Unit 5
E-Commerce
E-Commerce: History, Meaning, Objectives, Features, Types, Need, Business Application, Channels and Other Details
E-Commerce – Introduction
E-commerce means that mistreatment internet|the net} and also the web for business transactions and/or industrial transactions, which usually involve the exchange useful (e.g., money) across structure or individual boundaries reciprocally for product and services. Here we have a tendency to specialize in digitally enabled industrial transactions among organizations and people.
E-business applications develop into e-commerce exactly, once associate degree exchange useful happens. Digitally enabled transactions embrace all transactions mediate by digital technology and platform; that's, transactions that occur over internet|the net} and also the web.
Hence, e-tailing could be a set of e-commerce, that encapsulates all “commerce” conducted via the web. It refers thereto a part of e-commerce that entails the sale of product merchandise and doesn't embrace sale of services, particularly railway tickets, airlines tickets and job portals.
There ar 3 styles of destinations that cater to retail sales:
i. Ancient retail- brick-and-mortar
Ii. Corporatized retail- brick-and-mortar
Iii. Corporatized retail- e-tailing
E-Commerce – History of E-Commerce
Early Development:
The history of E-commerce begins with the invention of the phonephone at the tip of last century. EDI (Electronic knowledge Interchange) is wide viewed because the starting of ecommerce if we have a tendency to contemplate ecommerce because the networking of business communities and digitalisation of business info. Massive organizations are finance in development of EDI since sixties. It's not gained affordable acceptance till eighties. Which means of electronic commerce has modified over the last thirty years.
Originally, electronic commerce meant the facilitation of economic transactions electronically, mistreatment technology like Electronic knowledge Interchange (EDI) and Electronic Funds Transfer (EFT). These were each introduced within the late Nineteen Seventies, permitting businesses to send industrial documents like purchase orders or invoices electronically. The expansion and acceptance of credit cards, ATM machines (ATM) and phone banking within the Eighties were conjointly styles of electronic commerce. Another style of E-commerce was the airline and railway reservation system.
Online looking, a crucial element of electronic commerce was made-up by archangel Aldrich within the UK in 1979. The world’s 1st recorded business to business was Thomson Holidays in 1981. The primary recorded Business to shopper was Gateshead SIS/Tesco in 1984. Throughout the Eighties, on-line looking was conjointly used extensively within the UK by car makers like Ford, General Motors and Nisan. The systems used the switched public phone network in dial-up and hired line modes.
From the Nineteen Nineties forwards, electronic commerce would in addition embrace enterprise resource designing systems (ERP), data processing and knowledge deposit. Associate degree early on-line info marketplace, together with on-line consulting, was the yankee info Exchange, another pre net on-line system introduced-in 1991. In 1990 Tim Berners-Lee made-up the globe Wide net and reworked an educational telecommunication network into a worldwide common man everyday communication system referred to as internet/www(dot)Commercial enterprise on the web was strictly prohibited till 1991.
Although {the net|theweb|the net} became standard worldwide around 1994 once the primary internet on-line looking started, it took concerning 5 years to introduce security protocols and telephone circuit permitting continual association to the web. By the tip of 2000, several European and yankee business corporations offered their services through the globe Wide net. Since then folks began to associate a word “E-commerce” with the flexibility of buying numerous product through the web mistreatment secure protocols and electronic payment services.
The Internet and also the Web:
The Internet was planned in 1969, once the Advanced analysis comes Agency (a Department of Defense organization) funded analysis of laptop networking. The web may find yourself like EDI while not the emergence of the globe Wide net in Nineteen Nineties. The online became a well-liked thought medium (perceived because the fourth thought medium additionally to print, radio and TV) in a very speed that had ne'er been seen before. The online users and content were virtually doubled each one or two of months in 1995 and 1996.
E-Commerce – which means
The term electronic commerce or e-commerce refers to any type of business dealing that involves the transfer of knowledge through the web. By definition it covers a range of business activities that use net as a platform for either info exchange or financial dealing or each every now and then.
For example, the numbers of shopper whole retail sites like Amazon(dot)com and Flipkart(dot)com that ordinarily provides info concerning product and conjointly permits financial transactions to happen over the web.
On the contrary there ar the auctions sites like Quickr(dot)com and Ebay(dot)com wherever the knowledge concerning sure listed product and services ar provided however the financial transactions ordinarily happen physically.
Apart from these 2 classes of e-commerce sites, there ar some sites that alter businesses to exchange commercialism product and conjointly service between 2 or a lot of corporations. All of those styles of net primarily based business platforms ar called e-commerce.
Over the last decade the appearance of e-commerce has truly reworked the way during which folks used net. Folks currently aren't barely mistreatment net for gathering info, leisure or socialization on-line however conjointly at identical time they're seeking measures to conduct business.
Even standard social networking sites like Facebook(dot)com ar permitting folks to market and sell product and services on-line and also the introduction of laptop and mobile primarily based e-commerce application package like Shopify provides proof of however e-commerce have boomed over the past five years.
E-Commerce – Objectives: Development of Business-Relationship, Better-Customer Service and Getting More Customers
The various objectives of the e-commerce are often set down as follows:
1. Development of Business-Relationship:
The business development are often done through the e-commerce being the first and therefore the basic object. As their direct contact in between the corporate and therefore the shopper, their relationship are going to be increased. Thus the realm of the market are often increased .
2. Better-Customer Service:
As it is finished around the clock, the client can continually have on-line facilitate relating to the product. As all the data is well-found to the client, it becomes straightforward to him to settle on the simplest product among all alternative alternatives. As even the service may also be done through world wide web instantly, the client service are going to be ballooned. By light the client service, the businesses try to subjugate a lion-share within the market.
3. Obtaining a lot of Customers:
In recently it becomes the mandate of the businesses to double its customers, and this may be done by rendering the worth add service and maintaining the standard. Hence, it's additionally one in every of the first objectives of the businesses that provide impetus for the sturdy growth in sales and overall profit.
E-Commerce – nine necessary Features: Technology-Enabled, Mediated,Universality,Intercommunication,Delivery of data,Virtual Communities and a number of Others
E-Commerce has pertain key options that square measure explained as follows:
Feature # one. E-Commerce is Technology-Enabled:
Traditional commerce is happening since times old however E-commerce is results of integration of digital technology with business processes and business transactions. The technological foundations of E-commerce square measure web, computer network and varied protocols.
