BIT 02205/BAC 2105/BSD 2105

ELECTRONIC COMMERCE
Content
Introduction to E-Commerce
Communication Options
Models
Supply Chain
Electronic Commerce
 Short format - e-commerce
 The trading in products or services using computer networks such
as internet.
 It draws on technologies such as mobile commerce, electronic
funds transfer, supply chain management etc
 Modern e-Commerce uses World Wide Web and also other
technologies such as email
 A type business or commercial transaction that involves
transfer of information across the internet.
 You can use ecommerce channels such as your own website, an
established selling website like Amazon, or social media to drive
online sales.
History of ecommerce
Factors that impact ecommerce sales

Competitive Pricing.
Product Quality.
Shipping Time & Cost.
Online Reviews.
Easy Return Policy.
Loyalty Rewards.
Easy Navigation.
Word od Mouth
recommendations.
Ease of Checkout
Types of ecommerce models
of•Business
computertonetworks
Consumer (B2C)
•Business to Business (B2B)
•Business to Government (B2G)
•Business to Business to Consumer (B2B2C)
•Consumer to Consumer (C2C)
•Consumer to Business (C2B
EC Models
7 key components of EC
•Dynamic Pricing - you automatically satisfy different clients
due to various prices based on their specific attributes.
Promotions engine in conjunction with machine learning will
help you to dynamically determine pricing that varies
according to funnel stage, geography, and other
considerations.
•Supply Chain and Management - In e-commerce, suppliers
cannot only offer you the appropriate merchandise but also
relieve you of the responsibility of stocking your warehouse
•Customer Engagement - A good first impression is
important in turning potential customers into actual customers.
It is a representation of your online presence, so you will need
originality in your website
Cont.
•Video and other types of rich content - Rich product
information (thorough descriptions, reviews, and videos)
•Shipping and returns - require a good warehouse
management system and an excellent shipping service.
•Product Quality - The caliber of your offerings has the
potential to win over customers' allegiance and confidence.
Obtaining ISO accreditation is another method for earning the
target audience's trust.
•Loyalty and marketing programs - implement loyalty
programs like: Purchases with rewards; Social shopping;
Reward social media(freebies and discounts); Paid search
results and search engine optimization go hand in hand; Email
marketing; branding; Social media platforms.
B2B
 selling products and services directly between two businesses.
 B2B ecommerce involves transactions between a manufacturer and wholesaler, or a
wholesaler and a retailer, through an online sales portal.
 B2B ecommerce is one of the fastest-growing sales models. Some estimates value
the global B2B ecommerce market at over $12 trillion, taking up 13% of total B2B
sales in the US.
 Innovation and technology from B2B ecommerce platforms have helped drive the
movement. B2B business traditionally involved labor-intensive, manual sales and
marketing processes. The introduction of digital commerce helps these businesses
reduce costs and improve efficiency through ecommerce automation.
B2B sellers work with:
•Wholesalers
•Large retailers
•Organizations such as schools or nonprofits
•Resellers
 Buyers and sellers can now meet in one digital home, placing and
managing orders from their mobile phones and creating new
opportunities for businesses to connect with distributors and
Business to business model
Supply Chain
 is a complex logistics system that consists of facilities that convert raw materials
into finished products and distribute them to end consumers or end customers. the
interconnected journey that raw materials, components, and goods take before their
assembly and sale to customers
Aspects of supply chain
 Supply chain management(SCM) has five key elements—
planning, sourcing raw materials, manufacturing, delivery,
and returns. The planning phase refers to developing an
overall strategy for the supply chain, while the other four
elements specialize in the key requirements for executing
that plan
Components of Supply Chain
 Your supply chain efficiency and effectiveness make a massive impact
on the overall success of any business. To boost your business
productivity and profitability further, you need to improve and optimise
your supply chain.
 A properly designed supply chain strategy, with the core elements kept front
and center, will give you a host of benefits including support of your business
strategy, improved customer relationships and satisfaction, and efficiency,
performance, response, and quality improvements.
1. INTEGRATION - Assess your technology needs, and ensure your choice gives
you the right tools to integrate your full supply chain solution while being
flexible enough to change and grow with your business.
2. OPERATIONS - With the right software, you are able to align your operations
with the rest of your business, provide accurate and reliable information on the
production and current inventories for more efficient fulfillment processes.
3. PURCHASING - Keep track of suppliers, competing producers, and demand
cycles, so that you can reduce your operating costs across the sourcing and
purchasing process.
4. DISTRIBUTION - The transport, delivery, and return of goods is a component of
your supply chain that can always be simplified, optimised, and corrected for
better client service and reduced operating costs.
functions of SC
• Purchasing - the process of buying materials needed to manufacture products.
• Operations - everything a company does on a day-to-day basis to run a company.
Before a company purchases the needed materials and begins production, it must
forecast demand for its products. Forecasting involves anticipating or projecting
how many units of a product will be sold during a given period.
