Notes on Electronic Commerce and Enterprise Systems

Electronic Commerce (E-Commerce): E-commerce refers to business activities that are conducted electronically over computer networks. This includes buying and selling goods and services, as well as the transfer of funds and data to facilitate these transactions. E-commerce has revolutionized the way businesses operate and how consumers shop, allowing for greater convenience and accessibility.

Strong candidates for conversion to e-commerce include:

• Paper-based processes: Traditional methods that rely on physical documentation can be inefficient and prone to errors. E-commerce enables businesses to digitize these processes, simplify workflows, and enhance accuracy.

• Time-consuming operations: Tasks that require extensive manual labor or lengthy procedures can be streamlined through automation in e-commerce platforms.

• Inconvenient experiences for customers: E-commerce addresses customer pain points such as limited store hours and geographical limitations by allowing transactions to take place anywhere at any time.

Types of E-Commerce

Business-to-Business (B2B) E-Commerce

• Definition: This subset of e-commerce involves transactions where all participants are organizations, such as manufacturers, wholesalers, and retailers.

• Purpose: B2B e-commerce connects business partners within a virtual supply chain, facilitating operations that can cut resupply times and reduce costs, thereby improving efficiency in procurement and inventory management.

• Types of transactions:

  • Buy-side e-commerce: This includes purchasing goods and services from suppliers. It often involves complex negotiations, bulk purchasing, and long-term contracts.

  • Sell-side e-commerce: This refers to the processes where organizations sell products to consumers or other businesses, often utilizing an online storefront to reach broader markets.

Business-to-Consumer (B2C) E-Commerce

• Definition: B2C e-commerce encompasses direct transactions between customers and organizations. It typically involves customers purchasing products or services from a business via the internet.

• Key Concept: Disintermediation is a crucial aspect of B2C, where customers bypass middlemen or intermediaries like wholesalers. This allows for better pricing and more direct communication between businesses and consumers.

• Reasons for growth:

  • The web enables access to cheaper products due to lower overhead costs for online retailers.

  • Increased personalization for online shoppers enhances user experience as businesses can tailor offerings based on consumer behavior.

  • The use of social media for promotion and customer engagement has become a powerful tool to drive traffic and sales to e-commerce platforms.

Consumer-to-Consumer (C2C) E-Commerce

• Definition: C2C e-commerce involves transactions between consumers that are facilitated by a third-party platform that connects buyers with sellers.

• Popular platforms: Websites such as eBay, Craigslist, Etsy, and Poshmark exemplify C2C e-commerce models, where individuals can sell goods directly to each other.

• Legal Considerations: Participants in C2C transactions must adhere to local laws regarding sales, including regulations on taxes, consumer rights, and safety standards.

Comparative Analysis of B2B, B2C, and C2C E-Commerce

Mobile Commerce (M-Commerce)

• Definition: M-commerce refers to e-commerce conducted via wireless devices, such as smartphones and tablets, allowing for shopping on-the-go.

• .mobi Domain: Developed by ICANN, this domain extension aims to attract mobile users by ensuring websites are optimized for mobile viewing.

• Market Trends:

  • M-commerce is maturing at a slower pace in North America compared to Europe and Japan. As mobile technology improves, more consumers are adopting mobile shopping.

  • As of Q4 2015, mobile commerce accounted for 35% of retail e-commerce sales globally, demonstrating its significant impact on the e-commerce landscape.

  • Advances in wireless technology have led to a rapid growth in mobile websites, enhancing user experience and accessibility.

Marketing Strategies in E-Commerce

• Market Segmentation: This process involves identifying specific markets to target advertising, focusing on demographically defined subgroups to enhance marketing effectiveness. For example, eXelate provides access to a database of over 250 million business records, facilitating targeted marketing.

• Retargeting: Noting that 74% of online shopping carts are abandoned, retargeting uses targeted advertisements to re-engage these shoppers and direct them back to retailer sites, maximizing conversion rates.

• Price Comparison Tools: Mobile applications that enable users to compare prices using barcodes or photos empower consumers to make informed purchasing decisions and find the best deal available.

• Couponing Strategies: In 2015, $515 billion was distributed in consumer incentives across North America, yet less than 1% of these coupons were redeemed. There is a growing expectation for increased redemptions through social media integration, which can enhance consumer engagement and reduce the complexity of coupon usage.

E-Commerce Software Essentials

E-commerce platforms must support various functionalities, including:

• Catalog management: Effectively organizing and managing product listings, updates, and inventory.

• Product configuration: Allowing customization of products based on customer specifications and preferences.

• Shopping cart functionality: Facilitating a seamless user experience for adding products and processing purchases.

• Transaction processing: Ensuring secure and efficient processing of payments and orders.

• Web traffic analytics: Providing insights into user behavior to inform marketing strategies.