IT/ Blockchain Questions. Answer in 75 mins
Principles of Information Systems, Thirteenth Edition
Chapter 7
Electronic and Mobile Commerce
1
Principles of Information Systems, Thirteenth Edition
Chapter 7
Electronic and Mobile Commerce
Objectives
After completing this chapter, you will be able to:
Describe the current status of various forms of e-commerce, including B2B, C2C, and e-government
Outline a multistage purchasing model that describes how e-commerce works
Define m-commerce and identify some of its unique challenges
Identify several e-commerce and m-commerce applications
Objectives
After completing this chapter, you will be able to:
Describe the current status of various forms of e-commerce, including B2B, C2C, and e-government
Outline a multistage purchasing model that describes how e-commerce works
Define m-commerce and identify some of its unique challenges
Identify several e-commerce and m-commerce applications
2
Objectives
After completing this chapter, you will be able to (cont’d):
Identify the many benefits and challenges associated with the continued growth of e-commerce and m-commerce
Outline the key components of a successful e-commerce and m-commerce strategy
Identify the key components of technology infrastructure that must be in place for e-commerce and m-commerce to work
Discuss the key features of the electronic payment systems needed to support e-/m-commerce
Objectives
After completing this chapter, you will be able to (cont’d):
Identify the many benefits and challenges associated with the continued growth of e-commerce and m-commerce
Outline the key components of a successful e-commerce and m-commerce strategy
Identify the key components of technology infrastructure that must be in place for e-commerce and m-commerce to work
Discuss the key features of the electronic payment systems needed to support e-/m-commerce
3
An Introduction to Electronic Computers
Electronic commerce: conducting business activities electronically over computer networks
Business activities that are strong candidates for conversion to e-commerce are:
Paper based
Time-consuming
Inconvenient for customers
An Introduction to Electronic Computers
Electronic commerce: conducting business activities electronically over computer networks
Business activities that are strong candidates for conversion to e-commerce are:
Paper based
Time-consuming
Inconvenient for customers
4
Business-to-Business E-Commerce
B2B e-commerce is a subset of e-commerce
All the participants are organizations
Useful tool for connecting business partners in a virtual supply chain to cut resupply times and reduce costs
Many organizations use both:
Buy-side e-commerce to purchase goods and services from suppliers
Sell-side e-commerce to sell products to their customers
Business-to-Business E-Commerce
B2B e-commerce is a subset of e-commerce
All the participants are organizations
Useful tool for connecting business partners in a virtual supply chain to cut resupply times and reduce costs
Many organizations use both:
Buy-side e-commerce to purchase goods and services from suppliers
Sell-side e-commerce to sell products to their customers
5
Business-to-Consumer E-Commerce
B2C e-commerce
Customers deal directly with an organization and avoid intermediaries; this is called disintermediation
Reasons for steady growth
Cheaper goods and services via the Web
Online shoppers can design a personalized product
The use of social media networks to promote products and reach customers
Business-to-Consumer E-Commerce
B2C e-commerce
Customers deal directly with an organization and avoid intermediaries; this is called disintermediation
Reasons for steady growth
Cheaper goods and services via the Web
Online shoppers can design a personalized product
The use of social media networks to promote products and reach customers
6
Business-to-Consumer E-Commerce
Business-to-Consumer E-Commerce
7
Consumer-to-Consumer E-Commerce
C2C e-commerce
Involves electronic transactions between consumers are facilitated by a third party
Popular sites include:
eBay, Bidz.com, Craigslist, eBid, Etsy, Fiverr, Ibidfree, Kijiji, Ubid, and Taobao
Companies and individuals involved in C2C must be careful
Sales must not violate the rules of various county, state, and country legal jurisdictions
Consumer-to-Consumer E-Commerce
C2C e-commerce
Involves electronic transactions between consumers are facilitated by a third party
Popular sites include:
eBay, Bidz.com, Craigslist, eBid, Etsy, Fiverr, Ibidfree, Kijiji, Ubid, and Taobao
Companies and individuals involved in C2C must be careful
Sales must not violate the rules of various county, state, and country legal jurisdictions
8
Consumer-to-Consumer E-Commerce
Consumer-to-Consumer E-Commerce
9
E-Government
E-government is the use of information and communications technology to:
Simplify the sharing of information
Speed formerly paper-based processes
Improve the relationship between citizens and government
Forms of e-Government:
Government-to-consumer (G2C)
Government-to-business (G2B)
Government-to-government (G2G)
E-Government