• Logistics - a function that involves the coordination of all supply chain activities,
such as warehousing, inventory management, and transportation. Companies along
the supply chain must communicate effectively to ensure that products reach
consumers in a timely and efficient way in the precise form that the consumer
expects.
• Resource management - the planning, organizing, and controlling of resources.
Resources include the labor, the raw materials, and the technology that are required
to move products from their raw material phase to finished goods available for
consumption. Effective supply chain management requires the right allocation of
these resources to the right supply chain activities to optimize the entire system.
• Information workflow - a supply chain management function that relates to what
and how information moves between members of the supply chain. If information
doesn’t flow effectively or communication is poor, the entire process can suffer as
a result of disruptions, delays, and mistakes.
Trends affecting SCs
 increasing globalization and easier access to different
kinds of alternative products in today's markets, the
contribution of product design to generating demand
is more significant.
 competition, among companies for the limited market
demand increases and as pricing and other marketing
elements become less distinguishing factors
 Increase in industrial engineering
 Big data
 AI
 Machine learning
 Information technology.
B2C
 the process of businesses selling products and services directly to consumers, with no middle
person. B2C typically refers to online retailers who sell products and services to consumers
through the internet.
 B2C became immensely popular during the dotcom boom of the late 1990s when it was
mainly used to refer to online retailers who sold products and services to consumers
through the internet.
•Online B2C became a threat to traditional retailers, who profited from adding a markup to the
price.
•However, companies like Amazon, eBay, and Priceline have thrived, ultimately becoming
industry disruptors.
Business to Consumer model
B2C in the digital World
 Online B2C can be broken down into five categories:
1. Direct sellers. the most common model in which people buy goods from online
retailers. Include manufacturers or small businesses or simply online versions of
department stores that sell products from different manufacturers.
2. Online intermediaries. liaisons or go-betweens who don't actually own products
or services that put buyers and sellers together. Sites like Expedia, trivago, and Etsy
fall into this category.
3. Advertising-based B2C. uses free content to get visitors to a website. Those
visitors, in turn, come across digital or online ads. Like HuffPost, a high-traffic site
that mixes advertising with its native content.
4. Community-based. Sites like Meta (formerly Facebook), which build online
communities based on shared interests, help marketers and advertisers promote
their products directly to consumers. Websites typically target ads based on users'
demographics and geographical location
5. Fee-based. Direct-to-consumer sites like Netflix charge a fee so consumers can access their
content. The site may also offer free but limited content while charging for most of it.
The New York Times and other large newspapers often use a fee-based B2C business model.
B2C Companies and Mobiles
• Decades after the e-commerce boom, B2C companies are
continuing to eye a growing market: mobile purchasing.
With smartphone apps and traffic growing year-over-year,
B2C companies have shifted attention to mobile users and
capitalized on this popular technology
• Throughout the early 2010s, B2C companies were rushing
to develop mobile apps, just as they were with websites
decades earlier. In short, success in a B2C model is
predicated on continuously evolving with consumers'
appetites, opinions, trends, and desires.
• Note: Because of the nature of the purchases and
relationships between businesses, sales in the B2B model
may take longer than those in the B2C model.
Consumer-to-Consumer (C2C) Model
 The C2C model involves transaction between consumers. Here, a
consumer sells directly to another consumer. Online auction Web
sites that provide a consumer to advertise and sell their products
online to another consumer.
 However, it is essential that both the seller and the buyer must
register with the auction site. While the seller needs to pay a fixed
fee to the online auction house to sell their products, the buyer can
bid without paying any fee. The site brings the buyer and seller
together to conduct deals
 Any buyer can now browse the site of www.ebay.com to search for
the product he interested in. If the buyer comes across such a
product, he places an order for the same on the Web site of eBay.
EBay now purchase the product from the seller and then, sells it to
the buyer. In this way, though the transaction is between two
customers, an organization acts as an interface between the two
organizations.
The model
Consumer-to-Business (C2B) Model
Cont.
• The C2B model involves a transaction that is conducted between a consumer and a
business organization.
• it is similar to the B2C model, however, the difference is that in this case the
consumer is the seller and the business organization is the buyer.
• In this kind of a transaction, the consumers decide the price of a particular product
rather than the supplier. This category includes individuals who sell products and
services to organizations.
• In addition to the models discussed so far, five new models are being worked on
that involves transactions between the government and other entities, such as
consumer, business organizations, and other governments. All these transactions
that involve government as one entity are called e-governance.
The Impact of Electronic Commerce on Business

