E-commerce

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E-commerce is the activity of buying or selling of products on online services or over the Internet. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems.

In marketing, a product is an object or system made available for consumer use; it is anything that can be offered to a market to satisfy the desire or need of a customer. In retailing, products are often referred to as merchandise, and in manufacturing, products are bought as raw materials and then sold as finished goods. A service is also regarded to as a type of product.

Internet Global system of connected computer networks

The Internet is the global system of interconnected computer networks that use the Internet protocol suite (TCP/IP) to link devices worldwide. It is a network of networks that consists of private, public, academic, business, and government networks of local to global scope, linked by a broad array of electronic, wireless, and optical networking technologies. The Internet carries a vast range of information resources and services, such as the inter-linked hypertext documents and applications of the World Wide Web (WWW), electronic mail, telephony, and file sharing.

The term mobile commerce was originally coined in 1997 by Kevin Duffey at the launch of the Global Mobile Commerce Forum, to mean "the delivery of electronic commerce capabilities directly into the consumer’s hand, anywhere, via wireless technology." Many choose to think of Mobile Commerce as meaning "a retail outlet in your customer’s pocket."

Contents

Modern electronic commerce typically uses the World Wide Web for at least one part of the transaction's life cycle although it may also use other technologies such as e-mail. Typical e-commerce transactions include the purchase of online books (such as Amazon) and music purchases (music download in the form of digital distribution such as iTunes Store), and to a less extent, customized/personalized online liquor store inventory services. [1] There are three areas of e-commerce: online retailing, electronic markets, and online auctions. E-commerce is supported by electronic business. [2]

World Wide Web System of interlinked hypertext documents accessed over the Internet

The World Wide Web (WWW), commonly known as the Web, is an information system where documents and other web resources are identified by Uniform Resource Locators, which may be interlinked by hypertext, and are accessible over the Internet. The resources of the WWW may be accessed by users by a software application called a web browser.

Email Method of exchanging digital messages between people over a network

Electronic mail is a method of exchanging messages ("mail") between people using electronic devices. Invented by Ray Tomlinson, email first entered limited use in the 1960s and by the mid-1970s had taken the form now recognized as email. Email operates across computer networks, which today is primarily the Internet. Some early email systems required the author and the recipient to both be online at the same time, in common with instant messaging. Today's email systems are based on a store-and-forward model. Email servers accept, forward, deliver, and store messages. Neither the users nor their computers are required to be online simultaneously; they need to connect only briefly, typically to a mail server or a webmail interface for as long as it takes to send or receive messages.

Amazon (company) American electronic commerce and cloud computing company

Amazon.com, Inc., is an American multinational technology company based in Seattle, Washington, that focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is considered one of the Big Four technology companies along with Google, Apple, and Facebook.

E-commerce businesses may also employ some or all of the followings:

Online shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser. Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine, which displays the same product's availability and pricing at different e-retailers. As of 2016, customers can shop online using a range of different computers and devices, including desktop computers, laptops, tablet computers and smartphones.

Direct selling consists of two main business models: single-level marketing, in which a direct seller makes money by buying products from a parent organization and selling them directly to customers, and multi-level marketing, in which the direct seller may earn money from both direct sales to customers and by sponsoring new direct sellers and potentially earning a commission from their efforts.

Conversational commerce is e-commerce done via various means of conversation and using technology such as: speech recognition, natural language processing and artificial intelligence.

Timeline

A timeline for the development of e-commerce:

ARPANET Early packet switching network that was the first to implement the protocol suite TCP/IP

The Advanced Research Projects Agency Network (ARPANET) was an early packet-switching network and the first network to implement the TCP/IP protocol suite. Both technologies became the technical foundation of the Internet. The ARPANET was initially founded by the Advanced Research Projects Agency (ARPA) of the United States Department of Defense.

Stanford University has many centers and institutes dedicated to the study of various specific topics. These centers and institutes may be within a department, within a school but across departments, an independent laboratory, institute or center reporting directly to the Dean of Research and outside any school, or semi-independent of the University itself.

