Essay Question 1: What are the elements of a good

abc online retailing (e-tailing) website? Give examples, including the web address of a firm’s website that you feel uses these elements successfully
The online stores are nothing but an extension of retailing. In net terminology it is known as E-tailing. If you go by definition, it is “E-tailing refers to retailing over the internet. Thus an e-tailor is a B2C business that executes a transaction with the final consumer. E-tailors can be pure play businesses like Amazon.com or businesses that have evolved from a legacy business, Tesco.com. E-tailing is a subset of e-commerce”
It is crucial in any e-tailing business to keep the shopping process simple, fast, and consistent. The average time to shop keeps getting faster at just over four minutes with less than five clicks in the process from product selection through checkout.
I personally look for the sites, which are fast to load, got a lot of information about the displayed products, good prices of course should be there and which gives the price comparison with other big players. Apart from this, I look for the customer related services. This includes no value added service Also if the site has got any;#61514; section which is updated quite often for latest articles, latest trends on the online shopping and about the product details / description. The normal practice which I follow is to rely on the search engines for the desired product. Thanks to Google that it gives impartial results and very precise ones. Though it does not work on semantics, but most of the time it gives desired results. Many comparison websites are there to find out competitive rates, I like bizrate.com as you can get many vendors for the same products. The normal process which I follow is to look for at least 5 websites, evaluating them on different parameters like pricing, ease of shopping, security of transaction, guarantee of the product, return policy, after sales service, general services to customers etc.
Pricing: Pricing plays a very important role. A Lot of distribution costs are gone if you purchase online directly from the supplier or any distributor. You can get amazing prices if you invest some time for looking out different websites for the same products. Lot of price comparison websites are available to assist you out in this. I rely on bizrate.com
Ease of shopping: Ease of shopping is also important for any customer. The website should be very much user friendly. A customer should not feel lost while surfing and searching for the products. Amazon.com is quite a good website. The process of shopping is more or less same at every website. But few people provide very good interfaces and very good support at every stage so that the customer feels very good about it. Bluenile.com is a very good website selling diamonds. Though the diamonds are expensive as compared to other websites, but the way of presentation and the support services put them apart from others.
Security of transaction: Security of transaction plays a very important role. A customer should be taken in confidence that whatever information he is going to disclose for the shopping, will be kept confidential and will not be disclosed. Any leak in this information may result in huge financial loss to the customer. I look for various security certificates, their validity, certifying authority, pad lock etc before committing any transaction. Verisign security certificate comforts me.
Guarantee of the product: Guarantee of the product and quality of product are other important issues. You should know the product which you are going to purchase should be worth of the price you are paying, should meet the prevailing quality standards and should carry a valid guarantee or warranty. It is advisable to check and ask for the guarantee and warranty of the product before placing the order from the vendor who is selling it online.
Return policy: Return policy is very important if the product is costly, say jewelry or some computer accessory of electronic good. I like the websites with precisely defined return policies. This makes customer feel that they will not be at loss if the product does not meet their expectation.
Customer Care services: Customer services are back bone to any e commerce business. They are the mouth piece of any online web store. This is the front which can decide which website is better in today’s scenario. Almost all the website have security, all have good quality of products , but the point where one scores over other is the class of customer service. I like the website with chat support and very less turn around time for the query posted.


http://www.ite.poly.edu/people/brao/EMe-Tailing.pdf
E-retailing is defined as the sale of products and services to the consumer market over the Internet. The objective of e-retailers is to complete product purchase transactions; however, the unique benefits that e-retail transactions provide to consumers are in the performance of the service end of the e-retailing experience rather than in the qualities of the purchased good itself, which can be obtained through alternative commercial channels.
E-service is currently offered in a wide range of service industries. Despite benefits proposed by the web-based commercial environment, few e-retailers have succeeded in encouraging consumers to modify their current “shopping” habits, in favor of Internet shopping. Convincing surfers to advance from “monitor shopping” to “actual purchasing” and especially creating repeat-consumers has proven to be a challenge (Helander & Khalid, 2000; Jarvenpaa & Tractinsky, 1999; Kolesar & Galbrait, 2000).
Selected References
Helander, M. G. & Khalid, H. M. (2000). Modeling the customer in electronic commerce. Applied Ergonomics, 31, 609-619.

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Hommel, B. Pratt, J., Colzato, L. & Godijn, R. (2001). Symbolic control of visual attention. Psychological Science, 12, 360-365.
Jarvenpaa, S. L. & Tractinsky, N. (1999). Consumer trust in an Internet store: A cross-cultural validation. Journal of Computer Mediated Communication, 5(2).

Kiesler, S. Siegel, J. & McGuire, T. (1984). Social psychological aspects of computer-mediated communication. American Psychologist, 39, 1123-1134.

Kolesar, M. B. & Galbrait, R. W. (2000). A service marketing perspective on e-retailing: implications for e-retailers and directions for further research. Internet Research: Electronic Networking Applications and Policy, 10, 424-438.

Larocho, M., Bergeron, J. & Goutaland, C. (2001). A three dimension scale of intangibility. Journal of Service Research, 4, 26-38.

