E Commerce Business example essay topic

Essay Question 1: What are the elements of a good online retailing (e-tailing) website? Give examples, including the web address of a firm's website that you feel uses these elements successfully The online stores are nothing but an extension of retailing. In net terminology it is known as E-tailing. If you go by definition, it is "E-tailing refers to retailing over the internet. Thus an e-tailor is a B 2 C business that executes a transaction with the final consumer. E-tailors can be pure play businesses like Amazon. com or businesses that have evolved from a legacy business, Tesco. com.

E-tailing is a subset of e-commerce" It is crucial in any e-tailing business to keep the shopping process simple, fast, and consistent. The average time to shop keeps getting faster at just over four minutes with less than five clicks in the process from product selection through checkout. I personally look for the sites, which are fast to load, got a lot of information about the displayed products, good prices of course should be there and which gives the price comparison with other big players. Apart from this, I look for the customer related services. This includes no value added service Also if the site has got any section which is updated quite often for latest articles, latest trends on the online shopping and about the product details / description. The normal practice which I follow is to rely on the search engines for the desired product.

Thanks to Google that it gives impartial results and very precise ones. Though it does not work on semantics, but most of the time it gives desired results. Many comparison websites are there to find out competitive rates, I like biz rate. com as you can get many vendors for the same products. The normal process which I follow is to look for at least 5 websites, evaluating them on different parameters like pricing, ease of shopping, security of transaction, guarantee of the product, return policy, after sales service, general services to customers etc. Pricing: Pricing plays a very important role. A Lot of distribution costs are gone if you purchase online directly from the supplier or any distributor.

You can get amazing prices if you invest some time for looking out different websites for the same products. Lot of price comparison websites are available to assist you out in this. I rely on biz rate. com Ease of shopping: Ease of shopping is also important for any customer. The website should be very much user friendly.

A customer should not feel lost while surfing and searching for the products. Amazon. com is quite a good website. The process of shopping is more or less same at every website. But few people provide very good interfaces and very good support at every stage so that the customer feels very good about it. Blue nile. com is a very good website selling diamonds. Though the diamonds are expensive as compared to other websites, but the way of presentation and the support services put them apart from others.

Security of transaction: Security of transaction plays a very important role. A customer should be taken in confidence that whatever information he is going to disclose for the shopping, will be kept confidential and will not be disclosed. Any leak in this information may result in huge financial loss to the customer. I look for various security certificates, their validity, certifying authority, pad lock etc before committing any transaction. Verisign security certificate comforts me. Guarantee of the product: Guarantee of the product and quality of product are other important issues.

You should know the product which you are going to purchase should be worth of the price you are paying, should meet the prevailing quality standards and should carry a valid guarantee or warranty. It is advisable to check and ask for the guarantee and warranty of the product before placing the order from the vendor who is selling it online. Return policy: Return policy is very important if the product is costly, say jewelry or some computer accessory of electronic good. I like the websites with precisely defined return policies.

This makes customer feel that they will not be at loss if the product does not meet their expectation. Customer Care services: Customer services are back bone to any e commerce business. They are the mouth piece of any online web store. This is the front which can decide which website is better in today's scenario. Almost all the website have security, all have good quality of products, but the point where one scores over other is the class of customer service. I like the website with chat support and very less turn around time for the query posted. web is defined as the sale of products and services to the consumer market over the Internet.

The objective of e-retailers is to complete product purchase transactions; however, the unique benefits that e-retail transactions provide to consumers are in the performance of the service end of the e-retailing experience rather than in the qualities of the purchased good itself, which can be obtained through alternative commercial channels. E-service is currently offered in a wide range of service industries. Despite benefits proposed by the web-based commercial environment, few e-retailers have succeeded in encouraging consumers to modify their current 'shopping' habits, in favor of Internet shopping. Convincing surfers to advance from 'monitor shopping' to 'actual purchasing' and especially creating repeat-consumers has proven to be a challenge (Helander & Khalid, 2000; Jarvenpaa & Tractinsky, 1999; Kolesar & Galbrait, 2000). Selected References Helander, M.G. & Khalid, H.M. (2000). Modeling the customer in electronic commerce.

