Ecommerce 2014 business technology society tenth edition Kenneth

Chapter 1 The Revolution Is Just Beginning Copyright © 2014 Pearson Education, Inc. Publishing

Class Discussion Pinterest: A Picture Is Worth a Thousand Words n Have you used Pinterest or any other content curation sites? What are your main interests? n Have you purchased anything based on a pin or board on Pinterest or any other curation site? n Why do Pinterest links drive more purchasing than Facebook links? Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -3

E-commerce Trends 2013– 2014 n Expansion of social, local, and mobile e-commerce n Mobile platform begins to rival PC platform n Continued growth of cloud computing n Explosive growth in “Big Data” n E-books gain wide acceptance n Continued growth of user-generated content Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -4

The First 30 Seconds n First 17 years of e-commerce v Just the beginning v Rapid growth and change n Technologies continue to evolve at exponential rates v Disruptive business change v New opportunities Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -5

What Is E-commerce? n Use of Internet and Web to transact business n More formally: v Digitally enabled commercial transactions between and among organizations and individuals Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -6

E-commerce vs. E-business n E-business: v Digital enabling of transactions and processes within a firm, involving information systems under firm’s control v Does not include commercial transactions involving an exchange of value across organizational boundaries Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -7

Why Study E-commerce? n E-commerce technology is different, more powerful than previous technologies n E-commerce brings fundamental changes to commerce n Traditional commerce: v Consumer as passive targets v Mass-marketing driven v Sales-force driven v Fixed prices v Information asymmetry Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -8

Eight Unique Features of E-commerce Technology 1. 2. 3. 4. 5. 6. 7. 8. Ubiquity Global reach Universal standards Information richness Interactivity Information density Personalization/customization Social technology Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -9

Web 2. 0 n User-centered applications and social media technologies v User-generated content and communication v Highly interactive, social communities v Large audiences; yet mostly unproven business models v Examples: Twitter, You. Tube, Instagram, Wikipedia, Tumblr Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -10

Types of E-commerce n May be classified by market relationship or technology n Business-to-Consumer (B 2 C) n Business-to-Business (B 2 B) n Consumer-to-Consumer (C 2 C) n Social e-commerce n Mobile e-commerce (M-commerce) n Local e-commerce Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -11

The Growth of B 2 C E-commerce Figure 1. 3, Page 20 SOURCE: Based on data from e. Marketer, Inc. , 2013 a; authors’ estimates. Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -12

The Growth of B 2 B E-commerce Figure 1. 4, Page 21 SOURCE: Based on data from U. S. Census Bureau, 2013; authors’ estimates. Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -13

The Internet n Worldwide network of computer networks built on common standards n Created in late 1960 s n Services include the Web, e-mail, file transfers, and so on n Can measure growth by number of Internet hosts with domain names Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -14

The Web n Most popular Internet service n Developed in early 1990 s n Provides access to Web pages v HTML documents that may include text, graphics, animations, music, videos n Web content has grown exponentially v Google reports 30 trillion unique URLs; 120 billion Web pages indexed Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -15

The Mobile Platform n Most recent development in Internet infrastructure n Enables access to the Internet via wireless networks or cell-phone service n Mobile devices include v Tablets v Smartphones v Ultra-lightweight laptops Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -16

Insight on Technology: Class Discussion Will Apps Make the Web Irrelevant? n What are the advantages and disadvantages of apps, compared with Web sites, for mobile users? n What are the benefits of apps for content owners and creators? n Will apps eventually make the Web irrelevant? Why or why not? Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -17

Origins and Growth of E-commerce n Precursors: v Baxter Healthcare v Electronic Data Interchange (EDI) v French Minitel (1980 s videotex system) v None had functionality of Internet n 1995: Beginning of e-commerce v First sales of banner advertisements n E-commerce fastest growing form of commerce in United States Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -18

E-commerce: A Brief History n 1995– 2000: Invention v Key concepts developed v Limited bandwidth and media v Euphoric visions of n Friction-free commerce v Lowered search costs, disintermediation, price transparency, elimination of unfair competitive advantage n First-mover advantages v Network profits v Dot-com crash of 2000 Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -19

E-commerce: A Brief History (cont. ) n 2001– 2006: Consolidation v Emphasis on business-driven approach v Traditional large firms expand presence v Start-up financing shrinks up v More complex products and services sold v Growth of search engine advertising v Business Web presences expand to include -mail, display and search advertising, and limited community feedback features Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall e Slide 1 -20

E-commerce: A Brief History (cont. ) n 2007–Present: Reinvention v Rapid growth of: Online social networks n Mobile platform n Local commerce n v Entertainment content develops as source of revenues v Transformation of marketing Coordinated marketing on social, mobile, local platforms n Analytic technologies n Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -21

Insight on Business: Class Discussion Start-up Boot Camp n Why do you think investors today are still interested in investing in start-ups? n What are the benefits of investing in a company that is a graduate of a Y Combinator boot camp? n Is an incubator the best solution for start-ups to find funding? Why or why not? Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -22

Assessing E-commerce n Many early visions not fulfilled v Friction-free commerce n Consumers less price sensitive n Considerable price dispersion v Perfect competition n Information asymmetries persist v Intermediaries have not disappeared v First mover advantages n Fast-followers often overtake first movers Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -23

Predictions for the Future Technology will propagate through all commercial activity n Large, traditional companies will continue to play dominant role, consolidating audiences n v Start-up ventures can still attract large audiences in non-dominated arenas Integrated online/offline companies will experience more growth than purely online companies n Additional factors: n Increased regulation and control v Cost of energy v Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -24

Understanding E-commerce: Organizing Themes n Technology: v Development and mastery of digital computing and communications technology n Business: v New technologies present businesses with new ways of organizing production and transacting business n Society: v Intellectual property, individual privacy, public welfare policy Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -25

The Internet and the Evolution of Corporate Computing Figure 1. 11, Page 41 Copyright

Insight on Society: Class Discussion Facebook and the Age of Privacy n Why are social network sites interested in collecting user information? n What types of privacy invasion are described in the case? Which is the most privacy-invading, and why? n Is e-commerce any different than traditional markets with respect to privacy? Don’t merchants always want to know their customer? n How do you protect your privacy on the Web? Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -27

Academic Disciplines Concerned with E-commerce n Technical approach n Behavioral approach v Computer science v Information systems v Management science v Economics v Information systems v Marketing v Management v Finance/accounting v Sociology Copyright © 2014 Pearson Education, Inc. Publishing as Prentice Hall Slide 1 -28