Dr. Iyad Zoukar's E-Commerce Lecture 01 PDF

I NTRODUCTION TO E-B USINESS AND E- C OMMERCE – PART I Information Technology Engineering - Course (306575): STRATEGIES for e-BUSINESS Content 1. Electronic commerce: definitions and concepts 2. E‐commerce versus Traditional Commerce 3. Origin and development of e-commerce 4. E-Comm...

I NTRODUCTION TO E-B USINESS AND E- C OMMERCE – PART I Information Technology Engineering - Course (306575): STRATEGIES for e-BUSINESS Content 1. Electronic commerce: definitions and concepts 2. E‐commerce versus Traditional Commerce 3. Origin and development of e-commerce 4. E-Commerce Features 5. The electronic commerce field: classification, content, and a brief history Dr. Iyad Zoukar E-Business & E-Commerce 1-1 1. Electronic Commerce: Definitions and Concepts Electronic commerce (EC) The process of buying, selling, or exchanging products, services, or information via computer Communications Delivery of goods, services, information, or payments over computer networks or any other electronic means Commercial (trading) Provides capability of buying and selling products, services, and information on the Internet and via other online services Business process Doing business electronically by completing business processes over electronic networks, thereby substituting information for physical business processes Dr. Iyad Zoukar E-Business & E-Commerce 1-2 1. Electronic Commerce: Definitions and Concepts Electronic commerce (EC) Service A tool that addresses the desire of governments, firms, consumers, and management to cut service costs while improving the quality of customer service and increasing the speed of service delivery Learning An enabler of online training and education in schools, universities, and other organizations, including businesses Collaborative The framework for inter- and intraorganizational collaboration Community Provides a gathering place for community members to learn, transact, and collaborate Dr. Iyad Zoukar E-Business & E-Commerce 1-3 1. Electronic Commerce: Definitions and Concepts Buy-side & sell-side e-commerce Buy-side e-commerce ▪ Transactions to procure resources needed by an organization from its suppliers Sell-side e-commerce ▪ Transactions involved with selling products to an organization’s customers Dr. Iyad Zoukar E-Business & E-Commerce 1-4 1. Electronic Commerce: Definitions and Concepts Buy-side & sell-side e-commerce Dr. Iyad Zoukar E-Business & E-Commerce 1-5 1. Electronic Commerce: Definitions and Concepts E-business A broader definition of EC, which includes: ▪ Use of the internet to network and empower business processes, electronic commerce, and organizational communication ▪ Buying and selling of goods and services ▪ Servicing customers ▪ Collaborating within a company and with its customers, suppliers, and other stakeholders ▪ Conducting electronic transactions within an organization Dr. Iyad Zoukar E-Business & E-Commerce 1-6 1. Electronic Commerce: Definitions and Concepts Relationship between e-commerce and e-business Dr. Iyad Zoukar E-Business & E-Commerce 1-7 1. Electronic Commerce: Definitions and Concepts Mobile e-Commerce Subset of electronic commerce Online activities using mobile telecommunication networks through wireless hand-held devices such as mobile phones, smartphones, hand- held computers, and tablets. Social Commerce Use of the social web to deliver e-commerce activities and transactions Use of user-generated content and content sharing Enables users to interact with others and create value jointly Facilitate the exchange and integration of information and knowledge and promote selling and buying delivered through e-commerce platforms Dr. Iyad Zoukar E-Business & E-Commerce 1-8 1. Electronic Commerce: Definitions and Concepts Pure Versus Partial EC EC can take several forms depending on the degree of digitization Transformation from physical to digital of the: ▪ product (service) sold ▪ process (ordering, payment, fulfillment) ▪ delivery method Dr. Iyad Zoukar E-Business & E-Commerce 1-9 1. Electronic Commerce: Definitions and Concepts EC Organizations Brick-and-mortar (old economy) organizations Old-economy organizations that perform their primary business offline, selling physical products by means of physical agents Virtual (pure-play) organizations Organizations that conduct their business activities solely online Click-and-mortar (click-and-brick) organizations Organizations that conduct some e-commerce activities, usually as an additional marketing channel, but do their primary business in the physical