Feature # two. Technology Mediated:
In E-commerce patrons and sellers meet in cyber house instead of physical place. Thus E-commerce doesn't involve face to face contact.
Feature # three. Universality:
Buying and merchandising occur through websites in E-Commerce. The websites are often accessed from anyplace round the globe at any time thus it possess the feature of catholicity.
Feature # four. Intercommunication:
E-commerce technology ensures 2 means communications between emptor and merchant. On one hand by exploitation E- commerce companies will communicate with customers through E-commerce enabled websites. On the opposite finish, customers may also fill order forms, feedback forms and may communicate with business operative companies.
Feature # five. Delivery of Information:
E-commerce is the simplest channel of communication. E-commerce technologies guarantee speedy delivery info|ofdata|of knowledge} at terribly low value and significantly increase information density yet.
Feature # half-dozen. Electronic Completion of Business Processes:
By exploitation E- commerce we are able to perform business transactions like accounting and inventory through computers at international level.
Feature # seven. Virtual Communities:
Virtual Communities square measure on-line communities created by means that like chat rooms and specifically designed sites like, wherever folks will move with one another having common interest exploitation the net.
Feature # eight. Inter-Disciplinary in Nature:
Implementation of E-Commerce wants tons of data of social control, technological, social and legal problems. Besides this, understanding of shopper behaviour, selling tools and money aspects is as crucial as coming up with interactive E- Commerce websites.
Feature # nine. Customization:
With the employment of E-commerce technology, the globe is moving from mass-production to mass-customization. Product customization ensures that product square measure tailor created as per the necessities and preferences of consumers.
Like hollow laptops web site www(dot)dell(dot)com permits the shoppers to say configuration of a Computer so the merchandise is formed offered and delivered as per the configuration ordered by the client.
E-Commerce – five Major Types: Business-to-Business, Business-to-Consumer, Business-to-Government, Consumer-to-Consumer and Mobile Commerce
The major differing kinds of E-Commerce are:
I. Business-to-Business (B2B);
II. Business-to-Consumer (B2C);
III. Business-to-Government (B2G);
IV. Consumer-to-Consumer (C2C);
V. Mobile Commerce (M-Commerce).
Type # I. Business to Business (B2B):
1. Business to Business or B2B refers to E-Commerce activities between businesses.
2. In E-Commerce B2B, transactions square measure typically administered through Electronic knowledge Interchange or EDI. EDI is an automatic format of exchanging info between businesses over personal networks.
3. EDI consists of standards that alter businesses’ computers to conduct transactions with one another, while not human intervention.
4. For Example- makers and wholesalers square measure B2B corporations.
Type # II. Business to client (B2C):
1. Business to client or B2C refers to E-Commerce activities that square measure targeted on shoppers instead of on businesses.
2. For example, a book merchandiser would be a B2C company like Amazon.com.
Type # III.client to Business (C2B):
1. Client to Business or C2B refers to E-Commerce activities, that use reverse evaluation models wherever the client determines the worth of the merchandise or services.
2. For instance – tele employees and on-line auctions square measure C2B processes.
Type # IV.client to client (C2C):
1. Client to client or C2C refers to E-Commerce activities, that uses associate auction vogue model.
2. Customers also are the business and C2C permits customers to directly contend with one another. Associate example of this can be peer auction large, E Bay.
Type # V. M-Commerce (Mobile Commerce):
1. M-commerce (mobile commerce) is that the shopping for and merchandising of products and services through wireless technology i.e., hand-held devices like cellular telephones and private digital assistants. Japan is seen as a world leader in m-commerce.
2. As content delivery over wireless devices becomes quicker, safer and climbable, some believe that m-commerce can surpass wire line e-commerce because the methodology of alternative for digital commerce transactions. This might preferably be true for the Asia-Pacific wherever there square measure a lot of itinerant users than there square measure web users.
E-Commerce – Need in Modern Business Era: Wider Audience, Cost Efficiency, Faster Information and Enhanced Service
Electronic commerce, known as E-Commerce, occurs daily when sellers and buyers use the internet to conduct business transactions. Technology makes it possible for anyone to buy or sell practically anything online.
The study of following factors show the need for E-Commerce in modern business era:
1. Wider Audience- The internet provides businesses, access to millions and millions of people. A 2010 survey by Internet World Stats showed there are 266,244,500 internet users in North America. On the World Wide Web, companies move beyond geographic limits to reach wider audience.
2. Cost Efficiency- At the beginning of the internet age in the 1990s, creating websites was a costly undertaking. As the years passed, building websites became less and less expensive. In fact, small businesses can now build their own sites.
3. Faster Information- The information superhighway permits speedy exchange of data across the world, which also means new information, is available faster.
4. Enhanced Service- Development of E-Commerce equipped domestic providers to offer more services to clients.
E-Commerce – Business Applications: Sale, Purchase of Goods, Real Estate Market, Online Banking, Delivery of Goods, Import and Export, E-Tailing and a Few Others
Following are the major business application areas where E-Commerce is used widely:
1. Sale, Purchase of Goods:
By using E-Commerce, consumers can buy the various products and services from the different manufacturers. Industries can purchase raw materials, components etc. using E- Commerce. Sellers can sell their products by using E-commerce.
2. Real Estate Market:
Online real estate services are provided by websites that show listing of houses, shops and flats put up for sale and rent. Online real estate sites play supporting role for property dealers.
Now builders can use virtual reality technology on their website to demonstrate three dimensional floor plans to buyers. This helps real estate companies to attract buyers. So transactions normally can be initiated online but materialize offline in a face to face contact of parties. Many websites are providing online real estate services.
3. Online Banking:
Online Banking is also known as electronic banking, Net banking, virtual banking and internet banking online banking is defined as automated delivery of new and traditional banking products and services through electronic and interactive communication channels. Customers can access online banking services by using electronic devices like personal computer, laptop, palmtop, ATM, kiosks etc.
4. Delivery of Goods:
E-Commerce allows the delivery of products. For example, the computer software is directly downloaded by the software manufacturer on computer of the customer.
5. Import and Export:
Electronic payments are playing a great role in import and export business. The internet has simplified the import and export business. By using E-commerce importers can make enquiries about the products, their manufacturers, price, quality, other terms and conditions etc.
