E-Commerce

Web Presence

With the creation of the World Wide Web in 1990/1991, the idea of buying from the comfort of your own home was slowly becoming a reality. The idea of e-commerce began in the 80’s although the first sites didn’t appear until 1994. Examples of early e-commerce websites include Pizza hut and W H Smith, both of which are still online today. E-commerce was instantly popular and more businesses began to use the internet for selling products.

WHSmith was one of the first companies to launch an online E-commerce website along with Pizza Hut and Intershop

One revolutionary feature of E-commerce was the online/open catalogue. The catalogue is a database which stores information about each product for sale. Examples of this information include selling price and quantity. Categories are also used for the online catalogue to sort products easily. It is said that the idea of the online catalogue came from a real life store catalogue which also sorts all the products.

Not long after the birth of e-commerce, transaction websites began to appear online. These websites were different to ordinary e-commerce websites and allowed users to buy, sell and trade amongst themselves. The two main transactional websites (Ebay and Amazon) are still online today and are becoming more popular each year. Many other transactional websites were formed although Ebay and Amazon are the most successful with profits of $3.4m and $7m respectively.

With the increase of e-commerce usage, new features were developing. One example of these new features was ‘brick and click’. This involves the purchase of a product online and then, instead of the website delivering the product, the customer would pick it up in a ‘brick’ store. Brick and Click offer the advantages of both e-commerce and real life shopping for the customer. Brick and click is still a popular choice of shopping today compared to real life shopping and e-commerce.

Today, E-commerce allows users to easily choose from a wide range of products to buy

Advantages and disadvantages

Since its evolution, E-commerce has greatly increased in popularity with an estimate of $1.25 trillion being made by 2013. This is because of the number of advantages to both customer and business online. However,
this doesn't mean that E-commerce is without its disadvantages.

Despite the evolution of E-commerce, high street shopping is still popular choice of product purchase






Advantages for the customer

One advantage of e-commerce for the customer is that the internet offers a wider range of choice in terms of products. This means that a customer can use e-commerce to find a product that may not be available in store which would mean that it is a preferred choice to real life shopping.

Another advantage of e-commerce are the search functions that make finding products easier within the website. The search functions allow a customer to filter products through categories to find an exact product. However, this would not be as easy in a store where you would have to look for products on shelves. The easy-to-search feature of e-commerce also means that the customer can save time instead of finding products in store. Customers can also save time from buying at home instead of walking or driving to separate shops and stores. E-commerce also means that money can be saved in fuel costs for driving to those shops because E-commerce allows you to buy from a home or work computer.

Because of internet cookies, e-commerce sites of the user can save their preferences and settings when they visit again. This can make browsing the site quicker and more personal. One other advantage to the customer are the reviews and recommendations of certain products. The user can read these reviews and then make a decision based on what other buyers think about a certain product. Similar products can also be recommended by other users. Online users can also review and recommend particular e-commerce websites to other users based on their experiences on that website.

Disadvantages for the customer

However, e-commerce also has disadvantages towards the customer. One example of a disadvantage would be the extra shipping costs to deliver the order from its warehouse. Shipping costs can also vary in price depending on where the product warehouse is (you would pay more to have your product delivered from another country for example). However, a shop bought product would not cost you extra to actually buy that product. Delivery time is also inevitable when buying a product online whereas a shop bought product is with you instantly. Because the product needs to travel from a warehouse to you, buyers can expect an average of ten days to wait for an online order. Therefore, delivery waiting can be of an inconvenience if you need a product quickly.

If the waiting time isn’t enough, returning an online product can take even longer to arrange and send back. Firstly, there are some products you cannot return for certain reasons. Examples include personalised and consumable items. There is also a deadline you have to meet when returning products (usually 30 days after purchase). You then have to return the product via a store or mail, both of which require proof of purchase and other details. You may also want to buy another product to replace it (For example, buying a T shirt in a different size because it was the wrong size before).

There are also reasons why a buyer would want to return their product. One example would be damage of a product due to mishandling or delivery transit. Another reason would be the fact you can only rely on customer reviews to ‘know’ the product you are buying. In other words, you cannot see or try the product to understand if you really want it (see T shirt example in the paragraph above). However, buying products in store, you can see the quality of the product and see if it does have everything you would expect from it.

Despite the disadvantages, there is one reason alone that online users are most worried about when shopping online. This reason is the fact some users are afraid of online fraud. These users don’t trust e-commerce sites to keep their personal details safe and find it safer to avoid online shopping altogether. Identity theft and auction scams are examples of what online fraud can be responsible for with the average victim losing over $1750 in 2007.

Advantages for the business

E-commerce also provides many advantages and opportunities for businesses as well as customers. Using e-commerce, businesses can rely on fewer employees to work and less storage space for products. Overall, this means that businesses can save money from workers pay and storage space which leads to increased profits.

Because e-commerce is becoming more popular with customers, businesses are benefiting from more customers if they are using e-commerce. This means more profit from more potential customers. The number of customers can also increase due to footfall. Online stores can hold many more customers at one time compared shops in real life. This means that business benefit from more customers at one time, therefore profits are likely to increase.

Cookies can also be of an advantage to businesses using e-commerce. This is because cookies collect details of each customer which gives the business an idea of all their customers in total. Businesses use this information to their advantage by suiting and improving the customer service to the needs of the user. Furthermore, improvements of the customer satisfaction mean that users are likely to return and buy more products in the future. Both improving customer service and satisfaction therefore increase business profit. Customer details also provide businesses with user preferences and interests. This allows these businesses to use target advertising to hopefully attract potential customers to increase profits.

Disadvantages for the business

Despite the advantages, businesses also face the disadvantages of e-commerce. One of these disadvantages would be security issues. An online store would be responsible for keeping personal details such as addresses safe. However, some people might not trust that site (see fraud: disadvantages to the customer). This means that the business couldn't attract as many users as possible. Malicious attacks are also a threat to businesses and e-commerce websites. These malicious attacks can hijack website addresses and therefore, customers would avoid e-commerce sites for their online safety. This would finally result in the loss of customers.

Examples of E-commerce

Many businesses have used e-commerce to their advantage and others are entirely based on the idea of shopping at home. Tesco is one example of a website which uses e-commerce to suit the needs of the customer. As a supermarket, Tesco use e-commerce differently to other businesses. For those who don’t visit a Tesco supermarket, their website allows customers to choose their weekly shop and then book a time for it to be delivered. This form of e-commerce is designed for quick delivery of groceries that customers require quickly. As a business, Tesco was the first to introduce e-commerce in the form of supermarket shopping in 2006.

Tesco use vans such as this one to delivery groceries to many homes







Ebay and Amazon are two other examples of popular e-commerce sites. Both of these transactional websites which customers can buy sell and trade products. Ebay works as an online auction site which works in a similar way to a real auction. However, unlike a real auction, Ebay has other features such as ‘buy it now’ and separate stores set up by frequent users.

Along with Ebay, Amazon was founded in the mid 90’s and works as a massive online store in which anything can be bought. Amazon also deliver many products that are all bought online. Both sites are based around the idea of e-commerce and have proved popular with their customers.

The original design of the Ebay website

Personal experience

The increasing popularity of E-commerce means that I also use E-commerce to purchase products. Advantages such as the range of products and the search functions allow me to find the exact products I want easily. Ebay and amazon are two websites mentioned that I use to buy products.