Massachusetts Institute of Technology University in Massachusetts

The Massachusetts Institute of Technology (MIT) is a private research university in Cambridge, Massachusetts. The Institute is a land-grant, sea-grant, and space-grant university, with an urban campus that extends more than a mile (1.6 km) alongside the Charles River. The Institute also encompasses a number of major off-campus facilities such as the MIT Lincoln Laboratory, the Bates Center, and the Haystack Observatory, as well as affiliated laboratories such as the Broad and Whitehead Institutes. Founded in 1861 in response to the increasing industrialization of the United States, MIT adopted a European polytechnic university model and stressed laboratory instruction in applied science and engineering. It has since played a key role in the development of many aspects of modern science, engineering, mathematics, and technology, and is widely known for its innovation and academic strength, making it one of the most prestigious institutions of higher learning in the world.

Business application

An example of an older generation of avatar-style automated online assistant on a merchandising website. Automated online assistant.png
An example of an older generation of avatar-style automated online assistant on a merchandising website.

Some common applications related to electronic commerce are:

A digital wallet also known as "e-Wallet" refers to an electronic device or online service that allows an individual to make electronic transactions. This can include purchasing items on-line with a computer or using a smartphone to purchase something at a store. Money are deposited to digital wallet in prior to any transactions or, in other cases, an individual's bank account can be linked to the digital wallet. They might also have their driver's license, health card, loyalty card(s) and other ID documents stored on the phone. The credentials can be passed to a merchant's terminal wirelessly via near field communication (NFC). Increasingly, digital wallets are being made not just for basic financial transactions but to also authenticate the holder's credentials. For example, a digital wallet could verify the age of the buyer to the store while purchasing alcohol. The system has already gained popularity in Japan, where digital wallets are known as "wallet mobiles". A cryptocurrency wallet is a digital wallet where private keys are stored for cryptocurrencies like bitcoin.

Document automation is the design of systems and workflows that assist in the creation of electronic documents. These include logic-based systems that use segments of pre-existing text and/or data to assemble a new document. This process is increasingly used within certain industries to assemble legal documents, contracts and letters. Document automation systems can also be used to automate all conditional text, variable text, and data contained within a set of documents.

Supply chain system of organizations, people, activities, information, and resources involved in moving a product or service from the point where it is manufactured to where it is consumed

In business and finance, supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer. In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable. Supply chains link value chains.

Governmental regulation

In the United States, certain electronic commerce activities are regulated by the Federal Trade Commission (FTC). These activities include the use of commercial e-mails, online advertising and consumer privacy. The CAN-SPAM Act of 2003 establishes national standards for direct marketing over e-mail. The Federal Trade Commission Act regulates all forms of advertising, including online advertising, and states that advertising must be truthful and non-deceptive. [27] Using its authority under Section 5 of the FTC Act, which prohibits unfair or deceptive practices, the FTC has brought a number of cases to enforce the promises in corporate privacy statements, including promises about the security of consumers' personal information. [28] As a result, any corporate privacy policy related to e-commerce activity may be subject to enforcement by the FTC.

Federal Trade Commission Government agency

The Federal Trade Commission (FTC) is an independent agency of the United States government, established in 1914 by the Federal Trade Commission Act. Its principal mission is the promotion of consumer protection and the enforcement of civil (non-criminal) U.S. antitrust law through the elimination and prevention of anticompetitive business practices, such as coercive monopoly. It is headquartered in the Federal Trade Commission Building in Washington, D.C.

Consumer privacy is a form of information privacy concerned with the legal and political issues arising from the interaction of the public's expectation of privacy with the collection and dissemination of data by businesses or merchants. Consumer privacy concerns date back to the first commercial couriers and bankers who enforced strong measures to protect customer privacy. In modern times, the ethical codes of most professions specify measures to protect customer privacy, including medical privacy, client confidentiality, and national security. Since most organizations have a competitive incentive to retain exclusive access to customer data, and since customer trust is usually a priority, many companies adopt security engineering measures to protect customer privacy.

CAN-SPAM Act of 2003

The Controlling the Assault of Non-Solicited Pornography And Marketing (CAN-SPAM) Act of 2003, signed into law by President George W. Bush on December 16, 2003, established the United States' first national standards for the sending of commercial e-mail and requires the Federal Trade Commission (FTC) to enforce its provisions.

