Question by jessieyym: what are the elements of e-commerce?
Answer by trsmd
Electronic commerce, e-commerce or ecommerce consists primarily of the distributing, buying, selling, marketing, and servicing of products or services over electronic systems such as the Internet and other computer networks. The information technology industry might see it as an electronic business application aimed at commercial transactions. It can involve electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange, automated inventory management systems, and automated data-collection systems. It typically uses electronic communications technology such as the Internet, extranets, e-mail, Ebooks, databases, and mobile phones.
According to Forrester Research (as cited in Kessler, 2003), electronic commerce generated sales worth US $ 12.2 billion in 2003.
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 the late 1970s) 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 over the World Wide Web via secure servers (note HTTPS, a special server protocol which encrypts confidential ordering data for customer protection) with e-shopping carts and with electronic pay services, like credit card payment authorizations.
When the Web first became well-known among the general public in 1994, many journalists and pundits forecast that e-commerce would soon become a major economic sector. However, it took about 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 substantial number of businesses in the United States and Western Europe developed rudimentary Web sites.
Although a large number of “pure e-commerce” 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 e-commerce capabilities to their Web sites. For example, after the collapse of online grocer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through which consumers could order groceries online.
As of 2005, e-commerce has become well-established in major cities across much of North America, Western Europe, and certain East Asian countries like South Korea. However, e-commerce is still emerging slowly in some industrialized countries, and is practically nonexistent in many Third World countries.
Success factors in e-commerce
Technical & Organizational
In many cases, an e-commerce company will survive not only based on its product, but by having a well-organized business structure and a secure, well-designed website. Such factors include:
Providing an easy and secure way for customers to order. Credit cards are the most popular means of sending payments on the internet, accounting for 90% of online purchases. Card numbers are transferred securely between the customer and merchant through independent payment gateways, such as authorize.net.
Providing reliability and security. Parallel servers, hardware redundancy, fail-safe technology, information encryption, and firewalls can enhance this requirement.
Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. However, customers may not appreciate the big brother experience.
Constructing a commercially sound business model. If this key success factor had appeared in textbooks in 2000, many of the dot.coms might not have gone bust.
Engineering an electronic value chain in which one focuses on a “limited” number of core competencies — the opposite of a one-stop shop. (Electronic stores can appear either specialist or generalist if properly programmed.)
Operating on or near the cutting edge of technology and staying there as technology changes (but remembering that the fundamentals of commerce remain indifferent to technology).
Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.
Providing an attractive website. The tasteful use of colour, graphics, animation, photographs, fonts, and white-space percentage may aid success in this respect.
Streamlining business processes, possibly through re-engineering and information technologies.
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