E-Commerce and E-Business are not solely the Internet, websites or dot com
companies. It is about a new business concept that incorporates all previous business
management and economic concepts. As such,E-Business and E-Commerce impact on
many areas of business and disciplines of business management studies.
1. Management Information Systems – Analysis, design and implementation of e-
business systems within an organization; issues of integration of front-end and
back-end systems.
2. Human Resource Management – Issues of on-line recruiting, home working and
‘Intrapreneurs’ works on a project by project basis replacing permanent employees.
3. Finance and Accounting –On-line banking; issues of transaction costs; accounting
and auditing implications where ‘intangible’ assets and human capital must be tangibly
valued in an increasingly knowledge based economy.
4. Economics –The impact of e-commerce on local and global economies;
understanding the concepts of a digital and knowledge-based economy and how this
fits into economic theory
Cont.
5. Production and Operations Management –The impact of on-line processing has
led to reduced cycle times. It takes seconds to deliver digitized products and services
electronically; similarly the time for processing orders can be reduced by more than 90
per cent from days to minutes. Production systems are integrated with finance
marketing and other functional systems as well as with business partners and
customers.
6. Marketing – Issues of on-line advertising, marketing strategies and consumer
behavior and cultures. One of the areas in which it impacts particularly is direct
marketing. In the past this was mainly door-to door, home parties and mail order using
catalogues or leaflets.
7. Computer Sciences – Development of different network and computing
technologies and languages to support e-commerce and e-business, for example
linking front and back office legacy systems with the ‘web based’ technology.
8. Business Law and Ethics – The different legal and ethical issues that have arisen
as a result of a global ‘virtual’ market issues such as copyright laws, privacy of
customer information, legality of electronic contracts etc.
The Benefits of E-Commerce to Business, Consumers and Society
1. Benefits of E-Commerce to Business
a) International Marketplace - What used to be a single physical market place located in a
geographical area has now become a borderless market place including national and
international markets? By becoming e-commerce enabled, businesses now have access to people
all around the world. In effect all e-commerce businesses have become virtual multinational
corporations.
b) Operational Cost Savings - The cost of creating, processing, distributing, storing and
retrieving paper-based information has decreased.
c) Mass Customization - E-commerce has revolutionized the way consumers buy goods and
services. The processing allows for products and services to be customized to the customer’s
requirements. In the past when Ford first started making motor cars, customers could have any
color so long as it was black. Now customers can configure a car according to their
specifications within minutes on-line via the www.ford.com website.
d) Lower Telecommunications Cost - The Internet is much cheaper than value added networks
(VANs) which were based on leasing telephone lines for the sole use of the organization and its
authorized partners. It is also cheaper to send a fax or e-mail via the Internet than direct
dialing.
e) Digitization of Products and Processes - Particularly in the case of software and music/video
products, this can be downloaded or e-mailed directly to customers via the Internet in digital or
electronic format.
f) No more 24-hour-time Constraints - Businesses can be contacted by or contact customers or
Bus Topology
Cont.
2. Benefits of E-Commerce to Consumers
a) 24/7 Access - Enables customers to shop or conduct other transactions 24hours a
day, all year round from almost any location. For example – checking balances,
making payments, obtaining travel and other information.