Exporters can also make enquiries about suitable customers. Payments can be made by electronic modes including digital means like internet payment or internet money transfer.
6. Supply Chain Management:
A supply chain is a set of relationships between a number of companies who have a symbiotic relationship with each other in that one company supplies commodities or services to other companies which, in turn, supply commodities or services to other companies, and so on.
An important point about an application such as this one is that information should be kept confidential as it flows across the internet.
7. E-Tailing:
E-tailing refers to retailing over the internet. Thus an e-tailer is a B2C business that executes a transaction with the final consumer. E-tailers can be pure play businesses like amazon(dot)com or businesses that have evolved from a legacy business, Tesco(dot)com. E-tailing is a subset of e-commerce.
E-Commerce – Channels: Commercial Channels and The Internet
These are of following two types:
(i) Commercial Channels:
Various companies have set up on-line information and marketing services that can be accessed by those who have signed up for the service and pay a monthly fee. These channels provide information, news, libraries, education, travel, sports and reference, entertainment, shopping services, dialogues opportunities and e-mail etc.
(ii) The Internet:
The Internet is a global web of computer networks that has made instantaneous and decentralised global communication possible. Internet usage has spread with recent development of the user-friendly World Wide Web (www) browser software such as Netscape Navigator and Microsoft Internet Explorer.
Users can surf the Internet and experience fully integrated text, graphics, images and sound. Users can send e-mail, exchange views, shop for products, and access news and business information. The users need to pay an Internet provider-to be hooked up to it through their computers.
Internet Strategies for Business and Key Success Factors in E-Commerce:
Internet users are better educated, better informed. As more and more people find their way onto the internet, the cyberspace population is becoming more mainstream and diverse.
Younger users of Internet in general place a greater value in information, entertainment, socialising etc.
Old users are more likely to use Internet for investment and more serious matters. In general, Internet users respond to messages aimed at selling, and receive information about products and services. In on-line marketing through internet, the consumers, and not the marketer, gives permission and controls the interaction.
Internet ‘search engines’ such as “Yahoo” and “Google” give consumers access to varied information sources, making them better informed and more discerning shoppers.
Consumers gain the following capabilities in the E-commerce providing information-rich regime:
1. They can get objective information for multiple brands, including costs, prices, features and quality without relying on the manufacturer or retailers.
2 They can initiate requests for advertising and information from manufacturers.
3. They can use software agents to search for and invite offers from multiple sellers. These new buyer capabilities mean that the exchange process in the age of information has become customer initiated and customer controlled.
Marketers and their representatives are held at bay till customers invite them to participate in the exchange process, customers define the rules of engagement, and insulate themselves with the help of agents and intermediaries.
Customers define what information they need, what products or services they are interested in and what prices they are willing to pay.
E-Commerce – Essentials and Procedures: Product/Service, Processing Mechanism, Payment Gateway, Delivery of Product, After Sale Service and Reverse Logistics
E-commerce operates digitally. It has some unique ways to put a business transaction in place.
Let’s see how this happens:
1. Product/Service:
For E-commerce to happen there should be a product or service that has value and for which someone is willing to pay a price. If this criterion is met, then you can sell anything on ecommerce websites—gadgets, books, automobiles, grocery, toys, apparel, vegetables and digital goods such as music, e-books, software, air tickets, magazine subscriptions and the like.
2. Processing Mechanism:
The ecommerce website of a company should put an easy process in place so that the customer browsing through the site can place an order. The software that makes this happen is called a shopping cart.
3. Payment Gateway:
Once the customer fills the cart with items that he or she has shopped, the site should take the customer towards the payment gateway, which collects money electronically. If the product is downloadable such as music, e-book etc., the website must also provide for that after accepting payment from customer.
4. Delivery of Product:
Once customers make the payment, the e-commerce site must ensure the delivery of product in good condition on time. Logistics is a specialized function, so most sellers outsource it to third party logistics providers. Like Amazon using the services of FedEx.
5. After Sale Service:
Customers need to be serviced pre-sales as well as post sales. Before the sale, customers might have queries about product features that are not mentioned on the website. They might have questions about customization and accessories. After the sale, customers might have queries related to the usage, repair or enhancement of the products or services that they have already purchased.
6. Reverse Logistics:
There is no guarantee of supplying an error-free product. If products get damaged or stop functioning after a while, or a wrong product is delivered—the ecommerce seller must ensure the flow of products in the reverse direction—known as reverse logistics—where goods flow from customer to the seller.
E-Commerce – 4 Major Market Segments: E-Tailing, E-Advertising and E- Marketing (With Advantages and Disadvantages)
E-commerce is a means of conducting business, where the buying or selling of goods and services or the transmitting of funds or data, occur via electronic medium. There are no physical market places and the entire process of marketing and selling of goods, takes place on-line or electronically. This means, the buyer and the seller do not often meet face to face. It is a replica of a physical market place in the virtual world.
E-commerce, also called e-trading, operates in all four major market segments – Business to Business, Business to Consumer, Consumer to Consumer and Consumer to Business. Examples of E-commerce include on-line shopping, electronic payments, on- line auctions, internet banking, on-line ticketing etc.
1. E-Tailing:
E-Tailing is the abbreviation of electronic retailing. It is the sale of goods and services through the internet. E-tailing involves business-to-business or business-to-customers transactions. It can be regarded as the internet front of any traditional retailer.
E-tailing shops believe in building strong brands. The web sites they create are easily understood by the visitors. They also provide discounts and offers to engage the customers. The pricing, in E-tailing shops, is generally lower than that of a traditional shop.
In this way the e-tailing shops lure the customers to make purchases on-line. The customers also get benefited from the fact that he/she does not need to physically visit the shop for making the purchase. The customers are free to make their own decisions regarding the purchase, at their own leisure time.
However, e-tailing shops need to have a strong distribution network in order to secure the delivery of the products. Otherwise, the purpose of the e-tailing site will be defeated. Big e-tailing sites like Ebay(dot)com and Amazon(dot)com are making great business in this country.