Nass, C. Kim, E. & Lee, E. (1998). When my face is the interface: An experimental comparison of interacting with one’s own face or someone else’s face. Human Computer Interaction, 18, 148-153.

Papadopoulou, P., Andrew, A., Kanellis, P. & Martakos, D. (2001). Trust and relationship building in electronic commerce. Internet Research: Electronic Networking Applications and Policy, 11, 322-332.

Price, L. L. & Arnould, E. J. (1999). Commercial friendship: Service provider-client relationships in context. Journal of Marketing, 63, 38-56.

Rafaeli, A. & Vilnai-Yavetz, I. (2002). Instrumentality, aesthetics and symbolism of physical artifacts as triggers of emotion. In Press, Theoretical Issues in Ergonomics Science (TIES).

Riegelsberger, J. & Sasse, M. A. (2000). “Trust me, I’m a .Com”: The problem of reassuring shoppers in electronic retail environments. Intermedia, 28.

Roland, T. R. & Kannan, P. K. (2002). E-service: New directions in theory and practice. New-York: M. E. Sharpe.
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Wang, F. & Head, M. M. (2001). A model for web-based information systems in e-retailing. Internet Research: Electronic Networking Applications and Policy, 11, 310-321.


Essay Question 2: What, in your opinion, is the future of e-commerce? Be sure to support your answer with references.


