Prese sented ed By Andre drew w J. Mar arsi siglia lia, , PhD, CCP Novembe mber 2010
Electr Electron onic ic Co Comm mmer erce ce (EC) (EC) is is “The use use of of the he In Intern ernet or or no non-tr tradi aditiona ional forms orms of of elect electron onic ic mar marketi ting ng be betwee een a co compa pany an and it it cus custom omers ers, supplier su iers, or or ot other her bus usine ness partners” (Ruppel, 2003, p. 33). Through ough EC EC we we can can use use a PC PC or or Smar artp tphon one to to con connect ect to to th the In Inter ernet to globa to bally lly: Conduct Business Send & Receive Email Purchase Products Acquire Research Information EC had pr EC prob oblem lem-plagued agued gro rowth th that wa was onl nly recen cently tly over ercom come Summary y of EC Life Cycle 2 2 2 2 2 2
Requi uire res bus usine ness sses es change ange their eir idea a of ret etail il paradigm. igm. EC EC does es not ot only ly have e pot otential ential to generat nerate e bus usines iness, , but ut rather her, , it change nges the e point nt-of of-pur purch chase se. . (Wigand, 1997) Macro-Level el consideration nsiderations s (Freeman, 1998) Customer omers need d to trust t the e purchas ase e mechan hanis ism or webs bsit ite. e. Must be a viabl able pro roduct duct or servic ice e mix. Shop opping ping experien ience ce must be conven enien ient t to customer omers Customer omers must t be satisfied ied with th the e purchas ase Summary y of EC Life Cycle 3 3 3 3 3 3
If the e EC EC system em is perceiv eived ed to be too o risky ky , cus ustom omer ers s will not ot us use it. 1.0 EC EC system em mus ust t be reliable able Reliability EC system EC em mus ust t have e low w risk The higher the EC system‟s reliability ability and the e lower er its risk, 0 the greater the customer‟s trust Risk 1.0 The higher the customer‟s trust, the e highe her r the e probabil babilit ity y the e EC EC site e will suc ucceed ceed. Summary y of EC Life Cycle 4 4 4 4 4 4
Trus ust of Customer omers & Supp ppli liers Busine ness Need fo for Electronic product Abil ility ity to Secure promotion Interactio ion n with h customer omers and nd Information provision suppl plie iers Transaction processing Impl plementatio ion n and d Success of EC with h Known own Partne ners Source: (Ruppel, 2003, p. 32) Summary y of EC Life Cycle 5 5 5 5 5 5
Stage 1 Stage 2 Stage 3 Stage 4 Hype & Experi rimentatio ion Retrenchment & Sobriet riety Sustain inabilit ility Focus & Fragmentation Slower ower & M More e Pred edic ictable le Stabili ility y with Predictab ctable le Dif iffer erentiation entiation by Low Prices ices or Rapid id & Erratic ic Change nge Change nge Cyclical lical Patter erns ns Speci cializatio lization Early ly e-tail il pionee neers forced ced to E-taili iling ng Revolut lution: ion: Increa eased ed busines iness effici icienc encies ies Consol olid idation ion adapt pt or die. e. Surviv iving ing best of The Wild ld Wide e Web increa eases es abili ility to offer er lower wer prices ces breed ed specia ecialis lists adapt pt and increa ease e their ir odds of surviv ival Entrepr epreneu eneurial ial pioneers neers and a few ew become ome success ccessful ul pursue ue ambit itious ious & Integr egrated ed multic ichanne nnel l systems ems settler lers undis iscip cipli lined ned expans ansion on Mass-cus customiz omization ion and hyper er- High Start-up up & Failur ilure e Rate target geting ing facilit cilitates es person onalizati lization on Physica ical l store ore retailer ilers are in Focus cus strategy egy throug ugh acknowled knowledgemen ement and Opport ortunis unistic ic Micr icro-comm ommunities unities served ed throu ough gh cost-lead leader ership ip or adapt ptation. ion. Thes ese e eventual ntual exper perimentation imentation with brand nded ed channe nnels ls dif iffer erentiation entiation many y novel l forma