Monday, November 23, 2009

E-Commerce

E-commerce is a relatively new technology to the world. According to the lecture on November seventeenth, e-commerce, electronic commerce, is a set of technologies, applications, and processes that link businesses and consumers to one another or each other. The main difference between traditional commerce and electronic is the simplicity of buying within the comfort of the consumer’s own home. E-commerce can sell objects that are either tangible or digital. The transaction is done completely online between the buyer and seller. The benefits of e-commerce are not one sided. It is convenient for the consumer to stay in the comfort of their household likewise it is trouble-free for the retailer to eliminate the showroom and employing salespersons. Not all online commerce is done between businesses and consumers there are three type of e-commerce discussed in the class lecture: Consumer to consumer, business to business, and business to consumer. Because of the lack of salespersons in electronic commerce the manufacturer or wholesaler now has a direct line of communication with the consumer. This process is referred to as disintermediation. In order for the retail companies to resist extinction they have combated this with reinter mediation this “gives traditional retailers a web presence” as mentioned in the lecture. Companies such as Best Buy and Wal-mart are able to sell the same items that the manufacturer would by promising better customer service or linking the web presences with their existing physical stores. This website presence is known as a portal Aggregator and it is an extra step between the retailer and the consumer. With the convenience found on both sides of the transaction what are the barriers withholding e-commerce from swallowing traditional commerce completely? A study done by Weathers, Sharma, and Wood at New York University tested the effects of seeing an item online as opposed to seeing it in person prior to purchase. “For example, the smell of flowers can be assessed prior to purchase in a bricks-and-mortar, but not an online, florist shop” (Weathers). They tested if performance uncertainty would be lowered based on if a picture was available or not, the product information was provided by an independent third-party source compared to when the information was provided by the retailer, and finally when consumers are allowed to control the presentation of information compared to when they cannot control information presentation (Weathers). The study found that pictures reduced consumer uncertainty, third party feedback reduced uncertainty for search goods not experience goods. And lastly providing shoppers control over information reduced uncertainty for search goods more than experience goods. E-commerce will not satisfy customers as much as physically seeing the goods at this point in time; however photographs, third party feedback, and information control can help online stores come closer to traditional shopping.

Weathers, Danny, Sharma, Subhash, Wood, Stacy L. (2007). Effects of online communication practices on consumer perceptions of performance uncertainty for search and experience goods. Journal of Retailing, 83, 393-401.

6 comments:

  1. www.schuch.vze.com, the original Adam Schuch blog...

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  2. I think E-Commerce is a great addition to our technologically advanced society. If you already know of certain items that you wish to have and don't need any further information, then all you got to do is make a couple clicks online and the transaction is complete. I don't believe it will ever fully replace the traditional commerce way of shopping, but I do think it will continue to grow in the future. There is individuals now that strictly always do e-commerce shopping. But like the article stated, there are certain things you need to look at in person to get your attention and attract you to the purchase.
    huss.26

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  3. I completely agree with the comments made in this blog. I have just recently started to do some of my shopping online and am still somewhat skeptical of making purchases, but I feel like it is more convenient then leaving my home. If the website does show pictures I am much more willing to buy it however, mistakes can still be made. I recently bought something and got the dimensions completely wrong. I think the success of E-Commerce is the willingness and trustworthiness between the consumer and the business. Over time I believe this trust will only continue to increase and there will be an increase of these three types of E-Commerce. Henger.2

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  4. I do agree that e-commerce is such a convenient advance in technology for people. I had to actually buy flowers online once for a friend in the hospital and I felt better actually seeing the flower arrangement online rather than just calling a florist and telling them how much I wanted to spend. However, I was unsure if the arrangement was going to look like the picture (thankfully I saw them a couple days later and they did look exactly like the picture!). E-commerce has been a vital role in the global market also. Since shipping gifts across seas can be very expensive, finding a global company with an online website can be a wonderful alternative.
    mcclain.136

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  5. I think that e-commerce is a great way for businesses to expand their client base and to make it more convenient for customers to acquire their goods. I am very familiar with the ways that e-commerce can benefit the customers because I love to shop online. The only reason that I prefer going into a store is because I like to be able to physically see the product I am buying because pictures can be deceiving. Many services can be easily bought online, such as server space and things that are not physically tangible, such as videos.

    myers.891

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  6. I love e-commerce, and I think it's such a great way to add more options for the consumers as well as the businesses themselves. I shop online frequently, and I can say from first hand experience that the points from this study are true. I normally don't even consider something unless there is at least one picture available, and it helps even more if there are multiple views of the item. Recently I've been going to websites that allow consumers to post comments and ratings. It has helped me make many decisions on products so I didn't end up with something that I thought was different. It helps consumers make better decisions and ultimately save money. When you can't see the physical item, it causes uncertainty because this product could have false information or even be a scam!

    wilt.48

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