E-Commerce

By: Nathan Schmitt Computer Science University of Wisconsin – Platteville Email: [email protected]

Abstract

Online shopping has becoming increasingly popular in recent years with 289 billion U.S. dollars spent in 2012 up from 256 billion in 2011. That number is expected to increase to 361.9 billion U.S. dollars along with shoppers which is forecasted to be 175 million in 2016 [1], and that is only in the U.S. with only Africa not boasting a similar percentage of online shoppers (appendix A) E-Commerce is only increasing in popularity and importance with the advent of mobile devices that allow for online shopping. With this in mind, let’s look E-commerce and how certain concerns shoppers may have are alleviated, namely security.

Introduction

What does the subject of e-commerce entail? In addition to the obvious, which is the use of “virtual Storefronts” or online marketplaces where buying and selling is done, it includes a variety of concepts integral to such websites and who is involved. In addition to the pure commercial aspects of e-commerce, there is the gathering and use of demographics through social media and web contacts, using email to reach prospective and established customers (as newsletters, for example), and the security of business transactions.

History

Online shopping seems to be as old as computer networking, as even early online communication allowed Business to conduct business using Electronic Data Interchange (EDI) 2 to exchange document such as invoices, order forms or shipping confirmations. It’s with the American National Standards Institute (ANSI) in 1979 coming up with ASC X12 that provided a universal standard for sharing business documents as prior to ASC X12 each company had its own formatting standards. However, commercial activities were not widespread as even with the arrival of TCP/IP and the BITNET and USENET in the 1980’s, most networks were at major research Universities and from 1985 to 1991 the National Science Foundation had banned businesses from using computer networks for commercial activity, though CompuServe is said to be among the first to offer network services for home PC’s including Electronic Mall where users could purchase items from 110 online vendors. It is with in the mid 90’s that online shopping really takes off with the release of Netscape which included SSL, this security protocol encrypted messages on both sending and receiving ends protecting personal information such credit card numbers, allowing for the use of credit cards to pay for items online. It’s this practice and the idea of certificates, digital ID’s that verified an online shop was secure, that allowed for sites like Amazon and E- Bay to define E-Commerce. Both Amazon and E-Bay started as early garage-business in 1995 with simple ideas. Amazon first proclaimed itself as “Earth’s largest bookstore” as Jeff Bezos, founder and CEO of Amazon, found books easy to ship to buyers and order from publishers as many had vast digital archives of their titles. With the use of reader reviews that have led to a feel of community and the practice of steep discounts, Amazon has expanded beyond offering just books and its catalog of items that is completely searchable either by keyword or category. eBay, on the other hand, started as a software programmer’s curiosity. While what commerce online was the more conventional business selling products to consumers. Pierre Omidyar, eBay’s founder, wondered if the internet would be used by people to bid on other people’s items. In eBay’s success, e-commerce’s barrier to entry was drastically lowered. No longer did you need to design your own web site or even be a pre-existing business to sell things online; now anyone could make money online. [2] Together these commercial giants have created standards for online store, for example; it’s nearly impossible to find one that doesn’t have the ability to post and rank reviews either on the product or the seller.

Types

Business-to-Business

Business-to-Business e-commerce is simply that, business done between companies and deals with the relationships between them. There are two parts to Business-to-Business (B2B) e- 3 commerce, e-frastructure and e-markets. E-frastructure is the architecture of B2B and consists of logistics, application service providers, outsourcing of functions, content management software, and web-based commerce enablers (e.g., Commerce One, a browser-based, XML-enabled purchasing automation software). E-markets are online markets for the buying of supplies nd while they are relatively new; e-markets are expected to grow in the coming years. [3]

Business-to-Consumer

Business-to-consumer e-commerce, or B2C, involves the realtions ship between a company and any potential customers, as well as the purchasing process. Customers gather information regarding the goods they may want to buy, whether it is information provided by the business or from other customers, and many have a UI that aid in this, usually with a description of the goods followed by customer reviews along with how helpful the reviews have been. Purchasing the goods be they physical goods (i.e., tangibles such as books or consumer products) or electronic goods (software or e-books). And finally the delivery of goods for tangible goods, the customer is provided tracking information to know where their purchase is at any given time as well when to expect it; as for digital goods, the customer is able to receiving it over a network whether it is browser-based or through an app made by the company. B2C is the second largest and the earliest form of e-commerce due to the ease of transferring electronic goods. [3]

