E Commerce, a term that is almost on everybody’s lips these days irrespective of the fact whether they know what it is exactly or how it works. So what is E Commerce?
At it’s most simplistic level; eCommerce is simply the buying and selling of goods, services or information via the World Wide Web, email or other pathways on the Internet. To be very clear lets say you are in the mood of shopping today and you switch on your PC, connect to internet and open the homepage of a website and browse for the product you are looking for. If you happen to find something you wish to buy, you pay for it online, no traffic, no hustle bustle of the market nothing. You did it all by sitting in front of your PC. Electronic commerce or e-commerce consists of the buying, selling, marketing, and servicing of products or services over computer networks.
According to Forrester Research (as cited in Kessler, 2003), electronic commerce generated sales worth US $12.2 billion in 2003. The meaning of e-commerce changed with time from commercial transactions electronically to the purchase of goods and services over the World Wide Web via secure servers (SSL communications) with e-shopping carts and with electronic pay services, like credit card payment authorizations, more precisely termed Web-Commerce.
E-commerce from its humble starting in early nineties in US, has gained acceptance among both the buyers and the sellers. So what factors led to this where both the buyer and seller is pervasive and so is the commodity and yet it gets delivered.
For an e-commerce venture to be successful foremost attention must be paid to the product suitability factor. Certain products like perishable commodities may not be a suitable commodity for an e-com venture where as music and movies are. Examples of this type of company include Schwab, Google, eBay, Paypal, Egghead, and Morpheus. A factor for success in this venture consists of providing customers with exact, reliable information on the goods and services. Since there is no direct contact between the buyer and the seller, a lot of importance is paid on the trust factor.
Ecommerce and E-business are interchangeable terms. So what you call a shopping mall has been replaced by a website now hence one can say a website is the most important part of E-Business. There are a few factors one need to keep in mind while developing such a website. The first thing is online credit card transactions. In order to not to miss many important and profit making sales one should implement some form of online credit card processing. Since web site acts as the storefront for the products and services, you wish to sell online. Your site visitors are, for the most part, window shoppers and browsers. A commercial web site’s aim is to convert these browsers into buyers. The website should be designed in such an attractive way that it can earn you buyers .The site should be easily navigable. Plenty of necessary info should be available on the homepage itself. Use good quality images to give the buyer the feel of the product because one of the major hurdles in this business is this feeling of not being able to touch and feel the product.
Let’s look into the factors for which e-commerce segment has only few survivors:
Lack of market research:
One major reason is failure to understand customers, why they buy and how they buy.
Even a product with a sound value proposition can fail if producers and retailers do not understand customer habits, expectations, and motivations.
Sometimes investors lack to judge and utilize the complete edge in the market although they have a sound e-business model in place. The classic example in this is Amazon.com, which had a classic e-books site but is yet to see major profit.
Logistics is a major factor since they must match up with the claims of the seller or else leads to customer dissatisfaction. Most of the e-commerce venture failed because they did not have a good delivery system in place to match up there claims.
Failure to obtain employee commitment:
If planners do not explain their strategy well to employees, or fail to give employees the whole picture, then training and setting up incentives for workers to embrace the strategy may assist. Even if the transaction is on the internet, the employees run the show.
Several reasons might account for the slow uptake, including:
Concerns about security:
Many people will not use credit cards over the Internet due to concerns about theft and fraud.
Lack of instant gratification with most e-purchases (non-digital purchases):
Much of a consumer’s reward for purchasing a product lies in the instant gratification of using and displaying that product. This reward does not exist when one’s purchase does not arrive for days or weeks.
The problem of access to web commerce:
The problem persists in particularly for poor households and for developing countries. Low penetration rates of Internet access in some sectors greatly reduce the potential for e-commerce.
The social aspect of shopping:
Some people enjoy talking to sales staff, to other shoppers, or to their cohorts: this social reward side of retail therapy does not exist to the same extent in online shopping.
E-commerce is a concept that is here to stay but a lot of things must be put in order so that it can finally change the idea of consumerism. Profitability may have to wait for the achievement of market share.