E-Commerce
Imagine that your life revolved around a 17" box. Sound ridiculous?
It is happening more and more. With huge numbers of people telecommuting
(working from home via the internet), banking online, shopping online,
corresponding via e-mail, and more, it is entirely feasible for one to
never leave the house without sacrificing anything. (Anything except
human contact, however overrated that may be.)
All of us, in some way or another, participate in e-commerce. Even
if you have never shopped online, by its very definition, e-commerce is
no doubt an integral part of your life. A recent article in Electronic
Design (available where else? Online) defines e-commerce as basically
any monetary transaction that takes place via electronic means. This
includes everything from withdrawals from an automated teller machine to
ordering from a commercial web site. In 1997, electronic money activity
amounted to over $477 trillion dollars! And it is only expected to
grow. It is estimated that by the year 2002, electronic money activity
should reach 630 trillion dollars (Electronic Design, 1999).
While many of us may think of e-commerce in the context of electronic trade
and high finance, it is becoming more and more common to conduct personal
business online. The domestic consumer sector accounted for 3.2 trillion
dollars in sales electronically in 1998 alone (Electronic Design, 99).
It is safe to say that because of the success in this arena and in light
of the projected growth of this type of business, that e-commerce has proven
highly effective. In fact, more and more retailers, including giants'
Home Depot and Lowe's home improvement centers, are experimenting with
and expanding their presence online (Keough, 99). And they are not
only targeting individual sales, but reaching out to various businesses.
Forrester Research, an Internet research firm, said businesses sold $43
billion dollars worth of goods to each other over the web last year (Keough,
99). Not only has this type of trade proven effective, researcher
David Alschuler, an executive with the Aberdeen Group in Boston, says "business
to business trade on the Internet is cutting significant costs out of the
supply chain, with better procurement and resource planning."
While e-commerce has proven popular, easy, convenient and effective, there
are still many who fear that it is unsafe. Those who fear that their
credit card numbers may be intercepted and used fraudulently are also fearful
of the Year 2000 problem and the effect that it may have on receiving goods
and services. As for the Y2K problem, IBM's chief executive Louis
Gerstner, says their consumers are spending with confidence, "we keep waiting
for a shift to see something different [in sales] going on, and we don't
see it" (News.com, 99). Assuming that Y2K poses no problem, what
about the credit card theft fear? The nature of online buying allows
primarily for purchases to be made by credit card. Reportedly, as
many as 99% of Internet purchases are made with plastic (News.com, 99).
According to a recent News.com article, there are still an excess of 40
percent of Internet users that refuse to buy online due to security worries.
Retail analyst, Kate Delhagen, of Forrester online, attributes the fear
to a "perception problem." She is even so bold as to assert that
there is not a single case where a consumers credit card has been lost
while traversing the Internet. News.com goes as far as to call this
fear a "myth." But if comfort is what consumers need, many online
merchants including Amazon.com, Disney, and Shopping.com, will cover the
$50 liability charge that banks will assess in the event of fraud.
These merchants are so confident in the security of e-commerce that they
feel that they will not have to pay the fee. By exuding such confidence,
they feel that they will make their customers more comfortable and will
coax them into using their online services.
References
IBM: Quarter
of Revenue is E-Commerce. Bloomberg News. 12 May 1999.
Online: CNET News.com - http://www.news.com/News/Item/0,4,36496,00.html
E-Commerce
Enjoys E-mazing Success. Electronic Design. 22 February
1999. p. 83.
Keough, Jack.
Business Buying Grows on the Internet. Industrial Distribution.
February 1999. p. 15.