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Objective 3

Objective 3. Investigate how e-commerce has affected the way people buy goods and services. One definition of E Commerce. E Commerce is the buying and selling of goods and services, and the transfer of money, through the internet. . Some history.

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Objective 3

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  1. Objective 3 Investigate how e-commerce has affected the way people buy goods and services

  2. One definition of E Commerce E Commerce is the buying and selling of goods and services, and the transfer of money, through the internet.

  3. Some history • 1970s – Electronic Data Interchange (EDI) & Electronic Funds Transfer (EFT) introduced to send commercial documents electronically • 1980s – widespread growth & acceptance of credit cards, automated teller machines (ATMs – cashpoints) & telephone banking introduced

  4. Some history • Early 1990s – development of the world wide web on the internet • Late 1990s – security protocols sufficiently well developed to allow safe, cheap & easy trading to the general public • 2000 onwards – massive growth in e-commerce through the world wide web

  5. Types of E commerce • Shopping for home delivery • Downloading music and videos • Booking holidays, train & air tickets, theatre & concert tickets • Internet banking • Buying insurance and other financial products • E Bay and other auction sites • On-line gambling

  6. The Size of E Commerce in UK • One in ten retail sales now takes place online • £80 billion is either spent or influenced by the internet • Online retail sales have grown by 45 per cent year-on-year for the past six months and have increased 2,000 per cent in the past six years. • According to IMRG Index survey May 2006

  7. Ebay is one of the most popular E-commerce sites in the worldwide • The British are the biggest users of E-bay with sales last year equivalent to £50 per person • In December 2007 alone 15 million Brits visited Ebay • In 2007 Ebay worldwide sold $59 billion worth of goods • The most expensive item every bought on Ebay was a Gulfstream jet for $4.9 million!

  8. Disadvantages of e-commerce • You cannot physically look at and feel the products before buying • You have to wait for them to be delivered and you may not be at home • You may have to pay postage costs • You do not get the personal touch of shopping locally • Local shops are going out of business which is bad for local high streets and people without computers such as old people

  9. The task • Write a definition of e-commerce in your own words • List at least 5 types of e-commerce and give at least one example website for each type • Add screen prints of the sites

  10. Choice • Shopping on the internet gives you a much greater choice than shopping on the high street • Internet retailers can stock a much wider range as they run their entire operation from one warehouse holding all their stock instead of running many high street shops • You can visit several different websites before you make your final choice • Lots of specialist retailers selling things you would not find in your local shops

  11. Amazon.co.uk 25,000,000 book titles stocked 367,000 DVDs 2,000,000 CDs 500,000 toys and games

  12. Amazon Warehouse

  13. Convenience • You can shop on the internet any time any place • You can have the goods delivered to your home or work address or directly to friends or family as a gift • Shopping for groceries means you don’t have to drive to the shops and drag the kids round the supermarket – they deliver to your door at a time you decide

  14. Convenience

  15. Convenience • more convenient due to 24/7 access. INTERNET BOOK SHOP

  16. Cost • Shopping on the internet can be cheaper than shopping locally as you can visit several sites to find the best deals • Internet retailers have lower operating costs so they can sell products cheaper than high street shops – renting a warehouse on an industrial estate is cheaper than paying rent for a shop on the high street • You can buy second hand goods from auction sites such as eBay • You have to pay delivery costs which can push up the prices but you save money by not driving and parking

  17. Flexibility • Greater flexibility, e.g. wider payment options; opportunity to shop around for the best deals and compare prices, etc.

  18. Location • You can access the internet from home, office, libraries, internet cafés • You can have your purchases delivered to home, office or a designated pick up point • You are not restricted to using the retailers in your local town

  19. The Future of the High Street?

  20. Your Task • Explain how e-commerce has changed the way people buy goods and services. Discuss each of the following ways in which e-commerce has changed the way people shop: • Choice, convenience, cost,location, flexibility • Remember to include bad as well as good things • For each category give at least one example website (e.g. Tesco, Amazon, Compare the Market, Virgin Holidays) • Ask friends and family what sites they use and the benefits they get from using them to help with the task above (higher grades only)

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