08/01/2019. ACS 3907 E-Commerce. Administration. Course Overview. Instructor: Kerry Augustine January 10 th 2019

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1 ACS 3907 E-Commerce Instructor: Kerry Augustine January 10 th 2019 Administration Lectures: Wed 6-9pm Office Hours: Mon 5:00-6:00pm My approach: Core academic ideas, procedures, things to test Practical industry experiences, examples, side notes, stories Key people/companies in the field Class interaction, participation, presentations! 2 Course Overview 1 st Section: business/marketing Design and promote product Marketing strategy Web metrics and customer behaviour 2 nd Section: technology Design website Technology options for EC 3 rd Section: operations Business planning Dealing with customer concerns: security, payment, returns Focus on B2C and B2B 3 1

2 About the Course Objective: Understanding the technological, business, and operational foundations of E-Commerce Evaluation: Assignment 1 (7%) Assignment 2 (8%) 3 tests (60% total; 20% each) Team Project (25%) Presentation (10%) Report (15%) 4 About the Course (cont.) Computer lab access, accounts, s Course website: Course outline Policies: Late assignments Missed tests Plagiarism/cheating Tentative schedule Readings vs. slides Page/table references to 2015 edition will update! Project topics 5 6 2

3 Introduction to E-Commerce 7 The Uber-ization of Everything Have you used Uber or any other on-demand service companies? What is the appeal of these companies for users and providers? Are there any negative consequences to the increased use of on-demand services like Uber and Airbnb? Slide 1-8 E-commerce Trends Retail e-commerce grows over 15% Continued expansion of mobile, social, and local e-commerce Mobile platform rivals PC platform Continued growth of cloud computing Explosive growth in Big Data Continued growth of user-generated content on social networks, blogs, wikis 9 3

4 E-commerce: A Brief History : Innovation (Web 1.0 >) Key concepts developed Dot-coms + Heavy venture capital investment => The Crash : Consolidation ( >Web 2.0 >) Emphasis on business-driven approach Growth of search engine advertising Analytic technologies 2007 Present: Reinvention ( >Web 3.0) Transformation of marketing New models based on user-generated content, social networks, local services => The Social Web Mobile platforms On-demand personal services business 10 Periods in the Development of E-commerce Figure 1.8, Page What Is E-commerce? Use of Internet and Web to transact business More formally: Digitally enabled commercial transactions between and among organizations and individuals 12 4

5 E-business: E-commerce vs. E-business Digital enabling of transactions and processes within a firm, involving information systems under firm s control Does not include commercial transactions involving an exchange of value across organizational boundaries 13 E-Commerce and E-Business Electronic Business is using electronic information to improve performance, create value and enable new relationships between business and customers Electronic Commerce is the commercial marketing, selling and buying of products and services on the Internet Internet Commerce is the online exchange of information and services utilizing network technologies Web Commerce 14 Types of E-commerce May be classified by technology or market relationship Business-to-Consumer (B2C) Business-to-Business (B2B) Consumer-to-Consumer (C2C) Social e-commerce Mobile e-commerce (M-commerce) Local e-commerce 15 5

6 Online in 60 Seconds SOURCE: "Net Vitality: Identifying the Top-Tier Global Broadband Internet Leaders. 16 The Growth of B2C E-commerce in the U.S. Figure 1.3, Page 19 SOURCE: Based on data from emarketer, Inc., 2015c, 2015d; authors estimates. 17 The Growth of B2B E-commerce in the U.S. Figure 1.4, Page 20 SOURCE: Based on data from U.S. Census Bureau, 2015; authors estimates. 18 6

7 The Mobile Platform Most recent development in Internet infrastructure Enables access to the Internet via wireless networks or cell-phone service Mobile devices include Tablets Smartphones Ultra-lightweight laptops 19 B2B vs B2C vs MC 20 Markets Market = place to trade products and services Information asymmetry in practice Marketspace = online marketplace Extends beyond temporal and geographic boundaries Vision of a perfect market: Perfect information No participant with market power to set prices No barriers to entry or exit Equal access to production technology 21 7

8 Major Components in Marketspace Consumers: individuals and organizations Sellers: businesses that sell products/services online Products and services: physical or digital goods, information Infrastructure: technological foundations Front-end: seller s site, electronic catalogs, shopping cart, search engine, payment gateway Back-end: activities related to order aggregation and fulfillment, inventory control, purchasing from suppliers, accounting, finance, payment processing, packaging, delivery Intermediaries: third parties that operate between buyers and sellers Other business partners: e.g., stakeholders, firm with different skills Other support services: certification and ensure security to content providers 22 Eight Unique Features of E-commerce Technology 1. Ubiquity 2. Global reach 3. Universal standards 4. Information richness 5. Interactivity 6. Information density 7. Personalization/customization 8. Social technology

9 25 New Considerations Lower transaction costs less time/money to shop online Cognitive energy higher or lower for EC? Reach Potential market is the entire online population Traditional commerce must tradeoff between reach and richness Broadcast model (e.g. newspapers) EC has potential to personalize marketing to broad audience (e.g. agents) Lower market entry costs = cost merchants must pay just to bring goods to a market Lower search costs easier to window shop and compare Increase in information density = total amount of quality info available to all market participants Price discovery and price transparency Disintermediation = removing the middle man 26 Advantages of EC For sellers: Increase sales opportunities Operate 24/7 from virtual marketplace No geographic restriction Access to global markets Increased speed and accuracy of information exchange No barriers to entry For buyers: Wider choice selection Shop 24/7 Instant access to detailed product information Easy to compare prices Quick delivery of digital products 27 9

10 Disadvantages of EC For sellers: Rapidly changing technology Insufficient telecommunications capacity Difficulty integrating business systems with e-business software Increased problems with security Global market issues: language, policies/legal issues, currency Increased competition For buyers: Concern over security Lack of trust with unfamiliar sellers Inability to touch/feel products Resistance to unfamiliar buying processes 28 Comparison with Traditional Commerce EC do at least the following electronically Contact between consumer and seller Advertising Billing EC Standard goods Detailed examination of goods not needed e.g. steam iron Low value goods Low risk to buy online e.g. paperback books Digital goods Cheap storage and fast delivery e.g. mp3 Simple services Easy to complete transaction e.g. airline reservation TC Non-standard goods Items requiring personal fitting e.g. sunglasses Expensive goods Detailed examination of goods desired e.g. collectors items Perishable goods Cannot be stored for long periods e.g. vegetables Extremely low value goods More cost to store and ship e.g. dollar deals 29 Predictions for the Future Technology will propagate through all commercial activity Large, traditional companies will continue to play dominant role, consolidating audiences Start-up ventures can still attract large audiences in non-dominated arenas Integrated online/offline companies will experience more growth than purely online companies Additional factors: Increased regulation and control Cost of energy China s E-Commerce Market 30 10

11 Future of E-Commerce 31 The Growth of the On-Demand Economy 32 Understanding E-Business: Organizing Themes Business Foundation: Understanding the economic and business principals that apply specifically to Internet-based e-businesses. Technical Foundation: Understanding the client/server computing architecture model that makes the Web possible. Operational Foundation: Understanding the operational factors that need to be considered in developing and managing a typical e- business entity including financial, security, legal, and ethical matters

12 Interests from Diverse Fields Computer science Management science Information systems Economics Marketing Management Finance/accounting Sociology/psychology Law Technical approaches Behavioural approaches 34 12