Advantages of E-Tailing:
1. No requirement of physical infrastructure.
2. Order completion is smoother than that of physical shops.
3. Customers might get addicted to on-line shopping, which in turn boost sales and increase revenue.
4. It is easy to review the product before, actually, purchasing it.
5. Most items available on-line are cheaper with quick and easy shipping and returns.
Disadvantages of E-Tailing:
1. Creating and maintaining an e-tailing web site is an expensive process.
2. Customers do not often get to check the actual dimensions of the products and the quality displayed there.
3. Customers may have trust issues before providing their personal details and credit card details.
2. E-Advertising:
E-Advertising is the mechanism of promoting products or services on-line. It is the process of gaining attention of the customers, through the digital media.
The main purpose of e-advertising is to reach out to a wider range of customers. It is more cost effective when compared to the traditional forms of advertising. E-advertising also enables you to target the specific customers.
On safeguard to be taken regarding E-advertising is that advertisement had to be consistently monitored and controlled because if it is done poorly, it can severely damage the image of the company.
Features:
1. E-advertising will only be published on the internet.
2. Sometimes e-advertising will provide hyperlinks to the company’s web site.
3. Can include image, texts, and even animations within the advertisements.
Types of E-Advertising:
There are various types of e-advertising:
(a) Wallpaper Advertising – It changes the background of the web site to the chosen promotion.
(b) Pop Up Advertising – It pops up a new screen upon clicking on a certain link on the web site, that it advertises the product.
(c) Floating Advertising – The floating e-advertising is a kind of a floating banner on the web site, which tempts the visitor to click on it.
(d) Ad Sense Advertising – This refers to companies’ paying major search engines (such as Google) to promote their business within the first three links that appear when a search is entered.
3. E-Marketing:
Electronic marketing (e-marketing) is also known as internet marketing, web marketing and digital marketing on on-line marketing. It is the process of marketing a product or service using the internet, e-mail and wireless media. Unlike e-advertising, e- marketing is very subtle. It is not always a direct message of persuasion but rather it is something which will educate the customers and convince them to buy the product or service.
Digital marketing techniques include Search Engine Optimization (SEO), Search Engine Marketing (SEM), content marketing, e-commerce marketing, social media marketing, display advertisement, marketing through SMS and on-hold mobile ring tones, etc.
When compared to the means of traditional marketing, e-marketing offers several advantages.
Advantages of E-Marketing:
1. E-marketing provides much better return on the investment made by the marketer.
2. It reduces the cost of marketing campaign.
3. The marketer can easily monitor and track the results of the campaign.
4. The results are often easily measurable and quickly obtained.
5. E-marketing allows marketers to create viral content, allowing viral marketing.
Disadvantages of E-Marketing:
1. Devising a strong online marketing campaign involves spending money, the cost of which is ultimately borne by the customer. The cost of website design, software, hardware, maintenance of website, online distribution cost and invested time, are also factored in, while deciding the cost of providing a service or a product online.
2. Website of the company has to be constantly updated, which required research and skills and thus timing of updates are also critical.
3. Digital marketing is not suitable for marketing of industrial goods and pharmaceutical products making it useful for only specific categories of products, namely consumer goods.
Types of E-Marketing:
There are several options through which the e-marketers can promote their product and services:
1. Article Marketing – Writing articles about products and services often helps in the process of educating the customers.
2. Affiliate Marketing – It is a kind of referral marketing where reference of any product will be provided on the other websites and when the customer buy’s the product based on the recommendation this website owner with gets commission.
3. Video Marketing – In this kind of e-marketing, a video will be shared describing the usage and benefits of the product or a service. It is often similar to television commercials.
4. Email Marketing – Direct emails are being sent to potential customers describing benefits of the product or service.
5. Blogging – Publishing blogs about similar products is also a very subtle way of marketing some business.
6. Social Media Marketing – This form of marketing means promoting company’s products and service on social media handles like Facebook, Twitter and Instagram – It is cost-effective because these platforms allow business to create profiles for free.
E-Commerce – Managerial Issues: Formulate Ecommerce Strategy, Re-Engineering for ecommerce, Managing Ethical, Cultural and Legal Issues and a Few Others
Nowadays companies are transforming themselves into e-commerce enabled organizations. To assure successful implementation of e- commerce, management of the organization has to deal with certain type of issues.
Some of the important issues before the organizational management are explained as follows:
i. Formulate E-Commerce Strategy:
Management has to develop e-commerce strategy based on the analysis of industry and competition. Many companies like IBM created independent division for formation .and implementation of e-commerce in the organization. The e-commerce division, formulates strategy in the light of corporate strengthens and weaknesses.
Then e-commerce division communicates the vision of top management throughout the organization and annual objectives are identified. Essential education and training is given to those who are to implement the e-commerce plans. Efforts are made to change the behaviour and attitude of executives, managers, and trading partners.
The management needs to view electronic commerce potential in the light of the competition and not just as technological advancement. E-commerce needs to be used as a strategic tool to gain and sustain competitive advantage in the industry.
Ii. Re-Engineering for E-Commerce:
Organizations are to be restructured and re-engineered in to a network based organization. Therefore, building and integrating infrastructure is a big challenge faced by company managements. Integrating information technology with existing business processes is a big task. In fact network of computers, complex transmission lines and dozens of pieces of software must all work together to make E-commerce happen.
The business process re-engineering team has to ensure that they do not miss anything significant while building and implementing E- commerce system Manufacturers have to decide whether the whole manufacturing and distribution system is to be restructured to become committed to direct Internet based supply chain and marketing or to use e-commerce website as a simple channel of distribution.
Company management has to make decision regarding in sourcing or outsourcing. Big companies go for in-house development of website. It means company’s own staff build e-commerce enabled website. Company management can also outsource this task to some third party, normally an experienced web development firm.
Iii. Managing Ethical, Cultural and Legal Issues:
There exist big ethical and cultural differences between countries. Something may be ethical in our country but unethical in another country. So MNCs have to study culture of each country and develop corporate ethical code.
For example, France has certain language and cultural laws that must be obeyed. Therefore, it is necessary that advocates, accountants and executives of the companies must understand legal, trade, cultural and monetary issues of the countries with which their company has to deal.
Iv. Making Cost Benefit Analysis:
Company management has to make cost benefit analysis of implementing e-commerce venture. Costs associated with e-commerce includes costs of hardware like PC clients, web servers, transaction servers routers and other networking devices, leased line and software like operating system, firewall, application software, web server software and transaction processing software, cost of recruiting and training staff for e-commerce etc.