The Ryan Haight Online Pharmacy Consumer Protection Act of 2008, which came into law in 2008, amends the Controlled Substances Act to address online pharmacies. [29]

Conflict of laws in cyberspace is a major hurdle for harmonization of legal framework for e-commerce around the world. In order to give a uniformity to e-commerce law around the world, many countries adopted the UNCITRAL Model Law on Electronic Commerce (1996). [30]

Internationally there is the International Consumer Protection and Enforcement Network (ICPEN), which was formed in 1991 from an informal network of government customer fair trade organisations. The purpose was stated as being to find ways of co-operating on tackling consumer problems connected with cross-border transactions in both goods and services, and to help ensure exchanges of information among the participants for mutual benefit and understanding. From this came Econsumer.gov, an ICPEN initiative since April 2001. It is a portal to report complaints about online and related transactions with foreign companies.

There is also Asia Pacific Economic Cooperation (APEC) was established in 1989 with the vision of achieving stability, security and prosperity for the region through free and open trade and investment. APEC has an Electronic Commerce Steering Group as well as working on common privacy regulations throughout the APEC region.

In Australia, Trade is covered under Australian Treasury Guidelines for electronic commerce and the Australian Competition and Consumer Commission [31] regulates and offers advice on how to deal with businesses online, [32] and offers specific advice on what happens if things go wrong. [33]

In the United Kingdom, The Financial Services Authority (FSA) [34] was formerly the regulating authority for most aspects of the EU's Payment Services Directive (PSD), until its replacement in 2013 by the Prudential Regulation Authority and the Financial Conduct Authority. [35] The UK implemented the PSD through the Payment Services Regulations 2009 (PSRs), which came into effect on 1 November 2009. The PSR affects firms providing payment services and their customers. These firms include banks, non-bank credit card issuers and non-bank merchant acquirers, e-money issuers, etc. The PSRs created a new class of regulated firms known as payment institutions (PIs), who are subject to prudential requirements. Article 87 of the PSD requires the European Commission to report on the implementation and impact of the PSD by 1 November 2012. [36]

In India, the Information Technology Act 2000 governs the basic applicability of e-commerce.

In China, the Telecommunications Regulations of the People's Republic of China (promulgated on 25 September 2000), stipulated the Ministry of Industry and Information Technology (MIIT) as the government department regulating all telecommunications related activities, including electronic commerce. [37] On the same day, The Administrative Measures on Internet Information Services released, is the first administrative regulation to address profit-generating activities conducted through the Internet, and lay the foundation for future regulations governing e-commerce in China. [38] On 28 August 2004, the eleventh session of the tenth NPC Standing Committee adopted The Electronic Signature Law, which regulates data message, electronic signature authentication and legal liability issues. It is considered the first law in China's e-commerce legislation. It was a milestone in the course of improving China's electronic commerce legislation, and also marks the entering of China's rapid development stage for electronic commerce legislation. [39]

Forms

Contemporary electronic commerce can be classified into two categories. The first category is business based on types of goods sold (involves everything from ordering "digital" content for immediate online consumption, to ordering conventional goods and services, to "meta" services to facilitate other types of electronic commerce). The second category is based on the nature of the participant (B2B, B2C, C2B and C2C); [40]

On the institutional level, big corporations and financial institutions use the internet to exchange financial data to facilitate domestic and international business. Data integrity and security are pressing issues for electronic commerce.

Aside from traditional e-commerce, the terms m-Commerce (mobile commerce) as well (around 2013) t-Commerce [41] have also been used.