E-government is the use of information and communications technology to:
Simplify the sharing of information
Speed formerly paper-based processes
Improve the relationship between citizens and government
Forms of e-Government:
Government-to-consumer (G2C)
Government-to-business (G2B)
Government-to-government (G2G)
10
Introduction to Mobile Commerce
Mobile commerce (m-commerce) relies on the use of wireless devices
The Internet Corporation for Assigned Names and Numbers (ICANN):
Created a .mobi domain to help attract mobile users to the Web
Introduction to Mobile Commerce
Mobile commerce (m-commerce) relies on the use of wireless devices
The Internet Corporation for Assigned Names and Numbers (ICANN):
Created a .mobi domain to help attract mobile users to the Web
11
Mobile Commerce in Perspective
The market for m-commerce in North America
Maturing much later than in Western Europe and Japan
Worldwide, m-commerce accounted for 35 percent of all retail e-commerce sales in the fourth quarter of 2015
The number of mobile Web sites worldwide is growing rapidly
Because of advances in wireless broadband technologies
Mobile Commerce in Perspective
The market for m-commerce in North America
Maturing much later than in Western Europe and Japan
Worldwide, m-commerce accounted for 35 percent of all retail e-commerce sales in the fourth quarter of 2015
The number of mobile Web sites worldwide is growing rapidly
Because of advances in wireless broadband technologies
12
M-Commerce Web Sites
M-Commerce Web Sites
13
Advantages of Electronic and Mobile Commerce
Reach new customers
Reduce the cost of doing business
Speed the flow of goods and information
Increase the accuracy of order-processing
Improve the level of customer service
Advantages of Electronic and Mobile Commerce
Reach new customers
Reduce the cost of doing business
Speed the flow of goods and information
Increase the accuracy of order-processing
Improve the level of customer service
14
Multistage Model for E-Commerce
Multistage Model for E-Commerce
15
Multistage Model for E-Commerce
Search and Identification
Select and Negotiate
Purchasing products and Services Electronically
Deliver Products and Services
After-Sales Service
Multistage Model for E-Commerce
Search and Identification
Select and Negotiate
Purchasing products and Services Electronically
Deliver Products and Services
After-Sales Service
16
Multistage Model for E-Commerce
Multistage Model for E-Commerce
17
E-Commerce Challenges
Dealing with Consumer Privacy Concerns
About one-third of all adult Internet users will not buy online due to privacy concerns
Overcoming Consumers’ Lack of Trust
In online sellers
Overcoming Global Issues
Cultural, language, time and distance, infrastructure, currency, and legal challenges
E-Commerce Challenges
Dealing with Consumer Privacy Concerns
About one-third of all adult Internet users will not buy online due to privacy concerns
Overcoming Consumers’ Lack of Trust
In online sellers
Overcoming Global Issues
Cultural, language, time and distance, infrastructure, currency, and legal challenges
18
Electronic and Mobile Commerce Applications
Areas in which applications are used
Retail and wholesale – Manufacturing
Marketing – Advertising
Bartering – Retargeting
Price comparison – Couponing
Investment and finance – Banking
Electronic and Mobile Commerce Applications
Areas in which applications are used
Retail and wholesale – Manufacturing
Marketing – Advertising
Bartering – Retargeting
Price comparison – Couponing
Investment and finance – Banking
19
Wholesale e-Commerce
A key sector of wholesale e-commerce
Spending on manufacturing, repair, and operations (MRO) goods and services
MRO purchases often approach 40 percent of a manufacturing company’s total revenues
E-commerce software for plant operations provides powerful comparative searching capabilities to enable managers to identify functionality equivalent items
Wholesale e-Commerce
A key sector of wholesale e-commerce
Spending on manufacturing, repair, and operations (MRO) goods and services
MRO purchases often approach 40 percent of a manufacturing company’s total revenues
E-commerce software for plant operations provides powerful comparative searching capabilities to enable managers to identify functionality equivalent items
20
Manufacturing
Electronic exchange: an electronic forum where manufacturers, suppliers, and competitors buy and sell goods, trade market information, and run back-office operations
Private exchanges are owned and operated by a single company
Consortium-operated exchanges are run by a group of traditionally competing companies with common procurement needs
Independent exchanges are open to any set of buyers and sellers within a given market
Manufacturing
Electronic exchange: an electronic forum where manufacturers, suppliers, and competitors buy and sell goods, trade market information, and run back-office operations
Private exchanges are owned and operated by a single company
Consortium-operated exchanges are run by a group of traditionally competing companies with common procurement needs