Benefits can be measured through economic indicators like return on investment or through indicators like numbers of online customers, customer satisfaction and business partner satisfaction.
Organization of developed countries that have implemented e-commerce solutions have gained by way of realizing lower cost per transaction and taking advantage of economies of scale. In developing countries cost may exceed benefits in initial years of e-commerce initiatives.
v. Promoting E-Commerce Venture:
Company management has to take steps to promote the website.
Broadly, promotional activities can be classified into two categories:
a. Online Promotional Activities:
Online promotion is concerned with submitting your site to search engine. The objective is to get your site registered with the search engine so that the site appears as a link in search results of certain keywords-typed by internet user at the search engine like Google. This requires use of appropriate keywords in META tag.
Moreover, web team needs to search related sites and contact them so that their pages provide link to their web pages. So seeking reciprocal link is an effective way of promoting your e-commerce web site. Moreover, e-mails can be made of customers. Company that have advertising budget can promote the site by placing banner ads at popular websites and portals.
b. Offline Promotional Activities:
As far as offline promotion is concerned, company can advertise the web address through visiting cards, letter pads, bill books etc. Moreover, URL can also be advertised at various trade fairs, exhibitions and business related events like seminars, conferences etc. Therefore, company management has to set up advertising budget and decide the tools that it shall use to promote the e-commerce website.
Vi. To Deal with Security & Privacy Issues:
Websites collect information about visitors through filled in order forms, questionnaires and by recording browser information thought programs like cookies. But the personal information so collected must be used for stated business purposes. But many surveys have shown that online consumers have little privacy protection.
Therefore, it is necessary that company management must form privacy practice and must assure consumers and partners that information so collected shall be kept confidential.
In addition management needs to form security policy. Data security and network security are major issues. There have been cases when vital information like credit card numbers are stolen by hackers. Similarly e-mails can be and are often intercepted as they travel through the network.
This type of data and message security needs security measures like encryption, password protection etc. Similarly network security measures like firewall needs to be installed so that intruders are not able to make authorized access to corporate network. The firewall prohibits hackers from entering corporate network via internet. Therefore management needs to set up some kind of intrusion detection system an establish security policy.
Vii. Handling Human Resource Management Related Issues:
Electronic commerce is changing the manner in which staff is recruited, motivated, trained and educated. Two way interactions are now possible in video conferencing used for employee training and education. So, management needs to incorporate the impact of e-commerce on its human resource management practices.
Viii. Adopting Electronic Fund Transfer System:
Company management has to make agreement with acquiring bank, Credit Card Company and payment gateway to ensure that it is able to receive and make payments electronically through modes like credit cards, smart cards, e-cash etc. The management has to devise ways and means of integrating Internet based payment system with offline system.
E-Commerce – Impact of E-Commerce: Impact on Direct Marketing, Organisation, Manufacturing, Finance and Supply Chain Management
E-commerce has made a profound impact on society. People can now shop online in the privacy of their own homes without ever having to leave. This can force larger brick and mortar retailers to open an online division. In some cases, it can also force smaller businesses to shut their doors, or change to being completely online.
It also changes the way people look at making purchases and spending money. E-commerce has changed the face of retail, services, and other things that make our economy work. Undoubtedly, it will continue to influence how companies sell and market their products, as well as how people choose to make purchases for many years to come.
The following are the impacts of e-commerce on the global economy:
1. Impacts on Direct Marketing:
i. Product Promotion – E-commerce enhances promotion of products and services through direct, information-rich, and interactive contact with customers.
Ii. New Sales Channel – E-commerce creates a new distribution channel for existing products. It facilitates direct reach of customers and the bi-directional nature of communication.
Iii. Direct Savings – The cost of delivering information to customers over the internet results in substantial savings to senders when compared with non-electronic delivery. Major savings are also realized in delivering digitized products versus physical delivery.
Iv. Reduced Cycle Time – The delivery of digitized products and services can be reduced to seconds. Also, the administrative work related to physical delivery, especially across international borders, can be reduced significantly, cutting the cycle time by more than 100 percent.
v. Customer Service – Customer service can be greatly enhanced by enabling customers to find detailed information online. Also, intelligent agents can answer standard e-mail questions in seconds and human experts’ services can be expedited using help-desk software.
Vi. Corporate Image – On the web, newcomers can establish corporate images very quickly. Corporate image means trust, which is necessary for direct sales. Traditional companies such as Intel, Disney, Dell, and Cisco use their web activities to affirm their corporate identity and brand image.
Vii. Customization – E-commerce provides for customization of products and services, in contrast to buying in a store or ordering from a television, which is usually limited to standard products. Dell Computers Inc. Is a success story of customization.
Today, we can configure not only computers but also cars, jewellery, gifts, and hundreds of other products and services. If properly done, one can achieve mass customization. It provides a competitive advantage as well as increases the overall demand for certain products and services.
Viii. Advertisements- With direct marketing and customization comes as one-to-one or direct advertisement, which is much more effective than mass advertisement. This creates a fundamental change in the manner in which advertisement is conducted not only for online trades but also for products and services that are ordered in traditional ways.
Ix. Ordering Systems- Taking orders from customers can drastically be improved if it is done online. When taken electronically, orders can be quickly routed to the appropriate order-processing site. This saves time and reduces expenses, so sales people have more time to sell. Also, customers can compute the cost of their orders, saving time for all parties involved.
x. Markets- The physical market disappears as does the need to deliver the goods to the marketplace. In a market space, which is an electronic market, goods are delivered directly to buyers when purchasing is completed making markets much more efficient.
Already, small but powerful software packages are delivered over the internet. This fundamentally affects packaging and greatly reduces the need for historical distribution.
New selling models such as shareware, freeware are emerging to maximize the potential of the internet. New forms of marketing will also emerge, such as web-based advertising, linked advertising, direct e-mail, and an increased emphasis on relationship marketing. Customer’s convenience is greatly enhanced, availability of products and services is much greater, and cheaper products are offered.
2. Impacts on Organisation:
i. Technology and Organizational Learning:
Rapid progress in e-commerce will force companies to adapt quickly to the new technology and offer them an opportunity to experiment with new products, services, and processes. New technologies require new organizational approaches.
