What is e commerce,history,futureDocument Transcript
History of EcommerceOne of the most popular activities on the Web is shopping. It has much allure in it — you canshop at your leisure, anytime, and in your pajamas. Literally anyone can have their pages built todisplay their specific goods and services.History of ecommerce dates back to the invention of the very old notion of "sell and buy",electricity, cables, computers, modems, and the Internet. Ecommerce became possible in 1991when the Internet was opened to commercial use. Since that date thousands of businesses havetaken up residence at web sites.At first, the term ecommerce meant the process of execution of commercial transactionselectronically with the help of the leading technologies such as Electronic Data Interchange(EDI) and Electronic Funds Transfer (EFT) which gave an opportunity for users to exchangebusiness information and do electronic transactions. The ability to use these technologiesappeared in the late 1970s and allowed business companies and organizations to sendcommercial documentation electronically.Although the Internet began to advance in popularity among the general public in 1994, it tookapproximately four years to develop the security protocols (for example, HTTP) and DSL whichallowed rapid access and a persistent connection to the Internet. In 2000 a great number ofbusiness companies in the United States and Western Europe represented their services in theWorld Wide Web. At this time the meaning of the word ecommerce was changed. People beganto define the term ecommerce as the process of purchasing of available goods and services overthe Internet using secure connections and electronic payment services. Although the dot-comcollapse in 2000 led to unfortunate results and many of ecommerce companies disappeared, the"brick and mortar" retailers recognized the advantages of electronic commerce and began to addsuch capabilities to their web sites (e.g., after the online grocery store Webvan came to ruin, twosupermarket chains, Albertsons and Safeway, began to use ecommerce to enable their customersto buy groceries online). By the end of 2001, the largest form of ecommerce, Business-to-Business (B2B) model, had around$700 billion in transactions.According to all available data,ecommerce sales continued to growin the next few years and, by the endof 2007, ecommerce sales accountedfor 3.4 percent of total sales.Ecommerce has a great deal ofadvantages over "brick and mortar"stores and mail order catalogs.Consumers can easily search througha large database of products andservices. They can see actual prices, build an order over several days and email it as a "wish list"
hoping that someone will pay for their selected goods. Customers can compare prices with aclick of the mouse and buy the selected product at best prices.Online vendors, in their turn, also get distinct advantages. The web and its search enginesprovide a way to be found by customers without expensive advertising campaign. Even smallonline shops can reach global markets. Web technology also allows to track customerpreferences and to deliver individually-tailored marketing.History of ecommerce is unthinkable without Amazon and Ebay which were among the firstInternet companies to allow electronic transactions. Thanks to their founders we now have ahandsome ecommerce sector and enjoy the buying and selling advantages of the Internet.Currently there are 5 largest and most famous worldwide Internet retailers: Amazon, Dell,Staples, Office Depot and Hewlett Packard. According to statistics, the most popular categoriesof products sold in the World Wide Web are music, books, computers, office supplies and otherconsumer electronics.Amazon.com, Inc. is one of the most famous ecommerce companies and is located in Seattle,Washington (USA). It was founded in 1994 by Jeff Bezos and was one of the first Americanecommerce companies to sell products over the Internet. After the dot-com collapse Amazon lostits position as a successful business model, however, in 2003 the company made its first annualprofit which was the first step to the further development.At the outset Amazon.com was considered as an online bookstore, but in time it extended avariety of goods by adding electronics, software, DVDs, video games, music CDs, MP3s,apparel, footwear, health products, etc. The original name of the company was Cadabra.com, butshortly after it become popular in the Internet Bezos decided to rename his business "Amazon"after the worlds most voluminous river. In 1999 Jeff Bezos was entitled as the Person of theYear by Time Magazine in recognition of the companys success. Although the companys mainheadquarters is located in the USA, WA, Amazon has set up separate websites in othereconomically developed countries such as the United Kingdom, Canada, France, Germany,Japan, and China. The company supports and operates retail web sites for many famousbusinesses, including Marks & Spencer, Lacoste, the NBA, Bebe Stores, Target, etc.Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, andnowadays the company gets about 40% of its sales from affiliates and third party sellers who listand sell goods on the web site. In 2008 Amazon penetrated into the cinema and is currentlysponsoring the film "The Stolen Child" with 20th Century Fox.According to the research conducted in 2008, the domain Amazon.com attracted about 615million customers every year. The most popular feature of the web site is the review system, i.e.the ability for visitors to submit their reviews and rate any product on a rating scale from one tofive stars. Amazon.com is also well-known for its clear and user-friendly advanced searchfacility which enables visitors to search for keywords in the full text of many books in thedatabase.
