnline.com continues to grow.
Market ResearchIn early 1999, it was widely recognized that because of the interactive nature of the Internet, companies could gather data about prospects and customers in unprecedented amounts -through site registration, questionnaires, and as part of taking orders. The issue of whether data was being collected with the knowledge and permission of market subjects had been raised. (Microsoft referred to its policy of data collection as "profiling" and a proposed standard has been developed that allows Internet users to decide who can have what personal information.)
Electronic Data Interchange (EDI)EDI is the exchange of business data using an understood data format. It predates today's Internet. EDI involves data exchange among parties that know each other well and make arrangements for one-to-one (or point-to-point) connection, usually dial-up. EDI is expected to be replaced by one or more standard XML formats, such as ebXML.
E-Mail, Fax, and Internet TelephonyE-commerce is also conducted through the more limited electronic forms of communication called e-mail, facsimile or fax, and the emerging use of telephone calls over the Internet. Most of this is business-to-business, with some companies attempting to use e-mail and fax for unsolicited ads (usually viewed as online junk mail or spam) to consumers and other business prospects. An increasing number of business Web sites offer e-mail newsletters for subscribers. A new trend is opt-in e-mail in which Web users voluntarily sign up to receive e-mail, usually sponsored or containing ads, about product categories or other subjects they are interested in.
Business-to-Business Buying and SellingThousands of companies that sell products to other companies have discovered that the Web provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right people in a company for more information.
The Security of Business TransactionsSecurity includes authenticating business transactors, controlling access to resources such as Web pages for registered or selected users, encrypting communications, and, in general, ensuring the privacy and effectiveness of transactions. Among the most widely-used security technologies is the Secure Sockets Layer (SSL), which is built into both of the leading Web browsers.
CONTRIBUTORS:
Mark van Ketel and Tim D. Nelson
Thursday, December 13, 2007
Saturday, December 8, 2007
a short glimpse to ecommerce
Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown dramatically since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), automated inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.A small percentage of electronic commerce is conducted entirely electronically for "virtual" items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is known as e-tail. E-commerce or electronic commerce is generally considered to be the sales aspect of e-business.
History
Early development
The meaning of the term "electronic commerce" has changed over the last 30 years. Originally, "electronic commerce" meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders or invoices electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of e-commerce. From the 1990s onwards, e-commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing.
Perhaps the earliest example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a marketplace for used computers launched in 1982. The first online information marketplace, including online consulting, was likely the American Information Exchange, another pre-Internet online system introduced in 1991.
Web development
When the Web first became well-known among the general public in 1994, many journalists and pundits forecast that e-commerce would soon become a major economic sector. However, it took about four years for security protocols (like HTTPS) to become sufficiently developed and widely deployed. Subsequently, between 1998 and 2000, a substantial number of businesses in the United States and Western Europe developed rudimentary web sites.
In the dot com era, e-commerce came to include activities more precisely termed "Web commerce" -- the purchase of goods and services over the World Wide Web, usually with secure connections, with e-shopping carts and with electronic payment services such as credit card payment authorizations.
Although a large number of "pure e-commerce" companies disappeared during the dot-com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such companies had identified valuable niche markets and began to add e-commerce capabilities to their Web sites. For example, after the collapse of online grocer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through which consumers could order groceries online.
The emergence of e-commerce also significantly lowered barriers to entry in the selling of many types of goods; many small home-based proprietors are able to use the internet to sell goods. Often, small sellers use online auction sites such as eBay, or sell via large corporate websites like Amazon.com, in order to take advantage of the exposure and setup convenience of such sites.
$259 billion of online sales including travel are expected in 2007 in USA, an 18% increase from the previous year, as forecasted by the "State of Retailing Online 2007" report from the National Retail Federation (NRF) and Shop.org.[1]
Timeline
1990: Tim Berners-Lee wrote "The WorldWideWeb browser" using a NeXT computer.
1994: Netscape released the Navigator browser in October under the code name Mozilla. Pizza Hut offered pizza ordering on its Web page. The first online bank opened. Attempts to offer flower delivery and magazine subscriptions online. "Adult" materials were also commercially available, as were cars and bikes. Netscape 1.0 in late 1994 introduced SSL encryption that made transactions secure.