Applied Ergonomics, 31,609-619. Homme l, B. Pratt, J., Colza to, L. & Godin, R. (2001). Symbolic control of visual attention. Psychological Science, 12,360-365. Jarvenpaa, S.L. & Tractinsky, N. (1999).

Consumer trust in an Internet store: A cross-cultural validation. Journal of Computer Mediated Communication, 5 (2). Kies ler, S. Siegel, J. & McGuire, T. (1984). Social psychological aspects of computer-mediated communication.

American Psychologist, 39, 1123-1134. Kolesar, M.B. & Galbrait, R.W. (2000). A service marketing perspective on e-retailing: implications for e-retailers and directions for further research. Internet Research: Electronic Networking Applications and Policy, 10,424-438.

Laroche, M., Bergeron, J. & Goutal and, C. (2001). A three dimension scale of intangibility. Journal of Service Research, 4, 26-38. Nass, C. Kim, E. & Lee, E. (1998).

When my face is the interface: An experimental comparison of interacting with one's own face or someone else's face. Human Computer Interaction, 18,148-153. Papadopoulos, P., Andrew, A., Kan ellis, P. & Marta kos, D. (2001). Trust and relationship building in electronic commerce. Internet Research: Electronic Networking Applications and Policy, 11,322-332. Price, L.L. & Arnold, E.J. (1999).

Commercial friendship: Service provider-client relationships in context. Journal of Marketing, 63, 38-56. Rafael i, A. & Vilna i-Yavetz, I. (2002). Instrumentality, aesthetics and symbolism of physical artifacts as triggers of emotion. In Press, Theoretical Issues in Ergonomics Science (TIES). Riegelsberger, J. & Sass e, M.A. (2000).

'Trust me, I'm a. Com': The problem of reassuring shoppers in electronic retail environments. Intermedia, 28. Roland, T.R. & Kannan, P.K. (2002).

E-service: New directions in theory and practice. New-York: M.E. Sharpe. Sirdeshmukh, D. Singh, J. & Sabo l, B. (2002). Consumer trust, value and loyalty in relational exchange. Journal of Marketing, 66, 15-37. Wang, F. & Head, M.M. (2001).

A model for web-based information systems in e-retailing. Internet Research: Electronic Networking Applications and Policy, 11,310-321. Essay Question 2: What, in your opinion, is the future of e-commerce? Be sure to support your answer with references. The Emerging Digital Economy In order to understand the future of electronic commerce it is necessary to understand its emergence in a historical perspective. The rapid expansion of electronic commerce is just one component of a historical transition from an industrial economy to a digital economy.

Whereas traditional industrial economies are based on the production of industrial goods (steel, oil, and automobiles) and physical transformation (railroads, highways), the digital economy is based on the rapid processing of information and telecommunications. In 1998 the Department of Commerce's issued a report on the Emerging Digital Economy. This was followed in 1999 by the Emerging Digital Economy II. The readings at the beginning of this module are from those reports and provide a context to the material we will cover latter in the course. A major finding of the original 1998 report was the speed at which the internet was adopted by the general population. It took fifty years from the time the first commercial power plant was built in the 1890's until 80% of the homes in America were wired for electricity.

It was another 41 years (1973) before the last community (Camp wood TX) in the United States was added to the nation's electric grid. Radio was in existence 38 years before 50 million homes had radio receivers. TV took 13 years to reach that milestone. The Internet took only 4 years. The internet is clearly spreading faster than any other major innovation. And the pace hasn't slowed down.

Currently traffic on the Internet is doubling every 100 days. In the four years from 1993 to 1997 the number of Internet hosts has increased from 1.8 million to 19.5 million. The revolution in communication created by the Internet and other global computer networks is going to change the basic structure of the economy, but not in the way many of the dot. com pioneers believed. Since the Internet allows fast exchange of information between consumers and producers, it allows supply to quickly adjust to changes in demand. Information technology is therefore becoming a major share of the nation's economy.

