The Changing Face of E-Commerce

8/13/2019 The Changing Face of E-Commerce

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2006 by Tony Gauvin, UMFK

The Changing Faceof eCommerceTony Gauvin

Assistant Professor of eCommerceUniversity of Maine at Fort Kent


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Overview

A Brief Introduction A Definition of eCommerce

The Beginnings1st Generation of eCommerce

Dot Coms2nd Generation of eCommerce

Main Stream eBusinessThe Future of eCommerce


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An Early Definition Of eCommerce

From a communications perspective, EC is the delivery of goods,services, information, or payments over computer networks or byany other electronic meansFrom a business process perspective, EC is the application oftechnology towards the automation of business transactions andwork flowFrom a service perspective, EC is a tool that address the desire offirms, consumers, and management to cut services costs whileimproving the quality of customer service and increasing the speedof service delivery

From a online perspective, EC provides the capability of buying andselling products and information over the Internet and other onlineservices

From Electronic Commerce: A Managers Guide , Kalakota and Whinston, Addison Wesley, 1997


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A Broader Definition

An attempt to increase transactional efficiencyand effectiveness in all aspects of the design,

production, marketing and sales of products orservices for existing and developingmarketplaces through the utilization of currentand emerging electronic technologies

Source: eCommerce faculty at UMFK


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The beginnings of eCommerce

The Real BeginningEFT, electronic finds transfer (1970s) EDI, electronic data Interchange (1980s)

The Visible Beginning April 1995, the Internet moved from the Federal Sector to thecommercial sector when NSF decommissioned NSFNET andmoved assets to vBNS (very-High-Speed Backbone NetworkService) which allowed for ISPs (Internet Service Providers) to

develop.February 1996, The Telecommunications ActDeregulation (move to industry self-regulation)


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1 st Generation eCommerce (1995-2000)

Explosive Growth mostly in Dot Coms All about taking ideas to market FASTThe funding required for growth was investorsnot consumersThe goal was IPO

Talent left the major firms and joined start-upsTraded security for the instant millionaire promiseof stock options


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Millions Raised by Dot Coms1996 1997 1998 1999 2000

BusinessServices

780.42 1270.03 3409.02 14749.78 295536.22

Content 233.72 276.05 455.02 1977.78 2301.25

Retail 108.25 159.51 540.66 4209.14 1941.79

Infrastructure 466.67 879.88 1388.81 4589.29 13860.46

ISPs 369.41 561.27 1030.25 3499.10 7577.11

Software 1132.67 1634.05 2459.00 7132.39 2069.48

Totals 3102.54 4794.95 9361.86 36697.33 72411.02

Data Source: PriceWaterhouse Coopers Moneytree Survey 2001



Reality Check (from Thomson Financial)

1986-19951% of IPOs traded below $1 per share one year aftergoing public

Between 1998-200012% of IPOs traded below $1 per share on April 1,2001Some of these IPOs with their stock highs

IVillage.com $130.00 Ask Jeeves.com $190.50NetZero $40.00Drkoop.com $45.75



The End of the Beginning

Only 10% of dot coms formed since 1995 stillsurvive

An even smaller percentage generate a profitSome projections ( E-Commerce , Lauden and Traver, AddisonWelsey,2002 )

B2C revenues in 2001 are growing at 45% to 55% peryearBy 2005 eCommerce revenue should grow to $647billion (about 20% of total retail)



Table 4. Estimated Quarterly U.S. Retail Sales Not Adjusted 1): Total and E-commerce 2 (Estimates are based on data from the Monthly Retail Trade Survey and administrative records.)

Source: http://www.census.gov/mrts/www/data/html/05Q3table4.html
http://www.census.gov/mrts/www/data/html/05Q3table4.htmlhttp://www.census.gov/mrts/www/data/html/05Q3table4.html



Anonymous e-Mail Joke

Three beggars were begging in New York City, each with a smallcup in his hand. The first one wrote beg on his broken steel cupand he received 10 bucks after one day.

