01 Introduction

Bachelor: E-Commerce
1. Introduction
Prof. Dr. Jella Pfeiffer

BWL XII: Digitalisierung, E-Business und Operations Management
BWL XII: Digitalisierung, E-Business und Operations
Prof. Dr. Jella Pfeiffer 1
Management
JUSTUS-LIEBIG-UNIVERSITÄT GIESSEN
Why study E-Commerce?
http://www.milliondollarhomepage.com/ Last accessed 11 04 2021

Management
English teacher Bookseller

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• 90% of E-Commerce start-ups fail in less than 120 days

• Where is room for start-ups, if 10 companies own 50% of the E-Commerce
market?
• Many firms fail to understand new (online) consumer behaviors (e.g. Quelle,
Neckermann, Karstadt?, Kaufhof?,…)
• Struggle to keep up with personalization of products and services
• (Un)successful advertisement
• Crypto coins worth ~ $20 billion are inaccessible due to lost passwords
• Taxing and governing e-commerce is a challenge

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Filed under chapter 11

(i.e., insolvency):
16. Nov. 2011
• https://sellics.com/de/blog-amazon-verdoppelt-sortiment-seit-2014-auf-229-mio-produkte/
• https://rp-online.de/wirtschaft/unternehmen/82-jahre-tradition-die-geschichte-des-versandhaus-quelle_iid-23688967#18
• https://unternehmer.de/news/12564-der-tiefe-fall-von-quelle
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Quelle AG:
Established: 26. Oct. 1927, by Gustav Schickedanz in Fürth
In 1977 Quelle offered 80.000 products (Amazon 2019 ~230 mil. products)
2007 biggest mail order company in the EU, with 20.000 employees, 4.2 bn. € sales
Filed under chapter 11 (i.e., insolvency): 16. Nov. 2011
Some reasons for the failure:

Market entry of Amazon and eBay in 1999
Failed to understand customer behaviors -> sticked with
costly catalogues (1 main and 21 specialized catalogues)
Too little / too late entry into the E-Commerce era
By the time Quelle aimed to become the pioneer in
E-Commerce in Germany the market was already dominated by
Amazon and eBay
https://sellics.com/de/blog-amazon-verdoppelt-sortiment-seit-2014-auf-229-mio-produkte/
https://rp-online.de/wirtschaft/unternehmen/82-jahre-tradition-die-geschichte-des-versandhaus-quelle_iid-23688967#18
https://unternehmer.de/news/12564-der-tiefe-fall-von-quelle
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And much can go wrong …
Instruction failure Product description failure Substitution failure

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But the potential is great as well…

Retail e-commerce sales worldwide from 2014 to 2024 (in billion U.S. dollars)
Statista 2021. https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/ Last accessed 11.04.2021

BWL XII: Digitalisierung, E-Business und Operations *forecast
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E-Commerce revenue data indicates constant But: Very strong and stable market concentration
growth of more than 8% Y2Y in Germany around the Top 10 B2C E-Commerce Shops
80 43%
72.8
Revenue Share of the 10 largest B2C E-

70 41%
59.2 39%
60
53.3 amazon.de 15,836
Revenue in Billion €
Commerce Shops
37%
48.9
50 otto.de 5,251
44.2
35% zalando.de 2,218
39.9
40
35.6 mediamarkt.de 1,731
32 33%
lidl.de 1,159
30 28
24.4 31% apple.com 1,002
20.2
20 saturn.de 987
15.6 29%
12.6 ikea.com 983
10.4
10 8.4
6.4 27% notebooksbilliger.de 934
4.4
3
1.1 1.3 1.6 2.2 hm.com 813
0 25%
'99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
(1) Top 10 compared to revenue of Top 1000 in Germany, https://de.statista.com/statistik/daten/studie/188283/umfrage/anteill-der-groessten-online-
Source: HDE;
shops-am-onlineumsatz-in-deutschland/;
https://de.statista.com/statistik/daten/studie/3979/umfrage/e- EHI Retail Institute; ecommerceDB.com;
commerce-umsatz-in-deutschland-seit-1999/ (1)Revenue of the Top 10 E-Commerce shops in Germany (2020) in million USD
Sources: EHI Retail Institute; Statista; https://www.statista.com/forecasts/794070/germany-top-online-stores-germany-ecommercedb

