e Chapter 12: Consumer Trade Transactions

c
o
m
m
e
r
electronic
commerce


c strategy
technologies
and

e
applications

E-Commerce ©David Whiteley/McGraw-Hill, 2000 1

 What you want, when you want it
e
c
o  At the heart of most that is good about the Internet

m lies the simple, seductive offering - what you want,

when you want it. You want to buy an obscure

m book or track down a cheap holiday? Get online.

Do it. Now!

e (adapted from Waldman, 1999)

r
electronic
commerce


c strategy
technologies
and

e
applications

E-Commerce ©David Whiteley/McGraw-Hill, 2000 2

 Internet e-Commerce
e
c  The basic Internet elements used for e-Commerce
are:
o  The client system using a browser;

m
 The server holding the e-Commerce application;
 Links from the Internet application to back office

m systems.

e Internet
r
electronic Browser
commerce Internet Application
 Client Server
c strategy
technologies
and

e
applications Back Office
Systems
E-Commerce ©David Whiteley/McGraw-Hill, 2000 3
 The e-Shop
e
c  An example of a simple e-Shop, set up by Charlie
Bucket (and with apologies to Roald Dahl).
o
m Wo nk A Onl ine

m
O rder
Fudgemallow Delight

e Nutty Crunch Surprise

r
electronic
commerce


c
Name Credit Card
strategy
technologies Address No.
and

e
Expiry
applications

E-Commerce ©David Whiteley/McGraw-Hill, 2000 4

 The e-Shop
e
c  The basics:
 An online advert

o
 An e-Shop – providing online purchasing
(as provided by Wonka Online)
 Additional features may include:

m  Customer Registration
 Dynamic Web Pages

m  Personalised Web Pages

 A Shopping Basket

e  Additional Information
 Community

r
electronic  Multiple Payment Options
commerce
 Encryption


c strategy
technologies
and
 Online Delivery
 Loyalty Schemes

e
 Online Help
applications
 Shopping Mall

E-Commerce ©David Whiteley/McGraw-Hill, 2000 5

 e Internet Shopping and the Trade Cycle

c  The Retail Trade Cycle

o Search Pre-Sale

m Order

m Payment
Execution /
Settlement
e Deliver

r
electronic
commerce
 After Sales After Sales

c strategy
technologies
and

e
applications

E-Commerce ©David Whiteley/McGraw-Hill, 2000 6

 e Internet Shopping and the Trade Cycle

c  Search options:

o  Select a menu item or a button on a portal.

m
 Using a search engine

 Following a link to another page

m  Selecting a page that has been featured on an
e advert or that is recommended by a friend.

r
electronic
commerce  Using the url – a known url or a bookmark.


c strategy
technologies
and

e
applications

E-Commerce ©David Whiteley/McGraw-Hill, 2000 7

 e Internet Shopping and the Trade Cycle

c  Order:
 Helping the customer to find things:
o • Departments/categories
• A site search engine
m
m  Displaying the goods:
• Picture

e • Description
• VR Images
r
electronic
commerce • Sound


c strategy
technologies
and
 Selecting the goods:

e
applications • Electronic shopping basket. 

E-Commerce ©David Whiteley/McGraw-Hill, 2000 8

 e Internet Shopping and the Trade Cycle

c  Payment:

o  Credit Card

m or
 e-Cash

m  Debit Card
 Offline payment
e
r
electronic
commerce
 Security of payment (see Chapter 15).


c strategy
technologies
and

e
applications

E-Commerce ©David Whiteley/McGraw-Hill, 2000 9

 e Internet Shopping and the Trade Cycle

c  Delivery:
 For conventional shopping, the delivery function
o is typically performed by the customer.

m  Delivery issues:
• Cost
m • Security

e • Perishable / large items.

r
electronic
commerce  Delivery methods:
 • Post (through postbox)
c strategy
technologies
and
• Doorstep (may require customer to be
present)
e
applications
• Online.
E-Commerce ©David Whiteley/McGraw-Hill, 2000 10
 e Internet Shopping and the Trade Cycle

c  After-Sales:

o  For conventional shopping, goods that

m don’t fit/won’t work can be taken back.

m  For online shopping, return of goods can be/may

seem more problematic.
e
r  After sales support (instructions/fault diagnosis)
electronic
commerce
 can be provided online.

c strategy
technologies
and

e
applications

E-Commerce ©David Whiteley/McGraw-Hill, 2000 11

 e Other e-Commerce Technologies (1)

c  The Internet is not the first public access telematics

system and neither will it be the last word in

o developments in this field.

