Transcript Computers: Understanding Technology, 3e

Chapter 11
Electronic Commerce
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Overview
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An Overview of Electronic Commerce
Online Shopping
Online Services
Peer-to-Peer Online Transactions
Transaction Payment Methods
Establishing an E-tailer Web Site
Business-to-Business Electronic Commerce
The Supply Chain: A B2B Model
Major Types of B2B Technologies
B2B in the U.S. Economy
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An Overview of Electronic
Commerce
What is electronic commerce?
– Electronic commerce – buying and selling of
products and services over the Internet
– Business-to-consumer electronic commerce –
companies use Internet to sell products and
services to customers and receive payment
– Business-to-business electronic commerce –
companies use Internet to conduct a wide range of
business activities with other companies
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An Overview of Electronic
Commerce
Popular
Business-toConsumer
Shopping
Sites
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An Overview of Electronic
Commerce
Popular
Business-toConsumer
Shopping
Sites
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Online Shopping
What are the advantages of online shopping?
– Convenience – consumers purchase what they
want when they want from their own homes
– Greater selection – online stores offer consumers
almost unlimited products
– Product information – consumers find detailed
information on a wide variety of products
– Ease of comparison shopping – consumers
quickly find comparable items at similar stores
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Online Shopping
Online Store
– seller’s Web site where customers can view and
purchase products and services
– seller groups products or services in categories that
link to a list of merchandise in each category
– user clicks desired category to view pictures,
descriptions, and prices
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Online Shopping
Online superstores
– offer an extensive array of products
– products are grouped into departments
– provides search features to find specific products
Online shopping malls
– connects its stores by hyperlinks on the mall’s
home page
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Online Shopping
Shopping
agent
continually
scans databases for
products
and prices
that are
displayed
when a user
requests
a price
comparison.
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Online
Shopping
The online
shopping
process
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Online Shopping
Tip checklist
for shopping
online
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Online Shopping
Milestones
in federal
privacy
legislation
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Online Shopping
Data is coded when sent over Internet and decoded by recipient.
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Online Shopping
Online shopping sites should provide
– easy to find, read, and understand terms of sale
– satisfactory degree of information about the
product being offered
– simple to follow directions for purchasing
– high level of customer service
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Online Services
Online Banking and Investing
– Online banking involves using a computer,
modem, and Internet to conduct routine banking.
– Users pay bills, transfer funds among accounts,
and transact other financial business online.
– Brokerage firms maintain Web sites so consumers
can purchase and sell stocks and other securities.
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Online Services
Online Travel
– allows users to research destinations, transportation,
and prices
– users can surf price and schedule combinations to sort
options by airline, arrival and departure times, price,
and duration of flight
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Peer-to-Peer Online Transactions
– Peer-to-peer online transaction venue is a Web site
forum where anyone may sell, buy, trade, or share
goods with other individuals.
– Online auction is a site to place an item for sale or
bid on items being offered for auction.
– Digital music distribution is the free distribution of
music over the Internet.
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Transaction Payment Methods
Electronic Funds Transfer (EFT)
– any transfer of money over the Internet
Check or Credit Card by Phone
– Electronic check (e-check) initiates an electronic
transfer of funds from customer’s checking
account to merchant.
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Transaction Payment Methods
Credit Account
– represents a customer’s promise to pay for online
purchases upon receipt of a periodic statement
Credit Cards and Debit Cards
– Credit card – small plastic card with information
that enables user to make purchases on credit
– Debit card – withdraws funds directly from
purchaser’s current checking or savings account
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Transaction Payment Methods
Smart Card
– user swipes card through reader attached to computer
and information is transmitted to e-tailer which
completes payment transaction
Digital Cash
– allows customer to pay for online purchases by
transmitting a number from one computer to another;
the number represents a specified amount of money
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Transaction Payment Methods
Electronic Wallet
– encryption software stores user’s personal, credit card,
and shipping information
Micro Payments
– enables buyers to purchase low-cost items on Internet
Person-to-Person Payment Systems
– allows consumers to transfer money through a credit
card or bank account
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Establishing an E-tailer Web Site
Registering the Domain Name
Internet Corporation for Assigned Names and
Numbers (ICANN) provides information about site
registration, allows lookup to see if domain name is
available, and provides information about how to
register site’s address with registrar.