Business-to-Government

Business-to-government e-commerce or B2G is defined commerce between companies and the public sector. Compared to other forms of e-commerce, its development and use is rather insignificant at least at this time. In B2g, the public sector takes the leading role detailing procedures for procuring licenses and other government operations. [3]

Consumer-to-Consumer

Consumer-to-consumer or C2C refers to the business conducted between individuals or consumers. This type of e-commerce best known as electronic marketplaces or auction houses where users can put up items they want to sell, or buy items other users have posted. [3] 4

Mobile Commerce

M-commerce (mobile commerce) is the buying and selling of goods and services through wireless technology-i.e., mobile devices such as smart phones. As wireless services become faster, more secure, and scalable, some believe that m-commerce will surpass wired e-commerce as the method of choice for digital commerce transactions. This may well be true in places where it is easier and cheaper to have a mobile device than a traditional internet connection with a computer. [3]

Advantages

The advantages of Commerce being conducted online are many; Business can relay information almost instantly. Suppliers can immediately post what’s available and wither sell directly to consumers or go through a distributer and consumers can choose between multiple suppliers based on their needs. The web provides not just a place to do business, but a means of advertising. If someone has a recommendation or knows of a sale, that information can be spread through social media and shared faster than older media such as newspaper or TV ads. And with mobile devices all of this can be done at your convenience.

Disadvantages

While the advantages to embracing e-commerce are many, there are compelling reasons keeping brick and mortar stores in business. First off, there is the fact products can’t be tried or physically examined online, you have to trust that what is displayed on the website is what you’ll get and you have to trust to the seller’s word on it. Going along with that is security, while both traditional and e-stores have to be concerned with a customer’s personal information, the traditional store doesn’t have to worry as much about customers giving their personal information to a look-alike, or unable to provide service due to a denial-of-service attack.

Trust Assurance 5

With any online store it’s important to ask as a customer “how do I know my personal information is safe if I buy something from this store?” The answer seems to be to include a number of features into the website an online-store assurance and 3rd-party assurance. Online Store assurance is simply a statement easily seen by the shopper where the website states what measures, policies, and guarantees the store makes in order to look trustworthy to the shopper. 3rd-party assurance is bringing in a 3rd party to oversee transactions to try to prevent the hacking of the site and leaking of personal information and prominently displaying the 3rd party’s logo and guaranty (often near the store’s own policy)[4]

Conclusion

E-Commerce is a trend that is only growing as more people access it and will I predict that it’ll be the predominant means that goods are bought and sold. While today there are a number of security concern relating to the protection of personal information. If those issues are solved then there’d be little reason not to do business online. Buyers can choose from a larger number of competing sellers and sellers can reach a wider customer base. It’s a win-win situation.

Appendix

Appendix A

6

Appendix B 7 8

References 1-Jessica Kril. Statistics and Facts about Online Shopping. Statista – The Statistics Portal. October 15th, 2013 .

2- Dave Roos. The History of E-commerce. How Stuff Works. October 15th, 2013

< http://money.howstuffworks.com/history-e-commerce.htm>.

3. Anil M. Tirkar. (2013) Trend Of E-commerce Technology & Its Security Issues, Golden Research Thoughts, V olume-3, Issue-2, August-2013

4. Dongmin Kim and IzaK Benbasat. Designs for Effective Implementation of Trust Assurances in Internet Stores. Communications of the ACM. vol. 53, no. 2, february 2010, 121 – 126.

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6. Shanawaz Maniyar, Saran Govindarajan, Geetha V. Security Checkpoints For Enterprise Applications On The Web. International Journal of Engineering Science and Technology. Vol. 4 No.06 June 2012. 2740 – 2735.

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