The Evolution of E-commerce
Trading of goods started during the ancient times and it still remains essential for human survival in our present time. The adoption of the internet for commerce has created a major shift in the manner in which business is carried out. This new kind of commerce evolved in the past few decades and currently business transactions are being over the internet. The difference between traditional and e-commerce has continued to widen as many people continue to venture in computer commerce.
E-commerce is basically a modern business technology which is aimed at meeting the needs of today’s organizations. One of the main objectives of e-commerce is to improve quality besides reduction of cost. Through this method service is delivered faster than the old form of commerce. There are many benefits as well as limitations that result from this form of business (Thanasankit 2003).Electronic commerce basically involves transaction of business over other computer networks besides the internet.
Widespread usage of internet has led to extra ordinary growth of electronic trade. Internet commerce is conducted in various ways which include internet marketing, electronic data interchange, online transaction processing, inventory management systems, electronic funds transfer, automated data collection systems, and supply chain management. Advanced electronic commerce generally employs World Wide Web in the course of transaction’s lifecycle. Other technologies are also employed for instance e-mail. A major percent of electronic commerce is entirely conducted electronically for items like web premium contents though it mostly involve shipping of items which are physically. Retailers who transact online are at times referred as e-tailers.
Most big retailers are involved in e-commerce (Stahl 2008) Commerce conducted between businesses over internet is known as B2B or simply business-to-business. E-commerce that is carried out between consumers and businesses is what is known as B2C or business-to-consumer. In electronic commerce an intermediary is usually present for instance Ebay.com.
History of e-commerceEvolution of electronic commerce dates back to the discovery of trade, computers, internet, electricity, modems and cables. At the time of the invention of this technology the terminology electronic commerce was basically used to refer to commercial transactions which were being done over the internet. Some of the leading technologies at that particular time included electronic funds transfer as well as electronic data interchange. The meaning of electronic commerce changed in the year 2000 when business companies in from Western Europe and United States transferred there services to the World Wide Web. Therefore the meaning of e-commerce changed to purchasing of goods and services through secure internet connections as well as electronic payment service. The history of electronic commerce cannot be complete without the mentioning of Amazon because it was among the initial companies to offer electronic services. Currently Amazon.com is among the most popular electronic commerce companies. Amazon.com is located in the United States of America in Washington.
The company was founded by Jeff Bezos in 1994 and it’s among the first American companies to be engaged in e-commerce (Jackson, Harris and Eckersley 2003).The standardization of electronic data interchange was done through ASC X12 in 1984. In 1990 a researcher who was working with European Organization for Nuclear Research (CERN) by the name Tim Berners-Lee made a proposal of a hypertext-based web which could enable information navigation by employing a simple interface by the name browser. He therefore called the hypertext-based web as World Wide Web. A ban was lifted on internet commercial business by the National Science Foundation in the year 1991 thus creating a way for web-based electronic commerce. Therefore opportunities for online business transactions started to be available in 1992.
In 1993 Marc Andreesen who was working with the National Center for Supercomputing Applications invented a web browser by the name Mosaic; this web browser was the first to be distributed widely (Daintith, 2008).Users were provided with a simple browser which was essential for internet usage in 1994. Netscape offered a secure technology for online transactions by the name Secure Sockets Layer. After this progression the most popular electronic commerce companies were launched in the year 1995. These companies include eBay.com and Amazon.com. Electronic business started to expand drastically in 1998 because of the Digital Subscriber line which offered faster services to its users mainly from California. The effectiveness of these services attracted more people to electronic commerce and as a result people started spending more money and time on the internet. By 1999 retail spending through electronic commerce was reaching about $twenty billion.
In the year 2000 the government of the United States of America froze internet taxes until 2005 (Jackson, Harris and Eckersley 2003). Currently the largest e-commerce is the B2B type. This is because businesses are seriously involved in transacting goods and services to other business companies. Another form of electronic commerce which is stabilizing is consumer-to-consumer businesses where business transactions are solely between consumers. This form of business is greatly expanding because of the auction site which makes it possible for consumers to sell their products to other consumers. Another type of electronic business which was not there in the recent past is the peer-to-peer business; in this case peers are able to access and share resources like files with each other directly.
