CS28310

Ecommerce

An Introduction

Background

• Web– Growing sector

• Email– Successful method

• EDI– Early but well established non Internet system

Web-based Ecommerce

• Types of Business– Retail

• Marks and Spencer

– Digital Content• iTunes

– Auctions• ebay

– Travel• Expedia

– Financial• Moneysupermarket.com

Unique Features

• Ubiquity – available most places

• Universal Standards

• Richness – audio and video

• Interactivity – user interaction

• Information Density – costs drop, quality rises

• Personalisation

Types

• Business to Business B2B– Airbus

• Business to Consumer B2C– Debenhams

• Consumer to Consumer C2C– eBay

New markets

• Ebay – on line auctions

• Friends Reunited – text based database system

• Google – search engine (Advertising Giant)

• Youtube - video

• Facebook – image based database system

• Affiliate marketing/contextual advertising

New problems

• Internet Security

• Distribution

• Support of products

Processes

• Purchaser gives credit card

• Merchant passes on to gateway

• Gateway passes to issuing bank

• Issuing bank authorises and passes money to merchants bank

• Merchant ships goods

UK market

• Estimates put online consumer sales to £10.3 billion (excluding travel and finance)

• Retailing increasing by 25-30% per annum• 42,000 cars on Ebay UK• Amazon to ship average of 500,000 parcels

per day over festive season• Amazon to take on 1000 students over same

period

Problems

• After sales service

• High rate of product return

• Pressure to make web site visit more exciting

• Internet sales rising leading to closure of shops

• Could cap Internet retail at 10% of total retail trade

Opportunities

• Online retailing is accelerating

• Broadband allows a better online experience

• More people spending more time online

• Growth in online advertising

• Consumers more confident about purchasing online

Latest phase of growth

• High street retailers winning on web

• PC World sells 50% online

• Tesco sold over £1bn in groceries over the net in 2005

• 2012 Tesco £2.5bn

• 2017 Tesco £5.0bn

Internet only companies

• Fighting out their corner– Amazon has just moved into clothes and has

moved into jewellery – Lovefilm has over 60,000 titles with 450,000

subscribers.

Issues

• Customer not in– Tell customer when delivery is to take place

• Customer returns– Size– Texture– Misleading advertising etc– Ask customer reasons

Customer Service

• IKEA stayed away from online shopping

• Concerns about customer service

• Starting slowly and now nationwide

Some facts

• eBay UK has more people fully employed earning on ebay that employees at M&S (68,000 v 65,000)

• eBay has sales of $8.7 billion last financial year