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It and retailing

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It and retailing


What is e-commerce?

E-commerce is the buying and selling of products and services by both businesses and consumers over the Internet. Such practices have exploded over the last year as security has improved with more and more consumers now buying goods and services online. This coupled with the computer revolution of the late twentieth century has lead to e-commerce now becoming the buzzword of trade and industry as hundreds of companies are now moving online in an attempt to broaden their product range and direct contact with customers.

Why has it grown so rapidly?

Firstly we must understand why companies are being drawn towards selling their products online. An e-commerce site that is implemented well can significantly lower both order taking costs up front and also customer service after the sale has been made. For example being located on the Internet means that place does not enter into the marketing mix of an e-commerce company. As its customers will not visit the business, it means having a prominent high street location is no longer of importance; in fact a business can be set up in someone's home (if space for storage allows!). Also when considering mail order companies there is no longer the need to endure the costs of designing, printing and sending out catalogues. These factors contribute to e-commerce companies being able to offer products at greatly reduced prices as overheads have been minimised.

A company now has the ability to provide customers with a catalogue that has a far more extensive range than that of which any mail-order catalogue could provide. Recently Amazon have advertised that they currently offer more than 3 million books, to further their service they also give the customer the opportunity to read a description of every book supplied and also other titles buyers of the book have purchased. It is inconceivable to imagine all this information being provided in any catalogue that comes through the letterbox.

So we now can see some of the benefits that firms encounter from locating on the web but what do the consumers get out of this? It is now far easier to collect market research and make reasonable comparisons as by using the Internet you have the ability to amass, analyse and control large quantities of specialised data. The Internet can give the opportunity for customers to try before they buy. For example the online record store Klik-Klik-Whirly-Bleep-Bleep gives the online shopper the opportunity to listen to any record before they buy it, an essential factor to regular purchasers of records and especially dj's.

There is also the potential of wider availability of hard-to-find products and wider selection of items due to the width and efficiency of the Internet. One such example being 'Squaddies Online', this company has developed its success by selling goods that are normal in everyday life in the United Kingdom but are sorely missed by those that are overseas for any great length of time. For instance amongst the current best selling items are Heinz Tomato Ketchup and HP Brown Sauce!

The increase in the ability to undertake market research has inevitably led to the reductions in prices as more suppliers are able to compete in an electronically open market place. This increase in competition has lead to better quality and variety of goods through expanded markets and the ability to produce customised goods. When the motorbike company Dukati recently launched their online site they sold their stock within 31 minutes of opening with a popular feature being giving the customer the opportunity of designing the exact colour scheme of the bike.

E-commerce equals success?

So far the benefits of e-commerce are outlined and you would be forgiven for immediately wanting to dream up your own way of becoming rich through the internet. But it is by no means plain sailing. Seven out of ten internet businesses located within the United Kingdom fail to trial their service before it is launched. Even then almost all are likely to have experienced problems and over a fifth are now experiencing significant customer service disruption as a result of sudden surges in demand or server overload.


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