Introduction to Electronic Commerce
Online business has many names; e-Commerce, e-business, online shopping and others involving the use of the internet or a modern telephone or smart phone to place transactions for desired products and services. As you read, think about the power a successful online firm has over his store-based counterpart. What is online business? What is the role of the Internet and other communications media in providing an organization's e-business presence? What are some similarities and some differences between e-business and brick and mortar commerce? How can they complement each other? Are the days of brick-and-mortar stores coming to an end?
Why use the Internet?
Inefficiency risk
Failure to match competitors' unit costs–inefficiency risk–is a third strategic challenge. A major potential use of
the Internet is to lower costs by distributing as much information as possible electronically. For example, American
Airlines now uses its Web site for providing frequent flyers an update of their current air miles. Eventually, it may
be unnecessary to send expensive paper mail to frequent flyers or to answer telephone inquiries.
The cost of handling orders can also be reduced by using interactive forms to capture customer data and order
details. Savings result from customers directly entering all data. Also, because orders can be handled
asynchronously, the firm can balance its work force because it no longer has to staff for peak ordering periods.
Many Web sites make use of FAQs–frequently asked questions–to lower the cost of communicating with customers. A firm can post the most frequently asked questions, and its answers to these, as a way of expeditiously and efficiently handling common information requests that might normally require access to a service representative. UPS, for example, has answers to more than 40 frequent customer questions (e.g., What do I do if my shipment was damaged?) on its FAQ page. Even the FBI's 10 Most Wanted list is on the Web, and the FAQs detail its history, origins, functions, and potential.