How E-Commerce Has Changed the Way to Do Business - Research Paper Example

? E-Commerce E-Commerce E-Commerce is the short form of the word Electronic commerce (further identified as e-comm. or e-commerce). It refers to the trading of merchandise and services over electronic systems like computer networks and the internet (Nelson & Mark, 2000). This medium relies on technologies such as electronic funds transfer; electronic data interchange (EDI), internet marketing, online transaction processing, supply chain management, automatic information gathering set ups and record management system. This article will outline the benefits of E-Commerce to customers and discuss how popular corporations use it from a technological point of view. This essay will also give a brief history concerning E-Commerce and also state the advantages and disadvantages of E-Commerce to customers/ businesses. Earlier on, E-Commerce was branded as the facilitation of marketable business electronically by means of technologies like Electronic Funds Transfer (EFT) and Electronic Data Interchange (EDI). These technologies were introduced early in the 1970s. Technological advancement led to introduction of other systems like automated teller machines (ATM), telephone banking, airline reservation system and credit cards which are also forms of E-Commerce (Reynolds, 2009). In the early 90s, Tim Berners-Lee invented the World Wide Web which profoundly altered a scholarly telecommunication system to a global communication system named www or the internet (Plant, 2012). In time, many European and American business firms offered their services through the Worldwide Web. Since then, people are much conversant to E-Commerce with the ability to purchase various goods through the internet using electronic payment services and secure protocols. As defined earlier, E-Commerce is the process of buying and selling products and services from the internet, especially the World Wide Web. When retail selling is used, then the term e-tailing can be used. E-Commerce is divided into several categories. They include E-tailing, Electronic Data Interchange (EDI), business-to-business transactions, gathering and use of demographic data through Web contacts, E-Mail and fax and the security of business transactions (Plant, 2012). E-Commerce has a number of benefits to customers and other businesses. They include efficient buying and selling procedures as well as an easy way of finding products. Buying and selling of products is not limited. The customers are able to purchase products and get services 24 hours daily. E-Commerce also allows customers to select products from various providers without the need of moving physically from one point to another. This process, therefore, cuts down the rate associated with processing, inventory management, marketing, customer care and information storage (Reynolds, 2009). This in turn, reduces the burden influenced by infrastructure to conduct businesses. This form of business is easier to start and run. Moreover, this invention allows more customers to find products and services without hypothetical geographic boundaries. Lastly, there is no need for physical company setups since the business is run on a network. Since the early 1990s, the internet has tremendously grown as a technologically enthusiastic tool to many corporations. Improvement in technology and other forms of E-Commerce also came in play. There are four principal categories of E-Commerce business models. They are business to consumer (B2C), business to business (B2B), consumer to business (C2B) and consumer to consumer (C2C) (Plant, 2012). In E-Commerce, there are eight unique features that enable this web shopping process run successfully. They are global reach, ubiquity, richness, universal standards, interactivity, personalization and customization and information density (Plant, 2012). Ubiquity is the leading factor in the success of any E-Commerce business. Online stores never close and they are available every time and anytime. Global reach is also essential in ensuring a successful E-Commerce business. Global reach includes the ability of a business to reach other markets and other customers. Universal standards are jointly made available to the whole world. These standards are radical for both the world and E-Commerce at large. This factor ties in with global reach. Compared to traditional commerce these standards have low advertising and search costs. Another leading factor is the richness of the E-Commerce business setup. This factor can be defined as the complexity and content of a message. The web in conjunction with E-Commerce has made it possible to deliver a similar message even without face-to-face interaction (Plant, 2012). This increases and enhances a corporation’s shopping experience. In addition, there is the interactivity feature which enables online merchants to connect with their customers in face-to-face like interactions which are not necessarily made by the actual face. This is based on the fact that E-Commerce can collect information from businesses and consumers efficiently with surveys and forms. Traditional businesses like J Penny, print surveys enhancing their customer’s experience in web shopping (Reynolds, 2009). On the other hand, information density offers customers with quality information. This aspect goes hand in hand with information density. Therefore, through E-Commerce the prices offered are more transparent than traditional businesses, which try to compete with E-Commerce. Lastly, personalization and customization modify messages and products to consumers based on their preferences. Customization is incredibly inflexible for traditional businesses to perform since, just like richness the additional people it reaches the fewer customized it gets. E-Commerce has enabled unlimited access to goods for shoppers through this way and also expanded their specialty departments. Even traditional stores like Kohl's, Target, and Wal-mart have lengthened their field departments (Plant, 2012). In comparison to traditional businesses, E-Commerce has played a chief role in enriching the business world. E-Commerce has also other services like mobile e-commerce that is a new developed way to reach the customers and other businesses. Further analysis depicts that E-Commerce has its merits; it also has its own demerits. Some of the disadvantages of E-Commerce are as discussed below. In E-Commerce, there is no guarantee of product quality. This comes about owing to the actuality that the customer has no visible viewing of the product or service. Other than this, there are many hackers who seek for opportunities to exploit customers through products and services which are non-existent (Reynolds, 2009). These hackers can also attack an ecommerce website and alter services and payment gateways. Mechanical failures also arise in E-Commerce. These failures can lead to unpredictable effects on the total processes. Moreover, there is also a restricted opportunity of the customer to interact directly with the company offering goods and services (Reynolds, 2009). This originates from factors associated with location. Lastly, E-commerce is not suitable for perishable goods. People usually prefer to touch and feel perishable goods before they make purchases. This touching and feeling of the products ensures that they are fresh and have not expired. E-Commerce has vastly grown in importance as companies have adopted brick and click and pure-click channel systems (Plant, 2012). Pure-click companies are those which have established a website devoid of any prior existence as a business. Brick and click are those companies which were existent and have added an online site for ecommerce. Many ecommerce websites have established these services through low prices, convenient interfaces and high customer satisfaction. In conclusion, E-Commerce is one of the contemporary services that have been developed lately. This involves ordering content from the internet together with goods and services which are delivered as agreed by the customers. This economy ecosystem has virtually become the main street of the world (Plant, 2012). Different countries have some activities related to E-Commerce that are regulated by the government. An example in the United States is the Federal Trade Commission (FTC) and the Asia Pacific Economic Cooperation (APEC) in Asia (Plant, 2012). All these factors have been explained by economists as factors that have considerably intensified price competition in the business world. Research shows that, for this business, they should offer lowered prices and be able to maximize the use of economies of scale. References Nelson, T. & Mark, K. (2000). What is e-commerce? Retrieved from http://searchcio.techtarget.com/definition/e-commerce Plant, R. (2012). E-Commerce: Formulation of strategy. New York: Prentice Hall. Reynolds, J. (2009). The complete E-Commerce book: Design, build, and maintain a successful web-based business. India: CMP books publishers. Read More