The Emerging Digital Economy
In order to understand the future of electronic commerce it is necessary to understand its emergence in a historical perspective. The rapid expansion of electronic commerce is just one component of a historical transition from an industrial economy to a digital economy. Whereas traditional industrial economies are based on the production of industrial goods (steel, oil, and automobiles) and physical transformation (railroads, highways), the digital economy is based on the rapid processing of information and telecommunications. In 1998 the Department of Commerce’s issued a report on the Emerging Digital Economy. This was followed in 1999 by the Emerging Digital Economy II. The readings at the beginning of this module are from those reports and provide a context to the material we will cover latter in the course.
A major finding of the original 1998 report was the speed at which the internet was adopted by the general population. It took fifty years from the time the first commercial power plant was built in the 1890’s until 80% of the homes in America were wired for electricity. It was another 41 years (1973) before the last community (Campwood TX) in the United States was added to the nation’s electric grid. Radio was in existence 38 years before 50 million homes had radio receivers. TV took 13 years to reach that milestone. The Internet took only 4 years. The internet is clearly spreading faster than any other major innovation. And the pace hasn’t slowed down. Currently traffic on the Internet is doubling every 100 days. In the four years from 1993 to 1997 the number of Internet hosts has increased from 1.8 million to 19.5 million.
The revolution in communication created by the Internet and other global computer networks is going to change the basic structure of the economy, but not in the way many of the dot.com pioneers believed. Since the Internet allows fast exchange of information between consumers and producers, it allows supply to quickly adjust to changes in demand. Information technology is therefore becoming a major share of the nation’s economy. According to the report it grew from 4.9 percent of the economy in 1985 to 8.2% in 1997, and its continuing to grow at a rate of 15% per year. This is even more remarkable in that IT prices have been falling as capacity increases. It is estimated that the inflation rate was reduced by as much as 1% because of the fall in IT prices.
The improved communication between consumers and producers resulting from the Internet allows markets operate more efficiently resulting in increases in productivity. But this doesn’t replace the traditional marketing function as many Internet gurus, including Bill Gates believe, but instead requires it to be more integral to the valuation creation process by allowing the constant flow of information it provides producers also allows them to develop products that better match the needs of consumers. The Internet also serves to rapidly communicate news and information on new technical innovations. All these factors result in a faster rate of technical progress and innovation. Both issues will be discussed in this course. Although E-commerce may be a new field, the study of marketing is nearly a hundred years old and a large component of that knowledge bases is transferable to e-commerce marketing. The key in transferring this knowledge is not to be so awed by e-commerce that you forget the basics of good marketing. The way you apply the basic marketing techniques to e-commerce marketing may vary, but the basics of good marketing still remain the same for e-commerce marketing as it does for traditional marketing.
There are varying opinions regarding the future of e-commerce. Despite the fact that online sales are growing exponentially, some analysts believe that e-commerce is heading for a fall. Laurie Windham justifies her belief that as time goes on, sales will decrease instead of increasing. Windham believes that net consumers are very different than mall shoppers and catalog shoppers. Furthermore, she says that dot-coms are responsible for ruining their own chances to sell because they have spoiled customers to the point that consumers expect cheap prices and freebies and if they don’t get them, they just move on to another site. E-commerce, Windham says, is a fickle world with little, if any, customer loyalty (Fortune, 2000). Windham found some interesting differences between online shoppers and traditional shoppers. For instance, 34 percent of online shoppers describe themselves as comparison shoppers but only 8 percent of traditional shoppers describe themselves as comparison shoppers. Another comparison is that only 1 percent of Web shoppers say they hate stores but 10 percent of traditional shoppers say they hate stores (Fortune, 2000). Web shoppers are by and large comparison, price-sensitive consumers. Future 3 Windham, who spent two years studying the consumers who purchase online, said that as nonusers begin to use the Web for purchasing, they will be less adventuresome than people already making purchases online. They will also be slightly older than the norm and they will be more fearful and cautious about privacy and security. In other words, as nonusers begin using the Web to shop, they will be a more conservative group than current users. It is probable they will also be less fickle and more loyal to brands/stores (Fortune, 2000). Windham pointed out that there were numerous problems with people receiving exactly what they ordered online during last holiday season. Based on that, she suggested sales may be lower this year (Fortune, 2000). Surveys conducted after the last holiday season suggested online shoppers would continue shopping online. One survey, for instance, indicated that more than 90 percent of consumers reported that shopping online met or exceeded their expectations. Eighty percent said they would increase their online shopping in 2000 (Rutledge, 2000). Studies found that consumer confidence in using the Internet for shopping reached very high levels, which were due to a number of factors. Positive comments from family and friends were one of the factors that swayed more people to utilize this option. Better selections from online stores also made the experience more satisfying. Finally, Future 4 secure credit card transactions played a major role in increasing sales (Rutledge, 2000). Consumers were enticed to try shopping on the Internet by the massive marketing campaign last year for both dot-com stores and retail stores online. More than 70 percent of Net shoppers said they bought from e-commerce sites that offered free shipping. Another 54 percent said they were enticed by the discounts offered for their first online purchase. Forty percent used online coupons and 25 percent responded to the offer of free gifts for their online purchase (Rutledge, 2000). The Direct Marketing Association projected that sales generated from catalogs and the Internet would double in the next four years, reaching $3.33 billion (Entrepreneur, 2000). A study by Jupiter Communications agreed saying that sales would increase this holiday season. This study reported that holiday shoppers would spend almost $12 billion in online purchases between November 1 and December 31 this year, which represents a 66 percent increase over the same time period last year. The increase between the 1998 and 1999 holiday seasons was 126 percent. There is a slowdown in the degree of growth but it is still a substantial increase (Kontzner, 2000) The Gartner Group predicted a much larger growth this year. They projected sales of $19.5 billion. This group also believed that dot-com stores and retail stores online Future 5 would not spend as much money on advertising this year. Instead, they will spend resources on retaining customers (Kontzner, 2000). As a number of dot-coms collapsed during this past year, many retailers felt a wave of relief but it was short-lived. The Web’s bite into retail store sales is about to become noticeable and hurtful. Business Week (2000) reported that there is a rule of thumb that says a 10 to 15 percent loss in sales vaporizes a store’s profits. In 2000, online sales of books alone will top 11 percent of all books sold. That is up from 8.5 percent in 1999. CDs and videos will more than double their sales from 1999 and that will bring them to 10 percent of the entire market. Computer hardware and software already totals more than 18 percent of the market (Business Week, 2000). In order to combat this trend, some retailers are trying to lure consumers to their own online sites. They are also trying to use their Web sites to bring people into their stores. Since 94 percent of online buying is nothing but a shift from stores to a more convenient way of shopping, some of these strategies could work. Still, physical site retailers have begun to feel the effect of Net shopping. And, the fact is that sales on the Web are at least doubling every year (Business Week, 2000). The overhead is far less for dot-coms. They sell from a central warehouse and do not have to support thousands of stores Future 6 around the country. This fact is so clear that AMB Property Corp., a real estate investment trust in San Francisco, sold $560 million worth of local shopping centers and invested the proceeds in warehouses close to urban centers. The expectation is that the demand will be greater for warehouse property than for mall property (Business Week, 2000). Zona Research Corporation’s forecast is that Internet sales will soar in the next two years. The survey of Internet product buyers showed that the number of companies that use Internet-based selling will likely quadruple in the next two years, going from 44 percent from its current 10 percent. The reason for the dramatic increase is related to universal standards that will unite millions of businesses with billions of consumers (Menefee, 1998). Zona looks that the electronic economy in terms of a series of three technology waves. The first wave was able to save companies money by publishing on the Internet and the second wave opened up online sales profit centers. It was the second wave that made e-commerce a component in commerce as a whole (Menefee, 1998). The third wave will re-intermediate buyers and sellers through the creation of places on the Internet where buyers and sellers meet to exchange goods and services and complete transactions completely on the Internet and to complete them securely. The third wave has a significant influence on how business Future 7 is normally conducted. At some point, the third wave will be similar to a fax machine, or at least, the importance of a fax machine was a number of years ago. If you don’t have one, you won’t be able to conduct business (Menefee, 1998).
As the technological advances affect the way business is run it can be assumed that some unforseen circumstances will have a substantial impact on the way electronic commerce develops. As it has been in the past business to business commerce will grow the quickest with business to consumer also growing but at a slower rate. The distinctions between voice and data communication will break down and they will be combined more often to make a more efficient form of communication. In the post-modern era the emergence of the internet in other mediums apart from computers is growing and shall continue growing in the future, this will allow e-commerce to be conducted from any location even if there is no computer present, for example, through mobile phones and televisions. Companies will utilize the expansion of e-commerce and will most likely charge vendors wanting to access their users and most likely charge extra for exclusive access. Since it is inevitable that the web will only increase in its complexity the opportunities for companies to make money from intermediary services will increase. As electronic commerce becomes more widely used the government should maximise the efficiency and become a model user. As several countries engage in a race to become the most efficient in electronic commerce, they must keep in mind that over regulating the growth of the industry will inhibit the growth and depreciate the trust levels between both businesses and consumers.
Electronic commerce is changing the way to do business. Nowadays a lot of transactions are made through the Internet. Another important issue that will be discussed is the way mobile Internet can change the way we communicate and do business. Each country’s law control the transactions made through the Internet, besides there are international treaties policies that not allow some products to be commercialize. For instance, in Mexico, politicians are making a new Electronic Commerce law, because there was not regulations about it. The article also says that the culture will be diversified depending on nationality, ethnicity and religion. There are heaps of WebPages in Mexico that diversify the market. Some examples are: Travel Agencies Auctions Talking about PC’s and internet access US is the most advance country, therefore B-C has become popular because more peoples has computers and they have access to different sites, besides there are more internet education because it was the first country to have a rapid expansion. There are many obstacles in order to materialize e-Commerce.

