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E-commerce: What's It All About?
By Sumiko Kanzaki
Americans have always loved convenience and instant results.
Glance into the average American kitchen pantry and its contents
would illustrate this point. Microwave t.v. dinners, instant ramen
noodles (ready in three minutes), and "home-style" microwave buttered
popcorn--all seem to indicate that consumers prefer what is fast,
easy, and satisfying. Apply these same principles to the way America
does business, and it is not surprising that e-commerce has taken
the country by storm.
E-commerce, or electronic commerce, has made the ways in which
we do business, fast, easy, and satisfying. It marries the desire
for quick consumption with the convenience of the Internet's instant
interactions. It allows consumers to forego the headache-producing
hassle of trekking out to the local mall to battle long lines
and congested parking lots, and opt for a more appealing alternative.
From the comforts of their home, e-consumers can peruse the wares
of their favorite online retailers, bedecked in their favorite
terry-cloth bathrobe and pink hair rollers. Lifting their finger
only to click in a product search word, type out a new retailer's
site, or enter in their credit card digits, the new e-consumer
can accomplish as much as a six-hour shop-Ôtil-you-drop marathon
from the much more convenient haven of home.
Going Traditional Commerce One Better
To better understand the workings of e-commerce, we must return
to the basics of commerce itself. Commerce essentially is the
activity of providing and selling a given product by a retailer
to a consumer. It involves a product or service that is offered,
a place from which the products are sold, a flow of information
and advertising about those products, a means of taking orders,
a system for accepting money and billing consumers, and a final
delivery of the desired product and service. Added to these processes
are the institutions for providing technical support and customer
service, and a way of allowing consumers to return undesired products.
From the retailer's perspective, e-commerce minimizes some of
the high costs incurred in traditional commerce (e.g., retail
space rental), revamping the traditional business model, and offering
a significant edge in the ongoing fight to provide competitively
lower prices.
Why All the Excitement?
Although it is a virtual extension of the transactions that occur
in many retail stores, e-commerce offers additional incentives
and advantages to both the consumer and retailer.
- A virtual store lowers the costs of staff. Orders are processed
automatically, often requiring little human intervention from
order to delivery.
- Web stores enable people to sell and shop for unusual and
hard-to-find items.
- Customers can easily compare prices between multiple vendors
on identical products, build complicated custom orders, view
different products and their prices, and search through large
catalogs of products with customized search engines.
- Customers can also take advantage of the automation of their
transactions, following their orders through the manufacturing
and shipping processes with individual tracking numbers, and
involving themselves in the whole journey from warehouse to
home.
- Although e-commerce lacks the personal and social element
of mall shopping, it can in some ways offer a more personalized
service. Aided by automation, Web retailers often enable consumers
to build personalized accounts, tracking the history of past
purchases, interests, and wish lists.
- By indexing each customer's transactions, the vendors can
then offer consumer reviews on similar groupings of products,
display what other customers of similar tastes have purchased
and recommended, and customize the entire shopping experience.
Vendors can also notify customers via email when out-of-stock
items become available.
You May Still Prefer the Mall
Despite the many voices touting the merits of e-commerce, for some
consumers, shopping via the Internet offers little more than the
convenience of mail-order catalog shopping. Until retailers invent
a technology that can instantaneously deliver products to the us,
online shoppers still have to wait for delivery on many items, or
submit to inflated shipping costs for a more speedy delivery.
And some of us really like the hustle and bustle of the mall
shopping experience. Shopping on the Web cannot simulate the competing
smells of popcorn and perfume, the angry glances of fellow bargain
hunters, or the sight of children sitting on Santa's lap for pictures.
Additonal Sources on E-Commerce
- Anderson Consulting E-commerce home page
http://www.ac.com/ecommerce/ecom_home.html
Anderson Consulting is an international auditing and consulting
firm. On this page, you can find a definition of ecommerce,
statistics about ecommerce, and peruse the "rules of ecommerce."
- Executive Decision Consulting (EDC) E-commerce page
http://www.execdecisions.com/what_is_ecommerce.htm
EDC is an IT consulting firm, specializing in information systems
and data warehousing. On this page you can find another definition
of e-commerce and explore how it is employed in a number of
industries.
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