1995: Jeff Bezos launched Amazon.com and the first commercial 24 hr. internet only radio stations "Radio HK" and Netradio started broadcasting. Dell and Cisco began to aggressively use Internet for commercial transactions. eBay was founded by computer programmer Pierre Omidyar as AuctionWeb.
1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.
1999: business.com was sold for US $7.5 million (purchased in 1997 for US $150,000) The peer-to-peer filesharing software "Napster" was launched.
2000: The dot-com bust.
2003: Amazon.com: first-ever full-year profit.
Forms
Contemporary e-commerce involves everything from ordering "digital" content for immediate online consumption, to ordering conventional goods and services, to "meta" services to facilitate other types of e-commerce.
Success factors
This article does not cite any references or sources. (October 2007)Please help improve this article by adding citations to reliable sources. Unverifiable material may be challenged and removed.
In many cases, an e-commerce company survives not only based on its product, but through a competent management team, post-sales services, well-organized business structure, network infrastructure and a secured, well-designed website. The factors can be divided between technical or organization aspects and direct service to the consumer.
Technical and organizational aspects
Sufficient work done in market research and analysis. Like traditional models, e-commerce implicates good business planning and the fundamental laws of supply and demand.
A good management team armed with information technology strategy. A company's IT strategy can involve the business re-design process.
Providing an easy and secured way for customers to effect transactions. Credit cards are the most popular means of sending payments on the internet, accounting for 90% of online purchases. In the past, card numbers were transferred securely between the customer and merchant through independent payment gateways. Such independent payment gateways are still used by most small and home businesses. Most merchants process credit card transactions on site through arrangements made with commercial banks or credit cards companies.
Providing reliability and security. Parallel servers, hardware redundancy, fail-safe technology, information encryption, and firewalls can enhance this requirement.
Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. However, customers can react against a big brother experience.
Constructing a commercially sound business model.
Engineering an electronic value chain focused on a "limited" number of core competencies. Electronic stores have succeeded as either specialist or generalist in aim.
Operating on or near the cutting edge of technology and staying there as technology changes.
Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.
Providing an attractive website. The tasteful use of color, graphics, animation, photographs, fonts, and white-space percentage may aid success in this respect.
Streamlining business processes, possibly through re-engineering and information technologies.
Providing complete understanding of the products or services offered, which not only includes complete product information, but also sound advisers and selectors.
Other standard necessities include honesty about its product and its availability, shipping reliably, and handling complaints promptly and effectively. A unique property of the Internet environment is that individual customers have access to far more information about the seller than they would find in a brick-and-mortar situation. (Of course, customers can, and occasionally do, research a brick-and-mortar store online before visiting it, so this distinction does not hold water in every case.)
Customer experience
A successful e-commerce organization must also provide an enjoyable and rewarding experience to its customers. Many factors go into making this possible. Such factors include:
Providing value to customers. Vendors can achieve this by offering a product or product-line that attracts potential customers at a competitive price, as in non-electronic commerce.
Providing service and performance. Offering a responsive, user-friendly purchasing experience, just like a flesh-and-blood retailer, may go some way to achieving these goals.
Providing an incentive for customers to buy and to return. Sales promotions to this end can involve coupons, special offers, and discounts. Cross-linked websites and advertising affiliate programs can also help.
Providing personal attention. Personalized web sites, purchase suggestions, and personalized special offers may go some of the way to substituting for the face-to-face human interaction found at a traditional point of sale.
Providing a sense of community. Chat rooms, discussion boards, soliciting customer input and loyalty programs (sometimes called affinity programs) can help in this respect.
Owning the customer's total experience. E-tailers foster this by treating any contacts with a customer as part of a total experience, an experience that becomes synonymous with the brand.
Letting customers help themselves. Provision of a self-serve site, easy to use without assistance, can help in this respect. This implies that all product information is available, cross-sell information, advise for product alternatives, and supplies & accessory selectors.
Helping customers do their job of consuming. E-tailers and online shopping directories can provide such help through ample comparative information and good search facilities. Provision of component information and safety-and-health comments may assist e-tailers to define the customers' job.
Taxation
Main article: Internet taxation
From the inception of the Internet until the late 1990s, the Internet was free of regulation by government in the United States at all levels, and also free of any specially targeted tax levies, duties, imposts, or license fees. By 1996, however, that began to change, as several U.S. states and municipalities began to see Internet services as a potential source of tax revenue.
