E-Commerce: A Revolution in the Way We Do Business

There is no finish line… - Nike Corporate Motto

What is electronic commerce (e-commerce)?

• Financial business transaction that occurs over an electronic network 
• Sometimes called e-business

How are e-commerce transactions conducted?

• Primarily through desktop computers
• Wirelessly using handheld Web-enabled devices

What is a bricks-and-mortar business?

• Company with a physical location, such as Wal-Mart or Kmart

What is a clicks-and-mortar business?

• Company with a bricks-and-mortar location as well as an online presence 
• Some companies have online presence without physical locations 
• E*Trade and Amazon.com 

What is an electronic storefront?

• Web site where e-retailer displays its products 
• Shopping cart allows customer to collect purchases 
• Also called online catalog

What is a shopping bot?

• Web site that searches for the best price on a specific product 
• Also called a shopbot

What is business-to-consumer (B-to-C or B2C) e-commerce?

• Sale of products or services from a business to the general public

What is consumer-to-consumer (C-to-C or C2C) e-commerce?

• Individuals using Internet to sell products to other individuals 
• Online auction, such as eBay

What is business-to-business (B-to-B or B2B) e-commerce?

• Sale and exchange of products and service between businesses  
• Many businesses engage in both B2B and B2C 
• Supply chain creates and distributes products

E-Commerce Stats

What is business-to-employee (B-to-E or B2E) e-commerce?

• Sale and exchange of products and service between a business and its employees 
• Usually through an intranet

What are some advantages of e-commerce?

• Global market 24/7 
• Businesses have access to 459 million people with Internet access 
• Lower operating costs 
• Customers can conduct price comparisons easily 
• Feedback can be immediate 
• Changing information can be available quickly 
• FAQ (frequently asked questions) pages can provide easy access to customer support 
• Ability to gather customer information, analyze it, and react 
• New and traditional approaches to generating revenue 
• Manufacturers can buy and sell directly, avoiding the cost of the middleman 
• Distribution costs for information reduced or eliminated 
• Options to create a paperless environment

 Revenue Streams

• Sales 
• Subscriptions 
• Banner ads 
• Pop ups 
• Web searches 
• Paid listings 
• Paid inclusion 
• Search engine optimization

Building Traffic

• The 3Cs Approach  
• Content, community, and commerce 
• Keywords and Search Engines 
• Choose name and product names that best describe business purpose and features 
• Select descriptive domain names 
• Business-related keywords can be listed in the HTML meta tag
• Marketing 
• Online advertising methods include banner ads, pop-up ads, and e-mail 
• Offline advertising methods include magazines, newspapers, radio, and television

Electronic Payment Systems

• Electronic cash (e-cash or digital cash)  
• Provides a private and secure method of transferring funds  
• PayPal 
• Best-known e-cash provider  
• E-cash benefits
• Privacy - hides account information from vendors 
• Convenient if seller cannot process a credit card  
• Smartcards 
• Credit cards with embedded microchips

Ecommerce Spending Trends

• At the end of 2008, worldwide e-commerce is expected to exceed $470 brillion.
• By 2010: 
• 71% of US consumers will use the Internet to shop 
• 50% of ALL retail sales will be influenced by the Internet

Consumer Concerns

• A recent poll of Americans Found that 
• 13% had no fears about E-Commerce 
• 53% had concerns of privacy and security 
• 20% cited the inability to inspect products closely over the Internet 
• 3% do not like to wait for delivery

Limitations

• Bandwidth or data capacity 
• Comfort Factor 
• Security 
• Privacy

What factors lead to customer loyalty?

Best storefronts are efficient and easy to use  Customers who must wait more than eight seconds for a page to download usually will click to another site

Fun thought…

• People are more violently opposed to fur than leather because it's safer to harass rich women than motorcycle gangs.