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Agenda
• 1 Chair Introduction
• 2 Organisational Issues
• 3 Introduction to Electronic Commerce
10
Team
Prof. Dr. Jella Pfeiffer
Jella.Pfeiffer@wirtschaft.uni-giessen.de
Licher Str. 74, 3.OG, from May 2021 1. OG!
Office Hours: Tuesday: 11.00-12.00 (digital), please send an email to
Mrs Bogenhard for an appointment
Assistance (Secretary):
Jessica Bogenhard
0641 - 99-22041
digitalisierung@wirtschaft.uni-giessen.de
Sprechzeiten: siehe Homepage
Research Assistants:
Tobias Götz Salah Hassanin Pascal Heßler Tobias Weiss
Tobias.Goetz@wirtschaft.uni-giessen.de Salah.Hassanin@wirtschaft.uni-giessen.de Pascal.Hessler@wirtschaft.uni-giessen.de Tobias.Weiß@wirtschaft.uni-giessen.de

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Research Areas

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Research Projects
When are machine learning algorithms fair?
Which and how can game design-elements

improve learning effects?

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Research Projects (cont.)
How do recommender systems influence

users?
How to design conversational agents to increase

user acceptance?
Which role does the context and emotions play

in the human-computer interaction with a
conversational agent?

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https://takepart-projekt.de/
Can augmented reality apps for

construction projects increase citizen and
employee participation? What do suitable
business models look like? (KMU Innovativ,
BMBF)
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How can we measure extended reality (XR)
innovations in Germany?
How do we provide a timely and sufficiently granular

picture of the current state of XR innovation?
How are these innovations distributed in

Germany at company level?
Source: Demo illustration

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Can we predict consumers’ choice behavior
based on sensor data?
Which is the best point of time for

supporting consumers during their decision
process?
How to virtually connect experimental

research labs that are at different physical
locations?

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The Decisions in Immersive Systems Lab

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BWL XII Teaching Overview
Quelle: Professur-Seite BWL XII

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Agenda
20
Organization
Lecture: Lecture + Exercise with 6 ECTS

Lecture-Time: We will always start 8.30 instead of 8.00.
Exam: TBA. Repetition: TBA
Question types will be practiced beforehand;
example of the exam will be provided on StudIP
F&A in last session
Grading: 100% exam
Examination requirements:
Demonstration of in-depth knowledge of the foundations of electronic commerce
Proof of an understanding of relevant issues in electronic commerce and ability to
apply the knowledge to specific problems
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Exercise
Weekly tasks: You will find every week (uploaded between Wednesday to Friday) tasks on
Stud-Ip, which you should prepare
Your solution should be uploaded on Stud-IP (until next Wednesday)
If you provide well-conceived solutions or ideas, we will gave you written
feedback
Exercise: We will discuss the solution in the weekly exercise

Solutions will not be uploaded!
Exercise-time : We meet every Friday 12.15 pm
Career-training: There will be one or two career-training units in the exercise

You will group up in small groups an conduct an interview based on a case

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Materials
• All course files (slides for lecture and exercise) can be downloaded from StudIP
• Password to access StudIP group is „digi_ecommerce22“; from next week on access only via
password!
• Materials will be distributed in digital form latest one week before

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Materials and organizational Issues
• References on lecture content will be provided

• Recommended books on the lecture content
- 10 copies in library available - 2 copies in library available - 2 copies in library available

- Plus 1 digitlal copy (e-book)
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Term Overview
Date Lecture Exercise
April 13th Introduction
April 20th Technologies, Standards and Architecture
April 27th Technologies, Standards and Architecture (cont.) Exercise 1
May 4th Products and Services in Electronic Commerce Exercise 2
May 11th E-Commerce Business Models Exercise 3
May 18th Implementation and User Evaluation Exercise 4
May 25th Customers in E-Commerce Exercise 5

June 8th E-Commerce Marketing and Advertising Exercise 6
Security and Payment Systems (digital LIVE! In the meeting
June 15th room in StudIP) Exercise 7
June 22th B2B Commerce Exercise 8
You choose:
a) Ethics and Privacy
b) New Trends in E-Commerce (VR, AR, mobile)
June 29th c) Recommender Systems Exercise 9
July 6th Guest Lecture Exercise 10
July 13th BWL XII:
Q &Digitalisierung,
A E-Business und Operations Exercise 11
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Questions?
• All questions that don‘t refer to personal matters should be shared in

the forum

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Structure of the lectures
LECTURE SESSION
Summary
Content Repetition
& Reading
Summarizing
overview of main
Quiz questions
Presentation and points of the lecture
discussion of new
Opportunity to check
topics Readings for
your understanding
preparation and
deepening