For instance, the structure of the organizational unit dealing with E- commerce might have to be different from the conventional sales and marketing departments. To be more flexible and responsive to the market, new processes must be put in place. This type of corporate change must be planned and managed.
Ii. Changing Nature of Work:
The nature of work and employment will be transformed in the digital age; it is already happening before our eyes. Driven by increased competition in the global marketplace, firms are reducing the number of employees down to a core of essential staff and outsourcing whatever work they can to countries where wages are significantly less expensive.
The upheaval brought on by these changes is creating new opportunities and new risks and forcing us into new ways of thinking about jobs, careers, and salaries.
The digital age workers will have to become very flexible. Few of them will have truly secure jobs in the traditional sense, and all of them will have to be willing and able to constantly learn, adapt, make decisions, and stand by them.
Iii. New Product Capabilities:
E-commerce allows for new products to be created and existing products to be customized in innovative ways. Such changes may redefine organizations’ missions and the manner in which they operate.
E-Commerce also allows suppliers to gather personalized data on customers. Building customer profiles as well as collecting data on certain groups of customers, can be used as a source of information for improving products or designing new ones.
Mass customization enables manufacturers to create specific products for each customer, based on his or her exact needs. For example, Motorola gathers customer needs for a pager or a cellular phone, transmits them electronically to the manufacturing plant where they are manufactured, along with the customer’s specifications and then sends the product to the customer within a day.
3. Impacts on Manufacturing:
The production systems are integrated with finance, marketing, and other functional systems, as well as with business partners and customers. Using web-based ERP systems, orders that are taken from customers can be directed to designers and to the production floor, within seconds.
Production cycle time is cut by 50 percent or more in many cases, especially when production is done in a different country from where the designers and engineers are located.
4. Impacts on Finance:
E-commerce requires special finance and accounting systems. Traditional payment systems are ineffective or inefficient for electronic trade. The use of the new payment systems such as electronic cash is complicated because it involves legal issues and agreements on international standards.
Nevertheless, electronic cash is certain to come soon and it will change the manner in which payments are being made. In many ways, electronic cash, which can be backed by currency or other assets, represents the biggest revolution in currency since gold replaced cowry shells.
Its diversity and pluralism is perfectly suited to the internet. It could change consumers’ financial lives and shake the foundations of financial systems and even governments.
5. Impact on Supply Chain Management:
Electronic commerce and the internet are fundamentally changing the nature of supply chains, and redefining how consumers learn about, select, purchase, and use products and services.
The result has been the emergence of new business-to business supply chains that are consumer- focused rather than product-focused. They also provide customized products and services. E-commerce impacts supply chain management in a variety of keyways.
These include:
i. Cost Efficiency:
E-commerce allows transportation companies of all sizes to exchange cargo documents electronically over the internet. E-commerce enables shippers, freight forwarders and trucking firms to streamline document handling without the monetary and time investment required by the traditional document delivery systems.
By using e-commerce, companies can reduce costs, improve data accuracy, streamline business processes, accelerate business cycles, and enhance customer service. Ocean carriers and their trading partners can exchange bill of lading instructions, freight invoices, container status messages, motor carrier shipment instructions, and other documents with increased accuracy and efficiency by eliminating the need to re-key or reformat documents.
The only tools needed to take advantage of this solution are a personal computer and an internet browser.
Ii. Changes in Distribution System:
E-commerce will give businesses more flexibility in managing the increasingly complex movement of products and information between businesses, their suppliers and customers. E-commerce will close the link between customers and distribution centres. Customers can manage the increasingly Complex movement of products and information through the supply chain.
Iii. Customer Orientation:
E-commerce is a vital link in the support of logistics and transportation services for both internal and external customers. E-commerce will help companies deliver better services to their customers, accelerate the growth of the e-commerce initiatives that are critical to their business, and lower their operating costs. Using the Internet for e-commerce will allow customers to access rate information, place delivery orders, track shipments and pay freight bills.
E-commerce makes it easier for customers to do business with companies: Anything that simplifies the process of arranging transportation services will help build companies’ business and enhance shareholder value.
By making more information available about the commercial side of companies, businesses will make their web site a place where customers will not only get detailed information about the services the company offers, but also where they can actually conduct business with the company.
Ultimately, web sites can provide a universal, self-service system for customers. Shippers can order any service and access the information they need to conduct business with transportation companies exclusively online. E-commerce functions are taking companies a substantial step forward by providing customers with a faster and easier way to do business with them.
Iv. Shipment Tracking:
E-commerce will allow users to establish an account and obtain real-time information about cargo shipments. They may also create and submit bills of lading, place a cargo order, analyse charges, submit a freight claim, and carry out many other functions.
In addition, e-commerce allows customers to track shipments down to the individual product and perform other supply chain management and decision support functions. The application uses encryption technology to secure business transactions.
v. Shipping Notice:
E-commerce can help automate the receiving process by electronically transmitting a packing list ahead of the shipment. It also allows companies to record the relevant details of each pallet, parcel, and item being shipped.
Vi. Freight Auditing:
This will ensure that each freight bill is efficiently reviewed for accuracy. The result is a greatly reduced risk of overpayment, and the elimination of countless hours of paperwork, or the need for a third-party auditing firm. By intercepting duplicate billings and incorrect charges, a significant percent of shipping costs will be recovered.
In addition, carrier comparison and assignment allows for instant access to a database containing the latest rates, discounts, and allowances for most of major carriers, thus eliminating the need for unwieldy charts and tables.
Vii. Shipping Documentation and Labelling:
There will be less need for manual intervention because standard bills of lading, shipping labels, and carrier manifests will be automatically produced; this includes even the specialized export documentation required for overseas shipments. Paperwork is significantly reduced and the shipping department will therefore be more efficient.
Viii. Online Shipping Enquiry:
This gives instant shipping information access to anyone in the company, from any location. Parcel shipments can be tracked and proof of delivery quickly confirmed. A customer’s transportation costs and performance can be analysed, thus helping the customer negotiate rates and improve service.
E-Commerce – Advantages: Convenience, Information, Fewer Hassels, Lower Cost, Relatively Building, Audience Sizing, On-Line Marketing and a Few Others
E-commerce provides the subsequent main advantages:
(i) Convenience – Customers will order product or services twenty four hours each day where they're.
