E-COMMERCE TRENDS AND FORECASTS

E-COMMERCE TRENDS AND FORECASTS

Studies of web usage and e-commerce growth show that the web is a growing market. All indications are that the web user population will continue to grow rapidly in the next 5 to 6 years. In addition even though the web population is currently dominated by English speakers the number of users in other parts of the world is growing. The web has already become an important part of the millions of people’s lives.

THE RAPIDLY GROWING WEB

Let’s take a look at some of the statistics that illustrate the growth of the web which gathers information from a variety of freely available sources on the web

Ø  In 1999 almost half of the internet users worldwide were outside of the U.S  and Canada , the number for 2000 will probably push this over the 50 percent mark.

Ø  Women are closing the gap in internet shopping. In 1995 the represented about 36 percent of internet shoppers, today the number is 41 percent.

Ø  In 1999, 40 percent of the adult population of the U.S and Canada were using the internet regularly. That number has been growing steadily since 1995.

Ø  The average user spends 5 hours and 28 minutes per week on the web

DOMINANT TRENDS IN THE EVOLUTION OF E-COMMERCE

As use of the web for purchasing goods becomes more widespread and global there are several dominant trends that will shape the evolution of e-commerce internationalization, standardization, personalization, instant fulfillment, mobile internet access, custom pricing and intelligent. The following sections describe these trends in detail.

INTERNATIONALIZATION

The expectation is that the user population of the web will continue to grow very rapidly and become more global. This internationalization of the web means that businesses conducting e-commerce on the web need to address the needs of non-English speakers if they want to access this global market. More information on the needs of non-English speakers can be found at the W3Cs internationalization site.

STANDARDIZATION

The growing number of electronic transaction on the web also requires the adoption of e-commerce standards by every company that wants to be a major player in the marketplace. These standards include data interchange and such user protection as meaningful privacy statements and trustworthy security system.

PERSONALIZATION

Personalization refers to the growing practice of gathering information about established customers and providing a personalized web site for them when they return to your site. Information on products or topics in which users are interested cab be presented as soon as they arrive at your site. This helps build loyalty. Amazone.com is a good example of a site that tailors information to the user.

INSTANT FULFILLMENT

A trend in the purchase of digital products, such as software is instant fulfillment. Instant fulfillment means that the user receives the product almost immediately after he or she purchases it—via download from the web. Not only have online software venders begun to offer the services, but e-book venders such as Barnes and Noble are also conducting order fulfillment via download.

MOBILE INTERNET ACCESS

Many people believe that wireless internet access using handheld devices, such as personal digital assistants and mobile phones, will become more popular than using the web through desktop computers.

Because of the limited graphical and processing capabilities of these devices, a special internet protocol called the wireless application protocol has been development to provide versions of web sites that are suitable for these devices. To accommodate the growing number of users who will want to purchase products via their wireless devices, e-commerce businesses need to plan to implement WAP in the near future. Some of the internet businesses that are taking advantage of the wireless trend are providers of services that help web sites make their content viewable on wireless devices. The leading such service is currently Avantgo.

CUSTOM PRICING

Custom pricing is being pioneered by Priceline.com an e-commerce site where a user can specially the price he or she wants to pay for a particular service. Currently the site offers airline tickets, hotel rooms, new cars , home financing , rental cars and long distance service. Service providers review each request and if one of the providers accepts, the user is usually bound to following through with the purchase. This is a novel business concept enabled by e-commerce on the web

INTELLIGENT AGENTS

Intelligent agents are software that acts automatically on behalf of the user. These agents will eventually result in a vast improvement in internet searching. Because of intelligent agent ability to understand concepts and search for related topics, this agent is better able to provide relevant search results for users. A good example of intelligent agent technology in use today is Apple Computers Sherlock functionally.

FORCES DRIVING E-COMMERCE

FORCES DRIVING E-COMMERCE

The speed at which the web has brought e-commerce to the average person is astounding. In August 1995, there were 18 million internet users in the U.S and Canada. By April 1999 that number had skyrocketed to 92 million of these 60 percent were online shoppers.

Consequently new e-commerce sites are being developed and launched very rapidly. Given the downturn in the stock market fortunes of many e-commerce companies in 2000, the casual observer might be prompted to wonder why business continue to feel that a web presence is vital.

Despite the drop in stock prices of “dot.com” companies e-commerce is rapidly becoming a staple of the business world. Indeed this may be why the prices dropped; perhaps the “pie-in-the-sky” valuations of e-commerce ventures were are consequence of the type surrounding the new industry. Now that this industry is more established and traditional companies are also venturing into e-commerce the stock prices are more commensurate with those of promising companies in other industries.

There are several forces that are driving the development of new e-commerce Web sites. As in the physical world of commerce there are three key players.

Ø  BUSINESSES: Businesses want a piece of the pie. The number of people on the web and their demographic are impressive. The pie is still rapidly getting bigger. Also online consumers are not the only market available to web businesses. Increasingly businesses are using the web as a means to reduce the cost of conducting inter and intra company commerce. Inter- company e-commerce also known as B2B e-commerce reduces costs by avoiding middlemen. Intra-company e-commerce reduces costs by eliminating paperwork.

Ø  CUSTOMERS: There are many benefits of e-commerce for customers. At the simplest level e-commerce makes the acquisition of goods and services much less burdensome in terms of time and effort. Customers also want privacy and security while benefiting from the advantages that the web provides.

Ø  GOVERNMENT: Government entities are still trying to figure out how or whether to take an active role in governing the internet at all. One of the major issues with governance of the internet is that it’s a global entity and as such has no clear boundaries of jurisdiction.

KEY CONCEPTS FOR E-COMMERCE

KEY CONCEPTS FOR E-COMMERCE

Before get into the detail of e-commerce business and site development, it’s important that you understand some of the lingo.

COMMERCE

Commerce is the exchange of goods and services for money. This definition of commerce holds true for any type of commerce as well as any type of money. The following three key capabilities need to be provided by a merchant in any type of commerce.

·         COMMUNICATION: This is the method of transferring information from the buyer to the seller. For example when a shopper makes a purchase from a real world bookstore the shopper presents the books he or she wishes to buy and a method of payment such as cash, check or a credit card.

·         DATE MANAGEMENT: This dictates the exchange format of the information. In the case of check your account number is preprinted on the check. When it’s processed by the business bank the business uses the number to request the funds from your bank. With a credit card the transaction is more immediate. Your credit card number is submitted for approval over a private digital network (PDN) and an almost instant response is received.

·         SECURITY: The private digital network provides the necessary security for the transaction. You are also given the customer copy of your receipt and any other duplicates thus providing security for your credit card information. The cashier provides security for check purchase by storing the check in a secure area of the register until it’s taken to the back office to be processed.