One more company which has contributed much to the process of ecommerce development isDell Inc., an American company located in Texas, which stands third in computer sales withinthe industry behind Hewlett-Packard and Acer.Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of 1997 wasthe first company to record a million dollars in online sales. The companys unique strategy ofselling goods over the World Wide Web with no retail outlets and no middlemen has beenadmired by a lot of customers and imitated by a great number of ecommerce businesses. The keyfactor of Dells success is that Dell.com enables customers to choose and to control, i.e. visitorscan browse the site and assemble PCs piece by piece choosing each single component based ontheir budget and requirements. According to statistics, approximately half of the companysprofit comes from the web site.In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune 500 list and8th on its annual Top 20 list of the most successful and admired companies in the USA inrecognition of the companys business model.History of ecommerce is a history of a new, virtual world which is evolving according to thecustomer advantage. It is a world which we are all building together brick by brick, laying asecure foundation for the future generations.Ecommerce TodayEcommerce today is a remarkable experience. It has transformed traditional shopping beyondrecognition. It is so much better than any other way of shopping that it has already attracted agreat many of ecommerce-lovers.If some years ago ecommerce was a buzz word, now it has become the order of the day. Peopleseem to shop literally everywhere – at their workplaces during lunch times, in rush hour whenthere is nothing else to do but switch on their laptops and start surfing.Ecommerce today gained so much popularity because its underlying technologies are evolving atgiant steps. We are even offered to ―feel‖ the product with a 3D mouse to better understand itsshape, size and texture. Why go somewhere out when all you have to do is make an order,choose the shipping method, put up your feet and wait till the order is delivered right to yourdoor-step?Ecommerce today offers so much luxury that even conventional stores have already signaled thealarm. Although, every one agrees that it is a long way for an ecommerce to replace ―brick-and-mortar‖ stores, it has every chance to happen in the future. Ecommerce which we are witnessingtoday brings in so much adventure into our lives that it is enjoyed by the whole onlinecommunity.
Ecommerce today does have some drawbacks but they say ―he that fears every bush must nevergo a birding‖. A lot of consumers do put up with minuses since they trust the online world andwant it to be a better place.Ecommerce today reflects what we created at the very dawn of online electronic commerce. It ismade by us and meant for us.Future of EcommerceExperts predict a promising and glorious future of ecommerce in the 21st century. In theforeseeable future ecommerce will further confirm itself a major tool of sale. Successfulecommerce will become a notion absolutely inseparable from the web, because e-shopping isbecoming more and more popular and natural. At the same time severe rivalry in the sphere ofecommerce services will intensify their development. Thus prevailing future trends ofecommerce will be the growth of Internet sales and evolution.Each year number of ecommerce deals grows enormously. Sales volumes of on-line stores aremore than comparable with those of ―brick-and-mortar‖ ones. And the tendency will continue,because a lot of people are ―imprisoned‖ by work and household duties, while Internet saves alot of time and gives opportunity to choose goods at the best prices. Present-day Internet salesboom is the foundation for magnificent ecommerce future.The ―quantity to quality‖ tendency of ecommerce is also becoming more and more obvious, asthe Internet has excluded geographical factor from the sale. So it doesn’t matter any morewhether your store is situated in New York or London or in a small town. To survive, merchantswill have to adapt rapidly to the new conditions. To attract more customers e-store-owners willhave not only to increase the number of available services, but to pay more attention to suchelements like attractive design, user-friendliness, appealing goods presentation, they will have toopportunely employ modern technologies for their businesses to become parts of ecommercefuture.Of course, those, who acquire e-stores earlier, get better chance for future success and prosperity,though an ecommerce site itself doesn’t guarantee you anything. Only an appropriate ecommercesolution in combination with thorough emarketing and advertising can buy you businessinsurance.History of E-CommercebyBill H.
