IS300 [Chapter 10]

E-commerce

Use of the Internet, the web, and mobile apps and browsers running on mobile devices to transact business. More formally, can be defined as digitally enabled commercial transactions between and among organizations and individuals.

Marketspace

A marketplace extended beyond traditional boundaries and removed from a temporal and geographic location.

Transaction costs

The costs of participating in a market.

Market entry costs

The cost merchants must pay to bring their goods to market.

Search costs

The time and money spent locating a suitable product and determining the best place to purchase that product.

Richness

Refers to the complexity and content of a message.

Interactivity

Allowing for two-way communication between merchant and consumer and peer-to-peer communication among individuals.

Information density

The total amount and quality of information available to all market participants.

Price transparency

Ease with which consumers can find out the variety of prices in a market.

Cost transparency

Ability of consumers to discover the actual costs merchants pay for products.

Price discrimination

Selling the same goods, or nearly the same goods, to different targeted groups at different prices.

Personalization

Ability of merchants to target marketing messages to specific individuals by adjusting the message to a person’s clickstream behavior, name, interests, and past purchases.

Customization

Changing a delivered product or service based on a user’s preferences or prior behavior.

Information asymmetry

Exists when one party in a transaction has more information that is essential to the transaction than the other party; impacts the relative bargaining power of the participants.

Menu costs

Merchants’ costs of changing prices.

Dynamic pricing

Pricing of a product or service varies depending on the demand characteristics of the customer or the supply situation of the seller.

Disintermediation

The removal of organizations or business process layers responsible for certain intermediary steps in a value chain.

Digital goods

Goods that can be delivered over a digital network.

Business-to-consumer e-commerce (B2C e-commerce)

Type of e-commerce that involves selling products and services directly to individual consumers.

Business-to-business e-commerce (B2B e-commerce)

Type of e-commerce that involves sales of goods and services among businesses.

Consumer-to-consumer e-commerce (C2C e-commerce)

Type of e-commerce that involves consumers selling directly to other consumers.

Online retailer

Sells goods online. Sometimes called an e-tailer.

Transaction broker

Provides online processing for transactions that previously were conducted in person, by phone, or by mail.

Market creator

Provides a digital environment in which buyers and sellers can meet, display products, search for products, establish prices, and engage in transactions.

Content provider

Distributes information content, such as digital video, music, audio files in the form of podcasts, photos, text, and artwork, via the Internet to computers and mobile devices.

Download

Involves transferring a file from a web server to a user’s device, where it resides and can be accessed by the user at any time.

Streaming

A method of distributing audio and video files as a continuous stream of content to a user’s device without it having to be stored locally on the device.

Service provider

offers services online

Fintech

Start-up financial technology firms and services that use IT innovatively to compete with traditional financial services firms.

Community provider

Creates a digital online environment where people with similar interests can transact (buy and sell goods); share interests, photos, and videos; communicate with like-minded people; and receive interest-related information.

Portal

Web interface for presenting integrated personalized business content from a variety of sources.

Also refers to a website that acts as initial point of entry to the web with an integrated package of content and services.

Revenue model

Describes how a firm will earn revenue, generate profits, and produce a return on investment.

Advertising revenue model

E-commerce revenue model that is based on generating revenue from online advertising.

Sales revenue model

E-commerce revenue model that is based on generating revenue from the sale of goods, content, and/or services to customers.

Subscription revenue model

E-commerce revenue model that is based on generating revenue from subscription fees charged for access to some or all of a company’s content or services.

Free/freemium revenue model

E-commerce revenue model in which a business offers basic services or content for free, but generates revenue from a premium charged for advanced or special features.

Transaction fee revenue model

E-commerce revenue model based on generating revenue from fees for enabling or executing transactions.

Affiliate revenue model

E-commerce revenue model in which a business steers customers to an “affiliate” which then pays the company a referral fee or percentage of revenue from any resulting sales.

Long tail marketing

Refers to the ability of firms to find potential customers inexpensively for products for which demand is low, largely because the cost of reaching very small market segments (people who fall into the long tail ends of a Bell curve) is not high.

Behavioral targeting (interest-based advertising)

Tracking the clickstreams (history of online clicking behavior) of individuals for the purpose of understanding their interests and intentions, and exposing them to advertisements that are uniquely suited to their interests

Native advertising

Advertising that looks similar to editorial content but typically is inconspicuously tagged as "sponsored"; often placed in social network feeds or within online magazines.

Online social network

Enables users to communicate with one another, form group and individual relationships, and share interests, values, and ideas, via a website and/or app.

Wisdom of crowds

The belief that large numbers of people can make better decisions under certain circumstances than a single person or even a small committee of experts.

Social listening

Ability of marketers to understand what people are saying online about a brand as well as its competitors.

Crowdsourcing

Using large online audiences for advice, market feedback, new ideas, and solutions to business problems. Related to the “wisdom of crowds” theory.

Social e-commerce

Type of e-commerce that involves the use of social networks to share knowledge about items of interest with other shoppers and enable purchases directly via the social network.

Social graph

Map of all significant online social relationships, comparable to a social network describing offline relationships.

Electronic data interchange (EDI)

The direct computer-to-computer exchange between two organizations of standard business documents and transactions, such as orders, shipment instructions, or payments.

Private B2B network

Internet-enabled network typically employed by a large firm to link to its suppliers and other key business partners.

B2B e-commerce marketplace

Provides a single, digital marketplace that allows multiple business buyers and sellers to transact business.

Direct goods

Goods used in a production process.

Indirect goods

Goods not directly used in the production process, such as office supplies.

Exchange

Independently owned, third-party B2B e-commerce marketplace that is primarily transaction-oriented and that connects many buyers and suppliers for spot purchasing.

Mobile e-commerce (m-commerce)

Type of e-commerce that involves the sale of goods and services via mobile devices, such as a smartphone, tablet computer, or wearable.

Location-based services

Involves providing services to users based on the users’ location; enabled by GPS, Wi-Fi, and cellular technologies.

Geosocial services

Involves social networking based on users’ location.

Geoadvertising services

Involves delivering ads to users based on their location.

Geoinformation services

Involves providing users with information on local places and things based on the users’ location.