Therefore electronic commerce is still evolving depending on the needs of its clients. Currently electronic commerce has become stable and this has occurred because of increased popularity of internet. Through electronic commerce clients and business have been provided online transaction of high quality (Laudon and Traver, 2004).The impacts of electronic commerce on business conductionElectronic communication has greatly influenced many lives in diverse ways. Personal communication as well as financial tracking has greatly been influenced by online transactions.
Different forms of carrying out research have been developed because of electronic commerce. On addition to that the processes of purchasing goods and services has been greatly influenced by online transaction. Basically the business world has been revolutionized through electronic commerce and this is something that keeps changing each early because of new innovations. Many traditional ways of transacting have become outdated because of the advantages of online transaction. For instance electronic commerce is very fast and convenient therefore many retailers, consumers and companies prefer it over other forms of commerce.
On addition to that there are a number of ways which can be effectively used to carry out online transactions therefore the availability of various forms of trading has attracted many people to this form of business (Zappala and Gray 2006).People who are actively involved in online transactions are able to access worldwide market from there country and residential areas because of services like online auction offers. Therefore buyers are able to access a wide range of products without any problem. Besides that people like travelers are at a great advantage because it possible to purchase air tickets besides making reservations without much trouble. Currently retailers and businessmen who were used to old forms of transaction have no other option but to shift to online transaction in order for effective competition to occur.
In the United States of America this form of business transaction is transforming into a major source of business and other countries are adapting to online transaction at a faster rate than anticipated. It is not very easy to predict the expansion of electronic commerce as well as its influence on people because of the rate at which things are transforming (Zappala and Gray 2006).The internet has made it easy for people to get whatever they need within a very short time. There is so much information that can be assessed via the internet and electronic media as a result people are able to make right choices and decisions on how to purchase goods and where. Therefore business transactions have been greatly influenced by the available online services. There is a great shift from manual transaction to automatic transaction because currently stock markets and other important transactions are available online.
Faster communication and faster transfer of information has made the world to become like a small village and because of this conduction of business has greatly changed. In the past important information was usually filled but this is not the case at the moment because these documents are being stored in folders on the computer making accessibility of information easy and as a result a lot of time has been saved (Zappala and Gray 2006). Use of e-mails has made information transfer to be very easy and cheap. Today’s its possible for people to work from their homes something that was unthought-of in the past decades. Services like electronic commerce have greatly contributed to advanced technology making conduction of business to take another dimension.
Business is greatly influenced by technology because anything that will be produced with the aim of increasing production is beneficial to businesses. The only challenge that comes with advanced technology is change and adoption to the new mode of carrying out transactions. At the moment many business are being conducted over communication devises besides personal computers. This is because computers are very beneficial to businesses because of the services that they offer. Slow transfer of information was a major obstacle to business and this is something that is no longer there therefore it’s become easy of outsourcing of overseas jobs and business opportunities to occur (Zappala and Gray 2006).Companies are in a position to outsource duties for instance telephone customer service as well as computer programming from the original producers.
Outsourcing of fast-food restraint service is now possible through electronic commerce. Companies and businesses are able to save much money from about thirty to seventh percent through such online transaction. Since electronic commerce go hand in hand with advanced technology; technologies like radio frequency identification has really helped in taking business to another dimension. Now day’s companies and business attach information storage microchips on their products. This has made it possible for businesses to track their inventory. Currently some businesses have started to use human RFID chip implants with the objective of tightening security.
As a result the door can only be assessed by the employ thus reducing theft and other insecurity issues (Zappala and Gray 2006).The usage of internet has made it possible for provisions of online flight booking services. Banks and other big companies are now offering online accounts for online business transactions. Besides that it has become common for clients to purchase products through online services. At the moment many business have internet as their primary or only medium for business transaction.
It’s relatively easy for small businesses to pick up because of online services for instance goods being made at home like cookies can be successfully sold through the internet. Despite of the many benefits it’s important for the business to ensure maximum security because the chances of someone benefiting from another person’s business are very high. On addition to that the company and the business has to ensure that whatever is offered is original to avoid many complications. Businesses have greatly transformed through online marketing and advertisement. Companies are using Google to effective market their products (Zappala and Gray 2006).
