Chapter 7 - E-Commerce

Consumer-to-consumer (C2C)

e-commerce is the exchange of goods and services among individuals, typically facilitated by a third party.

Business-to-business (B2B)

-Web sites in operation today take a variety of forms, including private stores, customer portals, private company marketplaces, and industry consortia-sponsored marketplaces. -Access to a private store requires that the buyer enter a company identification code and password to make a purchase from a selection of products at pre-negotiated prices typically based on an established annual minimum purchase quantity. -A high percentage of B2B transactions take place between companies called original equipment manufacturers (OEMs) that supply parts and components and the companies that sell the final product. -Often, large manufacturers that purchase goods and services from many small suppliers build a private company marketplace to manage their purchasing functions through a Web site. -In many cases, companies are not large enough or do not have sufficient purchasing power to require suppliers to deal with them through a private company marketplace. In such a situation, several companies in a particular industry may join forces to create an industry consortia-sponsored marketplace to gain the advantages of the private company marketplace for all members of the consortia. -E-procurement software allows a company to create an electronic catalog with search capability.E-procurement software can automate key functions of the purchasing process, including creating, reviewing, and approving purchase orders and transmitting these purchase orders electronically to the supplier.

Location-based service:

A location-based service is a computer program that uses location data to control its features and the information it provides. Some location-based services are query-based, allowing a user to request local maps and directions to points of interest, local traffic and weather information, or even information on the whereabouts of a friend or coworker.

Order Fulfillment:

A number of components and processes must be considered when designing a timely, efficient order-fulfillment system. Adequate storage must be secured for inventory. Items must be stored safely and accessed easily for fast order fulfillment. Systems and processes must be capable of receiving fast and accurate deliveries from suppliers. Accurate inventory counts and the ability to do sales forecasting with some degree of accuracy are also critical. This enables management to minimize inventory levels (and the associated costs) while still providing a high rate of order fulfillment. Distribution processes must be capable of meeting customer expectations for delivery times and costs.

Banner Ads:

An organization can attract potential customers to its site through the use of Web page banner ads that display a graphic and include a hyperlink to the advertisers' Web site. The banner advertising network acts as a broker between Web sites and advertisers. The ultimate goals of most Web sites are to increase sales as well as to improve customer satisfaction and loyalty to an organization. To accomplish these goals, a company must create a Web site that will compel customers to return repeatedly. A few of the key steps include designing the home page to be informative and visually appealing to your target customer, ensuring that the navigation is highly intuitive, and providing a simple search tool that returns search results with thumbnails of actual products.

Dot-Com Failure Explained:

During the late 1990s, many poor ideas for Web-related businesses were proposed and funded in a wave of "irrational exuberance" for all things associated with the dot-com economy. In many cases, these new businesses ignored traditional business models built on delivering fundamental value for customers, achieving operational excellence, and generating revenues in excess of costs. Instead, many companies placed an unhealthy emphasis on increasing market share with little regard for bottom-line profits. With their focus on the wrong things, it really was not a surprise when hundreds of dot-com companies failed.

E-Commerce

E-commerce involves the exchange of money for goods and services over electronic networks.

Payment Card Industry (PCI):

Payment Card Industry (PCI) Data Security Standard is a multifaceted security standard that requires retailers to implement a set of security management policies, procedures, network architecture, software design, and other critical protective measures to safeguard cardholder data. It also requires retailers to store certain card data for up to 18 months in the event of a dispute with the cardholder. A smart card resembles a credit card in size and shape, but it contains an embedded microchip that can process instructions and store data for use in various applications such as electronic cash payments, storage of patient information, and providing access to secure areas. The microchip can store the same data as the magnetic stripe on a payment card and more. In the United States, many banks and financial services companies have been reluctant to impose additional requirements for authentication because they don't want to add additional steps (and time) to the checkout process. In the future, systems may be upgraded to use biometrics (technology that measures and analyzes human physical characteristics such as eye retinas, fingerprints, or voice patterns for security purposes); however, this approach is not currently considered economical for retail applications.

Search Engines:

The effective use of a search engine is critical to attracting prospects to a Web site. A search engine is software that maintains an index of billions of Web pages and uses that index to quickly display the URLs of those pages that "best match" the user's search term. To perform the matching process, many search engines such as Google, Yahoo!, and Bing use a software called crawlers to score Web sites. An organic list is a type of search engine result in which users are given a listing of potential Web sites based on their content and keyword relevancy.

e-Commerce Web Site:

Two key decisions that must be made in establishing and running an e-commerce Web site are who will build the site and who will operate (host) the site. Web site hosting involves storing, serving, and creating a backup of files for one or more Web sites.Web hosting services may offer dedicated hardware or virtual private servers in which multiple organizations share hardware and Internet connections but otherwise have isolated virtualized software. A shared server environment is less expensive than dedicated servers; however, it may not provide the desired level of security, performance, and reliability. Successful e-commerce Web sites are able to get their customers to return time and time again. Indeed getting customers to come back is what separates a prosperous business from a failed one. A key tactic to make visitors return to your Web site is to design it to be a sticky Web site so that visitors engage with your site and want to spend time there. Asking customers to review a recently purchased item can also draw customers back to your site and provides another opportunity to show related products or other items in which the customer may be interested. Web sites need to accept a variety of easy and secure payment methods to increase sales and encourage repeat business.A secure Web site uses encryption and authentication to protect the confidentiality of online transactions.By default, the most commonly used computer Web browsers (including Chrome, Internet Explorer, Firefox, Safari, and Opera) will inform you when you are entering or leaving a secure site. Well-written product descriptions, thumbnail (or larger) photos, and customer-written product reviews can not only increase product sales but can also go a long way toward eliminating returns. Many advantages result from the use of e-commerce. Interestingly, these advantages are not one-sided; some advantages accrue to the seller, some to the buyer, and some to society as a whole. Most of these benefits are possible because of the global exposure of products sold on the Web and the ability of e-commerce to reduce the time and costs associated with both selling and purchasing.

Business-to-consumer (B2C)

Web sites must focus on attracting prospects, converting them into customers, and retaining them to capture additional future sales.

Mobile Banking

With mobile banking, customers can use a mobile device to access balance information, pay bills, transfer funds, and find nearby ATMs or banking centers.

Customer portals:

are private stores that offer additional customer services beyond simply placing an order.

E-government (e-gov) commerce

involves the use of information technology (such as Wide Area Networks, the Internet, and mobile computing) by government agencies to transform relations between the government and citizens (G2C), the government and businesses (G2B), and among various branches of the government (G2G).

Omnichannel retailing

is the application of the same business strategy across all marketing channels (e.g., mobile Internet devices, computers, brick-and-mortar stores, television, radio, direct mail, and catalog), with each channel using the same database of customer information, products, prices, promotions, and so on.

Mobile commerce (m-commerce)

is the buying and selling of goods and/or services using a mobile device, such as a tablet, smartphone, or other portable devices. Worldwide, there are more digital mobile phones than personal computers and TVs combined. Most mobile phones now have full Internet capabilities. However, these mobile phones have a number of limitations that make it difficult to view standard Web pages. The main limitation of course, is the size of the viewing screen.