The 1998 Internet Tax Freedom Act halted the expansion of direct taxation of the Internet, grandfathering existing taxes in ten states.[2] In the United States alone, some 30,000 taxing jurisdictions could otherwise have laid claim to taxes on a piece of the Internet.[3] The law, however, did not affect sales taxes applied to online purchases. These continue to be taxed at varying rates depending on the jurisdiction, in the same way that phone and mail orders are taxed.
The enactment of this legislation has coincided with the beginning of a period of spectacular Internet growth. Its proponents argue that the benefits of knowledge, trade, and communications that the Internet is bringing to more people in more ways than ever before are worth the tax revenue losses, if any, and that the economic and productivity growth attributable to the Internet may well have contributed more revenues to various governments than would otherwise have been received. Opponents, on the other hand, have argued that the Internet would continue to prosper even if taxed, and that the current federal ban on Internet-specific levies denies government at all levels a much-needed source of revenue.
History
Early development
The meaning of the term "electronic commerce" has changed over the last 30 years. Originally, "electronic commerce" meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders or invoices electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of e-commerce. From the 1990s onwards, e-commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing.
Perhaps the earliest example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a marketplace for used computers launched in 1982. The first online information marketplace, including online consulting, was likely the American Information Exchange, another pre-Internet online system introduced in 1991.
Web development
When the Web first became well-known among the general public in 1994, many journalists and pundits forecast that e-commerce would soon become a major economic sector. However, it took about four years for security protocols (like HTTPS) to become sufficiently developed and widely deployed. Subsequently, between 1998 and 2000, a substantial number of businesses in the United States and Western Europe developed rudimentary web sites.
In the dot com era, e-commerce came to include activities more precisely termed "Web commerce" -- the purchase of goods and services over the World Wide Web, usually with secure connections, with e-shopping carts and with electronic payment services such as credit card payment authorizations.
Although a large number of "pure e-commerce" companies disappeared during the dot-com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such companies had identified valuable niche markets and began to add e-commerce capabilities to their Web sites. For example, after the collapse of online grocer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through which consumers could order groceries online.
The emergence of e-commerce also significantly lowered barriers to entry in the selling of many types of goods; many small home-based proprietors are able to use the internet to sell goods. Often, small sellers use online auction sites such as eBay, or sell via large corporate websites like Amazon.com, in order to take advantage of the exposure and setup convenience of such sites.
$259 billion of online sales including travel are expected in 2007 in USA, an 18% increase from the previous year, as forecasted by the "State of Retailing Online 2007" report from the National Retail Federation (NRF) and Shop.org.[1]
Timeline
1990: Tim Berners-Lee wrote "The WorldWideWeb browser" using a NeXT computer.
1994: Netscape released the Navigator browser in October under the code name Mozilla. Pizza Hut offered pizza ordering on its Web page. The first online bank opened. Attempts to offer flower delivery and magazine subscriptions online. "Adult" materials were also commercially available, as were cars and bikes. Netscape 1.0 in late 1994 introduced SSL encryption that made transactions secure.
1995: Jeff Bezos launched Amazon.com and the first commercial 24 hr. internet only radio stations "Radio HK" and Netradio started broadcasting. Dell and Cisco began to aggressively use Internet for commercial transactions. eBay was founded by computer programmer Pierre Omidyar as AuctionWeb.
1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.
1999: business.com was sold for US $7.5 million (purchased in 1997 for US $150,000) The peer-to-peer filesharing software "Napster" was launched.
2000: The dot-com bust.
2003: Amazon.com: first-ever full-year profit.
Forms
Contemporary e-commerce involves everything from ordering "digital" content for immediate online consumption, to ordering conventional goods and services, to "meta" services to facilitate other types of e-commerce.
Success factors
This article does not cite any references or sources. (October 2007)Please help improve this article by adding citations to reliable sources. Unverifiable material may be challenged and removed.
In many cases, an e-commerce company survives not only based on its product, but through a competent management team, post-sales services, well-organized business structure, network infrastructure and a secured, well-designed website. The factors can be divided between technical or organization aspects and direct service to the consumer.