Shopping on the internet is certainly a popular past time, anefficient time-saver, and a great way to comparison shop on virtually any kind of item you’reinterested in. The history of e-commerce as most people think of it has a short but interestingtime line. Most people don’t realize that e-commerce and its underlying technology have beenaround for about forty years.We’ve provided a brief history of e-commerce below starting with its conception and rapiddevelopment and finishing with a brief description of e-commerce’s advantages and its earlypioneers.The Early YearsThe term e-commerce was originally conceived to describe the process of conducting businesstransactions electronically using technology from the Electronic Data Interchange (EDI) andElectronic Funds Transfer (EFT). These technologies, which first appeared in the late 1970’s,allowed for the exchange of information and the execution of electronic transactions betweenbusinesses, typically in the form of electronic purchase orders and invoices. EDI and EFT werethe enabling technologies that laid the groundwork for what we now know as e-commerce. TheBoston Computer Exchange, a marketplace for used computer equipment started in 1982, wasone of the first known examples of e-commerce. Throughout the 1980’s, the proliferation ofcredit cards, ATM machines and telephone banking was the next step in the evolution ofelectronic commerce. Starting in the early 90’s, e-commerce would also include things such asenterprise resource planning (ERP), data warehousing and data mining.It wasn’t until 1994 that e-commerce (as we know it today) really began to accelerate with theintroduction of security protocols and high speed internet connections such as DSL, allowing formuch faster connection speeds and faster online transaction capability. Industry ―experts‖predicted explosive growth in e-commerce related businesses.
E-Commerce Begins to EmergeIn response to these expert opinions, between 1998 and 2000, a substantial number of businessesin Western Europe and the United States built out their first rudimentary e-commerce websites.The definition of e-commerce began to change in 2000 though, the year of the dot-com collapsewhen thousands of internet businesses folded. Despite the epic collapse, many of the worlds’most established traditional brick-and-mortar businesses were emboldened with the promise of e-commerce and the prospect of serving a global customer base electronically. The very next year,business to business transactions online became one of the largest forms of e-commerce withover $700 billion dollars in sales.Many of the dot-com collapses ―first-mover‖ failures served their offline competitors very well,providing evidence of what not to do in building a viable online business. For example,Webvan, which was one of the more infamous dot-com failures, trail blazed the path forAlbertsons and Safeway, two of the largest national supermarket chains, who each havedeveloped their own successful online grocery delivery businesses.E-Commerce PioneersThe birth of companies such as eBay and Amazon (launched in 1994) really began to lead theway in e-commerce. Both eBay and Amazon were among the first to establish prominent e-commerce brands. The most prominent e-commerce categories today are computers, books,office supplies, music, and a variety of electronics.Amazon.com, Inc., founded by Jeff Bezos, was the original e-commerce pioneer and certainlythe most recognizable. In the beginning, Amazon’s business model required massive investmentin warehousing, delivery and fulfillment capability and took years for Amazon to gainprofitability. But finally in 2003, almost 10 years after launching the company, Amazon.comrealized its first annual profit.Amazon began as just an online bookstore but over the years has extended its offering to a widevariety of product categories, including electronics, software, music, DVD’s, CD’s, video games,MP3’s, clothing, shoes, health and beauty products and even household goods. Bezos, wasresponsible for naming the company ―Amazon‖ after the world’s largest river and it enjoys atruly global presence with stand alone websites in six other countries, including the UnitedKingdom, Canada, France, Germany, Japan and China. Amazon.com was also the originalpioneer in affiliate marketing, allowing other websites to earn sales commissions for referringAmazon products to their customers. Today, Amazon generates anywhere between 30 to 40% ofits total sales revenue from affiliates or third party merchants who list and sell their products onAmazon’s web site. Today, the Amazon moniker certainly applies as it is one of the mostrecognized and most profitable e-commerce businesses on the planet. In 1999, Jeff Bezos washonored with Time Magazine’s ―Person of the Year‖ award, immortalizing him forever asprobably the single most recognizable figure in the entire e-commerce community.