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Structure of Class
AND BEYOND
Ethics and Privacy
STAYING
SUCCESSFUL New Trends in
BECOMING E-Commerce (VR, AR,
mobile)
SUCCESSFUL How to stay safe and
secure in the e- Recommender Systems
WHAT TO DO commerce
How to implement and
measure an e-commerce environment?
HOW DOES IT What is offered in business‘ success? Security and Payment
e-commerce? System
WORK Products and Services
Implementation and User
Evaluation
in Electronic How do companies
How does it Commerce How do customers digitally trade with one
technically work? behave and what do we another?
Technologies, How do e-commerce learn from their reviews? B2B Commerce
Standards and companies create Customers in E-
Architecture value? Commerce
E-Commerce Business
Models How to get the
customer‘s attention?
E-Commerce Marketing
and Advertising
© Katemangostar/Freepik
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Agenda
29
Symbols in this lecture

D Definitions Summary at the end of each lecture
References to other lectures and

exercises either in the e-commerce Topic of next lecture
class or at JLU in general or
interesting link on the WWW
Quote
Sources used for this slide
Action Time: Quizz, discussion, etc
Goals of this lecture
30
Learning Goals
After today’s session you should be able to

• Define and classify E-Commerce and distinguish
it from related concepts
• Explain features, drivers, and barriers of E-
Commerce
• Motivate your friends to visit this class as well!

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Agenda
• 3.1 Definitions and distinctions

• 3.2 Features of E-Commerce
• 3.3 Drivers and barriers of E-Commerce

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What is E-Commerce?
• “Buying and selling using the internet”
• E.g.: consumer retail purchases via Amazon
• Electronically mediated transactions between a seller and a buyer
• Fully digital buyer-seller transactions
Seller
• Digital data and Information flow Buyer
documents • Digital products
• Multimedia content • Services
• Software programs Online transactions • Information
• Products/services
Payment flow
• Fully digital production type transactions

Producers:
• Digital data and
Online Consumers:
documents production • Digital products
• Multimedia content process • Services
• Collateral information
Intermediaries • Processed orders
• Customer
participation
Kalakota, R. and Whinston, A. (1997), p. 4-5

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What is E-Commerce?
E-Commerce can be defined from different perspectives:
1. A communication perspective – E-Commerce as the delivery of information, products or
services, or payment by electronic means
2. A business process perspective – E-Commerce as the application of technology toward the
automation of business transactions and workflows
3. A service perspective – E-Commerce as cost cutting tool while improving the speed and quality
of service
4. An online perspective – E-Commerce as provider of the capability of buying and selling
products and information on the internet
Our Definition: Digitally enabled commercial transactions

D
between and among organizations and individuals
Laudon and Traver (2019),, p. 45.
Kalakota, R. and Whinston, A.
(1997), p. 4-5, p. 3
Turban, E. et al. (2017)

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What then is E-Business?
All electronically mediated information exchanges, both D

within an organization and with external stakeholders
supporting the range of business processes.
Chaffey, D. et al. (2019), p. 13
.
In other words:
A business which relies on information and communication technologies (ICTs) in its operations, and
which crafted its business model and its business processes around ICT.
Hence, an electronic business conducts all its core activities digital.
Chaffey, D. et al., (2019), p. 13.

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Action Time: What then is E-Business?
(A) E-Commerce has some degree EB EC

of overlap with E-Business
(B) E-Commerce is broadly EB = EC
equivalent to E-Business
EB
(C) E-Commerce is a subset of

EC
E-Business

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The difference between E-Commerce and E-Business
Buy-side E-Commerce Sell-side E-Commerce
The firm
Technological
Suppliers infrastructure Customers
Often main scope of e-business
E-Commerce includes E-Business embraces

 Online display of information, goods, services  Customer relationship management
 Selling / ordering / billing  Supply chain management
 Handling of payments and transactions  Enterprise resource planning
 Knowledge management
Laudon & Traver (2019), p. 45.

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Distinction between Buy-Side and Sell-Side E-Commerce
For more information on extranet,

see lecture on B2B.
Chaffey et al, (2019) p. 12.

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Examples of transaction alternatives between business, consumers, and

governmental organizations
From: Supplier of content/service
Consumer/Citizen Business/Organization Government
Consumer-to-Consumer (C2C) Business-to-Consumer (B2C) Government-to-Consumer (G2C)
Consumer/Citizen
 Peer-to-peer (Ebay, Craigslist)  Transactional: Amazon  National government transactions: tax, registration,
 Blogs and communities  Relationship-building: BP etc.
 Product recommendations  Brand-building: Unilever  National government information
 Social networks (Instragram, Snapchat)  Media owner: News Corp  Local government services
 Comparison intermediary: check24.de
To: Consumer of content/service
Consumer-to-Business (C2B) Business-to-Business (B2B) Government-to-Business (G2B)

Business/Organiz.
 Consumers selling to businesses  Businesses selling to other businesses  Government services and transactions: tax,
 Consumer-feedback, communities or  Alibaba, Euroffice, go2paper.com, salesforce.com registration, etc.
campaigns (Dell Ideastorm)  Legal regulations
Consumer-to-Government (C2G) Business-to-Government (B2G) Government-to-Government (G2G)

Government
 Feedback to government trough  Feedback to government businesses and non-  Inter-government services
pressure group or individual sites governmental organizations  Exchange of information
Chaffey et al, (2019) , p. 22.