Remember the time when there was no Internet? Where advances in telecommunications and computing largely occurred side-by-side in the past, today, they converge in the Internet. Timesharing, the concept of linking a large numbers of users to a single computer via remote terminals, was developed at MIT in the late 50s and early 60s. In 1973, Bob Kahn and Vint Cerf developed the basic ideas of the Internet. Now days almost everybody is connected to Internet. WORLD INTERNET CONNECTIVITY (As of 6/15/95) (http://www.pbs.org/nerds/timeline/network.html) There is another thing that Internet brought us at affordable price: it is electronic commerce (e-commerce). There is no specific definition for what is e-commerce everybody interprets it differently. Some view it as selling products and services on the net others more educated people see it as any networked enabled business practice such as Electronic Data Interchange (EDI), the World Wide Web, or email. Before the Internet small businesses were restricted on electronic communications because of high cost on installation and maintenance of networks. Business communications were performed by fax or telephone. Although, the Internet gave the ability for small businesses to become automated, which is advantageous for them, it also brought some costs and disadvantages, and it is facing bigger obstacles that will decide the future of electronic-commerce like government regulations. There are four functions of e-commerce: communication, process improvement, service management, and transaction capabilities. The perfect example form communication function is email. It delivers information or documents to facilitate business transactions. The process improvement function covers the automation and improvement of business processes. A good example of this would be networking two computers together so they could share and transfer data rather than have a person take data from one machine and input into another. Service management is the third function of EC. This is the application of technology to improve the quality of service. A good example of this function is any courier company web site. It permits customers to track shipments and schedule pick-ups 24 hours a day worldwide without having to talk to a customer service representative. Customer service is greatly enhanced due to the capabilities of the site. The final function EC is transaction capabilities. This provides the ability to buy and sell on the Internet or some other on-line service. The retail Web sites of Amazon.com and Drugstore.com offer good examples. The primary purpose of these sites is to sell the company’s supplies, although they do combine other functions such as communication and service management. These examples also highlight the fact that the four functions are not mutually exclusive. (Kalakota 6) There are a lot of advantages with EC it is hard to mansion them all but some of them include low cost, low barriers to enter, error reduction, and increased efficiencies. One good example of low cost is advertising. It can run a company well over 50,000 dollars to put a full-page advertisement in a newspaper with a circulation of 1 million. In contrast, assuming that there are at least 1 million Web browsers and the annual costs (hosting and maintenance) for a small corporate Web site are $900, then the daily cost for 1 million viewers ($900/365) on any given day is approximately $2.50. (http://www.ncsa.uiuc.edu/SDG/IT94/Proceedings/ComEc/kling/compare.html) Another benefit of Web sites are the low barriers to entry they offer companies in certain industries. For example, Amazon.com is a completely virtual based company. Without the Web, it would probably never have started selling books given the dominate position of its competitors like Barnes and Nobel and the tremendous amount of money they would have to invest to open and operate a store like that. Other benefits of Web sites include error reduction because orders don’t have to be re-keyed into order entry systems. When putted together the business process may be considered automated and its efficiency is increased. Although there are a lot of advantages of having an Internet based business there are also some disadvantages and costs that follow. The first cost a company faces when it decides it wants a Web presence is hosting. Hosting determines where the files and images associated with the Web site going to reside. Large companies or those that want total control tend to perform this function in-house while small businesses or those that do not consider this function a core competency will out-source the service with an Internet Service Provider (ISP) or Web Service Provider (WSP). It is hard to break down hosting costs for companies that perform the service in-house because a lot of the costs get absorbed into general overhead. In any event you have to account for such things as the salaries of the staff that runs the operation, the connection to the Internet, domain registration and equipment. Costs start in the low thousands of dollars for a small operation and rise quickly as needs grow. It is much easier to track the costs for out-sourced hosting. A local ISP will typically charge a $30.00 setup fee and $30.00 a month for a small business basic package of 5MB of disk space, 33.6/56Kbps dial-in connection, an email account, and 1GB of throughput per month. After the place to host the site is found, the next task is to design and build it. Again, if you are a large corporation or you want to control this process then it will be performed in-house. If contracted out, costs range from $10.00/hour for a local high school student to over $100.00/hour for an experienced Web designer in a large metropolitan market. Construction costs for a small corporate Web site are estimated between $2,800 and $5,000. A large corporate Web site can range in price from tens of thousands of dollars to millions depending on size and complexity. And let’s not forget it will probably have to be updated from time to time. For example, if the price list has to be changed or new information has to be added it’s time to call the web designer. Given these reoccurring costs, it is easy to see how a Web site, especially for large company, can become an expensive and daunting task. The stakes can be even higher if they want to use leading-edge technology. BigBook, a San Francisco based company that runs an advertising-based 3-D yellow pages, spent $5 million to build its Web site. (http://www.zdnet.com/enterprise/e-business/) The future of the electronic-commerce heavily depends on government regulations. So far, it is hard to tell what government is doing to regulate internet, but the more important questions is what is supposed to be regulated by government and how. For example, the Internet taxation issue is heavily debated, how the tax laws should apply to Internet based businesses. If a firm has a location in a state, it is required to charge sales tax on goods and services sold in the state. Many reputable sites do this. But what about those firms that register corporations overseas, where state and federal governments have little, if any powers of enforcement. Then, they buy server space in any state and avoid paying taxes. Should the government propose a new Internet tax, which would help, regulate that or should it be left alone? There are two major arguments to this issue. Too many government regulations can cause an end to a new medium, on the other hand; too few regulations can result in anarchy, which eventually will have the same ending. Electronic commerce is a great invention and hopefully it will overcome all the obstacles it is facing now. The first step in perfecting the Internet is to educate the public. A majority of the U.S. population has a misguided impressions of cyberspace being a place where anarchy rules. While some less than desirable activities and pursuits certainly exist on the Web, none are worse than can be found in society at large. In many respects the Web is just a reflection of our societal norms and behavior. However, EC development, especially on a retail level, will lag until large segments of society feel more comfortable with the medium. The government could help facilitate this with a more proactive position on such issues as encryption, security, and privacy. My prediction on the future of electronic-commerce is since it is already here it is not going anywhere. And like any other invention will be perfected and advanced with time.