Amazon and fellow e-commerce industry giant Dell remain two of the largest internet retailers inthe world, among other offline industry giants such as Staples, Office Depot, and HewlettPackard. Dell.com is another one of the most recognizable e-commerce brands online.Dell.com’s website was launched in 1994 with a single static web page and their online presencequickly grew. In 1997, Dell announced a single-day sales record of a million dollars on itswebsite. In fact, roughly half of Dell’s total profits come directly from their website alone. Withno offline retail outlets to speak of, Dell is another e-commerce pioneer that many businesseshave tried to model themselves after by selling products almost exclusively online.E-Commerce AdvantagesE-commerce businesses have numerous advantages over offline retail locations and catalogoperators. Consumers browsing online stores can easily search to find exactly what they arelooking for while shopping and can easily comparison shop with just a few clicks of the mouse.Even the smallest online retail sites can sell products and turn a profit with a very simple onlinepresence. Web tracking technology allows e-commerce sites to closely track customerpreferences and deliver highly individualized marketing to their entire customer base.As the popularity of e-commerce businesses continues to grow, the technology will onlycontinue to improve, making it even easier to open and operate a virtual online store with orwithout a brick-and-mortar presence. While e-commerce is still relatively new found territory, itcertainly offers plenty of opportunity for entrepreneurs of all types.In fact, sales data shows that from1999 until 2008 e-commerce sales have risen steadily and nowaccount for nearly 4% of total sales worldwide. What is e-commerce? Electronic commerce, commonly known as e-commerce or eCommerce, consists of thebuying and selling of products or services over electronic systems such as the Internet and othercomputer networks. The amount of trade conducted electronically has grown extraordinarilysince the spread of the Internet. A wide variety of commerce is conducted in this way, spurringand drawing on innovations in electronic funds transfer, supply chain management, Internetmarketing, online transaction processing, electronic data interchange (EDI), inventorymanagement systems, and automated data collection systems. Modern electronic commercetypically uses the World Wide Web at least at some point in the transactions lifecycle, althoughit can encompass a wider range of technologies such as e-mail as well. A small percentage of electronic commerce is conducted entirely electronically for virtualitems such as access to premium content on a website, but most electronic commerce involvesthe transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is sometimes known as e-tail. Almost all big retailers have electroniccommerce presence on the World Wide Web.
Electronic commerce that is conducted between businesses is referred to as Business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limitedto specific, pre-qualified participants (private electronic market). Electronic commerce is generally considered to be the sales aspect of e-business. It alsoconsists of the exchange of data to facilitate the financing and payment aspects of the businesstransactions.HistoryEarly development The meaning of electronic commerce has changed over the last 30 years. Originally,electronic commerce meant the facilitation of commercial transactions electronically, usingtechnology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT).These were both introduced in the late 1970s, allowing businesses to send commercialdocuments like purchase orders or invoices electronically. The growth and acceptance of creditcards, automated teller machines (ATM) and telephone banking in the 1980s were also forms ofelectronic commerce. From the 1990s onwards, electronic commerce would additionally includeenterprise resource planning systems (ERP), data mining and data warehousing. Perhaps it is introduced from the Telelphone Exchange Office.The earliest example ofmany-to-many electronic commerce in physical goods was the Boston Computer Exchange, amarketplace for used computers launched in 1982. The first online information marketplace,including online consulting, was likely the American Information Exchange, another pre-Internetonline system introduced in 1991. Web development When the Web first became well-known among the general public in 1994, many journalistsand pundits forecast that e-commerce would soon become a major economic sector. However, ittook about four years for security protocols (like HTTPS) to become sufficiently developed andwidely deployed. Subsequently, between 1998 and 2000, a substantial number of businesses inthe United States and Western Europe developed rudimentary web sites. In the dot com era, electronic commerce came to include activities more precisely termed"Web commerce" - the purchase of goods and services over the World Wide Web, usually withsecure connections with e-shopping carts and with electronic payment services such as creditcard payment authorizations. Although a large number of "pure" electronic commerce companies disappeared during thedot-com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that suchcompanies had identified valuable niche markets and began to add e-commerce capabilities totheir Web sites. For example, after the collapse of online grocer Webvan, two traditionalsupermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries throughwhich consumers could order groceries online.