m  Interactive videotext systems (1970s).

m  The French system was Télétel (1980s)

e  Free Minitel terminals

 Over six million subscribers (1993)

r
electronic
commerce  Used by 14 million people
 • Online Telephone Directory
c strategy
technologies
and
• Banking Services
• Travel (Information and Reservations)
e
applications
• Catalogue Sales.
E-Commerce ©David Whiteley/McGraw-Hill, 2000 12
 e Other e-Commerce Technologies (2)

c  Other networks (mainly US)

 CompuServe (1980)
o  Prodigy (1988 – IBM/Sears)

m  Television shopping channels

m  Projected developments:

e
 Interactive TV
(cable TV/Internet combinations)

r
electronic (satellite TV/telephone combinations)
commerce


c strategy
technologies
and
 Mobile e-Commerce
(mobile phone/laptop combinations)
e
applications (mobile phone e-Commerce)
E-Commerce ©David Whiteley/McGraw-Hill, 2000 13
 e-Commerce Sales
e
c  Dramatic / rapid expansion but still a small
proportion of overall retail sales.
o
m
 KPMG (1999) gives direct sales as 5% of retail
sales in the UK and 4% in the US; 16% of US home

m sales and 1% of UK direct sales were electronic.

e  Forrester Research (1999) stated online shopping

accounted for $1.2 billion of Europe’s $1.9 trillion in
r
electronic
commerce retail sales (0.06%) compared to $8 billion of $2.6

trillion (0.3%) in total sales in the US.
c strategy
technologies
and

e
applications (US, not UK, definitions of billion and trillion)

E-Commerce ©David Whiteley/McGraw-Hill, 2000 14

 Advantages and Disadvantages
e
c  Advantages of Consumer e-Commerce:

o  Home Shopping

m  World-wide, 24-Hours-a-Day Trading

m
e
 The Latest Thing at Bargain Prices

r
electronic
commerce  Home Delivery


c strategy
technologies
and
 Online Sales Support

e
applications

E-Commerce ©David Whiteley/McGraw-Hill, 2000 15

 Advantages and Disadvantages
e
c  Disadvantages of Consumer e-Commerce:

o  Privacy and Security

m  Delivery
m
e
 Inspecting Goods

r
electronic
commerce  Social Interaction


c strategy
technologies
and
 Return of Goods

e
applications

E-Commerce ©David Whiteley/McGraw-Hill, 2000 16

 Advantages and Disadvantages
e
c  Advantages for the vendor:
 World-wide market
o  High-tech Image

m  Reduced costs

m  Disadvantages for the vendor:

e
 Privacy and Security
 Delivery

r
electronic
commerce  Price transparency


c strategy
technologies
and
… and for most e-Shops

e
applications – an inability to make a profit

E-Commerce ©David Whiteley/McGraw-Hill, 2000 17

 e Consumer e-Commerce at Pens and Things

c BARKER pENS
o
m Site Index Earnest Barker started making
fountain pens in the English Lake
District over a hundred years ago in
The Barker 1894.

m
Story Today you can buy your Barker
Pen via the Internet. Business
methods change but be assured that
Boxed Pen Sets the care and craftsmanship that goes
The Elite Range into making a Barker Pen is still the

e Stationary Items
Site Guide
same as it was a hundred years ago.
You cannot write your e-mails
using a Barker Pen but there are
those special occasions, the vital

r
electronic Payment Policy contract or a letter to a loved one,
commerce The Barker when only paper, ink and a Barker
Guarantee Pen will do.


c
Geoffrey Barker
strategy
technologies
and

e
applications  Read and discuss the case study.

E-Commerce ©David Whiteley/McGraw-Hill, 2000 18

 Chapter 12 – Exercise 1
e
c  If you are not already an experienced user of
Internet e-Commerce, then look up a few sites to

o see what they look like. Use your favourite search

engine to find two or three online bookshops. Use

m the search facility but also check out any adverts or

menu items that click through to an online

m
bookstore. Look up this book and any other course
books and compare prices, delivery times and
shipping charges. After you have looked up the
e book, jot down three reasons why you might buy
the book online and three why it might not be
r
electronic
commerce advantageous.


c strategy
technologies
and
 If you did buy this book from an online bookshop
then well done; you can still write down three
e
applications reasons for and three against using an online
bookstore.
E-Commerce ©David Whiteley/McGraw-Hill, 2000 19