world Electronic market (e-marketplace) An online marketplace where buyers and sellers meet to exchange goods, services, money, or information Interorganizational information systems (IOSs) ▪ Communication systems that allow routine transaction processing and information flow between two or more organizations Dr. Iyad Zoukar E-Business & E-Commerce 1-10 1. Electronic Commerce: Definitions and Concepts Electronic markets and networks Internet The global system of interconnected computer networks that use the Internet protocol suite (TCP/IP) to link devices worldwide Intranet An internal corporate or government network that uses Internet tools, such as Web browsers, and Internet protocols Extranet A network that uses the Internet to link multiple intranets Dr. Iyad Zoukar E-Business & E-Commerce 1-11 1. Electronic Commerce: Definitions and Concepts EC in numbers 2018 Global e-commerce should reach $3.4 trillion in 2019. E-commerce is expected to become a $4trillion industry by 2020 There will be 2.05 billion online shoppers by 2020 Nearly 25% of the world’s population shops online. There are 9.6 million websites that use e-commerce technologies There are around 3.8 million e-commerce sites in the USA. China is the largest e-commerce market in the world. 13.7% of sales are online Dr. Iyad Zoukar E-Business & E-Commerce 1-12 1. Electronic Commerce: Definitions and Concepts EC in numbers 2018 92.2% of consumers prefer to shop in their own currency. 63.5% of all e-commerce sales come from mobile. The most active digital buyers fall into the 39-53 age group. Collecting information and looking for deals are the top two online shopping activities. Digital shoppers trust product ratings with 4.8 stars more than products with 5-star ratings. Monday is the best day for online shopping. 78% of US consumers found a product they were interested in on Facebook. Dr. Iyad Zoukar E-Business & E-Commerce 1-13 1. Electronic Commerce: Definitions and Concepts EC in numbers 2018 42% of consumers prefer credit cards as their payment method. In 2018, an online shopper spent $378 on average. M-commerce should generate approximately $2.3 trillion this year Annual online sales in the United States amount to $340 billion 51% of UK consumers prefer shopping online. UK digital shoppers are the biggest spenders In 2018, Amazon’s share of US e-commerce market was 49%. Amazon sells 5 billion items a year Dr. Iyad Zoukar E-Business & E-Commerce 1-14 1. Electronic Commerce: Definitions and Concepts EC in numbers 2018 EC sales in USA ▪ Ecommerce represented 14.3% of total retail sales in 2018 in US. o Amazon accounts for 40% of U.S. online retail. The grand total of EC: $3,545 billion ▪ $3,161 billion was B2B (89%) ▪ $385 billion was B2C (11%) Dr. Iyad Zoukar E-Business & E-Commerce 1-15 1. Electronic Commerce: Definitions and Concepts EC in numbers 2018 Retail e-commerce sales worldwide from 2014 to 2021 (in billion $) Dr. Iyad Zoukar E-Business & E-Commerce 1-16 1. Electronic Commerce: Definitions and Concepts EC in numbers 2018 Dr. Iyad Zoukar E-Business & E-Commerce 1-17 1. Electronic Commerce: Definitions and Concepts EC in numbers 2018 Dr. Iyad Zoukar E-Business & E-Commerce 1-18  2. E‐commerce versus Traditional Commerce E-Commerce Traditional Commerce Reduce Doesn’t involve data at multi points. The buyer and seller create purchase order Data Data goes directly from one computer to on their system and send it to their trading Error another Computer without involving partner. The receiver/seller then re‐enter human being the same information on the computer, which will create data error Reduce Initial cost of E‐commerce is very high as Time is directly linked to saving the money. cost compared to paper process but over a There is repetition of same work at every long period of time, it is very effective. level and it involves a lot of wastage of time and if the error is arisen that will lead to more wastage of money. Dr. Iyad Zoukar E-Business & E-Commerce 1-19  2. E‐commerce versus Traditional Commerce E-Commerce Traditional Commerce Reduce E‐commerce data in the electronic form It requires re‐entry of data at each level Paper make it easy to share it across the and requires lot of time. So the peak time is work organization. wasted in reentering and printing of the reports Reduce E‐commerce reduces the processing When the buyer order in a paper format, Processing cycle time of complete cycles as the the data is re‐entered in to the Sellers’s cycle time data is entered the system, it is computer and then only processing can simultaneously Processed. take place which is a time consuming process. Reduce No need to maintain large number of Need to maintain a large number of labor employees, instead there arises the employees because one‐third of labor force need to manage them more efficiently. is employed to fulfill orders from Dr. Iyad Zoukar E-Business & E-Commerce customers. 