Lecture 13

CSC 101 – Introduction

to Computing
Outline

 E-commerce:
 Overview
 E-commerce Basics
 Business Applications
 Global Trends;
 Impacts: Impacts on Market & Retailers
 Impact on Supply Chain Management
 Impact on Employment
 Impact on Customers
 Impact on Environment
 Impact on Traditional Retail
 Impact on Distribution Channels

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 What Is E-
Commerce?
• E-Commerce
– The act of doing business transactions over the Internet or
similar technology
– Has existed for years via private networks (electronic funds
transfers, etc.)
– Now most often performed via the Internet
– Dot-com
• An Internet-only store with no physical presence
– Brick-and-Mortar Store
• A conventional store with a physical presence

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 What Is E-
Commerce?
• M-Commerce
– E-commerce carried out via
smartphones and other mobile
devices
– Near Field Communications (NFC)
uses RFID to facilitate
communications between devices

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 Advantages of E-
Commerce
• For Businesses
– Reduced costs
• Dot-coms are less expensive than brick-and-mortar
stores because there is no physical storefront to
maintain
– Increased customer satisfaction
• Shopping experience is convenient (open all the time,
no driving, etc.)
• Can send customers personalized information
– Broader customer base (less geographical restrictions)
– Potentially higher sales

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 Advantages of E-
Commerce
• For Customers
– Convenience
– Higher degree of selection
– Easier comparison shopping
• Higher number of merchants to choose from
• Geographical location is not an issue
• Shopping bots and other comparison shopping tools
are available
– Potential cost savings
– Customized products

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 Technology and
You Box
Mobile Payments
– You can make purchases and send
money to others via a mobile
device
– Mobile payment processing allows
payments (typically credit card
payments) to be collected via a
mobile device
• Field workers
• Craft vendors
• Sales personnel

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 Disadvantages of E-
Commerce
• For Businesses
– Pressure to be always open, site always working
• Solid, well designed sites and hosting
– Lost business due to some customer hesitation to shop
online
– Risk of fraudulent credit card transactions
– Ease of entry for competitors

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 Disadvantages of E-
Commerce
• For Customers
– Potential for fraud and other potential security problems
• Buyer protection programs and using
credit card protection can help
– Not being able to see or touch the goods
• 3D online stores may help
– Possible expense of returning merchandise
• Some click-and-mortar stores allow returns to local
stores

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 E-Commerce Business
Models
• Business-to-Consumer (B2C) Business Model
– An e-commerce model in which a business provides goods
or services to consumers
• Business-to-Business (B2B) Business Model
– An e-commerce model in which a business provides goods
or services to other businesses
– Intermediary Hubs
• Bring buyers and sellers together
– Vertical hubs
– Horizontal hubs

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E-Commerce Business
Models
– Consumer-to-Consumer (C2C) Business Model
• An e-commerce model in which a consumer provides
goods or services to other consumers
• Craigslist and online auctions are common means of
C2C transactions
– Business-to-Government (B2G) Business Model
• An e-commerce model in which a business provides
goods and services to government organizations
• Businesses or individuals paying taxes online etc.
can be
viewed as G2B and G2C transactions, respectively