With the astonishing growth of the Internet, many companies are finding new and exciting ways to expand upon their business opportunities. There are very few successful companies that do not use computers in their everyday business activities, which also means there are few companies that do not use e-commerce. To emphasize the point that the effect of the Internet is so widespread in today’s business communities, one online article stated that more than 100000 companies have Internet addresses, and 20000 companies have home pages on the Internet as of February 1999 (DataQuest, 1999). These numbers have more than tripled since 1995, and the trend shows no signs of slowing. But what exactly is e-commerce? To most casual Internet surfers, e-commerce means online shopping and workaholics pointing their web browser to Amazon.com to order an emergency present because they forgot someone’s birthday again (Weiss, 1999). As we will soon find out, this is far from the case. Simply put, e-commerce is the exchange of business information between two or more organizations. An example of this would be buying and selling products or services over the Internet. E-commerce became very popular, soon after it proved to be an efficient means to conduct long distance transactions. The purpose of this report is to discuss some of the advantages and disadvantages e-commerce, as well as examining its potential for the future of business. Electronic commerce, or e-commerce has developed very rapidly in the last few years and has left some people wondering what it is all about. “Most people think e-commerce is just about buying and selling things over the Internet,” said Wareham (Wareham, 2000). E-commerce is a broad term describing the electronic exchange of business data between two or more organizations computers. Some examples might be the electronic filing of your income tax return, on-line services like Prodigy, and on-line billing for services or products received. E-commerce also includes buying and selling any item over the Internet, electronic fund transfer, smart cards, and all other methods of conducting business over digital networks. The primary technological goal of e-commerce is to integrate businesses, government agencies, and contractors into a single community with the ability to communicate with one another across any computer platform (Edwards, 1998). Electronic commerce was built on a foundation that was started more than 125 years ago with Western Union’s money transfer as an example of telegraph technology. In the early 1900’s the advent of credit cards as a payment system revolutionised the process of automated commerce functions. In the mid 1980’s the introduction of the ATM card was the latest improvement to electronic commerce. The Internet was conceived in 1969 when the Department of Defence began funding the research of computer networking. The Internet, as a means for commerce, did not become reality until the 1990’s. Before this time, it was mainly a tool for the army, and a research device for some American universities. Its popularity grew when it proved to become a fast and efficient means to conduct long distance transactions, as well as an effective way to distribute information. Economic impact clearly, E-commerce will change the face of business forever. Companies that are thousands of miles away can complete business transactions in a matter of seconds as well as exchange information. As one online article explained: Dell Computers sells more than $14 million worth of computer equipment a day from its web site. By taking their customer service department to the web Federal Express began saving $10,000 a day. The Internet provides businesses with the opportunity to sell their products to millions of people, in 24 hours a day (Baxton, 1999). Figure #1 shows the amount of revenues generated by the on the Internet dating back to 1996 as well as estimating possible revenues through the year 2002. With 1998, revenue equaling almost 74 billion dollars and experts predicting that it will climb to as much as 1,234 billion dollars by the year 2002, anyone can see that e-commerce is the wave of the future. Figure #1- Internet generated revenues in US dollars. Source: NUA Internet Surveys “Without a doubt, the Internet is ushering in an era of sweeping change that will leave no business or industry untouched. In just three years, the Net has gone from a playground for nerds into a vast communications and trading centre where some 90 million people swap information or do deals around the world. Imagine: It took radio more than 30 years to reach 60 million people, and television 15 years. Never has a technology caught fire so fast.” (Edwards, 1998) The number one advantage that e-commerce possesses is speed. The Internet and World Wide Web give businesses opportunities to exchange messages or complete transactions almost instantaneously. Even with the slowest connections, doing business electronically is much faster than traditional modes. With increased speeds of communication, the delivery time is expedited and that makes the whole transaction from start to finish more efficient. Additionally, you can find practically any product available for sale on the Internet, as one author put it from books and compact disks (from www.amazon.com) to French bread (available from www.sourdoughbread.com), (Buskin, 1998). Even more significant is the fact that information appearing on the Internet can be changed extremely rapidly. This gives business owners the ability to inform customers of any changes to the service that you are offering. This also allows for you to update marketing and promotional materials as often and as frequently as you would like. The second advantage of the electronic commerce is the opportunity it offers to save on costs. By using the Internet, marketing, distribution, personnel, phone, postage and printing costs, among many others, can be reduced. You can start doing business in cyberspace for as little as $100. Most businesses will spend more than this but compared to the cost of opening a physical store, the savings are tremendous. These funds can then be diverted to marketing and advertising of your product or service. Cyberspace knows no national boundaries. That means you can do business all over the world as easily as you can in your own neighbourhood. Since the Internet connects everyone in cyberspace, information is transmitted at the speed of sound or the speed of light, depending on your connection. Either way, distance becomes meaningless, which makes you able to link to anyone on the globe and anyone on the globe can link to you. The ability to provide links makes doing business on the Internet attractive to customers in any part of the world. Using the web to provide customer support is an excellent vehicle to help build the reliability and effectiveness of your product or service. The ability to provide on-line answers to problems through email or an provide an archive section of frequently asked questions 24 hours a day, 365 days a year, builds customer confidence and retention. In fact, a whole series of IBM E-commerce commercials were based on this one single point. The Internet tends to be a more personal environment. People expect to get a real person when they send mail. This can work to your advantage as a small start-up company, or when you are a large corporation. No matter what business you are involved in, an online-help feature is an extraordinary advantage to have. A potential source of trouble is customer concerns with privacy and security. Anything sent over the Internet is sent through several different computers before it reaches its destination. The concern regarding