The Changing Face of eCommerce

Tony Gauvin Assistant Professor of eCommerce University of Maine at Fort Kent
© 2006 by Tony Gauvin, UMFK


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A Brief Introduction A Definition of eCommerce The Beginnings 1st Generation of eCommerce
of eCommerce

 Dot Coms  2nd Generation  Main

Stream eBusiness

The Future of eCommerce

© 2006 by Tony Gauvin, UMFK

services. consumers. UMFK . or payments over computer networks or by any other electronic means From a business process perspective. EC is the delivery of goods. Addison Wesley. EC provides the capability of buying and selling products and information over the Internet and other online services From Electronic Commerce: A Managers’ Guide. EC is a tool that address the desire of firms. and management to cut services costs while improving the quality of customer service and increasing the speed of service delivery From a online perspective.An Early Definition Of eCommerce     From a communications perspective. information. Kalakota and Whinston. EC is the application of technology towards the automation of business transactions and work flow From a service perspective. 1997 © 2006 by Tony Gauvin.

UMFK . marketing and sales of products or services for existing and developing marketplaces through the utilization of current and emerging electronic technologies Source: eCommerce faculty at UMFK © 2006 by Tony Gauvin. production.A Broader Definition  An attempt to increase transactional efficiency and effectiveness in all aspects of the design.

electronic finds transfer (1970’s) EDI. UMFK . the Internet moved from the Federal Sector to the commercial sector when NSF decommissioned NSFNET and moved assets to vBNS (very-High-Speed Backbone Network Service) which allowed for ISPs (Internet Service Providers) to develop. The Telecommunications Act  Deregulation (move to industry self-regulation) © 2006 by Tony Gauvin. electronic data Interchange (1980’s)  The Visible Beginning   April 1995.The beginnings of eCommerce  The Real Beginning   EFT. February 1996.

1st Generation eCommerce (1995-2000)  Explosive Growth … mostly in “Dot Coms”  All about taking ideas to market FAST  The funding required for growth was investors not consumers  The goal was IPO  Talent left the major firms and joined start-ups  Traded security for the instant millionaire promise of stock options © 2006 by Tony Gauvin. UMFK .

54 4794.25 2459.05 159.67 1997 1270.11 2069.46 7577.42 233.25 466.14 4589.79 13860.88 561.25 1941.51 879.27 1634.67 369.10 7132. UMFK .02 455.39 2301.02 540.Millions Raised by Dot Coms 1996 Business Services Content Retail Infrastructure ISPs Software 780.48 Totals 3102.33 72411.66 1388.41 1132.78 4209.86 36697.81 1030.29 3499.95 9361.72 108.22 1977.78 295536.05 1998 3409.00 1999 2000 14749.02 Data Source: PriceWaterhouse Coopers Moneytree Survey 2001 © 2006 by Tony Gauvin.03 276.

75 © 2006 by Tony Gauvin.00 Ask Jeeves.50 NetZero $40.00 $130.Reality Check (from Thomson Financial)  1986-1995  1% of IPOs traded below $1 per share one year after going public  Between 1998-2000  12% of IPOs traded below $1 per share on April $45. UMFK . 2001  Some of these IPOs with their stock highs     $190.

The End of the Beginning  Only 10% of dot coms formed since 1995 still survive  An even smaller percentage generate a profit  Some projections (E-Commerce. UMFK .2002)  B2C revenues in 2001 are growing at 45% to 55% per year  By 2005 eCommerce revenue should grow to $647 billion (about 20% of total retail) © 2006 by Tony Gauvin. Addison Welsey. Lauden and Traver.

census.S. Retail Sales (Not Adjusted1): Total and E-commerce2 (Estimates are based on data from the Monthly Retail Trade Survey and administrative records. UMFK .) Source: 4.html © 2006 by Tony Gauvin. Estimated Quarterly U.

a B2B industry portal to offer supply chain integration in the beggar community. The first one wrote “beg” on his broken steel cup and he received 10 bucks after one day. each with a small cup in his hand. The second one wrote “beg. UMFK .com” on his cup and after one day he received hundreds of thousand dollars. The third one wrote “e-beg” on his cup. © 2006 by Tony Gauvin. Both IBM and HP sent vice presidents to talk to him about a strategic alliance and offered him free hardware and professional consulting while Larry Ellison claimed on CNBC that e-beg uses 95% Oracle technology and i2 announced e-beg Trade Matrix. Someone even wanted to take him to NASDAQ.Anonymous e-Mail Joke Three beggars were begging in New York City.

The 2nd Generation 2001-2005   eCommerce become eBusiness 5 major components all geared to any firm’s desire to gain competitive advantage in their marketplace   eCommerce  buying & selling using the Internet gathering and processing of information internal and external to firm in order gain strategic advantage solidify and expand relationships across all stakeholders unified operations for transferring of goods from suppliers to manufactures and ultimately to the consumers the digital streamlining of an company’s processes Business Intelligence    Customer relationship management  Supply Chain Management   Enterprise Resource Management  © 2006 by Tony Gauvin. UMFK .

customer retention) Business Process Customer relationship management Efficiency (Cost reduction) Activity Brochureware. UMFK . industry redefinition) Pure Play Enterprise Pure dot-com (E*Trade) Click and Mortar (eSchwab) Effectiveness (Incremental sales. Order processing Source: adapted from www.mohanbirsawhney.2nd Generation Business Involvement with eCommerce Level of business impact Business transformation (competitive © 2006 by Tony Gauvin.

eCommerce Models   B2B    C2G  Business to Business Business to Consumer  Constituent to Government Government to Business Business to Government B2C  G2B    C2C  B2G  Consumer to Consumer Government to Constituent G2C  © 2006 by Tony Gauvin. UMFK .

1st and 2nd Generations Compared  1st Generation      2nd Generation             Technology-driven Revenue growth emphasis Venture capital financing Ungoverned Entrepreneurial Disintermediation Perfect Markets Pure Online strategies First Mover advantage   Business-driven Earnings and profits emphasis Traditional financing Stronger regulation and governance Larger traditional firms Strengthening intermediaries Imperfect markets. brands. and network effects Mixed “clicks and Bricks” Strategies Strategic follower strength © 2006 by Tony Gauvin. UMFK .

An eCommerce Timeline High Visibility SOURCE: the Gartner Group © 2006 by Tony Gauvin. UMFK .

The future of eCommerce  Continued integration of technology into business and organizational entities until at some point there will be no distinct line of demarcation  Business become eCommerce and eCommerce becomes business  Business continues to be the driver of technology © 2006 by Tony Gauvin. UMFK .

The future of eCommerce  The creation of a discontinuous marketplace economy in which firms will compete in one of only two possible marketplaces  Commodity based products and services  Major differentiation between competing products is cost  eCommerce adds to increased efficiency and effectiveness  Boutiques  Major differentiation between competing products is perceived quality or higher service  eCommerce adds increased distribution possibilities and increased marketing potential © 2006 by Tony Gauvin. UMFK .

Future of eCommerce  7 features of eCommerce (E-Commerce: The Revolution is Just Beginning. UMFK . 2002)  Ubiquity  Global Reach  Universal Standards  Information richness  Interactivity  Information density  Personalization/Customization © 2006 by Tony Gauvin. Lauden and Traver.

edu http://littleblack.Questions?? Tony Gauvin Assistant Professor of eCommerce University of Maine at Fort Kent 23 University Drive Fort © 2006 by Tony http://www.maine.umfk. me 04743 (207) 834-7519 tonyg@maine. UMFK .