E-Commerce Electronic Commerce

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E-CommerceElectronic Commerce
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Electronic Commerce

• The process of two or more entities engaging in
  commercial transactions through electronic media,
  usually the Internet.

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Electronic Commerce

• What E-Commerce allows in its Simplest Form
• Companys Product Catalog to be hosted on a Web
  Server
• Customers and Potential Customers can visit the
  site
• See what the company has to Sell
• Place Orders

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Electronic Commerce

• Any size business can have an e-commerce strategy
• E-Commerce Strategy is dependent on the Money
  available to Invest
• Large Company may be able to afford space for
  Prime Time Television Commercials
• Small Company may only be able to buy ads in the
  Local Paper or Industry Journals

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E-COMMERCE VERSUS E-BUSINESS

• E-Commerce
• Process of Selling Goods and Services Online
• E-Business
• Business Model Re-Engineering must Permeate
  throughout all aspects of the Business
• Using Internet Technologies in the Majority of
  the Business Operations

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Models of Electronic Commerce
BUSINESS TO BUSINESS
Sells to
Business
Business
BUSINESS TO CONSUMER
Sells to
Business
Individual or Business
PERSON TO PERSON
Sells to
Individual

Individual
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Business-to-Business Models

• A model of commercial electronic transactions
  between two businesses in which the businesses do
  not negotiate each transaction.

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Business-to-Business/Individual EC Models

• Models in which commercial electronic
  transactions occur between a business and another
  business or individual, and all transactions are
  open to negotiations.

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Building and Maintaining Effective Electronic
Commerce Sites

• Keep the Site Interesting
• Successful EC sites convert uncommitted surfers
  into buyers by grabbing their interest
• Ensure Privacy and Security
• Good EC sites address consumers fears about loss
  of privacy and security openly and candidly
• Provide Value
• EC Web sites that are designed to inform are more
  successful than those designed to entertain
• Encourage Price Comparisons
• Similar to traditional shopping, customers like
  to price shop on the Internet before buying a
  product or service

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Building and Maintaining Effective Electronic
Commerce Sites

• Develop a Great Electronic Sales Team
• Cater to the whims of visitors
• Keep It Simple
• Sites should be so simple to use that customers
  find shopping on the Web site a pleasant,
  time-saving, hassle-free experience
• Encourage Customers to Visit the Physical Store
• It is helpful to give information such as store
  location, work hours, and a contact person at the
  physical store
• Build Cyberspace Loyalty
• On-line companies are pumping up ad budgets,
  developing on-line communities of potentially
  loyal customers, and trying to make it hard for
  new visitors to go anywhere except their site

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Promises of Electronic Commerce

• Creates Customer Power
• Customers can join electronic communities and see
  what other users think of a product, a service or
  a company
• Beware of web sites that suck.
• EC gives consumers more ability to comparison shop

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Promises of Electronic Commerce

• The World Is Your Marketplace
• EC blurs the boundaries of time and
  space--Participating in EC is almost equivalent
  to building stores in every city in the world
• Increases Business Efficiency
• EC is not only about selling more goods and
  services or reaching more customers it is also
  about increasing the efficiency of a business
• Builds a Closer Bond between Suppliers and
  Customers
• Interactivity is an important aspect of EC that
  adds a sense of customized attention to the
  consumer, which encourages repeat business

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Challenges of Electronic Commerce

• Immature Technology
• The technology to support heavy on-line trading
  is still immature
• The software to aid customer transactions is
  expensive and unaffordable for most smaller
  companies
• Networks are highly complex technical entities
  that require in-depth technical, business, and
  managerial knowledge
• Consumer Distrust
• Consumers fear of being duped is large and real
• A company must earn the trust of consumers the
  old-fashioned way through actual performance

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Challenges of Electronic Commerce

• The Difficulty and Expense of Maintaining and
  Managing Electronic Commerce Sites
• Maintaining and managing a companys Web site is
  an enormous challenge
• The cost of maintaining and EC site is
  substantial-- an EC Web site can cost from 1.5
  million to 3 million
• Security Concerns
• Security on the Internet is still a major concern
  for both consumers and companies
• Consumers hesitate to disclose confidential data
• Businesses dont know how to protect themselves
  against crackers, fraud, and cyberattacks

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Challenges of Electronic Commerce

• Societal Challenges
• EC sites replace front-line staff
• Society faces the challenge of regulating (or not
  regulating) the way in which EC marketing targets
  children
• EC marketing poses privacy challenges
• Ambiguous Laws Governing Electronic Commerce
• Laws governing electronic commerce are
  nonexistent, ambiguous, or in their infancy
• State and federal taxes
• Information privacy
• Secure transmission of data

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Challenges of Electronic Commerce

• Staff Shortages--Many companies are short-staffed
  when it comes to qualified technology
  professionals
• EC requires professionals with a blend of
  technical, marketing, and management skillsand
  such professionals are in short supply

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EC Forecasts for Japan
1998
2002
7,524.0
Users buying goods and services over the Web (in
millions)
1,717.1
26,031.1
Year-end commerce revenue (in U.S. millions)
1,545.6
Source International Data Communications, The
Global Market Forecast for Internet Usage and
Commerce, June 1998, www.headcount.com.
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EC Forecasts for China
1998
2001
292,745
Users buying goods and services over the Web
19,969
847.84
Year-end commerce revenue (in U.S. millions)
11.69
Source International Data Communications, Market
Forecast for Internet Commerce, 1996-2001,
October 1997, www.headcount.com.
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Guidelines for Electronic Commerce Success
Timing Is Everything
Avoid the Bandwagon Mentality
Plan for and Invest in Customer Service
Think Globally but Act Locally
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Guidelines for Electronic Commerce Success
Be Different
Understand Software Requirements
Design a Web Layout
Build a Product Catalog
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Guidelines for Electronic Commerce Success
Create a Shopping Basket
Build a Checkout Process
Secure Communications
Build a Search Tool
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Guidelines for Electronic Commerce Success
Establish Order Tracking
Implement a list Serve
Provide Purchase Recommendations
Market the E-Site
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DOT COM FAILURES

• When the Internet bubble burst in March 2000,
  unlucky investors watched more than 3 trillion
  of their money disappear.

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REASONS FOR DOT COM FAILURES

• IPOs (Initial Public Offerings)
• Bank and Venture Capitalist Mishandlings
• Media Hype regarding IPO Fortunes

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QUESTIONS?
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E-Commerce PBS-Video Clips on the Web
http//www.leadertalk.com/Pages/E-Commerce.html
http//news.com.com/2100-1017-277420.html?legacyc
net
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E-Commerce PBS-Video Clips on the Web
http//www.hoovers.com/news/detail/0,2417,11_3584,
00.htmlhttp//www.itworks.be/dotcomfailures/http
//www.upside.com/texis/mvm/graveyard/index