1 of 32

E-commerce 2014

Kenneth C. Laudon

Carol Guercio Traver

business. technology. society.

tenth edition

2 of 32

Chapter 1

The Revolution Is Just Beginning

3 of 32

Pinterest: A Picture Is Worth a �Thousand Words

Have you used Pinterest or any other content curation sites? What are your main interests?
Have you purchased anything based on a pin or board on Pinterest or any other curation site?
Why do Pinterest links drive more purchasing than Facebook links?

Slide 1-3

Class Discussion

4 of 32

E-commerce Trends 2019–2024

Expansion of social, local, and mobile

e-commerce

Mobile platform begins to rival PC platform
Continued growth of cloud computing
Explosive growth in “Big Data”
Ebooks gain wide acceptance
Continued growth of user-generated content

Slide 1-4

5 of 32

E-commerce Trends 2019–2024

Slide 1-5

6 of 32

The First 30 Seconds

First 17 years of e-commerce

Just the beginning
Rapid growth and change

Technologies continue to evolve at exponential rates

Disruptive business change
New opportunities

Slide 1-6

7 of 32

What Is E-commerce?

Use of Internet and Web to transact business
More formally:

Digitally enabled commercial transactions between and among organizations and individuals

Slide 1-7

8 of 32

E-commerce vs. E-business

E-business:

Digital enabling of transactions and processes within a firm, involving information systems under firm’s control
Does not include commercial transactions involving an exchange of value across organizational boundaries

Slide 1-8

9 of 32

Why Study E-commerce?

E-commerce technology is different, more powerful than previous technologies
E-commerce brings fundamental changes to commerce
Traditional commerce:

Consumer as passive targets
Mass-marketing driven
Sales-force driven
Fixed prices
Information asymmetry

Slide 1-9

10 of 32

Eight Unique Features of �E-commerce Technology

Ubiquity
Global reach
Universal standards
Information richness
Interactivity
Information density
Personalization/customization
Social technology
User Generation Content

Slide 1-10

11 of 32

E-commerce vs Traditional Commerce

Cost Effective
Time
Convenience
Accessibility
Introduction of new product
Profit
Physical Inspection
Product suitability

Slide 1-11

12 of 32

E-commerce vs Traditional Commerce

Human resources
Customer interaction
Process
Business relationship
Fraud
Information sharing
Method of Communication
Strategy

Slide 1-12

13 of 32

Web Version

Slide 1-13

1990- 2004

2004- 2010

2010- 2016

From 2016 we are in Web 4.0 AI – Blur between H & M

14 of 32

Types of E-commerce

May be classified by market relationship or technology

Business-to-Consumer (B2C)
Business-to-Business (B2B)
Consumer-to-Consumer (C2C)
Social e-commerce
Mobile e-commerce (M-commerce)
Local e-commerce

Slide 1-14

15 of 32

Types of E-commerce

Slide 1-15

16 of 32

The Growth of E-commerce�

Slide 1-16

17 of 32

The Internet

Worldwide network of computer networks built on common standards
Created in late 1960s
Services include the Web, e-mail, file transfers, and so on
Can measure growth by number of Internet hosts with domain names

Slide 1-17

18 of 32

The Web

Most popular Internet service
Developed in early 1990s
Provides access to Web pages

HTML documents that may include text, graphics, animations, music, videos

Web content has grown exponentially

Google reports 30 trillion unique URLs; 120 billion Web pages indexed

Slide 1-18

19 of 32

The Mobile Platform

Most recent development in Internet infrastructure
Enables access to the Internet via wireless networks or cell-phone service
Mobile devices include

Tablets
Smartphones
Ultra-lightweight laptops

Slide 1-19

20 of 32

Will Apps Make the Web Irrelevant?

What are the advantages and disadvantages of apps, compared with Web sites, for mobile users?
What are the benefits of apps for content owners and creators?
Will apps eventually make the Web irrelevant? Why or why not?

Slide 1-20

Insight on Technology: Class Discussion

21 of 32

E-commerce: A Brief History

1995–2000: Invention

Key concepts developed
Limited bandwidth and media
Euphoric visions of

Friction-free commerce

Lowered search costs, disintermediation, price transparency, elimination of unfair competitive advantage

First-mover advantages

Network profits

Dot-com crash of 2000

Slide 1-21

22 of 32

Origins and Growth of E-commerce

Precursors:

Baxter Healthcare
Electronic Data Interchange (EDI)
French Minitel (1980s videotex system)
None had functionality of Internet

1995: Beginning of e-commerce

First sales of banner advertisements

E-commerce fastest growing form of commerce in United States

Slide 1-22

23 of 32

E-commerce: A Brief History (cont.)

2001–2006: Consolidation

Emphasis on business-driven approach
Traditional large firms expand presence
Start-up financing shrinks up
More complex products and services sold
Growth of search engine advertising
Business Web presences expand to include e-mail, display and search advertising, and limited community feedback features

Slide 1-23

24 of 32

E-commerce: A Brief History (cont.)

Slide 1-24

25 of 32

Start-up Boot Camp

Why do you think investors today are still interested in investing in start-ups?
Is an incubator the best solution for start-ups to find funding? Why or why not?

Slide 1-25

Insight on Business: Class Discussion

26 of 32

Assessing E-commerce

Many early visions not fulfilled

Friction-free commerce

Consumers less price sensitive
Considerable price dispersion

Perfect competition

Information asymmetries persist

Intermediaries have not disappeared
First mover advantages

Fast-followers often overtake first movers

Slide 1-26

27 of 32

Predictions for the Future

Technology will propagate through all commercial activity
Large, traditional companies will continue to play dominant role, consolidating audiences

Start-up ventures can still attract large audiences in non-dominated arenas

Integrated online/offline companies will experience more growth than purely online companies
Additional factors:

Increased regulation and control
Cost of energy

Slide 1-27

28 of 32

The Growth of B2B E-commerce�

Slide 1-28

29 of 32

Understanding E-commerce: Organizing Themes

Technology:

Development and mastery of digital computing and communications technology

Business:

New technologies present businesses with new ways of organizing production and transacting business

Society:

Intellectual property, individual privacy, public welfare policy

Slide 1-29

30 of 32

Academic Disciplines �Concerned with E-commerce

Technical approach

Computer science
Management science
Information systems

Behavioral approach

Information systems
Economics
Marketing
Management
Finance/accounting
Sociology

Slide 1-30

31 of 32

Facebook and the Age of Privacy

Why are social network sites interested in collecting user information?
What types of privacy invasion are described in the case? Which is the most privacy-invading, and why?
Is e-commerce any different than traditional markets with respect to privacy? Don’t merchants always want to know their customer?
How do you protect your privacy on the Web?

Slide 1-31

Insight on Society: Class Discussion

32 of 32

Slide 1-32