According to the report it grew from 4.9 percent of the economy in 1985 to 8.2% in 1997, and its continuing to grow at a rate of 15% per year. This is even more remarkable in that IT prices have been falling as capacity increases. It is estimated that the inflation rate was reduced by as much as 1% because of the fall in IT prices. The improved communication between consumers and producers resulting from the Internet allows markets operate more efficiently resulting in increases in productivity. But this doesn't replace the traditional marketing function as many Internet gurus, including Bill Gates believe, but instead requires it to be more integral to the valuation creation process by allowing the constant flow of information it provides producers also allows them to develop products that better match the needs of consumers. The Internet also serves to rapidly communicate news and information on new technical innovations.

All these factors result in a faster rate of technical progress and innovation. Both issues will be discussed in this course. Although E-commerce may be a new field, the study of marketing is nearly a hundred years old and a large component of that knowledge bases is transferable to e-commerce marketing. The key in transferring this knowledge is not to be so awed by e-commerce that you forget the basics of good marketing. The way you apply the basic marketing techniques to e-commerce marketing may vary, but the basics of good marketing still remain the same for e-commerce marketing as it does for traditional marketing.

There are varying opinions regarding the future of e-commerce. Despite the fact that online sales are growing exponentially, some analysts believe that e-commerce is heading for a fall. Laurie Windham justifies her belief that as time goes on, sales will decrease instead of increasing. Windham believes that net consumers are very different than mall shoppers and catalog shoppers. Furthermore, she says that dot-come are responsible for ruining their own chances to sell because they have spoiled customers to the point that consumers expect cheap prices and freebies and if they don't get them, they just move on to another site. E-commerce, Windham says, is a fickle world with little, if any, customer loyalty (Fortune, 2000).

Windham found some interesting differences between online shoppers and traditional shoppers. For instance, 34 percent of online shoppers describe themselves as comparison shoppers but only 8 percent of traditional shoppers describe themselves as comparison shoppers. Another comparison is that only 1 percent of Web shoppers say they hate stores but 10 percent of traditional shoppers say they hate stores (Fortune, 2000). Web shoppers are by and large comparison, price-sensitive consumers. Future 3 Windham, who spent two years studying the consumers who purchase online, said that as nonusers begin to use the Web for purchasing, they will be less adventuresome than people already making purchases online. They will also be slightly older than the norm and they will be more fearful and cautious about privacy and security.

In other words, as nonusers begin using the Web to shop, they will be a more conservative group than current users. It is probable they will also be less fickle and more loyal to brands / stores (Fortune, 2000). Windham pointed out that there were numerous problems with people receiving exactly what they ordered online during last holiday season. Based on that, she suggested sales may be lower this year (Fortune, 2000). Surveys conducted after the last holiday season suggested online shoppers would continue shopping online.

One survey, for instance, indicated that more than 90 percent of consumers reported that shopping online met or exceeded their expectations. Eighty percent said they would increase their online shopping in 2000 (Rutledge, 2000). Studies found that consumer confidence in using the Internet for shopping reached very high levels, which were due to a number of factors. Positive comments from family and friends were one of the factors that swayed more people to utilize this option.

Better selections from online stores also made the experience more satisfying. Finally, Future 4 secure credit card transactions played a major role in increasing sales (Rutledge, 2000). Consumers were enticed to try shopping on the Internet by the massive marketing campaign last year for both dot-com stores and retail stores online. More than 70 percent of Net shoppers said they bought from e-commerce sites that offered free shipping. Another 54 percent said they were enticed by the discounts offered for their first online purchase. Forty percent used online coupons and 25 percent responded to the offer of free gifts for their online purchase (Rutledge, 2000).

The Direct Marketing Association projected that sales generated from catalogs and the Internet would double in the next four years, reaching $3.33 billion (Entrepreneur, 2000). A study by Jupiter Communications agreed saying that sales would increase this holiday season. This study reported that holiday shoppers would spend almost $12 billion in online purchases between November 1 and December 31 this year, which represents a 66 percent increase over the same time period last year. The increase between the 1998 and 1999 holiday seasons was 126 percent. There is a slowdown in the degree of growth but it is still a substantial increase (Kontzner, 2000) The Gartner Group predicted a much larger growth this year. They projected sales of $19.5 billion.

