ADVANTAGES of E-COMMERCE
The Internet was designed for national security and for many years was used almost exclusively by academics and scientists. Less than five years ago, there was even a debate concerning whether or not advertisements should be allowed on the Web. But as the world became connected, businesses saw the Web to be a new medium for connecting with customers in new ways and to sell and distribute their products in new, more efficient ways. The Internet has added a new dimension to business: companies have put marketing and promotional information on the Web; online stores sell books, CDs, flowers, or anything else; online magazines display flashing and constantly changing ads; businesses handle business-to-business transactions online. Practically every type of business is trying to figure out how to make money using the Internet, and the government is attempting to ensure that no obstacles are placed in the way of this new economic driver. At the same time, the government is trying to ensure that when these companies are invited into our homes on our computers they aren’t leaving with more information about us than we would like to share. Making government’s role more difficult is the fact that the same traits that make the Internet very attractive to legitimate businesses also make the Internet vulnerable to con artists. There are six basic characteristics of electronic commerce: addressability, interactivity, memory, control, accessibility, and digitalization. Addressability refers to those sites that identify customers before they make a purchase by requiring the customer to register at the site before entering. Interactivity occurs when there is a constant mode of communication between a customer and a company. For example, Travelocity.com
sends me an e-mail whenever there is a travel deal that they think I may be interested in. This is made possible by the memory of the web site. Travelocity.com maintains databases, which store personal information about their customers. I have been on several cruises that Travelocity.com is aware of. So whenever there is a deal on a cruise, I get an e-mail. E-commerce also provides to the consumer the advantages of controlling what the consumer views. Consumers are now able to log onto the Internet and shop for a car without the hassles of high-pressure salespeople. E-commerce has given consumers almost total accessibility to products in the market. You can find products that may not be available in the area that you live in. You can even read reviews about products from other online consumers. There is a tremendous amount of information on the net. Just recently, digitalization has allowed interactivity between entities, which is crucial for businesses. E-commerce advantages for businesses are growing each day. Smart catalogretailers focused on the Web to increase existing sales, as L.L. Bean did, offering secure online ordering via their web sites. Others created innovative sales models that took advantage of the Web’s accessibility: the creators of Amazon.com realized that a virtual storefront was all they needed to be profitable. With only a small warehouse, and without an actual bookstore, they could sell books cheaper than the competition. There are several different models for buying and selling products: the store, the auction, the want ads, and the convention. Web stores are usually large-scale retail establishments that use a shopping-cart sales model and accept credit cards via a secure server. Examples include Circuit City.com, Best Buy.com, Radio Shack.com, Amazon.com, and the Gap.com. Auctions make person-to-person sales easier and provide
a forum for feedback. Examples include Up4Sale and eBay. The want ad model is fairly straightforward, including classified listings on the Web and postings of items for sale on Usenet. The convention model is the most abstract: a group of users communicating via newsgroup or mailing list. The online convention focuses on communication and research more than straightforward sales. I found the greatest fear about shopping directly over the Internet to be transmitting a credit card number to a retailer. With Internet transmission, the number is encoded and no one ever sees it. I trust using my credit card online more than I trust handing the card to a waiter at a restaurant. AOL does offer an increased level of credit card security when shopping with AOL instead of over the Web. AOL requires a certification process of the merchants they list and vows to protect the consumer should credit card fraud occur. There is also an application available to encrypt the credit card number with PGP. Another advantage of e-commerce is the ability to purchase tickets online. You can now find tickets for everything from movies to concerts to sporting events, not to mention airline tickets that are often discounted when purchased online. Most of these tickets can be found at commercial sites, but you can sometimes find even cheaper tickets at various for-sale newsgroups. Although recently discontinued in Atlanta, you can use the Web to order groceries or dinner and have either one delivered to your door. The web site contracts with local vendors in order to provide fresh goods. The one time I used WebVan.com, I didn’t miss the traffic, the crowded grocery store, or the inevitable wait in line. Cybermeals.com
contracts with local restaurants to deliver meals. Clicking on the restaurant’s link takes you to a detailed menu. Truly one of the greatest advantages of e-commerce is the low cost of entry if you are interested in selling something. Anyone with access to a computer can make information available to millions of other people. Although it sounds funny, I’m mostly interested in selling myself. I’m in the process of preparing a resume and will soon post it wherever I’m allowed on the Internet. This gives me the potential to find different jobs in different locations that I may not have found without the Internet. Internet banking offers advantages for banks and consumers. Automated banking allows banks to be open for fewer hours and reduce staffing requirements. Online banking offers banks even more accessibility when it comes to prospective customers. As for consumers, paying bills and the ability to download personal account information directly into personal finance software is gaining stride everyday. I will be refinancing soon and have found the greatest advantage of online banking to be shopping around for interest rates. This advantage opens up options beyond my local area. Mybank.com lists online banks around the country by state. If I were confined to my local area, I would not be getting the lowest interest rate. Electronic commerce is evolving rather quickly. Shopping online has made it so much easier for consumers to get the best product at the lowest price. And with the security governing credit card numbers over the net, more and more people will use ecommerce to their advantage.