In 2010, the United Kingdom had the highest per capita e-commerce spending in the world. [42] As of 2013, the Czech Republic was the European country where e-commerce delivers the biggest contribution to the enterprises´ total revenue. Almost a quarter (24%) of the country's total turnover is generated via the online channel. [43]

Among emerging economies, China's e-commerce presence continues to expand every year. With 668 million Internet users, China's online shopping sales reached $253 billion in the first half of 2015, accounting for 10% of total Chinese consumer retail sales in that period. [44] The Chinese retailers have been able to help consumers feel more comfortable shopping online. [45] e-commerce transactions between China and other countries increased 32% to 2.3 trillion yuan ($375.8 billion) in 2012 and accounted for 9.6% of China's total international trade. [46] In 2013, Alibaba had an e-commerce market share of 80% in China. [47] In 2014, there were 600 million Internet users in China (twice as many as in the US), making it the world's biggest online market. [48] China is also the largest e-commerce market in the world by value of sales, with an estimated US$899 billion in 2016. [49]

Recent research clearly indicates that electronic commerce, commonly referred to as e-commerce, presently shapes the manner in which people shop for products. The GCC countries have a rapidly growing market and are characterized by a population that becomes wealthier (Yuldashev). As such, retailers have launched Arabic-language websites as a means to target this population. Secondly, there are predictions of increased mobile purchases and an expanding internet audience (Yuldashev). The growth and development of the two aspects make the GCC countries to become larger players in the electronic commerce market with time progress. Specifically, research shows that e-commerce market is expected to grow to over $20 billion by the year 2020 among these GCC countries (Yuldashev). The e-commerce market has also gained much popularity among the western countries, and in particular Europe and the U.S. These countries have been highly characterized with consumer-packaged-goods (CPG) (Geisler, 34). However, trends show that there are future signs of a reverse. Similar to the GCC countries, there has been increased purchase of goods and services in online channels rather than offline channels. Activist investors are trying hard to consolidate and slash their overall cost and the governments in western countries continue to impose more regulation on CPG manufacturers (Geisler, 36). In these senses, CPG investors are being forced to adapt e-commerce as it is effective as a well as a means for them to thrive.

In 2013, Brazil's e-commerce was growing quickly with retail e-commerce sales expected to grow at a double-digit pace through 2014. By 2016, eMarketer expected retail e-commerce sales in Brazil to reach $17.3 billion. [50] India has an Internet user base of about 460 million as of December 2017. [51] Despite being third largest user base in world, the penetration of Internet is low compared to markets like the United States, United Kingdom or France but is growing at a much faster rate, adding around 6 million new entrants every month.[ citation needed ] In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-retail activities. [52] [ citation needed ] The India retail market is expected to rise from 2.5% in 2016 to 5% in 2020. [53]

The future trends in the GCC countries will be similar with that of the western countries. Despite the forces that push business to adapt e-commerce as a means to sell goods and products, the manner in which customers make purchases is similar in countries from these two regions. For instance, there has been an increased usage of smartphones which comes in conjunction with an increase in the overall internet audience from the regions. Yuldashev writes that consumers are scaling up to more modern technology that allows for mobile marketing. However, the percentage of smartphone and internet users who make online purchases is expected to vary in the first few years. It will be independent on the willingness of the people to adopt this new trend (The Statistics Portal). For example, UAE has the greatest smartphone penetration of 73.8 percent and has 91.9 percent of its population has access to the internet. On the other hand, smartphone penetration in Europe has been reported to be at 64.7 percent (The Statistics Portal). Regardless, the disparity in percentage between these regions is expected to level out in future because e-commerce technology is expected to grow allowing for more users. The e-commerce business within these two regions will result in a competition. Government bodies at country level will enhance their measures and strategies to ensure sustainability and consumer protection (Krings, et al.). These increased measures will raise the environmental and social standards in the countries, factors that will determine the success of e-commerce market in these countries. For example, an adoption of tough sanctions will make it difficult for companies to enter the e-commerce market while lenient sanctions will allow ease of companies. As such, the future trends between GCC countries and the Western countries will be independent of these sanctions (Krings, et al.). These countries need to make rational conclusions in coming up with effective sanctions.

