© paradigm publishing inc. 11-1 chapter 11 electronic commerce

© Paradigm Publishing Inc. 11-1

Chapter 11Electronic Commerce


Overview

• An Overview of Electronic Commerce• Online Shopping• Online Services• Peer-to-Peer Online Transactions• Transaction Payment Methods• Establishing an E-tailer Web Site• Business-to-Business Electronic Commerce• The Supply Chain: A B2B Model• Major Types of B2B Technologies• B2B in the U.S. Economy


An Overview of Electronic Commerce

What is electronic commerce?– Electronic commerce – buying and selling of

products and services over the Internet– Business-to-consumer electronic commerce –

companies use Internet to sell products and services to customers and receive payment

– Business-to-business electronic commerce – companies use Internet to conduct a wide range of business activities with other companies



Popular

Business-to-

Consumer

Shopping

Sites


Online Shopping

What are the advantages of online shopping?– Convenience – consumers purchase what they

want when they want from their own homes– Greater selection – online stores offer consumers

almost unlimited products– Product information – consumers find detailed

information on a wide variety of products– Ease of comparison shopping – consumers

quickly find comparable items at similar stores


Online Shopping

Online Store– seller’s Web site where customers can view and

purchase products and services– seller groups products or services in categories that

link to a list of merchandise in each category– user clicks desired category to view pictures,

descriptions, and prices


Online Shopping

Online superstores– offer an extensive array of products

– products are grouped into departments

– provides search features to find specific products

Online shopping malls– connects its stores by hyperlinks on the mall’s home page


Online ShoppingShopping agent continually scans data-bases forproducts and prices that are displayed when a user requests a price comparison.


The online shopping process

Online Shopping


Online ShoppingTip checklist for shopping online


Online ShoppingMilestones

in federal privacy legislation


Online Shopping

Data is coded when sent over Internet and decoded by recipient.


Online Shopping

Online shopping sites should provide– easy to find, read, and understand terms of sale– satisfactory degree of information about the product being

offered– simple to follow directions for purchasing– high level of customer service


Online Services

Online Banking and Investing– Online banking involves using a computer, modem, and Internet to

conduct routine banking.– Users pay bills, transfer funds among accounts, and transact other

financial business online.– Brokerage firms maintain Web sites so consumers can purchase and sell

stocks and other securities.


Online Services

Online Travel– allows users to research destinations, transportation, and prices– users can surf price and schedule combinations to sort options

by airline, arrival and departure times, price, and duration of flight


Peer-to-Peer Online Transactions

– Peer-to-peer online transaction venue is a Web site forum where anyone may sell, buy, trade, or share goods with other individuals.

– Online auction is a site to place an item for sale or bid on items being offered for auction.

– Digital music distribution is the free distribution of music over the Internet.


Transaction Payment Methods

Electronic Funds Transfer (EFT)– any transfer of money over the Internet

Check or Credit Card by Phone– Electronic check (e-check) initiates an electronic transfer of

funds from customer’s checking account to merchant.



Credit Account– represents a customer’s promise to pay for online purchases upon receipt of a periodic

statement

Credit Cards and Debit Cards– Credit card – small plastic card with information

that enables user to make purchases on credit– Debit card – withdraws funds directly from purchaser’s current checking or savings account



Smart Card– user swipes card through reader attached to computer and information is

transmitted to e-tailer which completes payment transaction

Digital Cash– allows customer to pay for online purchases by transmitting a number from one

computer to another; the number represents a specified amount of money



Electronic Wallet– encryption software stores user’s personal, credit card, and shipping information

Micro Payments– enables buyers to purchase low-cost items on Internet

Person-to-Person Payment Systems– allows consumers to transfer money through a credit card or bank account


Establishing an E-tailer Web Site

Registering the Domain NameInternet Corporation for Assigned Names and Numbers (ICANN) provides information about site registration, allows lookup to see if domain name is available, and provides information about how to register site’s address with registrar.



Choosing Hardware and Software– Next step is to determine the type of hardware and

software needed to create a storefront.– A Web hosting service allows individuals or

businesses to use its Web servers to store Web pages.



Processing PaymentsTo process payments, you will need– to obtain a merchant account– to provide secure order forms at the site– to use payment-processing software– an electronic order form– to use a commercial payment-processing service



Checklist for designing an effective site



Managing the SiteCustomers expect e-tailer sites to– reflect current product descriptions and prices– show specials, new products or services, updated information, or

new images that encourage browsing the site frequently



Advertising and Promoting the SiteElectronic methods to let shoppers know about your site include– co-advertise and co-promote with other sites– links to other sites like yours, and vice versa– submit site to search engines



Analyzing the Effectiveness of the SiteSite analysis is ongoing evaluation of an e-commerce Web site and its activity.– One form involves timing a Web site’s ordering or processing activities.– Another form provides users with a simple online questionnaire that allows feedback.



Developing a Customer FocusCustomer relationship management (CRM) software electronically manages the business/customer relationship. It focuses on establishing and maintaining good relationships with online customers, suppliers, and other businesses.


Business-to-Business Electronic CommerceHow does the Internet support the supply chain in B2B e-commerce?– B2B e-commerce networks companies, suppliers, agents, customers, and others in a supply chain. – Procurement is finding products and services at the best possible prices.– Communicating with others in the supply chain can be done through Web sites, intranets, internets, extranets, and virtual private networks.


The Supply Chain: A B2B Model

Electronic commerce technologies allow businesses to conduct activities quickly and efficiently on a worldwide scale.


The Supply Chain: A B2B Model

Types of information shared in the B2B model


The Supply Chain: A B2B ModelAn intranet allows departments within a business to share information quickly and easily.


Major Types of B2B Technologies

The electronic data interchange (EDI) process



Payment and Transaction Systems– Financial electronic data interchange (FEDI) provides for

electronic transmission of payment and remittance information among a payer, payee, and banks.

– Automated clearinghouse (ACH) is established to transfer funds electronically from one account to another.



Security Technologies– Authentication identifies and individual and confirms authorization to access

a system.– Electronic signature is a digital code attached to a message to uniquely

identify the sender.– Trusted operating system isolates OS functions into separate compartments

and restricts access of unauthorized users to key areas of systems.


B2B in the U.S. Economy

General Electric Corporation– Customers can view high-resolution photos of engine

parts they have sent in for repair.– Site describes the defect and recommends whether

and how to fix it.



Wal-Mart’s Customer Inventory System– Computers electronically transmit purchase orders, shipping

lists, invoices, and payments; eliminates delays in shipping, obtains accurate pricing, and better serves customers.

– Electronic funds transfers allows payments to be electronically credited to suppliers’ bank accounts.



United Parcel Service (USP)– Employees use personal computers to enter information from customers who

request package pick up or trace.– Drivers use handheld devices to scan bar codes for product and destination

information.– Shipping label information can track packages and inform customers of

package status.


On the Horizon

Based on the information presented in this chapter and your own experience, what do you think is on the horizon?

© paradigm publishing inc. 11-1 chapter 11 electronic commerce

Documents

shopping online slide

online shopping shopping

paradigm publishing

online shopping data

online shopping milestones

advantages of online

online services online

electronic commerce