(ii) data – Customers will realize reams of comparative data regarding corporations, products, competitors and costs while not effort their workplace or home.
(iii) Fewer Hassels – Customers don’t need to face sales folks or open themselves upto persuasion and emotional factors, they conjointly don’t need to wait in line.
(iv) fast Adjustment to promote Conditions by Marketers – corporations will quickly add product to their providing and alter costs and descriptions.
(v) Lower price – On-line Marketers avoid the expense of maintaining a store and also the prices of rent, insurance and utilities.
They can turn out digital catalogues for abundant less price than the value of printing and mailing paper catalogues.
(vi) comparatively Building – On-line marketers will dialogue with shoppers and learn from them. Marketers will transfer helpful reports or a free demo of their softwares.
(vii) Audience size – On-line Marketers will learn the way many folks visited their internet site and the way several of them shopped at specific places on the location. This data will facilitate them improve offers and advertisements.
(viii) On-line selling – it's simple cheap by tiny companies, United Nations agency otherwise wouldn't are able to advertise within the print or broad price media.
(ix) E-Commerce – E-commerce through web and internet site will access and retrieve data in no time, compared to long mail and even fax.
(x) massive and Medium – These corporations have designed their own websites to automatise company getting. The high price on invoices and buy order copies as well as time area unit saved an excellent deal thanks to E-commerce and web part.
(xi) web newsgroups started for business functions facilitate corporations place on-line advertisements and therefore save price and time.
(xii) New teams, Bulletins board systems (BBSs) and internet committees facilitate conjointly consumers, sellers and folks normally to possess access to valuable data on various topics as well as data of cultivation for farmers.
E-Commerce – Disadvantages: Security, System and information Integrity, System measurability, ecommerce isn't Free, client Relationship issues and a number of others
1. Security:
Security continues to be a drag for on-line businesses. Customers need to feel assured regarding the integrity of the payment method before they conceive to the acquisition. Banks like ICICI Bank, HDFC Bank, bank of Asian nation have else secure payment gateways to method on-line banking transactions quickly and safely.
2. System and information Integrity:
Data protection and also the integrity of the system that handles the info area unit serious considerations.laptop viruses area unit rampant, with new viruses discovered a day. Viruses cause inessential delays, file backups, storage issues, and alternative similar difficulties. The danger of hackers accessing files associated corrupting accounts adds additional stress to an already advanced operation.
3. System Scalability:
A business develops associate interactive interface with customers via a web site. Once a short time, applied mathematics analysis determines whether or not guests to the location area unit one-time or continual customers. If the corporate expects two million customers and six million show up, web site performance is guaranteed to expertise degradation, slowdown, and eventually loss of shoppers. To prevent this downside from happening, a web site should be ascendable, or upgradable on an everyday basis.
4. E-Commerce isn't Free:
So far, success stories in e-commerce have forced massive business with deep pockets and sensible funding to take a position in making on-line websites. Per a report, tiny retailers that go head-to-head with e-commerce giants area unit fighting losing battle. As within the brick-and-mortar surroundings, they merely cannot contend on worth or product providing. Complete loyalty is said to the present issue, that is meant to be less important for on-line companies. Brands area unit expected to lower search prices, build trust, and communicate quality. a hunt engine will return up with the most effective music deals, as an example, nonetheless shoppers still flock to trustworthy entities like HMV.
5. Shopper Search isn't economical or Cost-Effective:
On the surface, the electronic marketplace appears to be an ideal market, wherever worldwide sellers and consumers share and trade while not intermediaries. However, a more in-depth look indicates that new kinds of intermediaries area unit essential to e-commerce. They embrace electronic malls that guarantee legitimacy of transactions. Of these intermediaries increase dealing prices.
6. Client Relations Problems:
Not several businesses realise that even e-business cannot survive over the future while not loyal customers. Building client loyalty to a selected web site isn't a straightforward task. Customers area unit notoriously fickle-minded, and don't minding visiting a competitory web site simply to avail even one-time edges or discounts.
7. Products-People Won’t purchase Online:
Imagine a web site referred to as piece of furniture, com or living.com, wherever venture capitalists area unit finance millions in merchandising home furnishings on-line. Within the case of a settee, you'd wish to sit down on that, feel the feel of the material etc. Beside the lounge check, on-line piece of furniture stores face pricey returns that makes the merchandise tougher to sell on-line.
8. Company Vulnerability:
The availability of product details, catalogues, and alternative data a few business through its website makes it at risk of access by the competition. The thought of extracting business intelligence from {the internetsite|the web site} is named web framing. And such threats area unit increasing day by day during this digital, networked world.
9. High Risk of web Start-Up:
Many stories unrolled in 1999 regarding triple-crown executives in established companies effort for Internet start-ups, solely to search out out that their get-rich dream with a dot.com was simply that – a dream.
E-Commerce – Threats to Present Day E-Commerce and Its Solution
Major threats to gift day e-commerce is also listed thus:
i. Cash Thefts E-commerce services square measure concerning transactions, and transactions square measure terribly mostly driven by cash. This attracts hackers, kooky and everybody with the data of exploiting loopholes during a system. Once a kink within the armour is discovered, they feed the system (and users) with various bits of dubious info to extract confidential knowledge (phishing).
This is notably dangerous because the knowledge extracted is also that of mastercard numbers, security passwords, dealing details etc. Also, Payment gateways square measure at risk of interception by unethical users. Smartly crafted methods will sift a locality or the whole quantity being transferred from the user to the net vender.
Ii. Identity thefts Hackers usually gain access to sensitive info like user accounts, user details, addresses, confidential personal info etc. it's a major threat in sight of the privileges one will avail with a false identity. As an example, one will effortlessly login to a web looking marketplace beneath a taken identity and create purchases value thousands of greenbacks.
He/she will then have the order delivered to associate degree address aside from the one listed on the records. One will simply see however those orders may be received by the role player while not arousing suspicion. Whereas the fraudsters gains, the initial account holder continues to pay the value till the wrongdoer is nabbed.
Iii. Threats to the system Viruses, worms, Trojans square measure terribly deceptive strategies of stealing info. Unless a sound virus-protection strategy is employed by the ecommerce Solutions firm, these malicious agents will compromise the believability of all ecommerce net answer services. Usually planted by people for reasons familiar best to them alone, viruses breed among the systems and multiply at astonishing speeds. Unchecked, they'll probably cripple the whole system.