The rate of growth of the number of internet users in the Arab countries has been rapid – 13.1% in 2015. A significant portion of the e-commerce market in the Middle East comprises people in the 30–34 year age group. Egypt has the largest number of internet users in the region, followed by Saudi Arabia and Morocco; these constitute 3/4th of the region's share. Yet, internet penetration is low: 35% in Egypt and 65% in Saudi Arabia. [54]

E-commerce has become an important tool for small and large businesses worldwide, not only to sell to customers, but also to engage them. [55] [56]

In 2012, e-commerce sales topped $1 trillion for the first time in history. [57]

Mobile devices are playing an increasing role in the mix of e-commerce, this is also commonly called mobile commerce, or m-commerce. In 2014, one estimate saw purchases made on mobile devices making up 25% of the market by 2017. [58]

For traditional businesses, one research stated that information technology and cross-border e-commerce is a good opportunity for the rapid development and growth of enterprises. Many companies have invested enormous volume of investment in mobile applications. The DeLone and McLean Model stated that three perspectives contribute to a successful e-business: information system quality, service quality and users' satisfaction. [59] There is no limit of time and space, there are more opportunities to reach out to customers around the world, and to cut down unnecessary intermediate links, thereby reducing the cost price, and can benefit from one on one large customer data analysis, to achieve a high degree of personal customization strategic plan, in order to fully enhance the core competitiveness of the products in company. [60]

Modern 3D graphics technologies, such as Facebook 3D Posts, are considered by some social media marketers and advertisers as a preferable way to promote consumer goods than static photos, and some brands like Sony are already paving the way for augmented reality commerce. Wayfair now lets you inspect a 3D version of its furniture in a home setting before buying. [61]

Logistics

Logistics in e-commerce mainly concerns fulfillment. Online markets and retailers have to find the best possible way to fill orders and deliver products. Small companies usually control their own logistic operation because they do not have the ability to hire an outside company. Most large companies hire a fulfillment service that takes care of a company's logistic needs. [62]

Contrary to common misconception, there are significant barriers to entry in e-commerce. [63]

Impact on markets and retailers

Store closing flags outside a Toys R Us in New Jersey. Despite investments, the chain struggled to win market share in the age of digital commerce. Store Closing Flags.jpg
Store closing flags outside a Toys R Us in New Jersey. Despite investments, the chain struggled to win market share in the age of digital commerce.

E-commerce markets are growing at noticeable rates. The online market is expected to grow by 56% in 2015–2020. In 2017, retail e-commerce sales worldwide amounted to 2.3 trillion US dollars and e-retail revenues are projected to grow to 4.88 trillion US dollars in 2021. [64] Traditional markets are only expected 2% growth during the same time. Brick and mortar retailers are struggling because of online retailer's ability to offer lower prices and higher efficiency. Many larger retailers are able to maintain a presence offline and online by linking physical and online offerings. [65] [66]

E-commerce allows customers to overcome geographical barriers and allows them to purchase products anytime and from anywhere. Online and traditional markets have different strategies for conducting business. Traditional retailers offer fewer assortment of products because of shelf space where, online retailers often hold no inventory but send customer orders directly to the manufacture. The pricing strategies are also different for traditional and online retailers. Traditional retailers base their prices on store traffic and the cost to keep inventory. Online retailers base prices on the speed of delivery.

There are two ways for marketers to conduct business through e-commerce: fully online or online along with a brick and mortar store. Online marketers can offer lower prices, greater product selection, and high efficiency rates. Many customers prefer online markets if the products can be delivered quickly at relatively low price. However, online retailers cannot offer the physical experience that traditional retailers can. It can be difficult to judge the quality of a product without the physical experience, which may cause customers to experience product or seller uncertainty. Another issue regarding the online market is concerns about the security of online transactions. Many customers remain loyal to well-known retailers because of this issue. [67] [68]

Security is a primary problem for e-commerce in developed and developing countries. E-commerce security is protecting business' websites and costumers from unauthorized access, use, alteration, or destruction. The type of threats include: malicious codes, unwanted programs (ad ware, spyware), phishing, hacking, and cyber vandalism. E-commerce websites use different tools to avert security threats. These tools include firewalls, encryption software, digital certificates, and passwords.[ citation needed ]

Impact on supply chain management

For a long time, companies had been troubled by the gap between the benefits which supply chain technology has and the solutions to deliver those benefits. However, the emergence of e-commerce has provided a more practical and effective way of delivering the benefits of the new supply chain technologies. [69]

