E-Commerce Essay, Research Paper

E-commerceAs the end of the century draws near we are coming into a new technological era where business relies on information and consumer controlled content. E-commerce is the sale of products and/or services over the Internet that are shipped to the customers that order them via UPS, FedEx, USPS and other miscellaneous shippers. It is usually paid for by credit card or a pre-paid account. There are however, other means of paying. E-commerce, a small trend in some people’s eyes, has made great strides and will change the way we do business in the next century.There are simply too many e-businesses to name here but there are a few worth mentioning. Amazon.com, an on-line retailer, not only sells books but also offers many other products to its consumers. They offer everything from music to gifts and DVDs (Digital videodiscs). They have recently added auctions. Another is Homegrocer.com, which is what it sounds like; a grocery store on the Internet. This is a very good idea. It’s simple to get what you need as long as you don’t need it within the day. Shipping time is one day. One problem with this is that you can only have dry non-perishable foods shipped. The products are shipped one-day via FedEx (Ervin, F1). CarPoint is the Internet’s on-line car retailer. Here customers can compare new and used models of cars that range from Hyundai to Porsches. The web site also offers financing and dealership lists, and will even find the car you want at a nearby dealer. However, you still have to sign on the dotted line at the dealership. Saturn.com has changed that and mixed it up a little. There you can order a custom built Saturn and have it delivered right to you door. Saturn’s web site allows users to avoid the hassles of shopping for a car, but there is still that all-important test drive.Last, there is the shining star of E-commerce, Cisco Systems, who through brilliant thinking, imaginative technological innovation, and hard work changed into a virtual enterprise in about three years. Just two years ago Cisco accounted for the majority of E-business conducted throughout the world all by itself. Its web site generates two thirds of its current business (Siebel, p.173). The Internet was created in the 1970s when the U.S. government and universities wanted to have their computers communicate with each other. With that, they created the first actual working Intranet (IntrAnet – A small private network of computers; usually used in business). This Intranet was the first small step toward connecting the world’s computers in the virtual world we call the Internet. Why didn’t we see E-commerce in the 1970s or even the 1980s, you ask? The big reason is that there wasn’t a market. The only people who used the Internet in the 1970s and 1980s were young computer geeks like Steve Jobs (Founder of Apple Computer). Another big reason was that the technology was not ready for handling such a big task. There was no security on the net and no real net format. The age of visual computing didn’t start until the late 1980s and early 1990s. Access speed was also a big issue. Back then it could have taken an hour just to download a picture of the product you were buying, and that’s obviously way too long to make it work. Speed and immediacy will help E-commerce to thrive. Rome wasn’t built in a day, however, a Geocities site can be built in a half-hour. (Builders and Titans, 137)The technology has now grown enough to allow E-commerce to be a booming business not only on the net but also in the stock market where billions have been made. The technology now has a new standard for the transactions. E-commerce is now the biggest shopping mall in the world where you can buy anything you could ever possibly need from shirts to cereal to your car. Last Christmas, Santa found a new way into the home. Millions of shoppers logged onto the Internet to do their Christmas shopping. They bought books, toys, music, and other gifts from computers hooked up by phone lines and cable modems to the virtual stores (Jung, C1). Skymall, the nations largest seller of goods through catalogues on airplanes, said its Internet sales tripled to $1 million, from $300,000 a year ago and it expects a sevenfold gain in its Internet sales. Jupiter communications, a new-media analyst firm, reports sales at Internet retailers of $2.3 billion during the last Christmas season (C1).”Technology is reshaping this economy and transforming businesses and consumers”, says Commerce secretary William Daly. “This is about more than E-commerce, or e-mail, or e-trades or e-files. It is about the ‘e’ in economic opportunity” (Feder, C1). The high tech industry today accounts for more than eight percent of the national output of goods and services, with the computer and communications sectors growing twice as fast as the rest of the economy (Linking up to Success, C1). By 2002, commerce on the Net is expected to increase tenfold to a whopping $400 billion, according to International Data Corporation (Koprowski, 32). Researchers say that online business to business commerce, in the next five years, will account for $327 billion annually, compared to $17 billion for online consumer commerce (33). In 1996 the Bank of Montreal Group of companies alone spent $62 million on employee technology/Internet education (Tapscott, 138). From 1996 to 1998 the number of web users more than doubled, growing from 28 million to 57 million (McGarvey, 32).In his book Darwin Among the Machines: The Evolution of Global Intelligence, George Dyson writes:Although difficult for our fish eyes to see, we are in the bowl of a transition, a period of vast change from a materials-based to information-based economy. It is bound to be difficult, but we are still able to manage machines. Critics say that the World Wide Web is a passing stage (right) and doomed to failure because it is so pervaded by junk (wrong). Yes, most links will be relegated to oblivion, but this wasteful process, like many of nature’s profligacy’s, will leave behind a structure that could not otherwise have taken form (Dyson, 172).