Internet security and privacy is that unscrupulous hackers can capture credit card or checking account data as it is transferred or break into computers that hold the same information. Security on the Internet is much like security for your home. There is a point when the effort outweighs the advantages. As with your home you usually stop adding security features when you feel safe. Making a customer feel safe is what is important in doing business on the Internet. Even though no one can guarantee 100% security of transferring financial information over the Internet, e-commerce is still safer than using credit cards at an actual store or restaurant, or paying for something with the use of a 1-800 number (unknown author, 1999). In addition, every time you throw away a credit card receipt you could make yourself powerless to fraud. But how do we, as consumers, know this for sure? What precautions do e-commerce websites take to avoid such problems? The answer is simple: encryption. Ever since the 2.0 versions of Netscape Navigator and Microsoft Internet Explorer, transactions can be encrypted using Secure Sockets Layer (SSL), an Internet protocol that creates a secure connection to the server, protecting the information as it travels over the Internet. SSL uses public key encryption, one of the strongest encryption methods around. A way to tell that a Web site is secured by SSL is when the URL begins with https instead of http. Browser makers and credit card companies are also promoting an additional security standard called Secure Electronic Transactions (SET). SET encodes the credit card numbers that sit on vendors’ servers so that only banks and credit card companies can read the numbers. Obviously no e-commerce system can guarantee 100-percent protection for your credit card, but you are less likely to get your pocket picked online than in a real store (Weiss, 1999). E-commerce is based on the assumption that the participants will pay for what they buy. There has been a noted reluctance among Internet users to actually pay, particularly for the digital goods and services. As a result, much of the current business on the Internet is funded using business models other than user-pays, primarily advertising and sponsorship. If a company is selling something, then they need to find a way to accept payment that is not only convenient for them, but most importantly, convenient for the customers. Setting up a simple web site can be very inexpensive, but if you are unsure of how to go about creating one, a simple web site thus may not be so simple. Moreover if you do not know what you are doing, your site will definitely not be effective. A functional web site with online ordering requires expertise in four different areas. If a business owner does not have HTML, CGI scripting, ODBC, and special programs for online clearing options experience, they may want to consider outsourcing. Outsourcing is the use of a third party service company to provide the missing pieces to complete the total functionality of the business. This is a cost-effective way to allow a site to get up and running much faster and concentrate on the product or service rather than getting overwhelmed with the technical challenges (DeCourey, 1999). Finally, a possible disadvantage to e-commerce is not having a strong organizational commitment. A functional web site that is going to be successful will soon need additional resources in technology and skills. E-commerce is evolving at a very rapid rate and the business owner must be willing to evolve with it. Newer and more advanced technology will cost more, but should be supplemented by additional revenues. Furthermore, the company must be willing to change the entire business or start a new one when they can see the need for change. “Yahoo started as a commercial operation in 1995, with a simple, if enormous, list of Web sites to help people navigate the Web. But like the Web itself, Yahoo is changing fast. The once amazing ability to search the entire World Wide Web became outdated in a Net instant, so Yahoo, at the tender age of two years, began reinventing itself as a place to trade stocks, make travel reservations, and conduct commerce (Hof, 1998). Rest assured the future of e-commerce is intact and ever changing. “Like electricity, antibiotics, or the car, the Internet is a revolutionary technology” (France, 1999). It is quite evident that e-commerce is only gaining speed. As one article stated, the growth of e-commerce would not diminish, it will become such a pervasive influence on how a company works that all functions within an organization will have a stake in their e-commerce strategy (Wareham, 2000). With Internet traffic doubling every 100 days the digital economy is alive and growing. The huge growths of virtual communities are causing shifts in economic power from large corporations to smaller businesses. “Virtual communities erode the marketing and sales advantages of large companies. A small company with a better product and better customer service can use these communities to challenge larger competitorssomething it probably could not do in the real world” (CommerceNet, 1999). With many of the technological advances in the banking, on-line trading and retail industries, e-commerce will soon become the foundation of our life just as radio, telephone and television have in the past. Technology has a place in everyone’s day-to-day activities and soon e-commerce will be a major factor in the decisions we have to make. Remember, e-commerce is more complex than just buying that special someone’s birthday present. E-commerce, along with the Internet, is an outlet for business. It is a way for the new man to compete with the proven giants in the industry. An example of this would be the launch of Wal-Marts new web site intended to compete with industry monster Amazon.com. Their new business venture allows Wal-Mart to go outside its usual corporate sphere for Web-savvy talent geared for dot.com commerce, such as engineers, programmers and marketers. It also provides them with the necessary Web-wampum “V” such as options, warrants and shares that are essential to attracting top talent (Veverka, 2000). Simply put, the Internet and the use of e-commerce provides many opportunities for even the smallest of businesses to compete with large corporations, in essence leveling the playing field. With the steady growth of the Internet, and the fact that every year more and more families are plugging in and surfing the web, can a company survive without the use of the Internet and e-commerce? Probably, but not for long. The Internet and e-commerce are here to stay, so businesses can either change with the times, or get left behind. The choice is theirs to make.
Bibliography
Future 8 REFERENCES Entrepreneur. (2000, October). THE PERCENTAGE. Entrepreneur 28(10), p. 46 Fortune. (2000, October). Don’t Expect A Merry E-Christmas: Online buyers expect freebies, lack loyalty, and purchase on price, says an e-commerce pro. Shopping sites need to retrain them. Fortune 142(7), p. 259+ Hof, Robert D. (2000, July). Online Sales Still a Threat. — Forget the falling stock prices. Web sales are reaching a critical mass. Business Week, (3691), p. EB130. Kontzner, Tony. (2000, September). Will Holidays Be Jolly Days? — E-retailers hope retaining customers will translate into profits. InternetWeek, p. 136. Menefee, Craig. (1998, March). Internet-based selling to boom in next two years; Third technology wave to have heavy influence on how normal business conducted, study claims. Computing Canada 24, p. 11. Rutledge, Keisha. (2000, February). On-line shopping a success despite holiday ditches. Discount Store News 39, p. 16.


