ECOMMERCE

"Electronic commerce" or "E-commerce" is the term given to any type of business, or commercial transaction, that involves the transfer of information, ownership or rights to use a good or service across the Internet through linked computer systems. It covers a range of different types of businesses, from business to consumer (B2C) with consumer based retail sites, auction or music sites (www.amazon.co.uk, www.ebay.co.uk, www.itunes.co.uk etc), to business to business (B2B) exchanges trading goods and services between companies.

E-commerce includes:

• Business to consumer retailing online (also known as "E-tailing" or "virtual shopfronts") through Web sites with online catalogues and payment systems;
• The collection and use of demographic data through Web contacts;
• Electronic Data Interchange (EDI), the business-to-business exchange of data;
• E-mail and fax and their use as media for reaching prospects and established customers (for example, with newsletters);
• Business-to-business buying and selling (B2B).

As described on Wikipedia, Ecommerce can therefore "involve electronic funds transfer, supply chain management, e-marketing, online marketing, online transaction processing, electronic data interchange (EDI), automated inventory management systems, and automated data collection systems. Electronic commerce typically uses electronic communications technology of the World Wide Web, at some point in the transaction's lifecycle, although of course electronic commerce frequently depends on computer technologies other than the World Wide Web, such as databases, and e-mail, and on other non-computer technologies, such as transportation for physical goods sold via e-commerce."

Ecommerce removes barriers of time and distance. Trade can be global, at any time. The boundaries between "conventional" and "electronic" commerce will become increasingly blurred as more and more businesses move sections of their operations onto the Internet to exploit the vast competitive advantages of Ecommerce over traditional methods. When implemented properly, ecommerce is often faster, cheaper and more convenient than the traditional methods of bartering goods and services.

Ecommerce superceeds Electronic Data Interchange (EDI) which facilitated electronic transactions but required dedicated date links between suppliers and customers. Ecommerce using the Internet is far more accessible, straightforward and cost-effective, enabling companies to set-up multiple, ad-hoc links and to establish electronic marketplaces where suppliers and potential customers come together and trade for mutual benefit.

Online shopping systems vary in complexity, from basic "out of the box" solutions to fully functional systems able to handle many transactions from initial promotion to the dispatch and tracking of shipments. However most systems share the same basic format, using a "Shopping Cart" principle by which customers browse goods or services online, select their purchases and then "checkout" to complete their purchase.

As well as providing a catalogue and selection system, Shopping cart software can also track customers' behaviour providing vital sales and marketing intelligence and facilitate electronic payment using credit cards or online payment systems such as PayPal and WorldPay:

• PayPal - Founded in 1998, PayPal, an eBay Company, enables any individual or business with an email address to securely, easily and quickly send and receive payments online. PayPal's service builds on the existing financial infrastructure of bank accounts and credit cards and utilises a proprietary fraud prevention system to create a safe, global, real-time payment solution. PayPal has quickly become a global leader in online payment solutions with 100 million account members worldwide. Available in 190 countries and regions around the world, buyers and sellers on eBay, online retailers, online businesses, as well as traditional off-line businesses are transacting with PayPal.


• WorldPay - For millions of people around the world, WorldPay is a trusted and secure payment system. Part of the Royal Bank of Scotland Group, the 5th biggest banking group in the world, WorldPay payment solutions are used by thousands of businesses, big and small. WorldPay customers can accept payments over the internet, by phone, fax and mail by all the major credit cards, debit cards and local payment schemes like Maestro, Laser, Electron and more. Bank transfers (such as the German ELV system), instalments, standing-order and direct-debit style payments can also be processed, all in the customer's currency and language - wherever they are in the world. WorldPay is the only way to accept such a universal range of payments through one merchant account, one payment processing system, 24/7.

The opportunity is huge, the growth of e-commerce in recent years has been phenomenal. According to the October 2006 Forrester Research report entitled, "US eCommerce: Five-Year Forecast And Data Overview, "Nontravel online retail revenues will top the quarter-trillion-dollar mark by 2011".

Research published in May 2007 by IMRG, the industry body for global e-retailers, predictedthat £42bn would be spent online by UK shoppers this year, equivalent to London's West End sales nine times over, matching the turnover of the supermarket giant Tesco. Some 860 million parcels will be shipped to the UK's 26 million internet shoppers and each online consumer will spend £1,600 on average.

This soaring growth in internet sales is also leading to a revolution in shopping habits as reported in the Independent on 1 May 2007. As a result of the boom in online transactions the traditional "bricks and mortar businesses" are following specialist e-retailers on to the web:

"The fashion retailer ASOS, which specialises in selling versions of celebrity outfits online, has posted an 111 per cent increase in annual sales. Taking aside the fact that last year's comparatives were hit by the explosion at the nearby Buncefield fuel depot, turnover was still up around 80 per cent. And in March 2007, ASOS recorded its highest traffic levels ever, with more than 2 million visitors to its website."

"It is just 13 years since the first secure internet shopping transaction took place in August 1994 - the sale of a CD in the US. By the time of the dotcom gold rush in 2000, internet sales had reached £800m a year. Despite fears over the future of the internet after the dotcom bubble burst and initial consumer concerns about the safety of shopping by credit card online, e-commerce sales have exploded over the past six years, growing by a whopping 3,500 per cent."

There is tremendous potential for all businesses and organisations to grow through ecommerce but to succeed they must be customer-oriented and manage all technical and organisational factors efficiently. A business or organisation must not only offer products or services that are in demand and can be sold at profit, but also provide good customer service pre- and post- sale, dependable communications and maintain a user-friendly, current, informative website with the necessary software to manage the transaction.

[This section is currently being updated - please check back soon.]