Independent exchanges are open to any set of buyers and sellers within a given market
21
Manufacturing
Manufacturing
22
Marketing
Market segmentation: the identification of specific markets to target them with advertising messages
Divides the pool of potential customers into subgroups usually defined in terms of demographic characteristics
eXelate (a subsidiary of Nielson)
Provides data as a service solution that customers can use to access a database of more than 250 million business records
Marketing
Market segmentation: the identification of specific markets to target them with advertising messages
Divides the pool of potential customers into subgroups usually defined in terms of demographic characteristics
eXelate (a subsidiary of Nielson)
Provides data as a service solution that customers can use to access a database of more than 250 million business records
23
Advertising
Methods of buying mobile ad impressions
Cost per thousand (CPM)
Cost per click (CPC)
Cost per action (CPA)
Three main measures of success
Number of users reached
Click through rate (CTR)
Number of actions users take
Advertising
Methods of buying mobile ad impressions
Cost per thousand (CPM)
Cost per click (CPC)
Cost per action (CPA)
Three main measures of success
Number of users reached
Click through rate (CTR)
Number of actions users take
24
Advertising
Advertising
25
Bartering
With economic downturn, many people and businesses have turned to bartering to gain goods and services
A number of Web sites have been created to support bartering
Bartering
With economic downturn, many people and businesses have turned to bartering to gain goods and services
A number of Web sites have been created to support bartering
26
Bartering
Retargeting
An average of 74 percent of all online shopping carts are abandoned
Retargeting is used by advertisers to recapture those shoppers by using targeted and personalized ads to direct shoppers back to a retailer’s site
Price comparison
Mobile phone apps enable shoppers to compare prices and products online
In some cases, shopper can simply scan an item’s barcode or snap a photo of the item
Bartering
Retargeting
An average of 74 percent of all online shopping carts are abandoned
Retargeting is used by advertisers to recapture those shoppers by using targeted and personalized ads to direct shoppers back to a retailer’s site
Price comparison
Mobile phone apps enable shoppers to compare prices and products online
In some cases, shopper can simply scan an item’s barcode or snap a photo of the item
27
Bartering
Couponing
In 2015, over $515 billion in consumer incentives were distributed in North America
Less than one percent were redeemed
Shoppers can subscribe to mobile coupon aggregators
Mobile coupon redemption rate is expected to increase due to coupon integration in social networks
Bartering
Couponing
In 2015, over $515 billion in consumer incentives were distributed in North America
Less than one percent were redeemed
Shoppers can subscribe to mobile coupon aggregators
Mobile coupon redemption rate is expected to increase due to coupon integration in social networks
28
Bartering
Bartering
29
Investment and Finance
The Internet has revolutionized the world of investment and finance
The brokerage business adapted to the Internet faster than any other arm of finance
Investment and Finance
The Internet has revolutionized the world of investment and finance
The brokerage business adapted to the Internet faster than any other arm of finance
30
Banking
Online banking customers can:
Check balances of their savings, checking, and loan accounts
Transfer money among accounts
Pay their bills
Many banks enable customers to perform online banking activities via mobile phone
Banking
Online banking customers can:
Check balances of their savings, checking, and loan accounts
Transfer money among accounts
Pay their bills
Many banks enable customers to perform online banking activities via mobile phone
31
Online Personalized Shopping
An increasing number of Web sites offer personalized consultations for shoppers
Key to the success of Web sites such as MyTheresa and Net-a-Porter
A philosophy of high customer service and strong, personal client relationships
Online Personalized Shopping
An increasing number of Web sites offer personalized consultations for shoppers
Key to the success of Web sites such as MyTheresa and Net-a-Porter
A philosophy of high customer service and strong, personal client relationships
32
Strategies for Successful E-Commerce and M-Commerce
Companies must develop effective Web sites that include the following characteristics:
Easy to use
Accomplish the goals of the company
Safe and secure
Affordable to set up and maintain
Strategies for Successful E-Commerce and M-Commerce
Companies must develop effective Web sites that include the following characteristics:
Easy to use
Accomplish the goals of the company
Safe and secure
Affordable to set up and maintain
33
Defining an Effective E-Commerce Model and Strategy
First major challenge for a successful e-commerce site is to decide on the effective e-commerce model it wants to use
