eCommerce Online Shopping
Online Shopping is the process consumers go through to purchase products or services
over the Internet. An online shop, eshop, e-store,
internet shop, webshop, webstore, online store, or virtual store evokes the physical analogy of buying products or services at a
bricks-and-mortar retailer or in a shopping mall.
The metaphor of an online catalog is also used, by analogy with mail order catalogs. All types of stores have retail web sites, including those
that do and do not also have physical storefronts and paper catalogs. Online Shopping
is a type of electronic commerce used for business-to-business (B2B) and business-to-consumer (B2C) transactions.
Webshop:
The term "Webshop" also refers to a place of business where web development, web hosting and other types of web related activities take place
(Web refers to the World Wide Web and "shop" has a colloquial meaning used to describe the place). Buying online introduced new ways of reducing
costs by reducing the number of staff needed. It is a more effective way of getting products to people and spreading into different demographics.
Benefits of online Shopping
- 1.Bargaining power of consumers. They enjoy a wider choice
- 2.Supplier power. It is more difficult for consumers to manage a non-digital channel.
- 3.Internet increases commoditisation
- 4.Threat of new entrants. Online means it is easier to introduce new services with lower over-heads
- 5.Threat of substitutes
- 6.Rivalry among competitors. It is easier to introduce products and services to different markets
History of Online Shopping:
The idea of online shopping predates the World Wide Web, for there are earlier experiments involving real-time transaction processing from a domestic
television. The technology, based on Videotext, was first demonstrated in 1979 by Michael Aldrich, who designed and installed systems in the UK,
including the first Tesco pilot system in 1984. The first B2B was Thomson Holidays in 1981.
In 1990 Tim Berners-Lee created the first World Wide Web server and browser. In 1992 Charles Stack created the first online book store,
Book Stacks Unlimited (aka Books.com), two years before Jeff Bezos started Amazon. In 1994 other advances took place, such as
online banking and the opening of an online pizza shop by Pizza Hut. During that same year, Netscape introduced SSL encryption of
data transferred online, which has become essential for secure online shopping. In 1995 Amazon expanded its online shopping, and in
1996 eBay appeared.
Customers:
In general, shopping has always catered to middle class and upper class women. Shopping is fragmented and pyramid-shaped. At the pinnacle
are elegant boutiques for the affluent, a huge belt of inelegant but ruthlessly efficient “discounters” flog plenty at the pyramid’s
precarious middle. According to the anaylsis of Susan D. Davis, at its base are the world’s workers and poor, on whose cheapened labor
the rest of the pyramid depends for its incredible abundance. Shopping has evolved from single stores to large malls containing many
stores that most often offer attentive service, store credit, delivery, and acceptance of returns. These new additions to shopping
have encouraged and targeted middle class women.
In recent years, online shopping has become popular; however, it still caters to the middle and upper class. In order to shop online,
one must be able to have access to a computer, a bank account and a debit card. Shopping has evolved with the growth of technology.
According to research found in the Journal of Electronic Commerce, if we focus on the demographic characteristics of the in-home shopper,
in general, the higher the level of education, income, and occupation of the head of the household, the more favourable the perception
of non-store shopping. An influential factor in consumer attitude towards non-store shopping is exposure to technology, since it has
been demonstrated that increased exposure to technology increases the probability of developing favourable attitudes towards new shopping channels.
Online shopping widened the target audience to men and women of the middle class. At first, main users of online shopping were young men
with a high level of income and a university education. This profile is changing. For example, in USA in the early years of Internet
there were very few women users, but by 2001 women were 52.8% of the online population. Sociocultural pressure has made men generally
more independent in their purchase decisions, while women place greater value on personal contact and social relations.
Trends:
One third of people that shop online use a search engine to find what they are looking for and about one fourth find websites by word of mouth.
Word of mouth has become a leading way by which people find shopping websites. When an online shopper has a good first experience with a certain
website, sixty percent of the time they will return to that website to buy more.
Books are one of the things bought most online. However, clothes, shoes, and accessories are all very popular things bought online. Cosmetics,
nutrition products, and groceries are increasingly being purchased online. About one fourth of travelers buy their plane tickets online
because it is a quick and easy way to compare airline travel and make a purchase. Online shopping provides more freedom and control than
shopping in a store.
From a sociological perspective, online shopping is arguably the most predictable way to shop. One knows exactly what website to go to,
how much the product will cost, and how long it will take for the product to reach them. Online shopping has become extremely routine and
predictable, which is one of its great appeals to the consumer.
Logistics:
Consumers find a product of interest by visiting the website of the retailer directly, or do a search across many different vendors using a
shopping search engine. Once a particular product has been found on the web site of the seller, most online retailers use shopping cart software
to allow the consumer to accumulate multiple items and to adjust quantities, by analogy with filling a physical shopping cart or basket in a
conventional store. A "checkout" process follows (continuing the physical-store analogy) in which payment and delivery information
is collected, if necessary. Some stores allow consumers to sign up for a permanent online account so that some or all of this
information only needs to be entered once. The consumer often receives an e-mail confirmation once the transaction is complete.
Less sophisticated stores may rely on consumers to phone or e-mail their orders (though credit card numbers are not accepted by e-mail,
for security reasons).
Product delivery:
Once a payment has been accepted the goods or services can be delivered in the following ways.
- Download: This is the method often used for digital media products such as software, music, movies, or images.
- Shipping: The product is shipped to the customer's address.
- Drop shipping: The order is passed to the manufacturer or third-party distributor, who ships the item directly to the consumer, bypassing the
retailer's physical location to save time, money, and space.