b) More Choices - Customers not only have a whole range of products that hey can
choose from and customize, but also an international selection of suppliers.
c) Price Comparisons - Customers can ‘shop’ around the world and conduct
comparisons either directly by visiting different sites, or by visiting a single site
where prices are aggregated from a number of providers and compared.
d) Improved Delivery Processes - This can range from the immediate delivery of
digitized or electronic goods such as software or audio-visual files by downloading
via the Internet, to the on-line tracking of the progress of packages being delivered by
mail or courier.
e) An Environment of Competition - Where substantial discounts can be found or
value added, as different retailers vie for customers. It also allows many individual
customers to aggregate their orders together into a single order presented to
wholesalers or manufacturers and obtain a more competitive price.
Cont.
3. Benefits of E-Commerce to Society
a) Enables more Flexible Working Practices -This enhances the quality
of life for a whole host of people in society, enabling them to work from
home. Not only is this more convenient and provides happier and less
stressful working environments, it also potentially reduces
environmental pollution as fewer people have to travel to work
regularly.
b) Connects People - Enables people in developing countries and rural
areas to enjoy and access products, services, information and other
people which otherwise would not be so easily available to them.
c) Facilitates Delivery of Public Services - For example, health
services availableover the Internet (on-line consultation with doctors or
nurses) filingtaxes over the Internet through the Inland Revenue
website.
The Barriers of E-Commerce
1. Commercial Infrastructure - Relates to issues such as international trade agreements, taxation laws and
other legal agreements that facilitate all kinds of on-line trading and so is a barrier relevant to all types of
businesses.
2. Technology Infrastructure - Deals with issues of standardization of systems and applications, which is a
particular concern for larger organizations who want to implement solutions such as value chain integration
and e-supply chain management.
3. Internet Infrastructure - Deals with issues such as availability and quality of the Internet in terms of
speed and reliability. This barrier is of particular concern to Business to Consumer organizations, since
their business relies more on general consumers, and so the ease with which the general public can connect
to the Internet has a direct impact on their Web-based business
4. Security - In its broadest term is one of the most significant barriers toe-commerce both within the
organization and external to it. Identified as Security and Encryption; Trust and Risk; User Authentication
and Lack of Public Key Infrastructure; Fraud and Risk of Loss it relates to the development of a broader
security infrastructure and it also relates to the kinds of measures barriers to e-commerce businesses can
take to improve security.
5. Interoperability of systems– This is identified as one of the major barriers for large US based Business to
Business corporations. This refers specifically to implementation and compatibility problems of integrating
new e-commerce applications with existing legacy systems and resources within organizations. This problem
also extends to interacting with systems of business partners and stakeholders.
6. Lack of Qualified Personnel- This is a particularly strong concern because internally they do not have
sufficient resources to attract and maintain their own support staff to develop a sophisticated technology
infrastructure. With regards to third parties, the qualified personnel tended to work for larger organizations.
Business Process Redesign
 refers to a complete overhaul of a company's key business process with the objective
of achieving a quantum jump in performance measures such as return on investment
(ROI), cost reduction, and quality of service
How does business process redesign work?