E-commerce has the capability to integrate all inter-company and intra-company functions, meaning that the three flows (physical flow, financial flow and information flow) of the supply chain could be also affected by e-commerce. The affections on physical flows improved the way of product and inventory movement level for companies. For the information flows, e-commerce optimised the capacity of information processing than companies used to have, and for the financial flows, e-commerce allows companies to have more efficient payment and settlement solutions. [69]

In addition, e-commerce has a more sophisticated level of impact on supply chains: Firstly, the performance gap will be eliminated since companies can identify gaps between different levels of supply chains by electronic means of solutions; Secondly, as a result of e-commerce emergence, new capabilities such implementing ERP systems, like SAP ERP, Xero, or Megaventory, have helped companies to manage operations with customers and suppliers. Yet these new capabilities are still not fully exploited. Thirdly, technology companies would keep investing on new e-commerce software solutions as they are expecting investment return. Fourthly, e-commerce would help to solve many aspects of issues that companies may feel difficult to cope with, such as political barriers or cross-country changes. Finally, e-commerce provides companies a more efficient and effective way to collaborate with each other within the supply chain. [69]

Impact on employment

E-commerce helps create new job opportunities due to information related services, software app and digital products. It also causes job losses. The areas with the greatest predicted job-loss are retail, postal, and travel agencies. The development of e-commerce will create jobs that require highly skilled workers to manage large amounts of information, customer demands, and production processes. In contrast, people with poor technical skills cannot enjoy the wages welfare. On the other hand, because e-commerce requires sufficient stocks that could be delivered to customers in time, the warehouse becomes an important element. Warehouse needs more staff to manage, supervise and organize, thus the condition of warehouse environment will be concerned by employees. [20]

Impact on customers

E-commerce brings convenience for customers as they do not have to leave home and only need to browse website online, especially for buying the products which are not sold in nearby shops. It could help customers buy wider range of products and save customers’ time. Consumers also gain power through online shopping. They are able to research products and compare prices among retailers. Also, online shopping often provides sales promotion or discounts code, thus it is more price effective for customers. Moreover, e-commerce provides products’ detailed information; even the in-store staff cannot offer such detailed explanation. Customers can also review and track the order history online.

E-commerce technologies cut transaction costs by allowing both manufactures and consumers to skip through the intermediaries. This is achieved through by extending the search area best price deals and by group purchase. The success of e-commerce in urban and regional levels depend on how the local firms and consumers have adopted to e-commerce. [70]

However, e-commerce lacks human interaction for customers, especially who prefer face-to-face connection. Customers are also concerned with the security of online transactions and tend to remain loyal to well-known retailers. [66] In recent years, clothing retailers such as Tommy Hilfiger have started adding Virtual Fit platforms to their e-commerce sites to reduce the risk of customers buying the wrong sized clothes, although these vary greatly in their fit for purpose. [71] When the customer regret the purchase of a product, it involves returning goods and refunding process. This process is inconvenient as customers need to pack and post the goods. If the products are expensive, large or fragile, it refers to safety issues. [65]

Impact on the environment

In 2018, E-commerce generated 1.3 million tons of container cardboard in North America, an increase from 1.1 million in 2017. Only 35 percent of North American cardboard manufacturing capacity is from recycled content. The recycling rate in Europe is 80 percent and Asia is 93 percent. Amazon, the largest user of boxes, has a strategy to cut back on packing material and has reduced packaging material used by 19 percent by weight since 2016. Amazon is requiring retailers to manufacture their product packaging in a way that doesn't require additional shipping packaging. Amazon also has an 85-person team researching ways to reduce and improve their packaging and shipping materials. [72]

Impact on traditional retail

E-commerce has been cited as a major force for the failure of major U.S. retailers in a trend frequently referred to as a "retail apocalypse." [73] The rise of e-commerce outlets like Amazon has made it harder for traditional retailers to attract customers to their stores and forced companies to change their sales strategies. Many companies have turned to sales promotions and increased digital efforts to lure shoppers while shutting down brick-and-mortar locations. [74] The trend has forced some traditional retailers to shutter its brick and mortar operations. [75]

Distribution channels

E-commerce has grown in importance as companies have adopted pure-click and brick-and-click channel systems. We can distinguish pure-click and brick-and-click channel system adopted by companies.