This group also believed that dot-com stores and retail stores online Future 5 would not spend as much money on advertising this year. Instead, they will spend resources on retaining customers (Kontzner, 2000). As a number of dot-come collapsed during this past year, many retailers felt a wave of relief but it was short-lived. The Web's bite into retail store sales is about to become noticeable and hurtful. Business Week (2000) reported that there is a rule of thumb that says a 10 to 15 percent loss in sales vaporizes a store's profits. In 2000, online sales of books alone will top 11 percent of all books sold.

That is up from 8.5 percent in 1999. CDs and videos will more than double their sales from 1999 and that will bring them to 10 percent of the entire market. Computer hardware and software already totals more than 18 percent of the market (Business Week, 2000). In order to combat this trend, some retailers are trying to lure consumers to their own online sites. They are also trying to use their Web sites to bring people into their stores. Since 94 percent of online buying is nothing but a shift from stores to a more convenient way of shopping, some of these strategies could work.

Still, physical site retailers have begun to feel the effect of Net shopping. And, the fact is that sales on the Web are at least doubling every year (Business Week, 2000). The overhead is far less for dot-come. They sell from a central warehouse and do not have to support thousands of stores Future 6 around the country. This fact is so clear that AMB Property Corp., a real estate investment trust in San Francisco, sold $560 million worth of local shopping centers and invested the proceeds in warehouses close to urban centers. The expectation is that the demand will be greater for warehouse property than for mall property (Business Week, 2000).

Zona Research Corporation's forecast is that Internet sales will soar in the next two years. The survey of Internet product buyers showed that the number of companies that use Internet-based selling will likely quadruple in the next two years, going from 44 percent from its current 10 percent. The reason for the dramatic increase is related to universal standards that will unite millions of businesses with billions of consumers (Menefee, 1998). Zona looks that the electronic economy in terms of a series of three technology waves. The first wave was able to save companies money by publishing on the Internet and the second wave opened up online sales profit centers. It was the second wave that made e-commerce a component in commerce as a whole (Menefee, 1998).

The third wave will re-intermediate buyers and sellers through the creation of places on the Internet where buyers and sellers meet to exchange goods and services and complete transactions completely on the Internet and to complete them securely. The third wave has a significant influence on how business Future 7 is normally conducted. At some point, the third wave will be similar to a fax machine, or at least, the importance of a fax machine was a number of years ago. If you don't have one, you won't be able to conduct business (Menefee, 1998). As the technological advances affect the way business is run it can be assumed that some unforseen circumstances will have a substantial impact on the way electronic commerce develops. As it has been in the past business to business commerce will grow the quickest with business to consumer also growing but at a slower rate.

The distinctions between voice and data communication will break down and they will be combined more often to make a more efficient form of communication. In the post-modern era the emergence of the internet in other mediums apart from computers is growing and shall continue growing in the future, this will allow e-commerce to be conducted from any location even if there is no computer present, for example, through mobile phones and televisions. Companies will utilize the expansion of e-commerce and will most likely charge vendors wanting to access their users and most likely charge extra for exclusive access. Since it is inevitable that the web will only increase in its complexity the opportunities for companies to make money from intermediary services will increase. As electronic commerce becomes more widely used the government should maximis e the efficiency and become a model user.

As several countries engage in a race to become the most efficient in electronic commerce, they must keep in mind that over regulating the growth of the industry will inhibit the growth and depreciate the trust levels between both businesses and consumers. Electronic commerce is changing the way to do business. Nowadays a lot of transactions are made through the Internet. Another important issue that will be discussed is the way mobile Internet can change the way we communicate and do business. Each country's law control the transactions made through the Internet, besides there are international treaties policies that not allow some products to be commercialize. For instance, in Mexico, politicians are making a new Electronic Commerce law, because there was not regulations about it.