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Examples of transaction alternatives between business, consumers, and

governmental organizations
From: Supplier of content/service
Consumer/Citizen Business/Organization Government
Consumer-to-Consumer (C2C) Business-to-Consumer (B2C) Government-to-Consumer (G2C)
Consumer/Citizen
 Peer-to-peer (Ebay, Craigslist)  Transactional: Amazon  National government transactions: tax, registration,
 Blogs and communities  Relationship-building: BP etc.
 Product recommendations  Brand-building: Unilever  National government information
 Social networks (Instragram, Snapchat)  Media owner: News Corp  Local government services
 Comparison intermediary: check24.de
To: Consumer of content/service
Focus of this lecture

Consumer-to-Business (C2B) Business-to-Business (B2B) Government-to-Business (G2B)
Business/Organiz.
 Consumers selling to businesses  Businesses selling to other businesses  Government services and transactions: tax,
 Consumer-feedback, communities or  Alibaba, Euroffice, go2paper.com, salesforce.com registration, etc.
campaigns (Dell Ideastorm)  Legal regulations
Consumer-to-Government (C2G) Business-to-Government (B2G) Government-to-Government (G2G)

Government
 Feedback to government trough  Feedback to government businesses and non-  Inter-government services
pressure group or individual sites governmental organizations  Exchange of information
Chaffey et al, (2019) , p. 22.

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Developments within E-Commerce classes
C2C, B2C, C2B, B2B
Mobile Social Local

E-Commerce E-Commerce E-Commerce
 Is a form of E-Commerce which is

enabled by social networks and
online social relationships  Is focused on engaging the
 Refers to the use of mobile  Drivers: consumer based on his or
devices to enable online  Social sign-on her current geographic
transactions  Network notification location by online
 Online collaborative shopping marketing techniques
tools
 Social search etc.
Lauden & Traver (2019), p. 43-47.

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Agenda


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What makes E-Commerce so special?
Lauden & Traver (2019), pp. 53 et seq.

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Features Description Business significance
1. Ubiquity Internet/Web technology is Marketplace:
available everywhere: • extended beyond traditional boundaries
• at home • removed from temporal and geographic location
• at work Customer:
• any time • convenience is enhanced
• shopping costs are reduced
2. Global reach The technology reaches across Commerce is enabled across national/cultural borders seamlessly
national borders without modification
“Marketspace” includes billions of customers and millions of
businesses
BWL XII: Digitalisierung, E-Business und Operations Lauden & Traver (2019), pp. 53 et seq.
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3. Universal standards One set of technology standards One set of technical media standard around the world
(internet)
4. Richness Video, audio, and text messages Video, audio, and text marketing messages are integrated into a
possible single marketing message and consuming experience
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5. Interactivity The technology works through Consumers are engaged in a dialog that dynamically adjusts the
interaction with the user experience to the individual, and makes the consumer a co-
participant in the process of delivering goods to the market
6. Information density The technology reduces Information processing, storage, and communication costs drop
information costs and raises quality dramatically, while accuracy and timeliness improve greatly
 Information becomes cheap, plentiful, and accurate
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7. Personalization/ The technology allows personalized Personalization of marketing messages and customization of products
Customization messages to be delivered to and services are based on individual characteristics
individuals as well as groups
8. Social networking User content generation and social Enable user content creation and distribution. Creates substitute,
technology networking user created, entertainment products
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Agenda


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Drivers of E-Commerce
Cost/efficiency drivers
• Reduced fixed / operating costs (inventory, shipping, service)
• Reduced printing and distribution costs of marketing
communications
• Faster and cheaper customer support
Opportunities for increased revenue
• New customers, new markets
• Existing customers (cross-selling)
Opportunities for learning
• More customer information
• Direct feedback on products, services and advertising campaigns
Competitiveness drivers
• Customer demand
• Improving the range and quality of services offered
• Avoid losing market share to businesses already using E-Commerce
Chaffey et al. (2019), p. 26.
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Barriers of adopting E-Commerce?
• High failure rates, high pace, high complexity