Solutions:
The following precautional steps may influence be helpful:
i. Authentication:
Most notable square measure the advances in identification and elimination of non-genuine users. E-commerce service designers currently use multi-level identification protocols like security queries, encrypted passwords (Encryption), biometry et al. To verify the identity of their customers. These steps have found wide favour all around thanks to their effectiveness in hunting down unwelcome access.
Ii. Intrusion Check:
The issue of try viruses and their like has additionally seen speedy development with anti-virus vendors cathartic sturdy anti-viruses. These square measure developed by skilled programmers UN agency square measure a notch higher than the hackers and kooky themselves. Firewalls square measure another common manner of implementing security measures. These programmes limit access to and from the system to pre-checked users/access points.
Iii. Educating Users:
E-commerce is run primarily by users. Thus, E-com¬merce service suppliers have additionally turned to educating users concerning safe practices that create the whole operation hassle free. Recent problems like phishing are tackled to an honest extent by informing real users of the perils of business enterprise their {confidential info|tip|lead|steer|wind|hint|guidance|counsel|counseling|counselling|direction} to unauthorized information seekers.
The Golden Triangle of Ecommerce
I speak to several individuals on a daily basis curious about Ecommerce. Some have existing businesses with provider relationships. Some have solely dreams. I tell every of them identical factor. There’s no magic within the web. If your plan doesn't add up within the globe it won’t add up on the net. You want to establish a desire and a client World Health Organization is willing to get it. The net will extend your reach and Ecommerce will offer the tools to support and grow your enterprise. Confirm you extend one thing that individuals need within the manner they require it.
Ecommerce may be a terribly specific set of the net business. There area unit 3 belongings you should move to succeed at Ecommerce. None of them need technical data and every one area unit pronto accessible to a any business owner. Somebody thinking of endeavour associate degree Ecommerce venture has to perceive these concepts. If you are having a oral communication with associate degree Ecommerce supplier and that they can't make a case for their ideas in easy non technical business terms, Run not walk to the door.
SEARCH ENGINE optimisation
The first leg of constellation is obtaining the client to understand you exist. There any range of ancient selling routes to succeed in users. In Ecommerce, we tend to have an interest in reaching users World Health Organization area unit on-line. {weneed|we'dlike|we need} to spot those that want to shop for what we tend to sell. We'd like to create them conscious of who we tend to areaand that we ought to deliver them to our virtual doorsill. We'd like to try and do this at the smallest amount attainable value per client.
In Ecommerce we tend to decision this computer programme optimisation. Computer programme optimisation is ensuring you're the highest listing once a client appearance for a product or service on-line. Google and Yahoo have modified the manner we glance and realize things on the net. They need developed subtle measurement devices to rate the relative deserves of suppliers of data, services and product. Understanding what search terms (Key Words) represent a need on behalf of the patron for your product and establishing yourself within the initial few natural* listing on the search engines is that the distinction between success and failure in Ecommerce. We offer this service by managing 2 crucial parts.
Physical transparency
We build technology that's clear to the search engines. Transparencies mean we tend to format the natural object and also the info in ways in which permit the computer programme to grasp exactly what our web site is concerning. If your web site isn't designed victimisation correct technologies in correct implementation the search engines won't perceive “who you are†and can not rank you suitably. We tend to area unit typically known as upon to exchange entire implementations that perform all of the specified functions, as a result of the search engines cannot see them. This can be overpriced and unessential. Thus build your web site with the search engines in mind.
External Reference
The second space of SEO is external web sites and their direct or indirect relevancy your site. If you sell toasters than Google and Yahoo need all the news concerning toasters to reference you. If a serious toaster manufacturer features a list of affiliates your web site ought to get on it. We tend to use a team of parents World Health Organization pay their days operating as publicists for toasters (or your product). It sounds funny however if the net isn't conscious of you from many various purpose sources you'll ne'er bring home the bacon a high ranking. Thus obtaining the word out on connected sites directly influences your ranking within the search engines.
Once you have got customers hit the doorstep you would like to produce 2 crucial services.
MAKE getting simple
The second leg of the golden triangle is concerning the positioning itself. The first suppliers of web commerce created associate degree expectation level in customers. Sites like Amazon.com and E-bay have outlined the manner during which customers expect to search out product, place orders and follow informed their transactions.
Do Not Re-Invent the Wheel
It is necessary that you just meet base criteria for net transactions. Customers ought to be ready to simply and quickly navigate your product. They ought to have multiple methods to identical finish that match their individual designs. They ought to at no purpose within the method got to agitate a structural surprise. In short, one important part to establishing believability is to produce uniform interface capability to your web site. Notwithstanding however distinctive your product or service is, your methodology for locating it, obtaining it into the cart and sorting out mustn't be.
People don't browse
The web may be a visual medium. Brobdingnagian tracks of written detail concerning your product area unit unworthy. Your presentation should be intuitive and obvious within the initial few moments a client views it. If a 5 year recent cannot navigate your web site with ease and procure your service make love over. The top result's that your product has to be given during a skilled manner. Your pictures ought to be prime quality. The main points of the planning ought to be clear and laconic. Your method has to be intuitive and obvious and your technology has to be time tested and solid.
CREATE A RELATIONSHIP
The final leg of the triangle is about everything that happens after the sale. The easiest customer to sell to is one that you already have. The Internet provides a superb low cost method of communicating with your user base. Once a customer buys from you they have already given you several built in options for communications.
Registering them to check on their product will bring them back to the site. Collecting their contact details to make them aware of new offerings is key. Managing and sending those offerings in a way that is going to be perceived as adding value is a complex art that takes time and attention. Having the tools to manage the financial, shipping, and customer follow up are key to making sure your customer has nothing but pleasant thoughts about their interaction with your company. Pleasant thoughts go a huge distance toward return purchases. Without exception successful ECommerce offerings have a high percentage of return customers.
THE GOLDEN TRIANGLE OF ECOMMERCE
- Get the Right Customer to your site
- Make it easy for them to buy from you
- Take care of them after the sale
These simple points require sophisticated tools and commitment. Your ecommerce offering, while related is separate business. When you expand your offering to include ecommerce you need to make sure that the human and financial assets and a partner who can help you make it work.
Good luck and good selling.