Three components of a successful model
Community
Content
Commerce
Defining an Effective E-Commerce Model and Strategy
First major challenge for a successful e-commerce site is to decide on the effective e-commerce model it wants to use
Three components of a successful model
Community
Content
Commerce
34
Defining an Effective E-Commerce Model and Strategy
Defining an Effective E-Commerce Model and Strategy
35
Defining the Functions of a Web Site
Decide which tasks the site must accomplish
Create an attractive presence for the company
Meet the needs of its visitors
Example: obtaining information about the organization and its products
Redefine the site’s basic business model as needed to capture new opportunities
Defining the Functions of a Web Site
Decide which tasks the site must accomplish
Create an attractive presence for the company
Meet the needs of its visitors
Example: obtaining information about the organization and its products
Redefine the site’s basic business model as needed to capture new opportunities
36
Establishing a Web Site
Web site hosting companies:
Allow you to set up a Web page and conduct e-commerce within a matter of days
Have little up-front cost
Storefront broker: a company that acts as an intermediary between your Web site and online merchants who have the products and retail expertise
Establishing a Web Site
Web site hosting companies:
Allow you to set up a Web page and conduct e-commerce within a matter of days
Have little up-front cost
Storefront broker: a company that acts as an intermediary between your Web site and online merchants who have the products and retail expertise
37
Building Traffic to Your Web Site
Measures to attract customers
Obtain and register a domain name
Make your site search-engine friendly
Include a meta tag in your site’s home page
Use Web site traffic data analysis software
Provide quality, keyword-rich content
Add new content to the Web site on a regular basis
Acquire links to your site from other Web sites
Building Traffic to Your Web Site
Measures to attract customers
Obtain and register a domain name
Make your site search-engine friendly
Include a meta tag in your site’s home page
Use Web site traffic data analysis software
Provide quality, keyword-rich content
Add new content to the Web site on a regular basis
Acquire links to your site from other Web sites
38
Maintaining and Improving Your Web Site
Personalization: the process of tailoring Web pages to specifically target individual consumers
Two types of personalization techniques to capture data and build customer profiles:
Implicit personalization captures data from customer Web sessions
Explicit personalization captures user-provided information
Maintaining and Improving Your Web Site
Personalization: the process of tailoring Web pages to specifically target individual consumers
Two types of personalization techniques to capture data and build customer profiles:
Implicit personalization captures data from customer Web sessions
Explicit personalization captures user-provided information
39
Technology Infrastructure Required to Support E-Commerce and M-Commerce
Poor Web site performance drives consumers to abandon some e-commerce sites in favor of those with better, more reliable performance
Technology Infrastructure Required to Support E-Commerce and M-Commerce
Poor Web site performance drives consumers to abandon some e-commerce sites in favor of those with better, more reliable performance
40
Hardware
The Web server’s required storage capacity and computing power depend on:
The software that must run on the server
Volume of e-commerce transactions that must be processed
Successful e-commerce solutions are designed to be highly scalable
Can be upgraded to meet unexpected user traffic
Hardware
The Web server’s required storage capacity and computing power depend on:
The software that must run on the server
Volume of e-commerce transactions that must be processed
Successful e-commerce solutions are designed to be highly scalable
Can be upgraded to meet unexpected user traffic
41
Hardware
Key Web site performance measures
Response time
Transaction success rate
System availability
Key decision for a new e-commerce company
Choosing whether to host its own Web site or to enlist a third-party Web service provider
Hardware
Key Web site performance measures
Response time
Transaction success rate
System availability
Key decision for a new e-commerce company
Choosing whether to host its own Web site or to enlist a third-party Web service provider
42
Hardware
Hardware
43
Web Server Software
Fundamental services needed in Web server software
Security and identification
Retrieving and sending Web pages
Web site tracking
Web site development
Web page development
Web Server Software
Fundamental services needed in Web server software
Security and identification
Retrieving and sending Web pages
Web site tracking
Web site development
Web page development
44
E-Commerce Software
Five core tasks that must be supported by e-commerce software
Catalog management
Product configuration
Shopping cart facilities
E-commerce transaction processing