(2004) ‘Future of E commerce’ Online: http://www.backe.com/toyota/future.html Accessed 28 October 2004
Driver, M (2003) ‘Assess the future of E commerce’ Online: http://www.ftponline.com/wss/2003%5F03/magazine/columns/trends/ Accessed 28 October 2004
Writer, S (2003) ‘Ecommerce News: Global: FTC Comissioner on the future of E commerce’ Online: http://www.ecommercetimes.com/story/31732.html Accessed 28 October 2004
Bibliography
Works Cited. Cringely, Robert X. “A History of the Computer: Network.” At: http://www.pbs.org/nerds/timeline/network.html Kalakota, Ravi., and Andrew B. Whinston. “Electronic Commerce, A Manager’s Guide.” Addison-Wesley, 1997 Kling, Arnold. “The Economic Consequences of WWW” At: http://www.ncsa.uiuc.edu/SDG/IT94/Proceedings/ComEc/kling/compare.html ZDNet E-Commerce At: http://www.zdnet.com/enterprise/e-business/
References
Baxton,J. Electronic Commerce online. Available: http://www.people.virginia.edu/jwb7w/icomm/home.html. (April 15, 1999)
Buskin,J. Tales from the Front V Firsthand look at buying online, Wall Street Journal online. Available: http://interactive.wsj.com/public/current/articles/SB912721174926656000.htm#top (December 7, 1998)
CommerceNet. Questions and Answers about Electronic Commerce Basics online. Available: http://www.commerce.net/resources/efaq.html. (1999)
Dataquest Technologies. E-commerce An Overview online. Available:
http://www.dqindia.com/nov3099/ (1999)
DeCourey, G. The ABC’s of E-Commerce online. Available:
http://www.virtualpromote.com/guest5.html. (April 5, 1999)
Edwards,P. Making Money in Cyberspace. New York: Penguin Putnam Inc. (1998)
France, M. A New Voice for the Web’s Worldwide Business Community online. Available: http://www.businessweek.com/ebiz/perspect/index.htm. (December 19, 1999)
Hof,R. The Click Here Economy online Available: http://www.businessweek.com/1998/25/itspec98.htm. (January 22, 1998)
NUA Internet Surveys. Index of Graphs & Charts – Comparisons/Predictions online. Available: http://www.nua.ie/index.html. (April 15, 1999)
Unknown Author. E-Commerce online. Available: http://members.tripod.com/Satta_Krit/engr923/ecommerc.htm (1999)
Veverka, M. Plugged In: Wal-Mart gets serious about the Web, Amazon shrugs, but maybe it should watch its back, Barrons, Volume 80, issue 2, pg. 37 (January 10, 2000)
Wareham, E. E-commerce makes the grade, Computing Canada, Volume 26, issue 1, pg. 35 (January 7, 2000)
Weiss, J. 10 Questions About E-commerce online. Available: http://builder.cnet.com/Business/Ecommerce20/. (August 31, 1999)
Bibliography
References Baxton,J. Electronic Commerce online. Available: http://www.people.virginia.edu/jwb7w/icomm/home.html. (April 15, 1999) Buskin, J. Tales from the Front “V” Firsthand look at Buying online, Wall Street Journal online. Available: http://interactive.wsj.com/public/current/articles/SB912721174926656000.htm#top (December 7, 1998) CommerceNet. Questions and Answers about Electronic Commerce Basics online. Available: http://www.commerce.net/resources/efaq.html. (1999) Dataquest Technologies. E-commerce An Overview online. Available: http://www.dqindia.com/nov3099/ (1999) DeCourey, G. The ABC’s of E-Commerce online. Available: http://www.virtualpromote.com/guest5.html. (April 5, 1999) Edwards,P. Making Money in Cyberspace. New York: Penguin Putnam Inc. (1998) France, M. A New Voice for the Web’s Worldwide Business Community online. Available: http://www.businessweek.com/ebiz/perspect/index.htm. (December 19, 1999) Hof, R. The Click Here Economy online Available: http://www.businessweek.com/1998/25/itspec98.htm. (January 22, 1998) NUA Internet Surveys. Index of Graphs & Charts – Comparisons/Predictions online. Available: http://www.nua.ie/index.html. (April 15, 1999) Unknown Author. E-Commerce online. Available: http://members.tripod.com/Satta_Krit/engr923/ecommerc.htm (1999) Veverka, M. Plugged In: Wal-Mart gets serious about the Web, Amazon shrugs, but maybe it should watch its back, Barron’s, Volume 80, issue 2, pg. 37 (January10, 2000) Wareham, E. E-commerce makes the grade, Computing Canada, Volume 26, issue 1, Pg. 35 (January 7, 2000) Weiss, J. 10 Questions About E-commerce online. Available: http://builder.cnet.com/Business/Ecommerce20/. (August 31, 1999)
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Some of the largest corporations in the United States first began using the
Internet in late 1998. Many of the chief executive officers (CEOs) were slow
to understand how the Internet would benefit their bottom line. Some companies
may have moved parts of their business online later than others, but this was
still one of the smartest moves they could have made. The shift to B2B on the
Internet is expected to lead to lower prices, higher worker productivity, and
reduced labor costs. Some estimates state that up to 91 percent of all U.S. companies
will make purchases over the Internet in 2001. This figure was zero five
years ago. Companies are using the Internet to redesign the way they do business.