The second one wrote beg.com on his cup and after one day hereceived hundreds of thousand dollars. Someone even wanted totake him to NASDAQ.

The third one wrote e -beg on his cup. Both IBM and HP sent vicepresidents to talk to him about a strategic alliance and offered himfree hardware and professional consulting while Larry Ellisonclaimed on CNBC that e-beg uses 95% Oracle technology and i2announced e-beg Trade Matrix, a B2B industry portal to offersupply chain integration in the beggar community.



The 2 nd Generation 2001-2005eCommerce become eBusiness5 major components all geared to any firms desire to gaincompetitive advantage in their marketplace

eCommercebuying & selling using the Internet

Business Intelligencegathering and processing of information internal and external to firm in ordergain strategic advantage

Customer relationship managementsolidify and expand relationships across all stakeholders

Supply Chain Managementunified operations for transferring of goods from suppliers to manufacturesand ultimately to the consumers

Enterprise Resource Managementthe digital streamlining of an companys processes



2nd Generation Business

Involvement with eCommerce

Activity

Business Process

Enterprise

PurePlayBusiness transformation(competitive advantage,

industry redefinition)

Effectiveness(Incremental sales,customer retention)

Efficiency(Cost

reduction)

Pure dot-com(E*Trade)

Click and Mortar (eSchwab)

Customer relationshipmanagement

Brochureware,Order processing

L e v e

l o

f b u s

i n e s s

i m p a c

t

Source : adapted from www.mohanbirsawhney.com
http://www.mohanbirsawhney.com/http://www.mohanbirsawhney.com/http://www.mohanbirsawhney.com/



eCommerce Models

B2BBusiness to Business

B2CBusiness to Consumer

C2CConsumer to Consumer

G2CGovernment to Constituent

C2GConstituent to Government

G2BGovernment to Business

B2GBusiness to Government



1st and 2 nd Generations Compared

1st GenerationTechnology-drivenRevenue growth emphasisVenture capital financingUngovernedEntrepreneurialDisintermediationPerfect MarketsPure Online strategiesFirst Mover advantage

2nd GenerationBusiness-drivenEarnings and profits emphasisTraditional financingStronger regulation andgovernanceLarger traditional firmsStrengthening intermediariesImperfect markets, brands,

and network effectsMixed clicks and BricksStrategiesStrategic follower strength



An eCommerce Timeline

SOURCE: the Gartner Group

High Visibility



The future of eCommerce

Continued integration of technology intobusiness and organizational entities until

at some point there will be no distinct lineof demarcationBusiness become eCommerce andeCommerce becomes business

Business continues to be the driver oftechnology



The future of eCommerce

The creation of a discontinuous marketplaceeconomy in which firms will compete in one ofonly two possible marketplaces

Commodity based products and servicesMajor differentiation between competing products is costeCommerce adds to increased efficiency and effectiveness

BoutiquesMajor differentiation between competing products is

perceived quality or higher serviceeCommerce adds increased distribution possibilities andincreased marketing potential



Future of eCommerce

7 features of eCommerce (E-Com m erce: TheRevolu t ion i s Ju s t Beginn ing , Lauden and Traver, 2002)

UbiquityGlobal ReachUniversal StandardsInformation richnessInteractivity

Information densityPersonalization/Customization


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Questions??

Tony Gauvin

Assistant Professor of eCommerceUniversity of Maine at Fort Kent

23 University Drive

Fort Kent, me 04743

(207) 834-7519

[email protected]

http://www.umfk.maine.edu

http://littleblack.umfk.maine.edu
mailto:[email protected]://www.umfk.maine.edu/http://littleblack.umfk.maine.edu/http://littleblack.umfk.maine.edu/http://www.umfk.maine.edu/mailto:[email protected]

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The Changing Face of E-Commerce