According to Dwayne Walker, former Microsoft executive, now running TechWave, “People already are ordering everything over the Net – apparel, furniture, appliances. E-Commerce has left the core group of weird techies and moved to the mainstream. By the year 2000 there won’t be such a thing as e-commerce, it will just be commerce” (Andrews, C1). At present, 53 percent of business web sites report sales activity because this billion-dollar market is irresistible (McGarvey 32). There are some obvious reasons why E-commerce may not make it. One of the big problems is that the consumers don’t know exactly what they are getting. They don’t know how big it is or how it feels in their hands, or how it will look in their house. With some of the really bad sites you may not even know what color it is or actually if it’s what they say it is. Despite these drawbacks the Internet poses, it continues to spawn all kinds of new businesses.On-line mortgages have been growing and the net has offered some conveniences to the average shopper. A California Company called Transamerica Intellitech showed that around sixty-three percent of Californians used the web to help refinance their homes. Although many people used the net to research their mortgages and find the best rate, only about fourteen percent actually finish the transaction on the web “because fundamentally it’s just a bigger transaction,” says Ned Hoyt, Cofounder and CEO of HomeShark (Bergstrom, E4). Most consumers don’t like the idea of not being able to talk to someone about the product that they are buying, which is one reason that on-line mortgages have not been as easily accepted. Another big problem is that most consumers don’t trust the net enough to do such a large transaction over the net. Hollywood has made the net a very ominous and forbidding place to most consumers filled with traps and hackers. When in reality it is not at all like Hollywood portrays it.Another big problem is that most on-line companies can’t afford to handle the amount of traffic that is present on the web. As with the mortgage companies, when rates swing they can get a large amount of business in a short amount of time. This can overload their servers causing slow connections to the people using the site and may even cause the system to crash. The same situation could arise with stores that are connected with the holidays. Those are big drawbacks (Bergstrom, E4).There is so much exposure over the Internet for E-commerce business (Amazon.com has eight million customers) that an executive from Dayton Hudson gave E-commerce this warning: “Big retail companies may drop apparel and houseware brands that are overexposed. Selling over the Internet can destroy years of brand-building investments made jointly by retailers and manufacturers” (Feder, C1). According to Bill Gates, “When starting an Internet business, people are not thinking through how they’ll be in a competitive position. People are not thinking through what the revenue is” (Bloomberg, C1). The consequences of E-commerce not making it greatly outweigh the consequences of making it. I believe that if E-commerce does not make it billions will be lost along with a new great technology that could shape the future. Ultimately I think that overall growth of the economy will slow down but E-commerce could take us through the slowdown. I believe that if we didn’t have E-commerce the slowdown would be much greater. The rewards of E-commerce making it are great not only for the consumer but also for the world’s markets. If it does succeed, you could see more automated homes in the near future. In theory, you could plan the whole week’s meals and have the computer determine if you need something to make those meals. It will then automatically order what you don’t have and have it sent directly to your house. It will overall be a great convenience for the consumer if it sticks around. Innovations like these will sustain the viability of E-commerce. “It’s for real. It’s here to stay,” Dalton Chandler, an analyst with Needham & Company, said of Internet commerce. “Are they going to put Sears out of business one of these days? I kind of doubt that” (Jung, C1). Worldwide e-commerce is here to stay and not only will it survive, but, it will thrive. Internet users are soaring. Commercial online services open 10,000 new accounts weekly (Spenser, D6). The net adds convenience to people’s lives. Buying products over the net not only saves time, but money.In “You’ve got Mail,” E-commerce, online, and the Internet is just a part of the main stream of life. The computer is now just another tool of every day life like the TV or the telephone (McCollum, E6). In his book The Road Ahead, Bill Gates, peering far into the future, glimpsed a technology-rich dream world, being able to do things on the web that can not even be imagined today (Gelernter, 202). We have barely begun to tap the web for its possibilities. One can find their favorite song and download it or check the traffic when they’re in Seattle. One can see when the movies are playing at the local theater, trade stocks, and get weather forecasts. Everything from buying a house to getting groceries on the net can be done. The net is not just a passing phenomenon. The Internet is a frontier and the possibilities are limitless.Increased congestion on the highways, fast paced life styles, increases in real earnings and the movement from an industrial to a service economy is making E-commerce more than a passing phenomenon – it’s becoming a necessity