The emergence of electronic commerce also significantly lowered barriers to entry in theselling of many types of goods; many small home-based proprietors are able to use the internet tosell goods. Often, small sellers use online auction sites such as eBay, or sell via large corporatewebsites like Amazon.com, in order to take advantage of the exposure and setup convenience ofsuch sites. $259 billion of online sales including travel are expected in 2007 in USA, an 18% increasefrom the previous year, as forecasted by the State of Retailing Online 2007 report from theNational Retail Federation (NRF) and Shop.org. Currently there are 67 Fortune 1000 companies that have ecommerce revenues greater than$10 million. The 5 largest Internet retailers are Amazon, Staples, Office Depot, Dell, andHewlett Packard. This indicates that the top categories of products sold on the Internet are books,music, office supplies, computers, and other consumer electronics. A list of Fortune 1000companies ranked by ecommerce revenues can be found on AListNet. Timeline * 1990: Tim Berners-Lee wrote the first web browser, WorldWideWeb, using a NeXTcomputer. * 1994: Netscape released the Navigator browser in October under the code name Mozilla.Pizza Hut offered pizza ordering on its Web page. The first online bank opened. Attempts tooffer flower delivery and magazine subscriptions online. Adult materials were also commerciallyavailable, as were cars and bikes. Netscape 1.0 in late 1994 introduced SSL encryption that madetransactions secure. * 1995: Jeff Bezos launched Amazon.com and the first commercial 24 hour, internet-onlyradio stations, Radio HK and NetRadio started broadcasting. Dell and Cisco began toaggressively use Internet for commercial transactions. eBay was founded by computerprogrammer Pierre Omidyar as AuctionWeb. * 1998: Electronic postal stamps can be purchased and downloaded for printing from theWeb. * 1999: business.com was sold for US $7.5 million, which was purchased in 1997 for US$150,000. The peer-to-peer filesharing software Napster was launched. * 2000: The dot-com bust. * 2003: Amazon.com had its first year with a full year of profit. Business ApplicationsSome common applications related to electronic commerce are:
duties, imposts, or license fees. By 1996, however, that began to change, as several U.S. statesand municipalities began to see Internet services as a potential source of tax revenue. The 1998 Internet Tax Freedom Act halted the expansion of direct taxation of the Internet,grandfathering existing taxes in ten US states. In the United States alone, some 30,000 taxingjurisdictions could otherwise have laid claim to taxes on a piece of the Internet. The law,however, did not affect sales taxes applied to online purchases. These continue to be taxed atvarying rates depending on the jurisdiction, in the same way that phone and mail orders aretaxed. The enactment of this legislation has coincided with the beginning of a period of spectacularInternet growth. Its proponents argue that the benefits of knowledge, trade, and communicationsthat the Internet is bringing to more people in more ways than ever before are worth the taxrevenue losses, if any, and that the economic and productivity growth attributable to the Internetmay well have contributed more revenues to various governments than would otherwise havebeen received. Opponents, on the other hand, have argued that the Internet would continue toprosper even if taxed, and that the current federal ban on Internet-specific levies deniesgovernment at all levels a much-needed source of revenue.