Electronic commerce (e-commerce or eCommerce) is composed mainly of the distribution, purchase, sale, marketing, services and products or services via electronic systems such as the Internet and other computer networks.
The industry of information technology could see it as an application of electronic commerce for business transactions. It can involve electronic funds transfer, management of the supply chain, emarketing, online marketing, online transaction processing, electronic data interchange, automated inventory management systems, automated data collection systems. It is often use electronic communications technology such as Internet, extranet, email, ebooks, databases, and mobile phones. According to Forrester Research (as cited in Kessler, 2003), electronic commerce generated sales worth U.S. $ 12.2 million in 2003.
History of eCommerce
The meaning of the term “electronic commerce” has changed over time. Originally, “electronic commerce” meant the facilitation of commercial transactions electronically, usually using technology like Electronic Data Interchange (EDI, introduced in late 1970) to send commercial documents like purchase orders or invoices electronically .
Later, it came to include activities more precisely termed “Web commerce” – the purchase of goods and services via the World Wide Web via secure servers (note HTTPS, a special server protocol which encrypts data confidential orders for customer protection) with eshopping carts and with electronic pay services, such as credit card payment authorizations.
When the Web first known among the general public in 1994, many journalists and experts predict that electronic commerce will soon become an important economic sector. However, it took nearly four years for security protocols like HTTPS to become sufficiently developed and widely deployed (during the browser wars of this period). Subsequently, between 1998 and 2000, a significant number of companies in the United States and Western Europe developed rudimentary Web sites.
Although a large number of “pure ecommerce” companies disappeared during the dot-com collapse in 2000 and 2001, many “brick and mortar” retailers recognized that such companies had identified valuable niche markets and began to add capabilities e-commerce to their Web sites. For example, after the collapse of the online retailer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through which consumers can order groceries online.
Since 2005, electronic commerce has become well established in major cities across much of North America, Western Europe, East and some Asian countries like South Korea. However, e-commerce is still emerging slowly in some industrialized countries like Australia, and is virtually nonexistent in many Third World countries.
Key Factors for eCommerce Success
Several factors have a role in the success of any e-commerce company. They may include:
- To provide value to customers. Vendors can achieve this by offering a product or product line that attracts potential customers at a competitive price, as in non-electronic commerce.
- Providing service and performance. Offering a sensible, user-friendly shopping experience, like a flesh-and-blood retailer, may in some way to achieving these goals.
- Providing an attractive website. The tasteful use of color, graphics, animation, photos, fonts, and white space can help percentage of success in this regard.
- To provide an incentive for customers to purchase and return to their homes. Sales promotions to this end may include coupons, special offers and discounts. Cross-linked websites and advertising affiliate programs can also help.
- Providing personal attention. Personalized Web sites, purchase suggestions and special offers can be customized some of the ways to substitute for face-to-face human interaction found in a traditional point of sale.
- To provide a sense of community. Chat rooms, discussion boards, soliciting customer input, loyalty schemes and affinity programs can help in this regard.
- Facilitate the reliability and security. Parallel servers, hardware redundancy, fail-safe technology, information encryption and firewalls can enhance this requirement.
- Provide a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers and partners have a complete picture, and the same view of the customer. However, customers may not appreciate the big brother experience.
- Possess the total customer experience. E-tailers foster this by treating any contact with a customer as part of a total experience, an experience that becomes synonymous with the brand.
- Streamlining business processes, possibly through re-engineering and information technology.
- Letting customers help themselves. Provision of a self-service site, easy to use, without assistance, can help in this regard.
- Helping customers do their job of consuming. E-tailers shopping and online directories can provide such assistance through an extensive search for comparative information and good facilities. Provide services and information component of the safety and health reviews can help e-tailers to define the customers of employment.
- Building a sound commercial business model. If this key success factor had appeared in textbooks in 2000, many of the dot.coms might not have gone bust.
- Electronic Engineering in the value chain that one focuses on a “limited” number of core competencies – the opposite of a one-stop shop. (Electronic stores can appear either specialist or generalist, although scheduled).
- Operating at or near the forefront of technology and staying there as technology changes (but remembering that the fundamentals of commerce remain indifferent to technology).
- The creation of an adequate monitoring and agility to respond quickly to changes in the economic, social and physical environment.