Every year, people are seeking how to improve their lives to live more easily, simply, and conveniently. Therefore, many new technologies have been invented to allow people to have a wonderful life. Electronic commerce is an example of one of these innovations.
History and development
Electronic commerce (e-commerce) is the use of, by two or more parties, information technology such as computers and telecommunications to make business transactions. This not only includes business-to-business transactions but also online retail and digitalization of the financial industry. E-commerce actually began in the 1970s. This was the period when large corporations started creating private networks in order to share business information with their partners or suppliers. This was also called Electronic Data Interchange (EDI) which transmitted standardized data via VANs (Value-added networks) between businesses, so paperwork and human intervention were nearly eliminated. This is the foundation of electronic commerce.
However, the e-commerce buzz that you hear on the radio, see on TV, and read about in the papers and on-line, today refers to on-line retailing, which uses the Web to sell goods, services, and information to customers. On-line retailing was pioneered by Internet companies five to six years ago. Every individual can buy flowers, airline tickets, stocks and bonds and even download software via a computer and some type of network.
Degree of Diffusion and Hardware and Software Usage
Currently, there are over 30 million users on the Internet. This is a very rapidly growing population compared to the number of users three to four years ago, which was only a few thousand. The number of users is expected to grow to over 200 million by 2000. Since both the United State and Canada are high tech countries, most people living in these two countries know how to use a computer and the Internet. Doing business on the Net is a good way for Canadian businesses to reach more potential customers. Clearnet, that is a telecommunication's company in Canada, has already offered on-line ordering to its customers. Mark's Work Wearhouse is another example using the Internet for marketing. Although the degree of diffusion of e-commerce on the Web is medium in Canada nowadays, it will be increasing as the number of Internet users increases. Using the Internet to build a marketing presence is an essential way to reach more customers.
Specific Hardware and Software
In order to do business and complete secure transactions on the Internet, you definitely need a computer but also require:
1. Banking--merchant account, which is a credit card merchant account at a bank that handles the Internet or "faceless" transactions.
2. A Web Site & Hosting: can be designed and put up by experts ready to help. Site size and complexity can vary immensely based on your requirements. Your Web site must be hosted in a secure server. Therefore, the credit card information and private data will be transferred safely.
3. Shopping basket--Shopping cart software: can be as simple as an order form, but it can also help you manage your entire operation.
4. Digital Certificate--Digital ID is a certificate that needs to be issued by a third trusted party. It assures both consumers as well as banks that you are who you say you are (It is just like a person's passport).
5. Credit clearing software: is transaction payment system software for credit cards. (It replaces the small credit card swiping terminals that you see at businesses.)
The Effects on Society
A utopianism point of view of e-commerce is listed as follows:
1. Business access - The Internet provides customers the opportunity to browse and shop anytime, anywhere at their convenience. They can access such services from home, the office, or on the road, 24 hours a day, 7 days a week.
2. Unlimited marketplace - The Internet allows you to reach people around the world. It transforms a local business into a global distributor and offers products on a global customer base.
3. Online fast updating - You can update your E-Catalog anytime. This includes adding new products, or adjusting prices without the additional expense and time of making a traditional print catalog.
4. Customizable to the Customer - By tracking user profiles, you can customize your catalog to specific customers by offering product selections specifically tailored to their likes.
5. Lower Cost - Internet marketing is one of the lowest cost methods of marketing products. By using this method you can save on catalog printing, postage, telephone costs, operators, toll-free customer service numbers and more. You only use a fraction of the cost required by traditional methods to reach worldwide audiences.
An anti-utopianism point of view of e-commerce is listed as follows:
1. On-line Security - Since there are many people who have the skill and technology to intercept and spy upon electronic information that flows through the internet, there are still a large number of individuals who do not feel secure when they are shipping electronically. They fear their credit card numbers, names, and private personnel date may be stolen
2. Cost - Although it is not expensive to set up a simple Web site for advertising a company's products, full-functioning electronic commerce sites are much more costly. The main reason is that telecommunications remain expensive. It is easy to see that sale literature, catalogues, and pictures of products are vital for the success of purchasing products on-line. High bandwidth is necessary so that the immense amounts of data, such as graphics, sound, and video can be transmitted
3. Quality of Purchasing Product - When people shop on-line, they are unable to touch or see the products until they receive them through the mail. Therefore, there is a greater chance that they will not like the products they ordered because of the quality and color. This is a major reason why some people do not like online-shopping.