mats that market ket leader ers enter er from m other er Infome omedaries ies and co-opt optio ion n via def efines ines e- tailing‟s basic sector ctors and channe nnels using ng allianc liances es, , marke keting ing relations ionship ips, various ous modes es of entry: y: direct ect, , function nction and nd form networ works ks and open n systems ems and acquisition, alliance and „clicks cross retail il coll llaborations orations occur cur in a Physica ical l store ore retailer ilers fear and bricks‟ period of „Wikinomics‟ being „Amazoned‟ – are in shoc ock k and denia nial Physica ical l stores ores still ll domina minate Maturi urity: : Compe petit itiv ive e advant ntages es are based ed on operationa ional Fragmentation gmentation involv olving ing Shakeout: keout: A domin ominant nt effici icienc encies ies based ed on incremental cremental improv ovemen ements and exper perimentation imentation model el emer erges. ges. offer ering ing distincti istinctive e value. e. Disrupt uptiv ive e Inno novations ions Sustaining ining Compet petit ition ion Based on on Compet petit ition ion Based Compet petit ition ion Based on Functi ctiona nalit lity on Reliabi iabilit lity Conveni enienc ence e & Price ce Low w Consume umer Trust Level el Low w High gh Adapted from (Williams, 2009, p.227) 6 6 6 6 6 6 Summary y of EC Life Cycle
Stage 1 Stage 2 Stage 4 Stage 3 Technolo logy Pre-In Interne rnet Hype & Retrenchment & Focus & Sustain inabilit ility Experim rimentation Sobrie riety Fragmentation Year 1983 1983- 1990 1990-1995 1995 1995 1995-2000 2000 2000 2000-2003 2003 2003 2003-2010 2010 Direct ect Dial l @ Inter ernet net via T1, DSL L Cable le DSL, L, Cable, le, Mobile le Commun munica ication ons – DSL, L, Cable, le, Mobile le 28kbps, ps, Telephon lephone e @ @ 1-2M 2Mbps ps Up to 24Mbps ps Acces cess to Inter ernet net High Speed ed Low w Speed ed 56kbps ps - Low w Speed eed Mod oder erate e Speed ed High Speed ed PC using ng CP/M /M or PC & Smart Phones nes PC & Smart Phones nes Pred edomin ominant nt MSDOS, , Termi mina nals, ls, PC using ng MSDOS OS or PC using ng Wind ndow ows, , Optimize imized for Inter Internet net Optimize imized for Inter ernet net Acces cess Devices ices Inter eracti ctive e Voice ce Wind ndow ows 95, IVR Mobil ile e Phones nes Brows owsing ing Brows owsing ing Respons ponse e (IVR) Proced cedure ure Coding ing Full-fled edged ged EC Simpl ple e Trans nsacti ction ons, Elect ectron onic ic Shoppi pping, ng, Types es of Electr ectron onic ic EDI, I, EFT, , Electr ectron onic ic System em (PCS) ) – utiliz lizing ing Pure-Play lay & & APOLLO, LLO, SABRE, Elect ectron onic ic Banking, nking, Commerce merce Bull lleti etin n Boards based applicatio lications ns Clicks icks-and nd-Bricks icks Telephon lephone e Banking nking Gover ernme nment nt Servic ices es for mobile ile phones nes busines inesses es Consumer sumer B2C – Very Low Low w Ver ery High Acceptanc ceptance B2B - Mod oder erate Types of Electronic Commerce adapted from (Wigand, 1997, p. 6) Summary y of EC Life Cycle 7 7 7 7 7 7
EC EC has made de disr sruptiv tive e imp mpact ct bus usiness iness & c comm mmerce ce similar lar to other other pur urchas asing ing innovati tions ons: Post-Civil ivil War introd roduct uction on of mass ret etai ail purchasi sing ng Mail Mail-or order der shopping ng Big-box x discou count t stores es Despi pite e fitful start, t, EC EC has provided vided signi nific icant ant benef nefit its: s: New avenu nues s of pro roduct duct purchase ses Effici icient, ent, conveni enient, ent, cost t effect ectiv ive e informati ormation on retri etrieval al “Electronic technology has changed the way we think about money and monetary value. It‟s changing the way companies organize themselves and do business.” (McDougall, 1995, p.1) Summary y of EC Life Cycle le 8
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