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Establishing an E-tailer Web Site
Choosing Hardware and Software
– Next step is to determine the type of hardware and
software needed to create a storefront.
– A Web hosting service allows individuals or
businesses to use its Web servers to store Web pages.
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Establishing an E-tailer Web Site
Processing Payments
To process payments, you will need
– to obtain a merchant account
– to provide secure order forms at the site
– to use payment-processing software
– an electronic order form
– to use a commercial payment-processing service
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Establishing an E-tailer Web Site
Checklist for designing an effective site
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Establishing an E-tailer Web Site
Managing the Site
Customers expect e-tailer sites to
– reflect current product descriptions and prices
– show specials, new products or services, updated
information, or new images that encourage browsing
the site frequently
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Establishing an E-tailer Web Site
Advertising and Promoting the Site
Electronic methods to let shoppers know about your site
include
– co-advertise and co-promote with other sites
– links to other sites like yours, and vice versa
– submit site to search engines
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Establishing an E-tailer Web Site
Analyzing the Effectiveness of the Site
Site analysis is ongoing evaluation of an e-commerce
Web site and its activity.
– One form involves timing a Web site’s
ordering or processing activities.
– Another form provides users with a simple online
questionnaire that allows feedback.
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Establishing an E-tailer Web Site
Developing a Customer Focus
Customer relationship management (CRM) software
electronically manages the business/customer
relationship. It focuses on establishing and maintaining
good relationships with online customers, suppliers, and
other businesses.
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Business-to-Business Electronic
Commerce
How does the Internet support the supply chain
in B2B e-commerce?
– B2B e-commerce networks companies, suppliers,
agents, customers, and others in a supply chain.
– Procurement is finding products and services
at the best possible prices.
– Communicating with others in the supply chain can
be done through Web sites, intranets, internets,
extranets, and virtual private networks.
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The Supply Chain: A B2B Model
Electronic
commerce
technologies allow
businesses to
conduct activities
quickly and
efficiently on a
worldwide scale.
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The Supply Chain: A B2B Model
Types of information shared in the B2B model
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The Supply Chain: A B2B Model
An intranet
allows
departments
within a
business to
share
information
quickly and
easily.
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Major Types of B2B Technologies
The electronic data interchange (EDI) process
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Major Types of B2B Technologies
Payment and Transaction Systems
– Financial electronic data interchange (FEDI)
provides for electronic transmission of payment and
remittance information among a payer, payee, and
banks.
– Automated clearinghouse (ACH) is established to
transfer funds electronically from one account to
another.
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Major Types of B2B Technologies
Security Technologies
– Authentication identifies and individual and
confirms authorization to access a system.
– Electronic signature is a digital code attached to a
message to uniquely identify the sender.
– Trusted operating system isolates OS functions into
separate compartments and restricts access of
unauthorized users to key areas of systems.
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B2B in the U.S. Economy
General Electric Corporation
– Customers can view high-resolution photos of engine
parts they have sent in for repair.
– Site describes the defect and recommends whether
and how to fix it.
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B2B in the U.S. Economy
Wal-Mart’s Customer Inventory System
– Computers electronically transmit purchase orders,
shipping lists, invoices, and payments; eliminates
delays in shipping, obtains accurate pricing, and
better serves customers.
– Electronic funds transfers allows payments to be
electronically credited to suppliers’ bank accounts.
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B2B in the U.S. Economy
United Parcel Service (USP)
– Employees use personal computers to enter
information from customers who request package
pick up or trace.
– Drivers use handheld devices to scan bar codes for
product and destination information.
– Shipping label information can track packages and
inform customers of package status.
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On the Horizon
Based on the information presented in this
chapter and your own experience, what do
you think is on the horizon?
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