Fundamentals of Consumer Oriented E-Commerce
There are some basic concepts regarding e-commerce. We have fitted this as consumer oriented because all that we are dealing is how to supply the items needed by the consumer at his doorsteps.
Basic Tenets of E-Commerce in a Consumer Oriented Scenario
It has been said that the convergence of money, commerce, computing and networks form the global consumer market place. Though it is true in most cases, the earliest (or rudimentary) systems had computers being replaced by other electronic devices like the television or even telephone. It is to be noted that there are several other, related areas that need to be address while setting up an e-commerce system. Though it is desirable that the entire system is automated, it may be possible that one/more of these activities may be transacted in a traditional manner. For example, while the order is placed over phone, further negotiations may be made with the sales representative calling on the buyer, the payment may be made through a cheque etc. to begin with, we include systems where in only a part of the operations are done through electronic means also as e-commerce systems.
Some of the fundamental issues that need to be addressed before consumer oriented e-commerce can be made broad based are listed below :
- Standard business practices and processes for buying and selling of products as well as services need to be established.
- Easy to use and well accepted software and hardware implementations of the various stages of e-commerce like order taking, payment, delivery, after sales interactions etc. need to be established.
- Secure commercial and transport practices that make the parties believe that they are not at the mercy of anybody else for the safety of their information and goods need to be in place.
It may be noted that each one of the above requirements can be established only over a period of time with several trial and error methods. Ironically, e-commerce can grow in a very big way only when these requirements are fully available and are within the grasp of the average user.
We next look at a few applications of e-commerce in some detail, to understand the implications of e-commerce in a full scale.
We look at the following concepts in some detail :
- Basic banking services
- Home shopping
- Home entertainment
- Micro transaction for information
Basic Banking Services
The concepts under basic banking services are what a normal customer would be transacting with his bank most of the time. They are mainly related to personal finances. It can be safely be presumed that most of normal transactions that a customer has with his bank can be classified into the following :
- Checking his account statements
- Round the clock banking (ATM)
- Payment of bills etc.
- Fund transfer and
- Updating of his pass books etc.
Indeed most of these can be done through telephone with suitable passwords etc. except round the clock banking. The concept of Automated Teller Machines is to allow the customer to draw money from his account at any part of the day (or night). In fact, ATMs are today thought to be one single concept that changes the way banks functioned. The customer need not go to the bank at all for his most important service. In other words, both the bank and the customer became faceless to each other. But it helped the customer by ensuring that he need not modify his working schedule to visit the bank. At the same time, the banks need not resort to concept like split hours, opening on holidays etc. to project themselves as customer friendly.
It can be noted that the individual ATMs are connected to a Bank Switching Centre. The Switching Centre’s of several banks are interconnected to an association switching centre ( May be all banks of a particular region, for example). All such centre are globally connected to a main switching centre. While the actual operations are not important to note that the PC are any such computers are not employed at the customer level. It is also argued that an average customer is more comfortable with the process of simple insertion of a card rather than complicated operations on PCs. However, we include the ATMs also under e-commerce.
The next example is home shopping. For simplicity, we presume it is television based shopping. It may be noted that this concept is picking up now in India in a small way, wherein the channels set apart only a very small portion of their broadcasting time to teleshopping.
In the simplest case, the channels describe the various aspects of their product and the customer can order items over phone. The goods are delivered to his home and payment can be made in the normal modes.
In a more sophisticated version, orders can be placed online (through computers) and payment also can be made through credit/debit cards. It may be noted that several concepts of traditional marketing like negotiation, trial testing etc. are missing from this scheme and it is most suitable for those customers who are almost sure of what they need to buy who are too busy to go to the shops. Otherwise, there is hardly any concept of interaction and there is little scope to ensure the quality of product,after sales services etc.
The next example of this type of commerce is home entertainment. Dubbed online movies, it is possible for the user to select a movie/CD online and make his cable operator play the movie exclusively for him (movie on demand) cause against payment. Payment can be either online/billed to his account. It is also possible to play interactive games online/download them to your computer to play .the concept of downloading games/news etc, at a cost to the mobiles is also a similar concept. It may be noted that in all these cases, the physical movement of the customer /trader is avoided, of course, the computer need not always be a part of the deal.
Micro Transactions for Information
The telephone directories provide a basic type of micro transaction. If you want by one particular of item- say – books – they list the addresses and phone numbers of the various book dealers whom you may contact. Similar facilities are available on the internet- may be for number of items and also with more details. IT may include detailed catalogues, other related information etc. of course, the customer has to pay a small charge for visiting the site- each time he visits the site. This can be thought of as an extension of the earlier described television based ordering. You don’t have to order only those items that are shown in the computer, but search for an item that you need. Also ordering is on line. Some preliminary two way interaction are also possible.
Several modifications and value addition to the above mentioned preliminary scheme are possible. Ofcourse, each value addition also adds cost.
1. Desirable characteristics of E-marketing
Common sense tells us that few transactions are more congenial for e-marketing than others. We list out the desirable features of a hypothetical market pace – let us call it e-market.
2. A minimal size of the phase
Obviously for any such place to thrive is a critical size, below which it is not profitable to operate. This minimal number of buyers and sellers characterizes the profitability of the place.
3. A scope for interactions
Interactions include trial runs of the products, classifications of doubts on the part of the customers, details of after sales services, ability to compare different products and of course scope for negotiations and bargaining. Negotiations can be on account of cost, value additions, terms and conditions, delivery dates etc.
4. Scope for designing new products
The customer need not only buy only what is available. He can ask for modifications, upgradations etc. The supplier must be able to accept these and produce made to order items.
5. A seamless connection to the marketplace
It is obvious that each customer will be operating with a different type of computer, software, connectivity etc. There should be available standards so that any of these customers will be able to attach himself to any of the markets without changing his hardware/software/ interfaces etc.
6. Recourse for disgruntled users
It is native to believe that transaction of such a place to end up in complete satisfaction to all parties concerned. Especially because of the facelessness of the customer and the supplier, there should be a standard recourse to settle such disputes.
Like it on Facebook, +1 on Google, Tweet it or share this article on other bookmarking websites.