e-Commerce Systems

Dr.Zainab KHALLOUF

Lecture1e-Commerce Systems: Basic Concepts and Terminology

Fall 2016

Lecture References

E-Commerce: Business, Technology, Society. By Keneth C. Laudon and Carol Guercio

Traver, Prentice Hall, 3rd Edition (2006). The first sample chapter available on the siteof the book.

Electronic Commerce: Principles and Practice, Hossein Bidgoli, School of Business and

Public Administration, California State University, Bakersfield, California.

E-Commerce Tutorial, http://www.tutorialspoint.com/e_commerce/index.htm

http://wordpress.org/plugins/woocommerce/

http://go.magento.com/support/kb/entry/name/understanding-shipping-methods/

Main Topics

1 Part 1: E-commerce systems: basic concepts and terminology.

2 Part 2: Implementing multi-tiered e-commerce application usingJava EE 7.

3 Part 3: Implementing multi-tiered e-commerce application usingAngularJS and Java EE 7.

4 Part 4: Implementing multi-tiered e-commerce application usingASP.NET MVC.

e-Commerce Systems: Basic Concepts and Terminology

The Story of Amazon.com from:

E-Commerce: Business, Technology, Society. By Keneth C. Laudon and Carol Guercio

Traver, Prentice Hall, 3rd Edition (2006). The first sample chapter available on the siteof the book.

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The Story of Amazon.com

Amazon.com a large Internet retailer.

The Amazon story represents the story of e-commerceenvironment...Started in a ”400-square-foot office” in 1995,it has since grown to become one of the Internet ”BigFour” companies, along with Yahoo, eBay and Google.

Amazon.com’s first web site.

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The Story of Amazon.com (cont.)

In 1994, Jeff Bezos, then a 29-year-old read that Internetusage was growing at 2,300% per year. To Bezos, thatnumber represented an extraordinary opportunity.

He investigated what products he might be able to sellsuccessfully online. He quickly hit upon books.

Amazon.com offered consumers four compelling reasons toshop there:

Selection.Convenience. (The 1-Click patent)Price: discounts on bestsellers.Service: e-mail and telephone customer support, automatedorder confirmation, tracking and shipping information...

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The Story of Amazon.com (cont.)

In 1998, Amazon expanded its product line, first addingmusic CDs and then videos and DVDs.

From 1997-2000, revenues increased from $148 million to$2.7 billion but so did losses, to $1.4 billion in 2001-2002.

New focus on cost-cutting and achieving profitability leadsto profit. In 2004 Amazon reported profits of $588 million.

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E-commerce Defined

E-commerce involves digitally enabled commercial transactions,like:

Purchasing, online payment, and customer support (e.g.Customer relationship management (CRM)), among others.

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E-commerce vs. E-business

Debate among consultants and academics about meaningsand limitations of terms e-commerce and e-business.

e-Business does not include commercial transactions thatgenerate revenue for the firm from outside businesses orconsumers, as e-commerce, by definition, does. Forexample, a company’s online inventory control mechanismsare a component of e-business.

E-Commerce: Business, Technology, Society. By Keneth C. Laudon and Carol Guercio

Traver, Prentice Hall, 3rd Edition (2006). The first sample chapter available on the siteof the book.

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Major Types of e-Commerce

E-Commerce: Business, Technology, Society. By Keneth C. Laudon and Carol Guercio

Traver, Prentice Hall, 3rd Edition (2006). The first sample chapter available on the siteof the book.

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M-commerce

Conducting commercial transactions via wireless mobile devicessuch as PDAs (personal digital assistants) or cell phones.

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F-commerce

Buying and selling of goods or services through Facebook.

Example from ecwid ecommerce facebook application. www.ecwid.com

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Some Electronic Payment Systems

Credit Card: Issued based on the customer’s credit history,income level, and total wealth. The customer is supposedto pay his or her debts during the payment period;otherwise interest will accrue.

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Some Electronic Payment Systems (cont.)

Debit Card: Similar to checks in that the charges will bededucted from the customer’s checking account.

Smart Card: Is about the size of a credit card, made of aplastic with an embedded microprocessor chip that holdsimportant financial and personal information. A popularexample of a disposable smart card is the one issued bytelephone companies. After using the prespecified amount,the card can be discarded.

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Some Electronic Payment Systems (cont.)

Electronic money (e-money or e-cash): Standard currencyconverted into an electronic format to pay for onlinepurchases. The following steps explain how a typicale-Cash system works:

The customer of a bank receives specific software to installon his or her computer. The software allows the customerto download (electronic coins) to his or her desktop. Thesoftware manages the electronic coins. The initial purchaseof coins is charged against the customer’s bank account oragainst a credit card.When buying goods or services from a web site that acceptse-cash, the merchant’s software generates a paymentrequest. When the customer accepts the payment request,the software residing on the customer’s desktop subtractsthe payment amount from the balance and creates apayment that is sent to the bank or or the financialinstitution of the merchant, and then is deposited to themerchant’s account.

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Some Electronic Payment Systems (cont.)

Electronic Fund Transfer (EFT): It is one of the oldestEPSs and is used for transferring money from one bankaccount directly to another. The most popular applicationof EFT is the direct deposit option used by millions ofworkers, instead of receiving a paycheck and depositing itinto an account, the money is deposited to an accountelectronically.

