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COMP2113
Introduction to
Electronic Commerce
Richard Henson
University of Worcester
February 2008
Introduction to E-commerce

Objectives:
 Describe the traditional supply chain
 Define electronic commerce and explain new
options for trading that have become available
through e-commerce
 Distinguish between B2C and B2B
 Identify and explain design features of web pages
that can be used by businesses
 Categorise websites into one of several different
types
What is Commerce?

Historically…
 associated with the activities directly involved with
trading

Other activities also involved in running a
business!!!
 e.g. marketing… management…

More recently, term used more broadly, to
encompass all the activities in the “supply chain”
Activities involved in
Commerce?

In groups of 3 or 4, compose a list of activities
associated with businesses...
The Supply Chain
Identify
need
for product
Develop
product
Provide
after-sales
support
Customer buys
product
Make
product
Gives customer
information
on other/new
products
Market
product
downstream
upstream
Activities involved in Ecommerce?
1.
In the same group, compose a list of activities
specifically associated with e-commerce...
(i.e. buying online)
Activities involved in Ecommerce

Some examples:
 electronic activities that promote the organisation’s
products
 electronic distribution of information about those
products
 on-line ordering
 on-line payment
 “intelligence” collected electronically about
customer buying behaviour
E-commerce and E-business


E-commerce is concerned with the storage,
processing and communication of electronic
information through the supply chain
E-business is concerned concerned with
using software to replace manual procedures
within a particular area of the supply chain
 e.g. procurement (buying)
 therefore actually part of e-commerce…

Neither of these are particularly new…
B2B, B2C, B2E

Broadly three types of online transaction that
could be regarded as part of doing business:
 Business sells to another business (B2B)
 Business sells to the consumer (B2C)
 Business communicates with its employees (B2E)


Many organisations will use B2B to get raw
materials
And use B2C (direct sales, possibly cutting
out the vendor) to market their products
E-commerce definitions




Almost as many definitions as there are ecommerce text books!
One popular definition or e-commerce:
“doing business, making use of electronic
communications media”
More accurate definition of e-commerce
includes on-line marketing and after-sales
support as well as buying and selling on-line
Communication of information relating to
business transactions can occur through any
digital media, not only via the Internet
Evolution of “doing business”





Pre-18th century: all products made
individually by hand, sometimes to customer
requirements, mostly taken to “market”
18th/19th century: business transformed by
inventions such as spinning jenny that allowed
processes to be automated
20th: Mass production revolutionised business
20th: Distribution enabled products to be
delivered to customers anywhere in the world
21st: Internet Economy – products themselves
customised to meet customer requirements
Is E-commerce that new?

Not for transactions between businesses…
 Larger companies have used EDI (Electronic Data
Exchange) and EFT (Electronic Funds Transfer)
since the early 1980s, if not earlier…
 But… many smaller companies continued to use
traditional methods because of the high cost of
using computers and telephone lines

Completely new for business to consumer
transactions, because consumers have only
quite recently been able to acquire the
technology to participate
B2B e-commerce

One business (seller) communicates
information relating to ordering and payment
electronically with another business (buyer)
 either by private telecoms link
 Or via a secure Internet channel
Telecoms link
Business A - seller
Business B - buyer
B2C e-commerce


Business markets products via website and
the Internet
Business communicates information relating
to ordering and payment electronically directly
to the customer via secure Internet line
Secure Internet
link
E-Business - seller
Consumer - buyer
Activities involved in B2B ecommerce (1)
Business develops a good working
relationship with its suppliers
 Suppliers provide secure access to
parts of their information systems to
check on product availability, etc.

Supplier
Business
Activities involved in B2B ecommerce (2)

Business provides secure access to parts of
its information systems to ease
communication with suppliers
business


supplier
Suppliers send invoices
Business can make payment electronically
Internet E-commerce (B2C)
the revolution!

Post 1995: direct business to consumer
transactions (B2C e-commerce)
 impossible before this date because consumers
simply didn’t possess the technology
 technology that makes B2C possible had been
building for at least 10 years
 Leapt into the public domain in 1996 (US), two
years later (UK)
 now sometimes (increasingly?) the case that
consumers have more technology in their homes
(including small networks) than the small business.
Differences in activities
involved in B2B and B2C
e-commerce

Over to you again…
Who should use e-commerce?