In addition to becoming involved in e-commerce, smart businesses will stay
on top of trends. As customers go online through wireless access and begin
using faster connection speeds, video will become increasingly important.

Simple photographs of a product on a web page will become ineffective
because they will seem boring. Additionally, businesses will not be able to
assume that customers are using their web services while sitting at a computer.

Customers will be doing business anywhere and at anytime.

STANDARDIZATION
_
Suppliers will have to examine all aspects of their businesses closely to make
sure they are meeting quality standards at the lowest possible costs. Suppliers
will be pressured by online auctions to produce more for less money.

Businesses will be looking globally for growth potential and will be competing
online with companies worldwide.

SERVICE TO GO
_
Small and large businesses will need to be aware of changes taking place in ecommerce.

Worldwide, more people can afford cellular phone service than can
buy a personal computer. In 2000, the average cell phone user upgraded to a
new cell phone about every nine months. In early 2000, a Hong Kong-based
cellular phone company introduced a hands-free headset with a large screen. By
2010, cell phones may be lightweight and worn on your ear. Cell phones of the
future may have small screens connected to the Internet through wireless access.

The screens will be rolled up and stored in a tube when the phone is not in use.

These screens will be used for reading or processing data. You will not need a
keyboard to connect to the Internet because your phone will recognize your
voice and connect you automatically.

You can also forget about keys, locks, and passwords. Personal digital assistants
(PDAs) will identify you through your thumbprint, allowing you to do business
on the Internet and to access doors, cars, and offices. Your thumbprint will allow
you to access your computer and will guarantee the privacy of your personal
records. The office of the future may be a completely open space that is alive with
information technology. Your desk may become somewhat like a movie screen,
programmed to complete tasks such as writing letters. Video conferencing will
allow you to interact with customers from around the world without leaving your
space. Technology does not stand still. It will continue to change for many years
to come and will become more efficient as more uses are found.


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