Objective 3

Investigate how e-commerce has affected the way people buy goods and services

One definition of E Commerce

E Commerce is the buying and selling of goods and services, and the transfer of money, through the internet.

Some history

1970s – Electronic Data Interchange (EDI) & Electronic Funds Transfer (EFT) introduced to send commercial documents electronically

1980s – widespread growth & acceptance of credit cards, automated teller machines (ATMs – cashpoints) & telephone banking introduced

Some history

Early 1990s – development of the world wide web on the internet

Late 1990s – security protocols sufficiently well developed to allow safe, cheap & easy trading to the general public

2000 onwards – massive growth in e-commerce through the world wide web

Types of E commerce Shopping for home delivery Downloading music and videos Booking holidays, train & air tickets, theatre

& concert tickets Internet banking Buying insurance and other financial

products E Bay and other auction sites On-line gambling

The Size of E Commerce in UK

One in ten retail sales now takes place online

£80 billion is either spent or influenced by the internet

Online retail sales have grown by 45 per cent year-on-year for the past six months and have increased 2,000 per cent in the past six years.

According to IMRG Index survey May 2006

Ebay is one of the most popular E-commerce sites in the worldwide

The British are the biggest users of E-bay with sales last year equivalent to £50 per person

In December 2007 alone 15 million Brits visited Ebay

In 2007 Ebay worldwide sold $59 billion worth of goods

The most expensive item every bought on Ebay was a Gulfstream jet for $4.9 million!

Disadvantages of e-commerce You cannot physically look at and feel the

products before buying You have to wait for them to be delivered and

you may not be at home You may have to pay postage costs You do not get the personal touch of shopping

locally Local shops are going out of business which is

bad for local high streets and people without computers such as old people

The task

Write a definition of e-commerce in your own words

List at least 5 types of e-commerce and give at least one example website for each type

Add screen prints of the sites

Choice Shopping on the internet gives you a much

greater choice than shopping on the high street

Internet retailers can stock a much wider range as they run their entire operation from one warehouse holding all their stock instead of running many high street shops

You can visit several different websites before you make your final choice

Lots of specialist retailers selling things you would not find in your local shops

Amazon.co.uk25,000,000 book titles stocked367,000 DVDs2,000,000 CDs500,000 toys and games

Amazon Warehouse

Convenience

You can shop on the internet any time any place

You can have the goods delivered to your home or work address or directly to friends or family as a gift

Shopping for groceries means you don’t have to drive to the shops and drag the kids round the supermarket – they deliver to your door at a time you decide

Convenience

Convenience more convenient due to 24/7 access.

INTERNET BOOK SHOP

Cost Shopping on the internet can be cheaper

than shopping locally as you can visit several sites to find the best deals

Internet retailers have lower operating costs so they can sell products cheaper than high street shops – renting a warehouse on an industrial estate is cheaper than paying rent for a shop on the high street

You can buy second hand goods from auction sites such as eBay

You have to pay delivery costs which can push up the prices but you save money by not driving and parking

Flexibility

Greater flexibility, e.g. wider payment options; opportunity to shop around for the best deals and compare prices, etc.

Location You can access the

internet from home, office, libraries, internet cafés

You can have your purchases delivered to home, office or a designated pick up point

You are not restricted to using the retailers in your local town

The Future of the High Street?

Your Task Explain how e-commerce has changed the

way people buy goods and services. Discuss each of the following ways in which e-commerce has changed the way people shop:

Choice, convenience, cost, location, flexibility Remember to include bad as well as good

things For each category give at least one example

website (e.g. Tesco, Amazon, Compare the Market, Virgin Holidays)

Ask friends and family what sites they use and the benefits they get from using them to help with the task above (higher grades only)