E-Commerce Fundamentals

Electronic Commerce (EC)

• EC refers to business transactions taking place via telecommunications networks, especially the Internet
• It involves buying, selling, and exchanging products, services, and information via computer networks, including the Internet

Examples of E-Commerce

• An individual purchasing a book on the Internet
• A government employee reserving a hotel room over the Internet
• A business ordering a computer using the seller's interactive telephone system
• A business buying office supplies online or through an electronic auction
• A retailer ordering merchandise using an EDI network or a supplier's extranet
• A manufacturing plant ordering electronic components from another plant within the company using the company's intranet
• An individual withdrawing funds from an automatic teller machine (ATM)

E-Business

• E-business refers to the optimization of a company's business activities using digital technology
• It includes supplier relations, customer service, and intra-business tasks
• E-business is often used interchangeably with EC

Growth of E-Commerce

• No specific notes on this topic

EC Concepts

• Brick-and-Mortar (old economy) organizations: perform primary business offline
• Click-and-Mortar (click-and-brick) organizations: conduct some e-commerce activities
• Virtual (pure-play) organizations: conduct business activities solely online

Unique Features of E-Commerce

Ubiquity

• Internet/Web technology available anywhere, anytime, 24/7, 365 days a year
• Effect: marketplace becomes a "Market Space", enhancing customer convenience and reducing shopping costs

Global Reach

• Transactions are across cultures and national boundaries
• Effect: market space includes potentially billions of consumers and millions of businesses worldwide

Universal Standards

• One set of technology standards: Internet standards
• Effect: lower market entry costs and lower consumers' search costs

Richness

• Supports video, audio, and text content and messages
• Effect: possible to deliver rich messages with text, audio, and video simultaneously to large numbers of people

Interactivity

• Technology works through interaction with the user
• Effect: consumers engaged in dialog that dynamically adjusts experience, making them co-participants in the process of delivering goods to market

Information Density

• Increases in information density: total amount and quality of information available to all market participants
• Effect: consumers have greater price transparency, enabling merchants to engage in price discrimination

Personalization/Customization

• Technology permits modification of information, goods, and services
• Effect: products and services can be customized to individual preferences

Social Technology

• Technology promotes user content generation
• No specific effect mentioned