Technical and organizational aspects
Sufficient work done in market research and analysis. Like traditional models, e-commerce implicates good business planning and the fundamental laws of supply and demand.
A good management team armed with information technology strategy. A company's IT strategy can involve the business re-design process.
Providing an easy and secured way for customers to effect transactions. Credit cards are the most popular means of sending payments on the internet, accounting for 90% of online purchases. In the past, card numbers were transferred securely between the customer and merchant through independent payment gateways. Such independent payment gateways are still used by most small and home businesses. Most merchants process credit card transactions on site through arrangements made with commercial banks or credit cards companies.
Providing reliability and security. Parallel servers, hardware redundancy, fail-safe technology, information encryption, and firewalls can enhance this requirement.
Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. However, customers can react against a big brother experience.
Constructing a commercially sound business model.
Engineering an electronic value chain focused on a "limited" number of core competencies. Electronic stores have succeeded as either specialist or generalist in aim.
Operating on or near the cutting edge of technology and staying there as technology changes.
Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.
Providing an attractive website. The tasteful use of color, graphics, animation, photographs, fonts, and white-space percentage may aid success in this respect.
Streamlining business processes, possibly through re-engineering and information technologies.
Providing complete understanding of the products or services offered, which not only includes complete product information, but also sound advisers and selectors.
Other standard necessities include honesty about its product and its availability, shipping reliably, and handling complaints promptly and effectively. A unique property of the Internet environment is that individual customers have access to far more information about the seller than they would find in a brick-and-mortar situation. (Of course, customers can, and occasionally do, research a brick-and-mortar store online before visiting it, so this distinction does not hold water in every case.)
Customer experience
A successful e-commerce organization must also provide an enjoyable and rewarding experience to its customers. Many factors go into making this possible. Such factors include:
Providing value to customers. Vendors can achieve this by offering a product or product-line that attracts potential customers at a competitive price, as in non-electronic commerce.
Providing service and performance. Offering a responsive, user-friendly purchasing experience, just like a flesh-and-blood retailer, may go some way to achieving these goals.
Providing an incentive for customers to buy and to return. Sales promotions to this end can involve coupons, special offers, and discounts. Cross-linked websites and advertising affiliate programs can also help.
Providing personal attention. Personalized web sites, purchase suggestions, and personalized special offers may go some of the way to substituting for the face-to-face human interaction found at a traditional point of sale.
Providing a sense of community. Chat rooms, discussion boards, soliciting customer input and loyalty programs (sometimes called affinity programs) can help in this respect.
Owning the customer's total experience. E-tailers foster this by treating any contacts with a customer as part of a total experience, an experience that becomes synonymous with the brand.
Letting customers help themselves. Provision of a self-serve site, easy to use without assistance, can help in this respect. This implies that all product information is available, cross-sell information, advise for product alternatives, and supplies & accessory selectors.
Helping customers do their job of consuming. E-tailers and online shopping directories can provide such help through ample comparative information and good search facilities. Provision of component information and safety-and-health comments may assist e-tailers to define the customers' job.
Taxation
Main article: Internet taxation
From the inception of the Internet until the late 1990s, the Internet was free of regulation by government in the United States at all levels, and also free of any specially targeted tax levies, duties, imposts, or license fees. By 1996, however, that began to change, as several U.S. states and municipalities began to see Internet services as a potential source of tax revenue.
The 1998 Internet Tax Freedom Act halted the expansion of direct taxation of the Internet, grandfathering existing taxes in ten states.[2] In the United States alone, some 30,000 taxing jurisdictions could otherwise have laid claim to taxes on a piece of the Internet.[3] The law, however, did not affect sales taxes applied to online purchases. These continue to be taxed at varying rates depending on the jurisdiction, in the same way that phone and mail orders are taxed.
The enactment of this legislation has coincided with the beginning of a period of spectacular Internet growth. Its proponents argue that the benefits of knowledge, trade, and communications that the Internet is bringing to more people in more ways than ever before are worth the tax revenue losses, if any, and that the economic and productivity growth attributable to the Internet may well have contributed more revenues to various governments than would otherwise have been received. Opponents, on the other hand, have argued that the Internet would continue to prosper even if taxed, and that the current federal ban on Internet-specific levies denies government at all levels a much-needed source of revenue.
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