ACS 3907 E-Commerce3. Identify and describe the unique features of e-commerce technology and discuss their business significance. 4. Describe the major types of e-commerce. 5. Understand

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©Bowen Hui, Beyond the Cube Consulting Services Ltd.

ACS 3907E-Commerce

Lecture 1-1

Instructor: Kerry Augustine



Administration

• Lectures: Wed 6-9pm

• Office Hours: Mon 5:00-6:00pm

• E-mail: [email protected]

• 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!

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mailto:[email protected]



Course Overview

• 1st Section: business/marketing– Business planning– Design and promote product– Marketing strategy– Web metrics and customer behavior

• 2nd Section: technology– Website design– E-Commerce design architecture– Technology options for EC

• 3rd Section: operations– E-Commerce marketing/ tools– Operational payment/ models– Business value chain (CRM/ SCM– Dealing with customer concerns: security, payment, returns– Focus on B2C and B2B

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Fifteenth Edition

E-Commerce 2019: Business, Technology, Society

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Companion Website for

E-commerce 2019: Business. Technology.

Society, 15th edition

https://e-commerce2019.com/index.html





About the Course

• Objective: Understanding the technological, business, and operational foundations of E-Commerce

• Evaluation:

– Assignment 1 (5%)

– Assignment 2 (5%)

– Mid-Term Exam (25%)

– Team Project (25%)• Project Proposal (5%)

• Report (20%)

– Final Exam (40%)

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About the Course (cont.)

• Computer lab access, accounts, emails

• Course website: http://www.acs.uwinnipeg.ca/3907/

• Course outline

• Policies:– Late assignments

– Missed tests

– Plagiarism/cheating

• Tentative schedule

• Readings vs. slides– Page/table references to 2016 edition – will update!

• Project topics

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Fifteenth Edition Twelfth Edition

http://www.acs.uwinnipeg.ca/3907/



Introduction to E-Commerce

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1. Understand why it is important to study e-commerce.

2. Define e-commerce, understand how e-commerce differs from e-business, identify the primary technological building blocks underlying e-commerce, and recognize major current themes in e-commerce.

3. Identify and describe the unique features of e-commerce technology and discuss their business significance.

4. Describe the major types of e-commerce.

5. Understand the evolution of e-commerce from its early years to today.

6. Describe the major themes underlying the study of e-commerce.

7. Identify the major academic disciplines contributing to e-commerce.

Learning Objectives



The Virtual Enterprise

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"

Uber, the world’s largest taxi company, owns no vehicles.

Facebook, the world’s most popular media owner, creates no content.

Alibaba, the most valuable retailer, has no inventory.

Airbnb, the world’s largest accommodation provider, owns no real estate.



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 UberFacebook, Alibaba, and Airbnb?



E-commerce Trends 2019-20

• Continued expansion of mobile, social, and local e-commerce

• Continued growth of cloud computing

• Explosive growth in Big Data

• Continued growth of user-generated content on social networks, blogs, wikis

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E-commerce: A Brief History

• 1995–2000: Innovation (Web 1.0…>)– Key concepts developed

– Dot-coms + Heavy venture capital investment => The Crash

• 2001–2006: 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

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Periods in the Development of E-commerceFigure 1.10



What Is E-commerce?

• Use of Internet and Web to transact business

• More formally:

– Digitally enabled commercial transactions between and among organizations and individuals

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E-commerce vs. E-business

• 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

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E-Commerce and E-Business

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is the commercial marketing, selling and buying of products and services on the

Internet

is using electronic information to improve performance, create value and enable

Internet Commerce

Electronic Business

Electronic Commerce

is the online exchange of information and services utilizing network technologies

Web Commerce

new relationships between business and customers



Types of E-commerce*

• Business-to-Consumer (B2C)

• Business-to-Business (B2B)

• Consumer-to-Consumer (C2C)

• Social e-commerce

• Mobile e-commerce (M-commerce)

• Local e-commerce

*May be classified by technology or market relationship

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©Bowen Hui, Beyond the Cube Consulting Services Ltd.SOURCES: Lori Lewis & Officially Chad via Visual Capitalist 18

https://www.statista.com/chart/17518/internet-use-one-minute/



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The Growth of B2C E-commerce in the U.S. Figure 1.5



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The Growth of B2B E-commerce in the U.S. Figure 1.7



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

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The Growth of M-commerce in the U.S. Figure 1.8



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

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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

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Eight Unique Features of E-commerce Technology

1. Ubiquity 2. Global reach 3. Universal standards 4. Information richness 5. Interactivity 6. Information density7. Personalization/customization8. Social technology

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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”

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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

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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

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Comparison with Traditional Commerce• EC do at least the following electronically…

– Contact between consumer and seller

– Advertising

– Billing

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EC TC

Standard goodsDetailed examination of goods not needede.g. steam iron

Non-standard goodsItems requiring personal fittinge.g. sunglasses

Low value goodsLow risk to buy onlinee.g. paperback books

Expensive goodsDetailed examination of goods desirede.g. collectors’ items

Digital goodsCheap storage and fast deliverye.g. mp3

Perishable goodsCannot be stored for long periodse.g. vegetables

Simple servicesEasy to complete transactione.g. airline reservation

Extremely low value goodsMore cost to store and shipe.g. dollar deals



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 niche

arenas

• Integrated online/offline companies will experience more growth than purely online companies

• Additional factors:– Increased regulation and control– Biometrics and wearable tech– Sustainability (energy)– Omnichannel Commerce– M-Commerce– AR & AI

• Sources: – Future of Ecommerce: Predictions for 2020 and Beyond (WEB4PRO)– Five Bold Predictions for the Future (3dcart)

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https://topdigital.agency/future-of-ecommerce-predictions-for-2020-and-beyond/

https://blog.3dcart.com/blog/five-bold-predictions-for-the-future-of-ecommerce



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.

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Interests from Diverse Fields

• Computer science

• Management science

• Information systems

• Economics

• Marketing

• Management

• Finance/accounting

• Sociology/psychology

• Law

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Technical approaches

Behavioural approaches

Documents

ACS 3907 E-Commerce3. Identify and describe the unique features of e-commerce technology and discuss their business significance. 4. Describe the major types of e-commerce. 5. Understand