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The history of ecommerce

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  • 1. ThHHHIe History Of EcommerceHISTORY: The history of Ecommerce seems rather short but its journey started over 40 years ago in hushed science labs. Ecommerce has revolutionized the way we live our lives today, most of us have used it to purchase products of some description online in fact, over 66% of us have. This statistic is set to rise to 85% over the next 5 years. If you are one of the few who havent statistics show you have used it to research any number of products before purchasing elsewhere.Its early beginnings started during the cold war years when the world was racing to build missiledefense systems but, the history of modern Ecommerce is relativity short having its beginnings inthe mid 1990s. The History Of Ecommerce, The Early YearsIn the 1960s, very early on in the history of Ecommerce, itspurpose was to exchanging electronic data long distance. Inthese early days of Ecommerce, users consisted of only verylarge companies, such as banks and military departments,who used it for command control communication purposes.This was called EDI, and was used for electronic datainterchange.In the late 1970s a new protocol was developed known asASC X12 which was used for the exchange of businessdocuments and information electronically.Another system was being developed at the same time by the Military known as ARPAnet, andwas the first to use the "dial up" method of sending information via telephone networks. It wasconsidered the grandfather of the modern Internet. I guess we can thank the cold war forsomething!In 1982 Transmission Control Protocol and Internet Protocol known as TCP & IP was developed.This was the first system to send information in small packets along different routes using packetswitching technology, like todays Internet! As opposed to sending the information streamingdown one route.These were amongst the largest developments in the history of Ecommerce that set the stage fora revolution in the exchange of electronic data, but it was not for another quarter of a century thatEcommerce became accessible to everyday people like you and me. The History Of Ecommerce, Beginnings Of An Electronic Revolution
  • 2. The Internet took a giant leap into the modern age in 1991 when a computer scientist working under contract for CERN "Tim Berners- Lee" made a huge advancement by communicating via the Internet using HTTP. The birth of the World Wide Web was upon us! He is now considered the father of the World Wide Web. This opened up the door for everyday people like you and me to use this wonderful new technology, however it was not until 1994 that the first truly user friendly browser was developed with built in security protocol to protect peoples personal information online.This made way for secure transactions to be conducted on the internet. A year later 3rd partycredit card payment services became available to the still small online community. The stagewas set, and the future of Ecommerce was about to take off. The History Of Ecommerce, The Revolution Takes Off!In 1995, with the introduction of online payment methods, two companies that we all know oftoday took their first steps into the world of Ecommerce. Today Amazon and Ebay are bothamongst the most successful companies on the Internet!One month after selling his first book online, founder of Amazon Jeff Bezos was selling to everystate in the U.S and over 40 other countries. Ecommerce allowed the easy processing of ordersand shipping also enabling him to buy directly from the publishers.Ebay saw growth that was just as staggering. By allowing anyone to buy and sell online, in just afew short years the company became a household name with a turnover of hundreds of millionsa year.From its humble beginning in 1995 modern Ecommerce has become the fastest growing area ofbusiness, showing continued growth year after year.Technology has advanced further making it so much more accessible to people from all walks oflife, and entire industries have been built around Ecommerce which are today, the whos who ofthe business world.Today virtually anything can be purchased online, from your pizza to your car. And people love toshop online, figures show that in the U.S over 60% of adults have purchased goods online this isa figure that is set to explode over the coming years as the youth of today mature fast, being thefirst to have been raised with this exciting environment interwoven into all aspects of life. If thereis one thing we can learn from the history of Ecommerce it is that anyone given a little motivationand drive can become successful. It has never been easier to get a foothold into the excitingonline world of Ecommerce, all anyone needs is an internet conection a computer and an idea.The advantages of Ecommerce are endless.Ecommerce has become the great leveler, giving anyone the ability to build an Ecommercewebsite, and sell to a world wide market with outstanding results.The history of Ecommerce has shown us just how fast people can embrace a new technology, Ithas evolved in leaps and bounds to become what it is today and the future is looking bright.LIMITATIONS:
  • 3. Limitations of e – commerce:-1. Security:- the security risk in e – commerce can be-• client / server risk• data transfer and transaction risk• virus risk2. High start up cost:-The various components of cost involved with e – commerce are:-• connection:- connection cost to the internet.• hardware / software:- this includes cost of sophisticated Computer, moduer,routers, etc.• maintenance:- this include cost invole in traning of employees and maintenance ofweb-pages.3. Legal issues:- these issues arises when the customer data is fall in the hands ofstrangers.4. Lack of skilled personnel:- there is difficulty in finding skilled www developersand knowledgeable professionals to manage and a maintain customer on line.5. Loss of contact with customers:-Sometimes customers feels that they doesnothave received sufficient personal attention.