Web traffic data analysis
E-Commerce Software
Five core tasks that must be supported by e-commerce software
Catalog management
Product configuration
Shopping cart facilities
E-commerce transaction processing
Web traffic data analysis
45
Mobile Commerce Hardware and Software
Limitations of handheld devices that complicate their use:
Screens are small
Input capabilities are limited to a few buttons
Less processing power and less bandwidth than desktop or laptop computers
Operate on limited-life batteries
For these reasons
Web developers must often rewrite Web applications so users with mobile devices can access them
Mobile Commerce Hardware and Software
Limitations of handheld devices that complicate their use:
Screens are small
Input capabilities are limited to a few buttons
Less processing power and less bandwidth than desktop or laptop computers
Operate on limited-life batteries
For these reasons
Web developers must often rewrite Web applications so users with mobile devices can access them
46
Electric Payment Systems
Authentication technologies are used by many organizations to confirm the identity of a user requesting access to information or assets
Digital certificate: an attachment to an e-mail message or data embedded in a Web site that verifies the identity of a sender or Web site
Certificate authority (CA): a trusted third-party organization or company that issues digital certificates
Electric Payment Systems
Authentication technologies are used by many organizations to confirm the identity of a user requesting access to information or assets
Digital certificate: an attachment to an e-mail message or data embedded in a Web site that verifies the identity of a sender or Web site
Certificate authority (CA): a trusted third-party organization or company that issues digital certificates
47
Electric Payment Systems
Various measures are being implemented to increase the security associated with the use of credit cards
Address Verification System is a check built into the payment authorization request
Compares the address on file with the address provided by the cardholder
Card Verification Number
A check of the additional digits typically printed on the back of the card
Electric Payment Systems
Various measures are being implemented to increase the security associated with the use of credit cards
Address Verification System is a check built into the payment authorization request
Compares the address on file with the address provided by the cardholder
Card Verification Number
A check of the additional digits typically printed on the back of the card
48
Electric Payment Systems
Transport Layer Security (TLS) is a communications protocol used to secure sensitive data during e-commerce
Electronic cash: an amount of money that is computerized, stored, and used as cash for e-commerce transactions
Credit, charge, debit, and smart cards are payment systems used for e-commerce
Electric Payment Systems
Transport Layer Security (TLS) is a communications protocol used to secure sensitive data during e-commerce
Electronic cash: an amount of money that is computerized, stored, and used as cash for e-commerce transactions
Credit, charge, debit, and smart cards are payment systems used for e-commerce
49
Electric Payment Systems
Electric Payment Systems
50
Electric Payment Systems
A p-card (procurement card or purchasing card) is a credit card used to streamline the traditional purchase order and invoice payment processes
Typically issued to selected employees who must follow company rules and guidelines
Spending activity is reviewed periodically by someone independent of the cardholder
Electric Payment Systems
A p-card (procurement card or purchasing card) is a credit card used to streamline the traditional purchase order and invoice payment processes
Typically issued to selected employees who must follow company rules and guidelines
Spending activity is reviewed periodically by someone independent of the cardholder
51
Summary
Electronic and mobile commerce are evolving, providing new ways of conducting business that present both potential benefits and problems
E-commerce and m-commerce can be used in many innovative ways to improve the operations of an organization
E-commerce and m-commerce offer many advantages yet raise many challenges
Organizations must define and execute an effective strategy to be successful in e-commerce and m-commerce
E-commerce and m-commerce require the careful planning and integration of a number of technology infrastructure components
Summary
Electronic and mobile commerce are evolving, providing new ways of conducting business that present both potential benefits and problems
E-commerce and m-commerce can be used in many innovative ways to improve the operations of an organization
E-commerce and m-commerce offer many advantages yet raise many challenges
Organizations must define and execute an effective strategy to be successful in e-commerce and m-commerce
E-commerce and m-commerce require the careful planning and integration of a number of technology infrastructure components
52