• Transparency of prices and behavior
• Technological challenges, e.g., security For more information see lecture on
Security and Payment System
• …

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And remember: Very much can go wrong …
Automation failure Naming failure
Keyword failure Factory failure

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Summary
E-Commerce…
• Digitally enabled commercial transactions between and
among organizations and individuals
• Is not the same as E-Business, but rather is a subset of E-
Business
• Can be classified by the participants who are involved (e.g.,
B2B, B2C, B2G)
• Has unique features including ubiquity, global reach,
universal standards, information richness, interactivity,
information density, personalization or customization, and
social technology
• Is thrilling and complex – as we will see in greater detail
during this course
Outlook:
• Next two lectures: Technologies, Standards and
Architecture

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Readings and Literature
Readings
• Chaffey, D. et al. 2019. Digital Business & E-Commerce Management (7th ed.). Pearson, pp. 3-32
• Laudon, K. C., and Traver, C.G. 2019. E-Commerce 2019: Business. Technology. Society (15th ed.). Pearson, pp. 43-63
Literature
• Chaffey, D. et al. 2019. Digital Business & E-Commerce Management (7th ed.). Pearson
• “It Keeps Growing And Growing …,” 2012. Harvard Business Review, pp. 32-33.
• Kalakota, R. and Whinston, A. 1997. Electronic-Commerce: A Manager‘s Guide. Addison Wesley,
• Laudon, K. C., and Traver, C.G. 2019. E-Commerce 2019: Business. Technology. Society (15th ed.). Pearson
• Rigby, D. 2011. “The Future of Shopping,” Harvard Business Review, pp. 65-76.
• Turban, E. et al. 2017. Introduction to Electronic Commerce (4th edition), Springer.

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Management

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Bachelor: E-Commerce

Prof. Dr. Jella Pfeiffer

Why study E-Commerce?

http://www.milliondollarhomepage.com/ Last accessed 11 04 2021

BWL XII: Digitalisierung, E-Business und Operations

Why study E-Commerce?

English teacher Bookseller

BWL XII: Digitalisierung, E-Business und Operations

Why study E-Commerce?

• 90% of E-Commerce start-ups fail in less than 120 days

BWL XII: Digitalisierung, E-Business und Operations

Why study E-Commerce?

Filed under chapter 11

Why study E-Commerce?

Some reasons for the failure:

Why study E-Commerce?

Instruction failure Product description failure Substitution failure

BWL XII: Digitalisierung, E-Business und Operations

Why study E-Commerce?

But the potential is great as well…

Statista 2021. https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/ Last accessed 11.04.2021

Why study E-Commerce?

Revenue Share of the 10 largest B2C E-

BWL XII: Digitalisierung, E-Business und Operations

• 3 Introduction to Electronic Commerce

Tobias.Goetz@wirtschaft.uni-giessen.de Salah.Hassanin@wirtschaft.uni-giessen.de Pascal.Hessler@wirtschaft.uni-giessen.de Tobias.Weiß@wirtschaft.uni-giessen.de

BWL XII: Digitalisierung, E-Business und Operations

BWL XII: Digitalisierung, E-Business und Operations

When are machine learning algorithms fair?

Which and how can game design-elements

BWL XII: Digitalisierung, E-Business und Operations

Research Projects (cont.)

How do recommender systems influence

How to design conversational agents to increase

Which role does the context and emotions play

BWL XII: Digitalisierung, E-Business und Operations

Research Projects (cont.)

Can augmented reality apps for

Research Projects (cont.)

How do we provide a timely and sufficiently granular

How are these innovations distributed in

Source: Demo illustration

Research Projects (cont.)

Which is the best point of time for

How to virtually connect experimental

BWL XII: Digitalisierung, E-Business und Operations

The Decisions in Immersive Systems Lab

BWL XII: Digitalisierung, E-Business und Operations

BWL XII Teaching Overview

Quelle: Professur-Seite BWL XII

BWL XII: Digitalisierung, E-Business und Operations

• 3 Introduction to Electronic Commerce

Lecture: Lecture + Exercise with 6 ECTS

Exercise: We will discuss the solution in the weekly exercise

Exercise-time : We meet every Friday 12.15 pm

Career-training: There will be one or two career-training units in the exercise

BWL XII: Digitalisierung, E-Business und Operations

BWL XII: Digitalisierung, E-Business und Operations

Materials and organizational Issues

• References on lecture content will be provided

- 10 copies in library available - 2 copies in library available - 2 copies in library available

May 4th Products and Services in Electronic Commerce Exercise 2

May 11th E-Commerce Business Models Exercise 3

May 18th Implementation and User Evaluation Exercise 4