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E-Commerce Business
Models

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Business Applications
 Manufacturer and E-Tailer Sites
 Manufacturers and online retailers sell
directly to customers via their Web sites
 Subscription Sites
 Sells access to its online content
▪ Newspapers and journals
▪ E-book rentals
▪ Premium social networking services
Business Applications
 Brokerage Sites
 Bring buyers and sellers together and earn revenue
by charging commissions on sales made via the site
 Online Auctions
 Financial Brokerages
 Allow individuals to sell stocks, bonds, futures, etc.
 Generate revenue by charging commissions or
transaction fees
 Real Estate, Travel, and Other Consumer
Brokerages
 Assist consumer in finding resources they desire
▪ Real estate
▪ Airline tickets
▪ Hotel reservations
 E-commerce Trends
 The global ecommerce market is expected to
total $5.55 trillion in 2022
 Global retail sales growth will continue to rise and take
up more retail market share
 According to eMarketer, online retail sales will reach $6.17
trillion by 2023
 China is accounting for 52.1% of all retail ecommerce sales
worldwide
 Latin America saw $85 billion in ecommerce sales in 2021
 The Indian ecommerce market is expected to grow to
$111.4 billion by 2025
 Russia, the UK, and the Philippines saw more than 20%
ecommerce sales growth in 2021.
https://www.shopify.com/enterprise/global-ecommerce-statistics#1
E-commerce Trends
 Mobile shopping and social commerce
 Online retail continues to expand due to the
increasing use of smartphones and tablets
globally
 30% of US consumers report purchasing goods
through social platforms
 The metaverse and interactive shopping
 Brands are betting on virtual shopping and
experimenting with augmented and virtual
reality retail
 Language localization
Impact on markets and
retailers
 E-commerce markets are growing at
noticeable rates
 Traditional markets are reported slow
growth as compared to online business
• Online and traditional markets have different
strategies for conducting business
Traditional Business Online Business

Geographical Barrier Over Come Geographical Barriers

Prices to cover cost of keeping Pricing based on speed of delivery
inventory
Few products due to shelf space Warehouses, sometime have no
inventory, but send customer order
Impact on Supply Chain
management
 Increase warehouse capacity and customer proximity: The closer
your warehouses are to customers, the faster you can fulfill orders
directly to consumers or brick-and-mortar retailers.

 Lower the cost of shipping: shipping deals for orders over a certain
price, as well as incentives to bundle items, such as price discounts
and free shipping.

 Integrate an order management system: The end-to-end order

management process is automated, working hand-in-hand with each
link of the supply chain to guarantee customer satisfaction.

 Kit items: Kitting items is the process of automatically manufacturing

and storing bundled items together.

 Automated Invoice: With online invoicing, your customers can pay

online and access all important payment documentation whenever
they need to.
Impact on Employment
 Increased Demand for Worker
 Remote sales agents
 Technology provides workers with an upper hand
 The continual growth of the e-commerce sector has fueled the
development of new technology.
 Omnichannel sales and recruitment
 Omnichannel selling means accessing consumers at every
point, both online and offline. Many established stores have
taken advantage of this and launched online shopping
experiences to mimic the ones found in their stores.
Impact of E-commerce on Customers

 Increased customers
 Convenience
 Availability

 E-commerce lacks human interaction

for customers
 Customers are also concerned with the
security of online transactions and
tend to remain loyal to well-known
retailers
Impact of E-Commerce on
Environment
 Transportation emissions
 E-commerce business models allow for organizations to
conduct business without physically commuting.
 work from home
 Paper waste
 When information is transferred digitally, it reduces the need
for the use of physical paper throughout the business.
 Digital storage
 The digital transfer of information paired with digital
manufacturing could eliminate warehouses and create on-
demand production.
Impact of E-commerce on Traditional
Business

 Elimination of middlemen: Businesses

can sell directly to the customers
 Marketing: The rise in e-commerce,
digital marketing has replaced traditional
marketing methods.
 Higher Profits: 24*7 availability and
convenience has resulted in huge profits.
 Global marketplace: All the customers
from overall the world can access your
products by simply sitting at home.
Impact of E-Commerce on
Distribution Channels
 Evolving Channels
 The end of old distributionchannels
mainly had the consumer purchasing
a product by visiting a physical retail
location. Increasingly customers now
expect the product to come directly
to them.
Summary

 E-commerce:
 Overview
 E-commerce Basics
 Business Applications
 Global Trends;
 Impacts: Impacts on Market & Retailers
 Impact on Supply Chain Management
 Impact on Employment
 Impact on Customers
 Impact on Environment
 Impact on Traditional Retail
 Impact on Distribution Channels

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