The article also says that the culture will be diversified depending on nationality, ethnicity and religion. There are heaps of WebPages in Mexico that diversify the market. Some examples are: Travel Agencies Auctions Talking about PC's and internet access US is the most advance country, therefore B-C has become popular because more peoples has computers and they have access to different sites, besides there are more internet education because it was the first country to have a rapid expansion. There are many obstacles in order to materialize e-Commerce.

Remember the time when there was no Internet? Where advances in telecommunications and computing largely occurred side-by-side in the past, today, they converge in the Internet. Time sharing, the concept of linking a large numbers of users to a single computer via remote terminals, was developed at MIT in the late 50's and early 60's. In 1973, Bob Kahn and Vint Cerf developed the basic ideas of the Internet.

Now days almost everybody is connected to Internet. WORLD INTERNET CONNECTIVITY (As of 6/15/95) (web) There is another thing that Internet brought us at affordable price: it is electronic commerce (e-commerce). There is no specific definition for what is e-commerce everybody interprets it differently. Some view it as selling products and services on the net others more educated people see it as any networked enabled business practice such as Electronic Data Interchange (EDI), the World Wide Web, or email. Before the Internet small businesses were restricted on electronic communications because of high cost on installation and maintenance of networks.

Business communications were performed by fax or telephone. Although, the Internet gave the ability for small businesses to become automated, which is advantageous for them, it also brought some costs and disadvantages, and it is facing bigger obstacles that will decide the future of electronic-commerce like government regulations. There are four functions of e-commerce: communication, process improvement, service management, and transaction capabilities. The perfect example form communication function is email. It delivers information or documents to facilitate business transactions. The process improvement function covers the automation and improvement of business processes.

A good example of this would be networking two computers together so they could share and transfer data rather than have a person take data from one machine and input into another. Service management is the third function of EC. This is the application of technology to improve the quality of service. A good example of this function is any courier company web site.

It permits customers to track shipments and schedule pick-ups 24 hours a day worldwide without having to talk to a customer service representative. Customer service is greatly enhanced due to the capabilities of the site. The final function EC is transaction capabilities. This provides the ability to buy and sell on the Internet or some other on-line service. The retail Web sites of Amazon. com and Drugstore. com offer good examples. The primary purpose of these sites is to sell the company's supplies, although they do combine other functions such as communication and service management.

These examples also highlight the fact that the four functions are not mutually exclusive. (Ka lakota 6) There are a lot of advantages with EC it is hard to mansion them all but some of them include low cost, low barriers to enter, error reduction, and increased efficiencies. One good example of low cost is advertising. It can run a company well over 50,000 dollars to put a full-page advertisement in a newspaper with a circulation of 1 million. In contrast, assuming that there are at least 1 million Web browsers and the annual costs (hosting and maintenance) for a small corporate Web site are $900, then the daily cost for 1 million viewers ($900/365) on any given day is approximately $2.50. (web) Another benefit of Web sites are the low barriers to entry they offer companies in certain industries.

For example, Amazon. com is a completely virtual based company. Without the Web, it would probably never have started selling books given the dominate position of its competitors like Barnes and Nobel and the tremendous amount of money they would have to invest to open and operate a store like that. Other benefits of Web sites include error reduction because orders don't have to be re-keyed into order entry systems. When putted together the business process may be considered automated and its efficiency is increased. Although there are a lot of advantages of having an Internet based business there are also some disadvantages and costs that follow.

The first cost a company faces when it decides it wants a Web presence is hosting. Hosting determines where the files and images associated with the Web site going to reside. Large companies or those that want total control tend to perform this function in-house while small businesses or those that do not consider this function a core competency will out-source the service with an Internet Service Provider (ISP) or Web Service Provider (WSP). It is hard to break down hosting costs for companies that perform the service in-house because a lot of the costs get absorbed into general overhead. In any event you have to account for such things as the salaries of the staff that runs the operation, the connection to the Internet, domain registration and equipment. Costs start in the low thousands of dollars for a small operation and rise quickly as needs grow.

It is much easier to track the costs for out-sourced hosting. A local ISP will typically charge a $30.00 se.