Section 1-3 Why It’s Important E-commerce has revolutionized the business world, making it essential for companies in virtually every industry to have an online presence. Understanding the mechanics of the electronic marketplace will help you to appreciate its nature, scope, and importance. Early 1990s - $60 billion 2009 – estimated over $900 billion 3 major areas – consumer (individuals), retail (businesses), auctions Section 1-3 1

Section 1-3 Key Terms electronic commerce bricks-and-mortar business multichannel retailer pure-play retailer Electronic commerce – conducting business and communication transactions by electronic means Section 1-3 2

The Evolution of Electronic Communication The introductory stage of the computer revolution lasted about four decades, when the Internet was still in the stages of development, revision, and refinement.   The permeation stage of the computer revolution began when computer usage took hold in personal lives, workplaces, homes, and schools. This continues today. Morse Code, telegraph – cables on the floor of the ocean, 1866 – satellite transmission – 1990s, workplaces, libraries, schools, homes, Internet, World Wide Web – 1st companies to do e-commerce, Pizza Hut, Reebok, FedEx Section 1-3 3

Characteristics of E-Commerce A bricks-and-mortar business is a traditional business that does not engage in e-commerce. bricks-and-mortar business a business with a physical storefront Section 1-3 4

Characteristics of E-Commerce A multichannel retailer has a physical location and an e-commerce component. multichannel retailer a retailer that sells its products via traditional channels (catalog, bricks-and-mortar, and telephone) as well as via an online channel Section 1-3 5

Characteristics of E-Commerce While some companies generate sales from both real-world and online storefronts, pure-play retailers mainly sell online. pure-play retailers retailers that sell primarily through the Internet Section 1-3 6

Purpose of E-Commerce The basic goal of e-commerce is to reach and transact business with customers using electronic means.   E-commerce is bringing new opportunities, challenges, and adventures to today’s business world. Transcends geographic boundaries Allows businesses to use new sources of advertising, selling, and distribution E-mail, advertisements, specials – low cost advertising On-line surveys, chat rooms- helps companies understand customer demographics, buying trends, and product preferences Section 1-3 7

Section 1-3 Review 1. How can the introductory and permeation stages of the computer revolution be differentiated? Describe how e-commerce has changed business. What jobs has e-commerce created? 2. Section 1-3 Review The introductory stage lasted about four decades, when the Internet was still in the stages of development, revision, and refinement. The permeation stage of the Internet started when computer usage took hold in personal lives, workplaces, homes, and schools. This continues today. Customers no longer have to visit or call a store to purchase a product or service. E-commerce allows customers to select and purchase almost anything they desire at any time in the online marketplace. E-commerce has created technology jobs, including computer programmers, system analysts, and network administrators. Additional jobs, including order handlers and customer service technicians, have also been created by businesses that take part in e-commerce. 3. Section 1-3 8

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