  • 4. 6. Uncertainty and lack of information:- most of the companies has never usedany electronic means of communication with its customers as the internet is anunknown mode for them.7. Some business process may never be available to e – commerce:-Someitems such as foods, high cost items such as jwellery may be impossible to beavailable on the internet.When the goods or services are sold or purchased over the Internet then this way of commerce isknown as E-commerce. In this process consumers use the Internet to purchase goods and servicesonline; added to this in web e-commerce businesses sell and communicate with other businessesthrough the Internet.There is no doubt behind the fact that E-commerce has given many companies the right to cheer butthere are few limitations of E-commerce too.The companies or the businesses who are selling the products are not able to communicate with thecustomer face to face. Due to this they are not able to get the feedbacks about the products so thatthey may improvise on the products. Although online chat programs have solved this issue to someextent but it needs to be implemented on a large scale.Another limitation with E-commerce is that you are not able to touch and check quality of a productbefore buying it.Credit Card security is a serious issue. People who are carrying out a transaction over the Internet areworried about their credit card security. Customers are still worried and fear about their online CreditCard orders.The next one is a technological limitation that the cost involved with bandwidth and server is too high.Another limitation is that the people are becoming more and more isolated without having a contactwith other people. Due to this people are facing difficulty interacting with peopleCredit Card security is a serious issue if vulnerableCosts involved with bandwidth and other computer and server costsExtensive database and technical knowledge and experience requiredCustomer apprehension about online Credit Card ordersConstantly changing technology may leave slow businesses behindSome customers need instant gratification, and shipment times interrupt thatSearch utilities far surpasses the speed used to find products through catalogsEncourages competition between small and large online retailersFEATURES:When setting up an e-commerce site there are many features to think off to have on yoursite, below are few must have features to relay ensure that your site is fully equipped foronline sales.
  • 5. 1. Search Box: Having a search box positioned well, will allow your visitors to quickly search for the product that they are looking for.2. Featured Products: By displaying featured products on your home page or on the side columns of your site will inform your visitors of top selling products, sales offers or it can be a general products that you want to push further and make sure they get noticed.3. Related product: This is a great up selling feature, which will show your visitors what other products they can purchase along side what they are currently viewing, a cleaver way of positioning this is with a heading, Customers who bought this also bought: This will encourage your visitors to purchase more then one item at once.4. Newsletter Subscription: Allow users to enter their email address to stay up to date with your offers and promotions, having this feature will allow you to build your mailing list for your to use in marketing campaigns.5. Product Zoom: Having a good zoom feature for your product images, is always a plus point online, as it allows visitors to see the minute details of your products, which works well, as some times customers prefer to feel and touch, so you can easily replace this by having a good zoom feature, which really brings out the details in your product.6. Categories: Have clear categories on your site to list your products into, and have your categories displayed somewhere easy to access, e.g. across the top or on the side columns.7. Good Navigation: Navigation is extremely important on an e-commence site, users should be able to easily access various sections of the site, along with a quick link back to the shopping cart.8. Good Payment Gateway: Choosing the perfect payment gateway solution for you site will give assurance and peace of mind to your visitors. Choose a merchant account that your visitors are comfortable with.9. Privacy Policy: Display clear Privacy Policy link in your footer.10. Good Return Policy: When buyers see a good return policy they will have more assurance and peace of mind if eversomething was to go wrong they can easily return their product. A good policy generally increases sales, as customers feel more safer to buy.
  • 6. 11. Customer login & registration: Give the option for customers to register on your site, so when they do return they don’t need to enter all their billing and payment details in again, giving them the flexibility to quickly check out. 12. Good Graphics: Make good use of graphics banners and images on the site, to attract visitors, also display your sales promotions, offers in attractive banners on the site for users to click on to. 13. Delivery Information: Always inform how your going to be delivering your products to the customers, along with clear time scales, so that your customers know when to expect the delivery. 14. News & Events: This section on the site where you can keep your visitors informed of new products, events, and other news related to your online business. Using a blogging platform or a module does this job perfectly. 15. Social Media Presence: Let your customers know that your available on networking sites, by having Social Media Logos on your site, some companies use networking sites as their customer support systems, interacting with their customers for enquires related to their orders. On the other hand some online retailers are only available to contact via networking platforms. Having a good social media presence will boost your online presence and brand.E-commerce is the use of internet and the web to make business transactions. Millions of peoplemake purchases on the web, so what makes e-commerce so special?There are 8 unique features of e-commerce that make it so successful.The first thing that makes e-commerce so great is Ubiquity; it is available everywhere at anytime.Online the stores never close. Online shopping has hurt traditional businesses in some ways andhelped it in other ways. A positive thing is clicks-and-bricks; you can order online and pick it up at thestore. E-commerce has forced business to get online or loss business. One of the negatives is that e-commerce takes away business from traditional businesses. It hurts small "mom and pop" shops aswell as big business. Office supply companies like Staples and OfficeMax send out coupons offering$10 off $50 if you buy in-store instead of online so they can reduce in store stock and increase sales.Many companies have a sales quota to make for each store and if they dont they will have to closethat store.Global Reach is a great feature of e-commerce. It takes the marketplace to marketspace. You cango "shopping" all around the world in one place. This has given businesses a chance to reach othermarkets and to billions of potential customers. I think that traditional businesses traditionallyadvertised on the radio, billboards and then television, but when the web was created it openedanother world for business and advertising. Traditional businesses now advertise online, it is muchmore affordable and reaches more consumers than television or radio. Sites like Google offeradvertising that you are charged per clicks. For every person who visits your site, you pay fivecents opposed to paying $500 to advertise on the radio and no one or only a few people go to yourstore or website.Universal Standards are standards shared by the world. This is a revolutionary thing for not just e-commerce but the world. It gives us all the ability to connect at the same "level" and it provides