Benefits of electronic commerceThrough electronic commerce business processes which integrate consumers and suppliers as well as vendors and traders via the internet is made possible. Monetary terms are necessary for online transaction. For instance credit card payments are very common in this kind of business. Therefore electronic commerce is the final stage of e-business which deals with collection of payments of transacted products. The greatest advantage of electronic commerce is worldwide presence. For this reason companies which are engaged in online business are privileged to access a worldwide audience.
Companies have been able to achieve great success by conducting online transactions because of the enormous audience. Companies have been able to reduce promotion and marketing costs through the internet because of online transaction. This form of business conduction is very effective in cost reduction. Besides that goods and services which are marketed through the internet often reach a wide market at a nominal price (Bragg, 2007).Some strategies which have greatly reduced marketing and advertising costs includes pay per click advertising where a company makes the payment of advertised products which have been viewed. Affiliate marketing has also helped to a great extend in reducing costs of advertising as well as marketing.
Cost effective strategies of advertising which are found online has greatly helped to reduce the expenses which are incurred by business organizations. Development of competitive strategies has been possible through online transactions. Competitive strategies are beneficial to businesses because it creates competitive advantage. Besides that effective market strategies are necessary for maintenance of competitive advantage which is a requirement for increased profits. One of the most beneficial strategies is a cost or differential strategy.
Through this strategy a company can be able to capture a wider market and this is very beneficial (Bragg, 2007).Clients are experiencing improved services because of electronic commerce. Customers are able to complete business transaction within a relatively short time. On addition to that customer services can be easily offered or accessed. Therefore clients are able to learn more about the product on sale because of the available sufficient information.
Consumers can receive the products which they have purchased without having to move. Online payment lessens the work of the consumer and as a result many people are encouraged to use these services. Through electronic commerce clients are able to make purchases at any time and any day because services are available in the whole week and within twenty four hours. Besides that these services are available in all corners of the world at any particular time. Online transactions are very secure compared to transactions which are made using cheques. The company’s sales potential can greatly be increased as well as productivity.
A company’s product or brand can be promoted globally and time spent on transactions is minimized. Availability and location business restraints are eliminated through online transactions (Bragg, 2007).Limitations of electronic commerceThe main limitation of this kind of business is reduced growth in various business sectors because of sector restrictions. For instance business dealing with food has experienced less growth because of the nature of the product. On addition to that it’s very rare for people to search for food over the internet because it’s something that can be easily acquired at a preferred time from the supermarket. Optimization solutions are very costly because of the required substantial resources which are meant for product redefining in order for it to be sold online.
Some of the substantial resources which are very expensive include computer system upgrading, websites updating as well as personal training. On addition to that there are people who still consider online transactions to be insecure and for this reason they never go for it. At times the client may fail to receive the exact product which he purchased (Jackson, Harris & Eckersley, 2003).Electronic commerce growth Research which was carried out by Forrester indicated $175 billion transactions in electronic commerce and analyst project great growth to about $335 billion by the year 2012. Business-to-consumer type of electronic business has shown tremendous growth.
For instance it has taken a form of double digit growth in each succeeding year and it’s expected to continue at the same rate. This is happening because of increased movement of products away from the stores. On addition to that many online shoppers are not very sensitive to harmful economic conditions as the citizens of America. Online retailers experience a number of challenges as far as growth is concerned. For instance many shoppers consider this kind of business as the second option because of lack of trust.
On addition to that people consider it to as seasonal business and there are many online shoppers who hardly browse therefore they are never reached (Leon 2007). Electronic commerce has greatly evolved since its discovery. The rate at which online transaction is growing is very high and tremendous growth is expected in the near future. There are many benefits which can be enjoyed by consumers, companies and businesses for taking part in electronic commerce. For instance it’s a very effective way of carrying out business transaction because a client is able to access products from various parts of the world. Besides that a lot of time is saved because information as well as products can be transferred at a very fast speed.
Business and retailers also benefit a lot of expenses are reduced. On addition to that business and companies are able to access a large market. Electronic commerce is the effective way to conduct business in the 21st century (Leon 2007).