1-20 3. Origin and development of e-commerce Phase One: ▪ E-commerce based on EDI (Electronic Data Interchange) Phase Two: ▪ E-commerce based on Internet Phase Three: ▪ E-concept based e-commerce Dr. Iyad Zoukar E-Business & E-Commerce 1-21 3. Origin and development of e-commerce Phase One: E-commerce based on EDI Using Electronic Data Interchange via private networks ▪ Difficult to implement ▪ High cost Phase Two: E-commerce based on Internet Using Electronic Data Interchange via Internet ▪ Low in cost ▪ Wide in overlaying ▪ Complete in function ▪ Flexible in use Dr. Iyad Zoukar E-Business & E-Commerce 1-22 3. Origin and development of e-commerce Phase Three: E-concept based e-commerce electronic education electronic treatment electronic administration electronic command online banks virtual enterprises Dr. Iyad Zoukar E-Business & E-Commerce 1-23 4. E-Commerce Features Ubiquity Global Reach Universal Standards Richness Interactivity Information Density Personalization/ Customization Social Technology Dr. Iyad Zoukar E-Business & E-Commerce 1-24 4. E-Commerce Features Ubiquity available everywhere at all times Marketspace: a marketplace extended beyond traditional boundaries and removed from a temporal and geographic location ubiquity reduces transaction costs Global Reach E-commerce technology permits commercial transactions to cross cultural, regional, and national boundaries far more conveniently and cost-effectively Reach: Total number of users or customers an e-commerce business can obtain is a measure of its reach Dr. Iyad Zoukar E-Business & E-Commerce 1-25 4. E-Commerce Features Universal Standards Technical standards of the Internet and conducting e-commerce are universal standards Lower market entry costs Reduce search costs Price discovery becomes simpler, faster, and more accurate Richness Complexity and content of a message E-commerce technologies have the potential for offering considerably more information richness than traditional media such as printing presses, radio, and television because they are interactive and can adjust the message to individual users Dr. Iyad Zoukar E-Business & E-Commerce 1-26 4. E-Commerce Features Interactivity E-commerce technologies enable two-way communication between merchant and consumer and among consumers Information Density Total amount and quality of information available to all market participants, consumers, and merchants Price transparency Cost transparency Price discrimination Dr. Iyad Zoukar E-Business & E-Commerce 1-27 4. E-Commerce Features Personalization/Customization Personalization: merchants can target their marketing messages to specific individuals by adjusting the message to a person’s name, interests, and past purchases Customization: changing the delivered product or service based on a user’s preferences or prior behavior Social Technology Allowing users to create and share content with a worldwide community Dr. Iyad Zoukar E-Business & E-Commerce 1-28 5. The Electronic Commerce Field: Classification, Content, and a Brief History An EC framework Dr. Iyad Zoukar E-Business & E-Commerce 1-29 5. The Electronic Commerce Field: Classification, Content, and a Brief History Classification of EC Business-to-Business (B2B) ▪ E-commerce model in which all of the participants are businesses or other organizations ▪ Businesses make online transactions with other businesses Business-to-Consumer (B2C) E-commerce model in which businesses sell to individual shoppers E-tailing Online retailing, usually B2C Business-to-Business-to-Consumer (B2B2C) E-commerce model in which a business provides some product or service to a client business that maintains its own customers Dr. Iyad Zoukar E-Business & E-Commerce 1-30 5. The Electronic Commerce Field: Classification, Content, and a Brief History Classification of EC Consumer-to-Business (C2B) E-commerce model in which individuals use the Internet to sell products or services to organizations or individuals who seek sellers to bid on products or services they need Intrabusiness EC E-commerce category that includes all internal organizational activities that involve the exchange of goods, services, or information among various units and individuals in an organization