Anyone…
 who has something to sell
Can benefit by having a
potential world market, 24
hours a day, 365 days a
year!
Must FIRST… be aware of
the set up, running costs and
implications of selling
Internationally in this way…
Many UK businesses choose
only to deal with UK
customers…
http://www.imrg.org
Technologies involved in the
development of e-commerce

This is NOT a module about technology…
 but e-commerce couldn’t have happened without it
 fascinating to briefly focus on the gradual them
earth shatteringly fast developments of the 1980s
and 1990s

Technologies at the end of the 70s:
 VERY large & expensive computers
 Software to replace manual processing of paper
documents:
» Order processing systems
» Stock control systems
Technologies involved in the
development of e-commerce
1. Digital processing and storage
technologies:
• faster, more efficient, more powerful CPUs
• faster, more compact, computer memory
• result – the “home” computer
2. Development of digital communications
technologies & secure digital networks
• networks became digital
• Internet provided connectivity
Technologies involved in the
development of e-commerce
3. Network Software became standardised
•
•
communications protocols
Applications such as
EDI, EFT
4. Development of secure analogue-digital
computer-computer communications
through public networks
•
digital Home computer could hook up to digital
Internet via sound-based telephone network
Technologies involved in the
development of e-commerce
5. Development of User-friendly humancomputer interfaces
•
•
allowed non-computer professionals to
use “home” computers effectively
Examples:
•
•
Windows & Windows applications
Internet browsers for viewing web pages
Technological Revolution
It just happened that all these
technologies came to maturity at just
the right time…
 The Internet now became accessible
through Tim Berners-Lee’s wonderful
invention

The World Wide Web…
In Tim’s own words:
http://www.bcs.org/server.php?show=nav.8997
Requirements for a Website
offering B2C e-commerce


Provide access to company marketing 24
hours and day, 7 days a week, anywhere in
the world
Need to:
 look good (company/product image, etc.)
 be quickly downloadable (downfall of boo.com?)
 be up to date
 provide useful product information

Should give the customer an opportunity to
buy… [otherwise, not really e-commerce!]
How much do people use Ecommerce Websites?

Recent UK figures for online sales:
 “For 2005 as a whole, it calculated that spending
over the internet in the UK totalled £19.2bn, 32%
more than 2004
 Shoppers spent £4.98bn online during the 2005
Christmas period, compared with £3.3bn for the
same time a year earlier, according to ecommerce trade body IMRG
 Some 24 million UK consumers shopped online in
2005, spending on average £816 each during the
year, and £208 in the run-up to Christmas.
 IMRG now forecasts that e-commerce will grow
by 36% in 2006, with sales worth £26bn”
» Figures: http://news.bbc.co.uk/1/hi/business/4630472.stm
Producing Websites for
B2C e-commerce



A Website “on the net” consists of a number
of files held on an Internet server
Can use software that makes uploading files
as easy as transferring files between folders
Web pages themselves not difficult to
produce
 don’t need to be a programmer
 but you do need to have an eye for design…
Websites for B2C
e-commerce

Plenty of development environments
available that can:
work with business logic
use software to generate the code for you
» even for sites that work with remote databases!

Navigation through the site is all
important
pages must link together in a coherent
way...
Shopping website categories

Several possibilities in order of
increasing complexity/functionality:
“Small Ad” on a page on another website
“Billboard” web page
“Cyberbrochure” of linked pages
Detailed Product Information
Portal
“Virtual shopfront”

Each type can now be scrutinised...
E-Commerce website types:
“small ad”
Most basic solution
 Example website:

provides basic company information
should also include telephone number and
address
can also be the basis for e-commerce by
including an e-mail address that can be used
to make orders
E-Commerce website types:
“billboard”
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
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Use of a whole web page allows more detailed
information to be included
User can become interactive through use of a
HTML form to send an email to a contact
Unique URL:
 Emails and stationary (letters/faxes/business cards)
can include the URL of the website in their
“signatures” to advertise the existence of the web
site to contacts/customers
 The site can be made accessible to search engines
in a focused way through use of keywords

Example: musicians site Rod Pooley - Organist
E-Commerce website types:
“Cyber brochure”
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Much larger undertaking than a billboard
Information sheets, brochures and general
information about the business and its
products/services
Includes items that point to other webbased sources and information
Gives businesses greater coverage and a
higher profile
Example Web site:
 Left Bank – riverside complex in Hereford
E-Commerce website types:
“Local Portal”
Gateway to other sites
 Can be used with cyberbrochure type
 Provides a way into the web, and could
be used as a user “home page”
 Example website:

Chadds - department store in Hereford
» links to related websites
» local & community news/information
E-Commerce website types:
“International portal”
Sells space for advertising goods and
services - national or international
 Has a facility to search the web

allows directed advertising
if user is searching on a keyword relating
to a type of product or service, particular
advertising banners may flash up on the
screen

Example website: BBC web site
E-Commerce website types:
Virtual Storefront


A full e-commerce implementation
Provides combinations of:
 Full information about the company (cyber
brochure approach)
 Links to other local/international) sites and search
engines (Portal approach)
 On-line ordering of products and services
 Secure on-line payment systems

Example website:
 Amazon.co.uk
E-Commerce website types:
“subscription only”

Members/customers only site
 make money by offering service not products

Username/password only available by:
 subscribing to an on-line magazine
 filling in an on-line form

An increasing number of sites are requiring
payment before subscription is allowed…
 e.g. Information Finders like 192.com
 e.g. Business Travel
Next Week

The technologies that drive e-commerce:
 computers
 networks & the Internet
 Browsers & servers
 web pages
 web applications