ITM 100 – Exam Notes Chapter 5 – E-Commerce • Advances in technology, product variety, and consumer demand have brought an accompanying change in retailing strategy. The arrival of the telegraph enabled orders to be placed rapidly and shipped by mail. Rail and airline transportation brought new and rapid possibilities for order fulfillment. • It seems inevitable that the invention of the internet would create another revolution in commerce, specifically the arrival of e-commerce as a way of doing business around the world in an instant without the need for a physical business presence. The internet brought along the forces of build to order as a way for manufactures, such as Dell and others, to directly solicit orders from consumers and deliver products directly, rather than relying on a global network of wholesalers and distributors/dealers as a way of bringing products to market. • Some have tried to distinguish between e-commerce (transactions that involve buying and selling goods and services through the internet) with e-business (the broader use of internet technologies to reduce operating costs, such as extending the electronic supply chain to partners and suppliers). • 1880s (Mail order, catalogue retailing), 1920s (Chain/Dealer Stores), Discounters, Warehouse Clubs, 1980s (Category Killers), Internet Retailers • There is still much unexplored potential in these technologies that relate to everything we do as a society, so artificial distinctions will not serve any particular purpose. We group these technologies together and simply call it e-commerce. Beyond the Basic Definition • Formal definition of E-Commerce: E-commerce is the use of information systems, technologies, and computer networks by individuals and organizations to carry out transactions in order to create or support the creation of business value. • This includes all types of computer networks, all types of transactions, and all types of business relationships and models.
• Transactions: Business-to-Consumer(B2C) – Online equivalent of the retail store as well as other services – Chapters.com; Business-to-Business(B2B) – Electronic exchanges between companies – Worldwide Retail Exchange; Business-to- Government(B2G)– Online sales to government agencies as well as electronic payments of taxes – Government of Ontario; Consumer-to-Government(C2G) – Electronic payment of taxes as well as purchase of various types of licenses – Taxes to federal government; Consumer-to-Consumer(C2C) – Use of online auctions like eBay and similar other sites – Kijiji, Amazon E-Commerce and Products: Physical and Digital • Physical products include anything that requires an actual shipment of the item from a central distribution point to the buyer (whether an end-consumer, wholesaler, or to another company). This also requires an offline supply chain to handle the sales, order processing, and delivery of these goods, even if they are discovered and purchased online.