Business-to-Employees (B2E) E-commerce model in which an organization delivers services, information, or products to its individual employees Consumer-to-Consumer (C2C) E-commerce model in which consumers sell directly to other consumers Dr. Iyad Zoukar E-Business & E-Commerce 1-31 5. The Electronic Commerce Field: Classification, Content, and a Brief History Classification of EC Peer-to-Peer (P2P) ▪ Technology that enables networked peer computers to share data and processing with each other directly ▪ Can be used in C2C, B2B, and B2C e-commerce Collaborative commerce (c-commerce) E-commerce model in which individuals or groups communicate or collaborate online E-government E-commerce model in which a government entity buys or provides goods, services, or information from or to businesses or individual citizens E-learning The online delivery of information for purposes of training or education Dr. Iyad Zoukar E-Business & E-Commerce 1-32 5. The Electronic Commerce Field: Classification, Content, and a Brief History Classification of EC Mobile commerce (m-commerce) E-commerce transactions and activities conducted in a wireless environment Location-based commerce (l-commerce) M-commerce transactions targeted to individuals in specific locations, at specific time Exchange (electronic) A public electronic market with many buyers and sellers Exchange-to-Exchange (E2E) E-commerce model in which electronic exchanges formally connect to one another for the purpose of exchanging information Dr. Iyad Zoukar E-Business & E-Commerce 1-33 5. The Electronic Commerce Field: Classification, Content, and a Brief History Classification of EC Dr. Iyad Zoukar E-Business & E-Commerce 1-34 5. The Electronic Commerce Field: Classification, Content, and a Brief History The Interdisciplinary Nature of EC Major EC disciplines ▪ Computer science ▪ Marketing ▪ Consumer behavior ▪ Finance ▪ Economics ▪ Management information systems Dr. Iyad Zoukar E-Business & E-Commerce 1-35 5. The Electronic Commerce Field: Classification, Content, and a Brief History A Brief History of EC 1970s: Electronic Funds Transfer (EFT) ▪ Funds routed electronically from one organization to another ▪ Limited to large corporations Electronic data interchange (EDI) ▪ Electronically transfer routine documents o participating companies: manufacturers, retailers, services, … Interorganizational system (IOS) ▪ Travel reservation systems, Stock trading 1969 U.S. government experiment ▪ The Internet came into being initially used by technical audience o Government agencies o Academic researchers and scientists Dr. Iyad Zoukar E-Business & E-Commerce 1-36 5. The Electronic Commerce Field: Classification, Content, and a Brief History A Brief History of EC 1990s dot-coms The Internet commercialized and users flocked to participate in the form of dot-coms, or Internet start-ups Innovative applications Ranging from online direct sales to e-learning experiences Web site Most medium and large-sized organizations have a Web site Portal Most large U.S. corporations have comprehensive portals 1999 the emphasis of EC shifted from B2C to B2B Dr. Iyad Zoukar E-Business & E-Commerce 1-37 5. The Electronic Commerce Field: Classification, Content, and a Brief History A Brief History of EC 2001 the emphasis of EC shifted from B2B to B2E, c-commerce, e-government, e-learning, m-commerce The Google Revolution F-commerce E-commerce activities conducted on Facebook or influenced by the site EC will undoubtedly continue to shift and change Dr. Iyad Zoukar E-Business & E-Commerce 1-38 5. The Electronic Commerce Field: Classification, Content, and a Brief History A Brief History of EC EC successes ▪ Virtual EC companies Google – Facebook – eBay - VeriSign – AOL – Checkpoint … ▪ Click-and-mortar Cisco - General Electric - IBM – Intel - Schwab … EC failures ▪ 1999, a large number of EC-dedicated companies began to fail ▪ EC’s days are not numbered! o Dot-com failure rate is declining sharply o EC field is experiencing consolidation o Most pure EC companies, are expanding operations and generating increasing sales (Amazon.com) Dr. Iyad Zoukar E-Business & E-Commerce 1-39 Summary 1. Electronic commerce: definitions and concepts 2. E‐commerce versus Traditional Commerce 3. Origin and development of e-commerce 4. E-Commerce Features 5. The electronic commerce field: classification, content, and a brief history Dr. Iyad Zoukar E-Business & E-Commerce 1-40  I NTRODUCTION TO E-B USINESS AND E- C OMMERCE – PART I Information Technology Engineering - Course (306575): STRATEGIES for e-BUSINESS