  • 7. network externalities that will benefit everyone. Universal standards ties in with global reach; it isone giant marketplace. There are lower entry costs and minimal search costs compared totraditional commerce. I think that universal standard benefits have forced traditional businessesinto improving on their customer service. Traditional businesses attempt to lower search costs byoffering to search for you. Best Buy will let you go into the store and compare all appliance storeprices so you dont have to "shop around". Many stores will also call all their other stores or get itfrom their site shipped to the store so you dont have to go anywhere. If Staples does havesomething you need in stock will actually order it for you and personally deliver it to your door.Richness is the complexity and content of a message. I usually think about marketing and salespitches I think about richness. You go to the department store to buy perfume or make-up andyou get personal attention. Everyone loves to feel special and important. The web and e-commerce has made it possible to deliver the same kind of "feeling" or message without the faceto face interaction. I think this has made traditional business make greater improvement in theircustomer service so they can make a traditional shopping experience richer than ever before. Mystore like Areopostale, DEB and Wal-Mart hire greeters or shopping helpers to enhance yourshopping experience.Interactivity allows online merchants to engage consumers in face-to-face like interactions withoutan actual face to face experience. E-commerce interactivity is much better because businesses caninteract on a much larger scale. E-commerce can collect information from consumers more easilyand efficiently with forms and surveys. In an attempt to compete with online stores, manytraditional businesses like JC Penny print surveys with all their receipts and offer a discount onyour next shopping trip for filling it out.Information density offers consumers better quality information and more of it. My example goesalong with interactivity. Many companies like Best Buy offer price comparison and price matching,because e-commerce prices are more transparent so traditional business try to compete with e-commerce by making traditional shopping easier for consumers.Personalization and Customization are tailoring messages and products to consumers based ontheir preferences. Websites like MSN let you customize your homepage to all the information youwant and they also place advertising on your page based on your preferences. Customization issomething really hard for traditional businesses to do because just like richness the more people itreaches the less customized it gets. I think the closest thing to customization traditionalbusinesses have come up with are specialty stores. You see a lot more stores for specific groups,like big & tall stores, maternity and plus size stores created by businesses looking to reach othermarkets that needs werent really being met. Even traditional stores like Target, Kohls and Wal-mart have expanded their specialty departments. E-commerce has opened the door to unlimitedgoods for shoppers, so unless the traditional businesses attempt to keep up with this demand,they will lose certain groups to completely online shopping.1. ease to use, interface and navigation2. ease of payment3. variety of product4. competitive pricing5. good discounts6. customer care and grievance redressalSUCCESS FACTORS:Several factors have a role in the success of any e-commerce venture. They mayinclude:
  • 8. 1. Providing value to customers. Vendors can achieve this by offering a product or product-line that attracts potential customers at a competitive price, as in non-electronic commerce.2. Providing service and performance. Offering a responsive, user-friendly purchasing experience, just like a flesh-and-blood retailer, may go some way to achieving these goals.3. Providing an attractive website. The tasteful use of colour, graphics, animation, photographs, fonts, and white-space percentage may aid success in this respect.4. Providing an incentive for customers to buy and to return. Sales promotions to this end can involve coupons, special offers, and discounts. Cross-linked websites and advertising affiliate programs can also help.5. Providing personal attention. Personalized web sites, purchase suggestions, and personalized special offers may go some of the way to substituting for the face-to-face human interaction found at a traditional point of sale.6. Providing a sense of community. Chat rooms, discussion boards, soliciting customer input, loyalty schemes and affinity programs can help in this respect.7. Providing reliability and security. Parallel servers, hardware redundancy, fail-safe technology, information encryption, and firewalls can enhance this requirement.8. Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. However, customers may not appreciate the big brother experience.9. Owning the customers total experience. E-tailers foster this by treating any contacts with a customer as part of a total experience, an experience that becomes synonymous with the brand.10. Streamlining business processes, possibly through re-engineering and information technologies.11. Letting customers help themselves. Provision of a self-serve site, easy to use without assistance, can help in this respect.12. Helping customers do their job of consuming. E-tailers can provide such help through ample comparative information and good search facilities. Provision of component information and safety-and-health comments may assist e-tailers to define the customers job.13. Constructing a commercially sound business model. If this key success factor had appeared in textbooks in 2000, many of the dot.coms might not have gone bust.14. Engineering an electronic value chain in which one focuses on a "limited" number of core competencies -- the opposite of a one-stop shop. (Electronic stores can appear either specialist or generalist if properly programmed.)
  • 9. 15. Operating on or near the cutting edge of technology and staying there as technology changes (but remembering that the fundamentals of commerce remain indifferent to technology).16. Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.