Types of digital channels

E-commerce may take place on retailers' Web sites or mobile apps, or those of e-commerce marketplaces such as on Amazon, or Tmall from AliBaba. Those channels may also be supported by conversational commerce, e.g. live chat or chatbots on Web sites. Conversational commerce may also be standalone such as live chat or chatbots on messaging apps [77] and via voice assistants. [3]

Recommendation

The contemporary e-commerce trend recommends companies to shift the traditional business model where focus on "standardized products, homogeneous market and long product life cycle" to the new business model where focus on "varied and customized products". E-commerce requires the company to have the ability to satisfy multiple needs of different customers and provide them with wider range of products.

With more choices of products, the information of products for customers to select and meet their needs become crucial. In order to address the mass customization principle to the company, the use of recommender system is suggested. This system helps recommend the proper products to the customers and helps customers make the decision during the purchasing process. The recommender system could be operated through the top sellers on the website, the demographics of customers or the consumers' buying behavior. However, there are 3 main ways of recommendations: recommending products to customers directly, providing detailed products' information and showing other buyers' opinions or critiques. It is benefit for consumer experience without physical shopping. In general, recommender system is used to contact customers online and assist finding the right products they want effectively and directly. [78]

See also

Related Research Articles

Shopping buying goods

Shopping is an activity in which a customer browses the available goods or services presented by one or more retailers with the potential intent to purchase a suitable selection of them. A typology of shopper types has been developed by scholars which identifies one group of shoppers as recreational shoppers, that is, those who enjoy shopping and view it as a leisure activity.

Retail Sale of goods and services from individuals or businesses to the end-user

Retail is the process of selling consumer goods or services to customers through multiple channels of distribution to earn a profit. Retailers satisfy demand identified through a supply chain. The term "retailer" is typically applied where a service provider fills the small orders of a large number of individuals, who are end-users, rather than large orders of a small number of wholesale, corporate or government clientele. Shopping generally refers to the act of buying products. Sometimes this is done to obtain final goods, including necessities such as food and clothing; sometimes it takes place as a recreational activity. Recreational shopping often involves window shopping and browsing: it does not always result in a purchase.

Market research is an organized effort to gather information about target markets or customers. It is a very important component of business strategy. The term is commonly interchanged with marketing research; however, expert practitioners may wish to draw a distinction, in that marketing research is concerned specifically about marketing processes, while market research is concerned specifically with markets.

A sales tax is a tax paid to a governing body for the sales of certain goods and services. Usually laws allow the seller to collect funds for the tax from the consumer at the point of purchase. When a tax on goods or services is paid to a governing body directly by a consumer, it is usually called a use tax. Often laws provide for the exemption of certain goods or services from sales and use tax. A value-added tax (VAT) collected on goods and services is similar to a sales tax.

Best Buy Consumer electronics retailer

Best Buy Co., Inc. is an American multinational consumer electronics retailer headquartered in Richfield, Minnesota. It was originally founded by Richard M. Schulze and James Wheeler in 1966 as an audio specialty store called Sound of Music. In 1983, it was re-branded under its current name with an emphasis placed on consumer electronics.

Broadvision

BroadVision is an international software vendor of self-service web applications for enterprise social software, electronic commerce, enterprise portals, and customer relationship management.The company provides applications to businesses. In addition, the company provides toolkit, framework, library for extending its products and services. The company is headquartered in Redwood City, California, United States. It was founded on May 13, 1993 by Pehong Chen, and its initial public offering took place in 1996.

Receipt written acknowledgment that a person has received money or property in payment

A receipt is a document acknowledging that a person has received money or property in payment following a sale or other transfer of goods or provision of a service. All receipts must have the date of purchase on them. If the recipient of the payment is legally required to collect sales tax or VAT from the customer, the amount would be added to the receipt and the collection would be deemed to have been on behalf of the relevant tax authority. In many countries, a retailer is required to include the sales tax or VAT in the displayed price of goods sold, from which the tax amount would be calculated at point of sale and remitted to the tax authorities in due course. Similarly, amounts may be deducted from amounts payable, as in the case of wage withholding taxes. On the other hand, tips or other gratuities given by a customer, for example in a restaurant, would not form part of the payment amount or appear on the receipt.