Business process redesign requires specific steps. You perform these steps regardless of
the process that you intend to change.
1. Assess the current process
2. Identify issues with current activities
3. Define the necessary process changes
4. Define KPIs
5. Implement the changes
When should you consider process redesign?

1.Overall process inefficiency

2.Delayed SLAs
3.Too much manual work
4.High error rate
Communication Options
• Being able to communicate with your customers
can make the difference in both their shopping
experience and your conversion and overall profit
line; it anticipates the customer's needs, helps to
guide the consumer journey, and fulfill your
business goals.
• For instance, person A could be more of a telephone
person who likes to talk and reach a
solution. Person B could prefer to communicate
only by email, while person C may prefer a live
chat
Why Communicate?
• As Kristie Lorette Put it - “In the business world, good communication
is important for the daily operation of the company, but can also affect
sales and profitability. Without good business communication, the
internal and external structure of a business can face numerous
challenges that can ultimately lead to its demise.”
• Social CRM is one of the most useful tools that an Ecommerce
company can have. In such a connected world, it would be a mistake
to miss out on the incredible wealth of information at your disposal
within your consumer base.
• Social engagement is not only an extremely useful tool for market
research, allowing you to better cater your brand and product to your
target demographic, but it is the beginning of customer service.
• One method for offering personable customer service is the
implementation of a live chat feature.
Reasons for communication
 There are two key reasons businesses need to consider
customer communications in the eCommerce sphere
carefully.
1. Getting Attention in the First Place - The answer is to think
carefully about communication. Consider who you want to
communicate with. This will often inform your decision on
the best way to reach your audience and what you might
say to reel them in.
2. Maintaining a Relationship - This involves arming them
with robust customer support software that allows them to
track customer queries across communication channels so
that customers aren’t forced to repeat themselves every
time they get in touch
Effective Communication Methods
1. Social media - Using Facebook, Instagram, or Twitter, it’s possible to build an
online community. social media platforms is a great route for getting information
out to customers in a speedy and effective manner.
2. Phone Calls - include basic telephone communication as one of your main contact
channels and provide monitoring software.
3. Email - it delivers the ability to communicate with many people, irrespective of
their geographical location. It offers infinite room to expand on lengthy subjects
like new product ranges or more text-heavy areas like an exploration of your
business’s carbon footprint.
4. Chatbots - Automated services that have revolutionized customer
communications. Speed(quick response) and offer customers a degree of
independence.
5. Blogging - publish content related to customer onboarding, troubleshooting, and
FAQs that can then be repurposed or hyperlinked from other channels, including
email, help desks, and chatbots
6. SMS - technique to send out short, sharp communications to your customers, and
try auto sms set ups on the subject of time-limited offers. Mostly for urgency.
7. Live Chat and websites
Aids to Effective Communication in
an E-commerce

1.Easy-to-Use Website
2.Well-Trained Staffers
3.Fast Email Response
4.Customer Service Chat
5.Customer Service Phone
Lines
Importance of Customer Centric
Web Design

1.Ease of Use
2.Resolving Problems
3.Generating Sales
4.Company Information
EC Tools tools are pieces of software like apps, platforms, and plug-ins that
• Ecommerce
help business owners manage their online stores.
• they all share a common purpose: to streamline, organize, and automate the
processes of running and growing an ecommerce store.
• The best ecommerce platforms
1.Shopify- Best for easy, all-in-one ecommerce store building
2.Wix- Best for individual sellers
3.BigCommerce- Best for big companies
4.Adobe Commerce (formerly Magento)- Best for businesses with PHP
programming experience
5.WooCommerce- Best for WordPress users
6.Squarespace- Best for high quality templates
7.Big Cartel- Best for artists and creatives
8.Weebly - Most affordable for small businesses
9.3dcart- Best for business owners familiar with ecommerce
10.Volusion- Best for quick set up and easy interface
11.OpenCart- Best for free ecommerce solution
The Impact of Supply Chain in EC
 EC helps in supply chain management by providing a platform for
online orders and payments, as well as tracking shipments and
inventory.
 It also improves the speed at which you can receive orders, and
allows customers to find your products more easily
• In e-commerce, effective supply chain management entails
optimization. This can mean a variety of things, including:
•Maintaining a stronger relationship with your suppliers
•Preparing for demand spikes or troughs ahead of time
•Business process automation
•Inventory management that is "smart."
Role of EC in SCM
Advantages of e-commerce in supply chain management

• Contributes to cost reduction

• Traditional Roles Have Seen a Shift
• Affects the demand patterns
• Across-the-Board Visibility
• Cost-Cutting
• Improved Customer Relations
• Preventing Delays
• Visibility
• Stock Availability and Inventory Visibility
• Customer Experience
• Increased Profitability
• Less Cost
• Reduced Overhead Expenses
• Better Income
• Enhanced productivity
• Lesser Marketing Cost
• Financial transactions and decision-making
• Multiple Payment Methods
• Transparency in Product Information
• Availability of Products and Service Level
• Convenient Display of Products
Real-world applications of Supply
Chain Management in e-commerce
Understanding the basics of SCM is essential before
you implement it in your business. Here are some
examples of best practices and applications of SCM in
e-commerce around the world:
• Keeping track of inventories
• Monitoring supply chain with the help of data
analytics
• Tracking food products with blockchain
technology
• Identifying customers needs with AI tools
e-commerce platforms

• Organizations that sell products and services online can

use e-commerce platforms to help them create and
manage their online stores. Retail organizations can
integrate their CMS and e-commerce platform to
manage product catalogues and streamline the
checkout process with product-specific content.
• Organizations can also use data from an e-commerce
platform like Shopify and content from their CMS to
personalize product recommendations, improve the
overall CX, create a content marketing strategy that
aligns with customer interest and make their website
more engaging.
• Name the platforms?