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Some Electronic Payment Systems (cont.)

Paypal: PayPal is an online payment processing websitethat simplifies the electronic exchange of money. It acts asan intermediary between two parties, eliminating the needfor either party to divulge credit card numbers or bankaccount details to the other over the Web.

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Some Electronic Payment Systems (cont.)

Electronic Payment Systems Reference:

Electronic Commerce: Principles and Practice, Hossein Bidgoli, School of Business and

Public Administration, California State University, Bakersfield, California.

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Some Shipping Strategies

Free shipping.

Variable rate shipping: Charge what you get charged, thisecommerce shipping strategy is ideal for heavy shipmentson which free shipping could drain your profits away. Usinga real time calculator can help you win the trust ofcustomers that shows you are not inflating your shippingcharges.

Flat shipping rates: Refers to a pricing structure thatcharges a single fixed fee for a service, regardless of usage.This approach is recommended when the items have almostsimilar costs like that of t-shirts.

How To Choose a Shipping Strategy For Your eCommerce Business?

http://www.insync.co.in/how-to-choose-a-shipping-strategy-for-your-ecommerce-business/

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Some Shipment Strategies: Free Shipping

http://www.forever21.com/

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Some Shipment Strategies: Variable Rate Shipping

An example of shipping calculator from: Simple Sugars.

How To Choose a Shipping Strategy For Your eCommerce Business? https:

//www.shopify.com/blog/8343330-how-to-choose-a-shipping-strategy-for-your-online-store

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Some Shipment Strategies: Flat Shipping Rates

http://www.cabelas.com/

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Some Shipping Carriers

UPS: United Parcel Service offers domestic andinternational shipping services by land and air to morethan 220 countries.

USPS: The United States Postal Service is the independentpostal service of United States government. USPS offersdomestic and international shipping services by land andair.

FedEx: Offers domestic and international shipping servicesby land and air to more than 220 countries.

DHL: Offers integrated international services and tailored,customer-focused solutions for managing and transportingletters, goods and information.

http://go.magento.com/support/kb/entry/name/understanding-shipping-methods/

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Some Shipping Carriers (cont.)

Many shipping carriers provide API to integrate theirsservices in your application.

http://www.ups.com/content/us/en/bussol/browse/online_tools_shipping.html

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Example of eCommerce Toolkit

WooCommerce - a free eCommerce toolkit for WordPress.

http://www.woothemes.com/woocommerce/

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Example of eCommerce Toolkit (cont.)

WooCommerce - Setup.

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Example of eCommerce Toolkit (cont.)

WooCommerce - Settings (General).

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Example of eCommerce Toolkit (cont.)

WooCommerce - Settings (Flat Rate Shipping).

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Example of eCommerce Toolkit (cont.)

WooCommerce - Products.

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Example of e-Commerce Website with WooCommerce

From: Create An Ecommerce WordPress Website In 3 Hours! (Woothemes Wootique) 2013http://www.youtube.com/

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Example of e-Commerce Website with WooCommerce

Product details.

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Example of e-Commerce Website with WooCommerce(cont.)

Cart and checkout.

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The Features of e-Commerce Technology and TheirSignificance

Is ubiquitous.

In traditional commerce, a marketplace is a physical placeyou visit in order to transact. E-commerce, in contrast, ischaracterized by its ubiquity: It is available just abouteverywhere, at all times, making it possible to shop fromyour desktop, at home, at work, or even from your car usingmobile commerce.

Information richness.

Which refers to the complexity and content of a message. Itenables an online merchant to deliver marketing messageswith text, video, and audio to an audience of millions. Priorto the development of the Web, there was a trade-ofbetween richness and reach: the larger the audiencereached, the less rich the message.

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The Features of e-Commerce Technology and TheirSignificance (cont.)

Is interactive.

Can simulate face-to-face experience, but on global scale.

Permits personalization/customization.

Personalization: merchants can target their marketingmessages to specific individuals by adjusting the message toa person’s name, interests, and past purchases.Customization: changing the delivered product or servicebased on a user’s preferences or prior behavior

The Features of e-Commerce Technology and Their Significance

E-Commerce: Business, Technology, Society. By Keneth C. Laudon and Carol Guercio

Traver, Prentice Hall, 3rd Edition (2006).

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E-Commerce Disadvantages

Technical disadvantages.

Non-Technical disadvantages.Reference: E-Commerce Tutorial. http://www.tutorialspoint.com/e_commerce/index.htm

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E-Commerce Disadvantages: Technicaldisadvantages(cont.)

There can be lack of system security owing to poorimplementation of e-Commerce, lack of reliability orstandards .

Software development industry is still evolving and keepschanging rapidly.

In many countries, network bandwidth might cause anissue as there is insufficient telecommunication bandwidthavailable.

Special types of web server or other software might berequired by the vendor setting the e-commerce environmentapart from network servers.

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E-Commerce Disadvantages: Non-Technicaldisadvantages (cont.)

The cost of creating and building E-Commerce applicationmay be very high. There could be delay in launching theE-Commerce application due to mistakes, lack ofexperience.

User may not trust the site being unknown faceless seller.

Lack of touch or feel of products during online shopping.

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