Brick and mortar class for companies that possess buildings, production facilities, or store for operations

Brick and mortar refers to a physical presence of an organization or business in a building or other structure. The term brick-and-mortar business is often used to refer to a company that possesses or leases retail shops, factory production facilities, or warehouses for its operations. More specifically, in the jargon of e-commerce businesses in the 2000s, brick-and-mortar businesses are companies that have a physical presence and offer face-to-face customer experiences.

A comparison shopping website, sometimes called a price comparison website, price analysis tool, comparison shopping agent, shopbot or comparison shopping engine, is a vertical search engine that shoppers use to filter and compare products based on price, features, reviews and other criteria. Most comparison shopping sites aggregate product listings from many different retailers but do not directly sell products themselves, instead earning money from affiliate marketing agreements. In the United Kingdom, these services made between £780m and £950m in revenue in 2005. Hence, E-commerce accounted for an 18.2 percent share of total business turnover in the United Kingdom in 2012. Online sales already account for 13% of the total UK economy, and its expected to increase to 15% by 2017. There is a huge contribution of comparison shopping websites in the expansion of current E-commerce industry.

Taobao Chinese website for online shopping

Taobao is a Chinese online shopping website, headquartered in Hangzhou, and owned by Alibaba. It is the world's biggest e-commerce website and the seventh most visited website according to Alexa.

Business-to-employee (B2E) electronic commerce uses an intrabusiness network which allows companies to provide products and/or services to their employees. Typically, companies use B2E networks to automate employee-related corporate processes. B2E portals have to be compelling to the people who use them. Companies are competing for eyeballs of their employees with eBay, yahoo and thousands of other web sites. There is a huge percentage of traffic to consumer web sites comes from people who are connecting to the net at the office.

Consumer to consumer (C2C) markets provide an innovative way to allow customers to interact with each other. Traditional markets require business to customer relationships, in which a customer goes to the business in order to purchase a product or service. In customer to customer markets, the business facilitates an environment where customers can sell goods or services to each other. Other types of markets include business to business (B2B) and business to customer (B2C).

Omnichannel is a cross-channel content strategy that organizations use to improve their user experience. Rather than working in parallel, communication channels and their supporting resources are designed and orchestrated to cooperate. Omnichannel implies integration and orchestration of channels such that the experience of engaging across all the channels someone chooses to use is as, or even more, efficient or pleasant than using single channels in isolation.

E-commerce credit card payment system

Electronic commerce, commonly known as e-commerce or eCommerce, or e-business consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown extraordinarily with widespread Internet usage. The use of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.

India has an internet users base of about 475 million as of July 2018, about 40% of the population. Despite being the second-largest userbase in world, only behind China, the penetration of e-commerce is low compared to markets like the United States, or France, but is growing, adding around 6 million new entrants every month. The industry consensus is that growth is at an inflection point.

Tmall Chinese-language website for business-to-consumer online retail

Tmall.com, formerly Taobao Mall, is a Chinese-language website for business-to-consumer (B2C) online retail, spun off from Taobao, operated in China by Alibaba Group. It is a platform for local Chinese and international businesses to sell brand name goods to consumers in mainland China, Hong Kong, Macau and Taiwan. Being the world's second biggest e-commerce website after Taobao, it has over 500 million monthly active users, as of February 2018. It is the world's seventh most visited website according to Alexa.

Electronic commerce or e-commerce in Southeast Asia is the buying and selling of products and services over the internet in the countries of Southeast Asia. These practices reached Southeast Asia during the dot-com mania in the 1990s. After the dot-com bust, native e-companies have seen promising and fast growth in their sector.

AliExpress is an online retail service based in China that is owned by the Alibaba Group. Launched in 2010, it is made up of small businesses in China and other locations, such as Singapore, that offer products to international online buyers. It is the most visited e-commerce website in Russia and was the 10th most popular website in Brazil. It facilitates small businesses to sell to customers all over the world. AliExpress has drawn comparison to eBay, as sellers are independent and use the platform to offer products to sellers.

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Further reading