- In-store pickup: The customer orders online, finds a local store using locator software and picks the product up at the closest store.
This is the method often used in the bricks and clicks business model.
- In the case of buying an admission ticket one may get a code, or a ticket that can be printed out. At the premises it is made sure that the
same right of admission is not used twice.
Shopping cart systems:
- Simple systems allow the offline administration of products and categories. The shop is then generated as HTML files and graphics that can be
uploaded to a webspace. These systems do not use an online database.
- A high end solution can be bought or rented as a standalone program or as an addition to an enterprise resource planning program. It is usually
installed on the company's own webserver and may integrate into the existing supply chain so that ordering, payment, delivery, accounting and
warehousing can be automated to a large extent.
- Other solutions allow the user to register and create an online shop on a portal that hosts multiple shops at the same time.
- Open source shopping cart packages include advanced platforms such as Interchange, and off the shelf solutions as Satchmo, osCommerce, Magento,
Zen Cart, OpenCart, VirtueMart, Flying Cart and PrestaShop or the dual licensed PhPepperShop.
- Commercial systems can also be tailored to ones needs so that the shop does not have to be created from scratch. By using a framework already
existing, software modules for different functionalities required by a web shop can be adapted and combined.
Concerns
Fraud and security concerns:
Given the lack of ability to inspect merchandise before purchase, consumers are at higher risk of fraud on the part of the merchant than in a
physical store. Merchants also risk fraudulent purchases using stolen credit cards or fraudulent repudiation of the online purchase. With a
warehouse instead of a retail storefront, merchants face less risk from physical theft.
Secure Sockets Layer (SSL) encryption has generally solved the problem of credit card numbers being intercepted in transit between the consumer
and the merchant. Identity theft is still a concern for consumers when hackers break into a merchant's web site and steal names, addresses and
credit card numbers. A number of high-profile break-ins in the 2000s has prompted some U.S. states to require disclosure to consumers when this happens.
Computer security has thus become a major concern for merchants and e-commerce service providers, who deploy countermeasures such as firewalls
and anti-virus software to protect their networks.
Phishing is another danger, where consumers are fooled into thinking they are dealing with a reputable retailer, when they have actually been
manipulated into feeding private information to a system operated by a malicious party. Denial of service attacks are a minor risk for merchants,
as are server and network outages.
Quality seals can be placed on the Shop web page if it has undergone an independent assessment and meets all requirements of the company
issuing the seal. The purpose of these seals is to increase the confidence of the online shoppers; the existence of many different seals,
or seals unfamiliar to consumers, may foil this effort to a certain extent.
A number of resources offer advice on how consumers can protect themselves when using online retailer services. These include:
- Sticking with known stores, or attempting to find independent consumer reviews of their experiences; also ensuring that there is
comprehensive contact information on the website before using the service, and noting if the retailer has enrolled in industry oversight
programs such as trust mark or trust seal.
- Before buying from a new company, evaluate the website by considering issues such as: the professionalism and user-friendliness of the site;
whether or not the company lists a telephone number and/or street address along with e-contact information; whether a fair and reasonable
refund and return policy is clearly stated; and whether there are hidden price inflators, such as excessive shipping and handling charges.
- Ensuring that the retailer has an acceptable privacy policy posted. For example note if the retailer does not explicitly state that it
will not share private information with others without consent.
- Ensuring that the vendor address is protected with SSL (see above) when entering credit card information. If it does the address on the
credit card information entry screen will start with "HTTPS".
- Using strong passwords, without personal information. Another option is a "pass phrase," which might be something along the lines:
"I shop 4 good a buy!!" These are difficult to hack, and provides a variety of upper, lower, and special characters and could be site specific
and easy to remember.
Although the benefits of online shopping are considerable, when the process goes poorly it can create a thorny situation. A few problems that
shoppers potentially face include identity theft, faulty products, and the accumulation of spy ware. Most large online corporations are
inventing new ways to make fraud more difficult, however, the criminals are constantly responding to these developments with new ways to
manipulate the system. Even though these efforts are making it easier to protect yourself online, it is a constant fight to maintain the lead.
It is advisable to be aware of the most current technology and scams out there to fully protect yourself and your finances..
One of the hardest areas to deal with in online shopping is the delivery of the products. Most companies offer shipping insurance in case the
product is lost or damaged; however, if the buyer opts not to purchase insurance on their products, they are generally out of luck.
Some shipping companies will offer refunds or compensation for the damage, but it is up to their discretion if this will happen. It is
important to realize that once the product leaves the hands of the seller, they have no responsibility (provided the product is what the buyer
ordered and is in the specified condition).
Privacy:
Privacy of personal information is a significant issue for some consumers. Different legal jurisdictions have different laws concerning consumer
privacy, and different levels of enforcement. Many consumers wish to avoid spam and telemarketing which could result from supplying contact
information to an online merchant. In response, many merchants promise not to use consumer information for these purposes, or provide a
mechanism to opt-out of such contacts.
Brick-and-mortar stores also collect consumer information. Some ask for address and phone number at checkout, though consumers may refuse to
provide it. Many larger stores use the address information encoded on consumers' credit cards (often without their knowledge) to add them to a
catalog mailing list. This information is obviously not accessible to the merchant when paying in cash.
References
- Cumming, Maeve, et al. Management Information Systems, Third Canadian Edition. Canada: McGraw-Hill Ryerson, 2006.
- https://www.microsoft.com/windows/ie/ie6/using/articles/shopping.mspx
- http://money.cnn.com/news/newsfeeds/articles/prnewswire/LAM05119112007
- 'Videotex-Key to the Wired City' Michael Aldrich Quiller Press London 1982
- Wikipedia.org
