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Chapter 12: Consumer Trade Transactions

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  1. Chapter 12: Consumer Trade Transactions E-Commerce ©David Whiteley/McGraw-Hill, 2000

  2. What you want, when you want it • At the heart of most that is good about the Internet lies the simple, seductive offering - what you want, when you want it. You want to buy an obscure book or track down a cheap holiday? Get online. Do it. Now! (adapted from Waldman, 1999) E-Commerce ©David Whiteley/McGraw-Hill, 2000

  3. Internet e-Commerce • The basic Internet elements used for e-Commerce are: • The client system using a browser; • The server holding the e-Commerce application; • Links from the Internet application to back office systems. E-Commerce ©David Whiteley/McGraw-Hill, 2000

  4. The e-Shop • An example of a simple e-Shop, set up by Charlie Bucket (and with apologies to Roald Dahl). E-Commerce ©David Whiteley/McGraw-Hill, 2000

  5. The e-Shop • The basics: • An online advert • An e-Shop – providing online purchasing(as provided by Wonka Online) • Additional features may include: • Customer Registration • Dynamic Web Pages • Personalised Web Pages • A Shopping Basket • Additional Information • Community • Multiple Payment Options • Encryption • Online Delivery • Loyalty Schemes • Online Help • Shopping Mall E-Commerce ©David Whiteley/McGraw-Hill, 2000

  6. Internet Shopping and the Trade Cycle • The Retail Trade Cycle E-Commerce ©David Whiteley/McGraw-Hill, 2000

  7. Internet Shopping and the Trade Cycle • Search options: • Select a menu item or a button on a portal. • Using a search engine • Following a link to another page • Selecting a page that has been featured on an advert or that is recommended by a friend. • Using the url – a known url or a bookmark. E-Commerce ©David Whiteley/McGraw-Hill, 2000

  8. Internet Shopping and the Trade Cycle • Order: • Helping the customer to find things: • Departments/categories • A site search engine • Displaying the goods: • Picture • Description • VR Images • Sound • Selecting the goods: • Electronic shopping basket.  E-Commerce ©David Whiteley/McGraw-Hill, 2000

  9. Internet Shopping and the Trade Cycle • Payment: • Credit Cardor • e-Cash • Debit Card • Offline payment • Security of payment (see Chapter 15). E-Commerce ©David Whiteley/McGraw-Hill, 2000

  10. Internet Shopping and the Trade Cycle • Delivery: • For conventional shopping, the delivery function is typically performed by the customer. • Delivery issues: • Cost • Security • Perishable / large items. • Delivery methods: • Post (through postbox) • Doorstep (may require customer to be present) • Online. E-Commerce ©David Whiteley/McGraw-Hill, 2000

  11. Internet Shopping and the Trade Cycle • After-Sales: • For conventional shopping, goods that don’t fit/won’t work can be taken back. • For online shopping, return of goods can be/may seem more problematic. • After sales support (instructions/fault diagnosis) can be provided online. E-Commerce ©David Whiteley/McGraw-Hill, 2000

  12. Other e-Commerce Technologies (1) • The Internet is not the first public access telematics system and neither will it be the last word in developments in this field. • Interactive videotext systems (1970s). • The French system was Télétel (1980s) • Free Minitel terminals • Over six million subscribers (1993) • Used by 14 million people • Online Telephone Directory • Banking Services • Travel (Information and Reservations) • Catalogue Sales. E-Commerce ©David Whiteley/McGraw-Hill, 2000

  13. Other e-Commerce Technologies (2) • Other networks (mainly US) • CompuServe (1980) • Prodigy (1988 – IBM/Sears) • Television shopping channels • Projected developments: • Interactive TV(cable TV/Internet combinations)(satellite TV/telephone combinations) • Mobile e-Commerce(mobile phone/laptop combinations)(mobile phone e-Commerce) E-Commerce ©David Whiteley/McGraw-Hill, 2000

  14. e-Commerce Sales • Dramatic / rapid expansion but still a small proportion of overall retail sales. • KPMG (1999) gives direct sales as 5% of retail sales in the UK and 4% in the US; 16% of US home sales and 1% of UK direct sales were electronic. • Forrester Research (1999) stated online shopping accounted for $1.2 billion of Europe’s $1.9 trillion in retail sales (0.06%) compared to $8 billion of $2.6 trillion (0.3%) in total sales in the US. (US, not UK, definitions of billion and trillion) E-Commerce ©David Whiteley/McGraw-Hill, 2000

  15. Advantages and Disadvantages • Advantages of Consumer e-Commerce: • Home Shopping • World-wide, 24-Hours-a-Day Trading • The Latest Thing at Bargain Prices • Home Delivery • Online Sales Support E-Commerce ©David Whiteley/McGraw-Hill, 2000

  16. Advantages and Disadvantages • Disadvantages of Consumer e-Commerce: • Privacy and Security • Delivery • Inspecting Goods • Social Interaction • Return of Goods E-Commerce ©David Whiteley/McGraw-Hill, 2000

  17. Advantages and Disadvantages • Advantages for the vendor: • World-wide market • High-tech Image • Reduced costs • Disadvantages for the vendor: • Privacy and Security • Delivery • Price transparency … and for most e-Shops – an inability to make a profit E-Commerce ©David Whiteley/McGraw-Hill, 2000

  18. Consumer e-Commerce at Pens and Things • Read and discuss the case study. E-Commerce ©David Whiteley/McGraw-Hill, 2000

  19. Chapter 12 – Exercise 1 • If you are not already an experienced user of Internet e-Commerce, then look up a few sites to see what they look like. Use your favourite search engine to find two or three online bookshops. Use the search facility but also check out any adverts or menu items that click through to an online bookstore. Look up this book and any other course books and compare prices, delivery times and shipping charges. After you have looked up the book, jot down three reasons why you might buy the book online and three why it might not be advantageous. • If you did buy this book from an online bookshop then well done; you can still write down three reasons for and three against using an online bookstore. E-Commerce ©David Whiteley/McGraw-Hill, 2000