Unit 34: E-commerce

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Unit 34: Assignment 1        5/5/2009


Unit 34 – E-Commerce

Assignment 1

Table of Contents


Task 1

Social Implications of E-Commerce

Changing Customer Perspective:

Value -         Customers will always want the best price when spending their money, and this is generally found in E-Commerce (on the internet). Any ‘bricks’ that are competing with ‘clicks’ will have serious difficulties competing with these prices due to overheads. Overheads include bills (water, electrical, etc.), assets, rent, etc. If a ‘click’ wants to be successful then they must offer deals and services to compete with other ‘clicks’ these could include: BOGOF, free postage and price comparisons.

Services -         ‘Bricks’ can usually offer better services than ‘clicks’ because they come into direct contact with the customer. The customer can ask the store for exactly what they want and how they want it and it can be done instantly. However, clicks can compete with this by offering a number of services on their sites, these could include: next day or even same day delivery, gift wrapping, recommendations (suggested using customers shopping history) and after sales aid (troubleshooting, online help).

Ease of Use -         Customers being used to walking around stores and finding everything in logical sections will expect the same practicality online. Any web site must by easy to read and navigate and must have the ability to create user accounts quickly and effortlessly. ‘Clicks’ have an advantage here as online sites are open for use 24/7 and going through the checkout can be as simple as pressing a few buttons.

Security -         Many people have a fear of the internet due to the fact that they must enter their personal details and worry about what becomes of it. Therefore, any ‘clicks’ must advertise secure and safe sites that protect customer details – especially bank details and contact information. This can usually be determined using https or if there’s a padlock next to the address bar.    

Impact on Business and Society as a Whole

E-commerce has impacted the world considerably over a very short period of time. There are now niches and markets available that didn’t exist less than 10 years ago, these include: media downloads (Mp3s, E-books, pod casts) and there are also services such as online advice and loans or you could now pay taxes and bills online. E-commerce allows not just the locals to buy from businesses but anyone on the internet; this however lowers profit from high street businesses because people don’t need to leave the home to shop. It is now possible to break into foreign markets that didn’t used to be possible. Also supplying stores has been made so much easier and quicker however this is also, now, much more competitive. Prices and services of suppliers drop constantly in ratio to how many goods are ordered. E-commerce allows stores to source their supplies from anywhere in the world, depending on size and weight of products and a wider range of information and actual suppliers are available. High street stores are facing financial challenges as a result of E-commerce; mainly due to the high overheads that they are paying. Whereas ‘clicks’ have hardly any of these costs so they can sell their products at a lower price, for the ‘bricks’ to compete with this they need to keep their prices at rock bottom and offer competitive promotions.  Any stores that can’t keep their heads above the e-water will eventually become redundant; this loss of high street stores lowers the quantity of jobs in retail – however more businesses are becoming ‘clicks’ causing a high demand of warehouse (low-wage) workers and IT specialists (high-wage). E-commerce has also enabled people to carryout a whole series of tasks, which they would usually do by post or telephone, online. These include: TV license, book theory and driving tests, tax returns, post offices, car tax, stamps, and foreign money exchange. This is easier, faster and can be done from home, on the other hand this may cause post offices to close and cause job losses. In conclusion, remember that not everyone has access to E-commerce: some people have no computer, no access to internet or simply can’t afford it.

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Economic and Social Impact due to Speed of Changes

Trading by e-commerce allows businesses to react to changes in the economy and society more quickly than a traditional business. High street stores would find lowering prices very difficult and time consuming because all price labels would have to be changed as well as the information on the barcodes along with any advertisement. However E-commerce businesses simply have to change their databases.  E-commerce has also opened a wide range of services and products that were formerly unheard of. This includes social networks such as: Facebook, MySpace, and Twitter. Also allows e-based ...

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