What is e-commerce - Essay Example

Electronic commerce, otherwise known as e-commerce consists of the buying and selling of goods and services via electronic systems. In today's modernage the internet has enabled the possibility for people to interact with others all over the world. It was a natural progression that these people would soon begin introducing goods and services as well, making it easier for anyone to purchase anything that they desired at any given time. One of the most popular e-commerce websites is EBay, but there are hundreds of thousands others websites that sell products online. In the last decade, with the growing popularity of the internet and more people having their own personal computers, the market for e-commerce is outstanding. A large percentage of electronic commerce is conducted entirely electronically for virtual items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Today most major retail stores have a virtual store as well, making it even easier for their customers to access their products. E-commerce was first developed in the nineteen seventies as a way for businesses to electronically send information to one another in a faster and more efficient way. With the introduction of the Electronic Funds Transfer (EFT) and Electronic Data Exchange (EDI) businesses were able to send documents like purchase orders and invoices electronically from one facility to the next. In nineteen seventy nine "online shopping was invented in the United Kingdom by Michael Aldrich and during the nineteen eighties it was used extensively particularly by auto manufacturers such as Ford, Peugeot-Talbot, General Motors and Nissan" (Seybold). It is believed that the reason why e-commerce has grown so quickly since its first invention in the nineteen seventies is because it is efficient and makes transactions more simple and accessible to everyone. Since it's first introduction e-commerce continued to grow. "From the nineteen nineties onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing" (Graham). The ERP software allowed businesses to store and retrieve information in real time, making online purchases more secure for both the customer and the seller. This "modular software design should mean a business can select the modules they need, mix and match modules from different vendors, and add new modules of their own to improve business performance" (Graham). Data mining is a process that transforms data into information and can be particularly helpful in detecting fraud and keeping online purchases safe while at the same time providing useful marketing information to companies about a consumer's interests. With the invention of this new process, people felt more secure purchasing items and services online because they knew that their financial information would be safe. The results of data mining can help companies market their products to a specific customer group. "Based on the collections on data mining, data warehouses were intended as large-scale collection, storage, and staging areas for corporate data. Data could be retrieved from one central point or data could be distributed to 'retail stores' or 'data marts' that were tailored for ready access by users" (Frieden). Along with the invention of the EFT and EDI these three new processes are what ultimately propelled e-commerce into what it is today. The main concern for the future of e-commerce is the continued security of customers and making sure that transactions remain private. Even though online transactions are growing in number and popularity everyday, many analogists believe that e-commerce is heading for a fall. Consumers find it easier to bargain shop online, then they do shopping in physical stores. It is easier to do because all that is required is a simple click of the mouse, but a negative side affect to the opportunity for consumers to buy online is that many companies will go out of business due to overwhelming competition. As online shopping becomes more and more popular, consumers can find several websites to buy the same product, and they will search until they find the one that is the cheapest price. E-commerce has "spoiled customers to the point that consumers expect cheap prices and freebies and if they don't get them, they just move on to another site" (Friedman). Despite this negative side affect to retail e-commerce, there is still hope for the future of e-commerce and business interactions. "Most industry experts expect that the next force in electronic commerce will be business-to-business exchanges, and most of the new companies entering the public marketplace are participants in this arena" (Friedman). Some of the most influential people in the world of e-commerce are the ones constantly looking for ways to improve security and to enable different systems to communicate and work together. Past inventors like those responsible for the creation of the EFT and the EDI have influenced present day inventors to continue to create innovative new processes that will continue to build e-commerce. More modern influencers include: Tim Berners-Lee who was responsible for the first web browser, Jeff Bezos who launched Amazon.com, and Pierre Omidyar who launched EBay. In short, e-commerce creates opportunities for both businesses and consumers to reach out and communicate with each other in ways previously unavailable. Businesses can target their market consumer groups and customers can easily find exactly what they are looking for at the click of a mouse. While the future of e-commerce is uncertain, its rise to power and popularity has been quick and impressive. The improvements in e-commerce over the last few decades and its continued improvement make it a force to be reckoned with. With all of its success e-commerce could very likely pose a threat to all businesses that do not jump at the opportunity to go virtual. With consumers demanding more and more online services, businesses have no other option but to comply. If e-commerce continues to provide both businesses and consumers with what they need in the ever changing modern world, then its place in the future will be secured. Works Cited 1.) Frieden, Jonathan D. E-Commerce: Legal Issues of the Online Retailer. Richmond Journal of Law & Technology. Vol. 52. Issue 13. Dec. 2006. 2.)Graham, Mark. Warped Geographies of Development: The Internet and Theories of Economic Development. Geography Compass. Vol 21. Aug. 2007. 3.)Seybold, Pat. Customers.com. Crown Business Books for Random House Publishing. New York 2000. Read More