E-Commerce: The Revolution

Chapter 1Electronic Commerce Course

BADM 561, Dr. Cara Peters

Definitions

• E-commerce: digitally enabled commercial transactions– Using the Web & Internet to transact business – More of a marketing function– Not to be confused with internal transactions• Management information systems function• What the book defines as E-business

The Reinvention of E-Commerce

• 1995-2000 , Innovation– Digitize business on the web– Weak business models– Liquidity bubble

• 2001-2008, Consolidation– Honed business models, 25% growth per year– Success of social networking services

Where is E-Commerce Today

• Trends in 2008-2009– New business models based off social

technologies• Web 2.0

– Growth in search engine marketing & advertising– Retail ecommerce grows in double digit rates• Online population slows but average purchase expands• Fastest growth in teen, tween and older shoppers

Ecommerce today (cont.)

• Revolution in telecommunications, print media, real estate, hotels, bill payments

• Entrepreneurs flood the net, riding on infrastructures of Amazon, eBay and Google

• Large companies continue to improve multi-channel, bricks & clicks models

• Growth in B2B supply chain use of the web

Online Retailing2008: 120 million Americans will spend $265 on Internet products & services

Lands End

• Opened in 1963 as the Lands’ End Yacht Stores– Averaged 15 mail orders per day

• Bought by Sears in 2002 for $1.9 billion

• 2005, Fifteenth largest mail order firm

• Annual sales of over $1.3 billion

• Target quality-conscious, middle-age consumers with traditional casual apparel

Lands End

• Direct marketing

• Multi-channel merchant– Catalogs, stores, and website

– 269 million catalogs mailed in 2001– 16 outlet and inlet stores in three countries– Website online in 1995, initially offering 100

products

• Today, every product in catalog sold online

Lands End

• 15 million web site visitors (1999)– $61 million in revenue– Considered world’s largest apparel website

• Known for customer service– First firm with 24/7 order taking & 800 number– Lands End Live (talk with personal shopper)

Lands End

• Website has full set of features:

– Lands End My Personal Shopper (live chat)– Online style advice – Swim suit fitting– Three-dimensional model– Build an oxford shirt

Lands End

• Online orders filled through catalog warehouse– Size of 16 football fields– Sort 10,000 pieces per hour– Ship 150,000 orders per day

• Using a multi-channel model resulting in seamless customer experience

Different from Traditional Formats

• Ubiquity (anywhere/anytime)

• Global Reach (no boundaries)

• Universal Standards (common standards)

• Richness (video/audio/text)

Different from Traditional Formats

• Interactivity (technology interacts with user)• Information Density (reduces information

cost/raises quality)• Customization (personal messages on mass

level)• Social Technology (content generation/social

networks)

Ubiquity

Global Reach

Universal Standards

Richness

Interactivity

Information Density

Personalization

User Generated Content

The Impact of Social Networking Technology

Take My Survey!

Online Dating Industry

• $516 million in revenues (2005)• Over 850 online dating services– 59% of daters find it “difficult” to meet someone

new– Most likely place to meet people: • Work (22%), Internet (18%), Bars (18%), Clubs (11%)

• Downsides: stigma & anonymity (married)

Key Players

• Match.com• Yahoo! Personals• eHarmony• Lavalife• Traditional dating firms– It’s Just Lunch

• Social networking communities

Match.com

• Conceived in 1993• Owned by Interactive Corporation– Ticketmaster

• World’s largest online dating firm– 900,000 paying subscribers– 12 million profiles posted– January (2004), 29.6 million unique visitors

Match.com

• Partnered with several firms– America Online & Microsoft’s MSN

• Subscriptions as low as $12.99 per month

• New services include:– video, off line speed dating, friend list, travel site,

MatchLive off line events

Types of E-Commerce

• B2C – Amazon.com• B2B – Farmer’s Market/Food Coop• C2C – Craigslist.com• P2P – Bit Torrent• M-Commerce -- Safira