Analyse the contribution IT makes to the delivery of physical products from online retailers and discuss how this relates to the requirements of the consumer.

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Managing Information and Operations


Date of submission: 10th January 2005

Tutor: Mr Mark Henry

Compiled by: Prerna Thakkar

Student Number: 0428819

Table of Contents


Introduction 2

The Reality of E-Commerce 4

Internet Commerce 5

Convenience of Online Shopping 5

Consumer's Demands 7

IT Contribution 8

The Details Behind the Scenes 12

The Customer Perspective 15

Innovation v/s Technological Progress 16

Conclusion 17

Bibliography 19

Word Count 19

Topic A:

Analyse the contribution IT makes to the delivery of physical products from online retailers and discuss how this relates to the requirements of the consumer.


The 'dot-com' era is now fast receding into the past. But, throughout the world, managers are still grappling with turning the e-business concept into a business reality. Companies in some sectors have demonstrated success. In Europe, the low cost airlines such as easyJet and Ryanair have succeeded in migrating the majority of their customers to online booking in the space of a few years, while acquiring many new customers. Other companies have used the internet to gain competitive advantage. For example, the supermarket Tesco has launched a market-leading e-commerce service for customers and also uses the internet extensively for purchasing (Tesco Information Exchange).

Although many start-up companies which adopted innovative business models, have now failed, some are now achieving profitability. For example, now operating profitability across many countries in Europe include lastminute (main focus travel:, Kelkoo (consumer retail: and Wanadoo (Internet Service Provider: In some traditional industries, the impact of the internet has been immense. Banking, for example, shows that in a seven and half year period (May 1995 - December 2002), the number of households using online banking worldwide increased to 100 million as around 6,000 different financial institutions offered web based banking. (Source: Online Banking Report, Number 89, 10 December 2002). Meanwhile, many business-business companies and governments have found encouraging their customers to use their online services to be much more challenging.

In this 'post-dot-com' era, managers are looking to learn from the experiences of the early adopters, identifying success factors and incorporating best practices while trying to avoid the costly mistakes made by others.

The Reality of E-Commerce:

Most introductions to e-business open with a history of the growth of the Internet, and the predictions of the growth of e-commerce and e-business. E-Commerce is implemented using three technologies: Electronic Data interchange (EDI), Internet Commerce and Electronic Markets.

We limit our approach to covering commercial activities conducted on the Internet. E-commerce offers opportunities to dramatically improve the way that businesses interact with both their customers and their suppliers, that is, to make business negotiations faster, cheaper, more personalized, and more agile.

The number of web users who shop or buy products online is continuously increasing. However, searching and buying products via on-line can be frustrating due to the lack of help or decision support given to the user. Nowadays e-commerce applications are being improved from a first generation stage where buyers are humans who browse through a catalogue of commodities (e.g. books, computer components, films) and make purchases, often by means of a credit card transaction, to a second generation with a greater degree of automation on both the buyer's and the seller's side. The aim of this work was to develop a technology for facilitating 'Business-to-Consumer' (B2C) and 'Business-to-Business' (B2B) processes.

Internet Commerce:

Although the growth in Internet retailing has not turned out to be as strong as predicted in the late 1990s, it is clear that some e-tailers offer distinctive value propositions to certain customers. At the core of any business strategy is the ability to develop a sustainable competitive advantage. Current market leaders, such as Amazon, enhance the shopping experience by providing reviews and making suggestions based on past purchases. However products such as apparel can be difficult for customers to purchase over the Internet because of the need to touch, feel and try on products. Market leaders, like The Gap and cataloguer Lands' End, can be successful because of their prior customer base, strong brand identity, consistent quality and fit and outstanding service and guarantees.
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Convenience of Online Shopping:

'Convenience shopping online' is becoming increasingly popular with both adults and young people. Internet may be a good source for bargain hunting. The simplicity of online shopping can lure consumers into making purchases that may not qualify as a good deal. It is therefore imperative to know when a deal is really a deal!

There are advantages and disadvantages to shopping online that are similar to real world shopping. A few of them are listed below:


* The stores are never closed; 24/7 shopping.

* Convenience, no pressure ...

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