E-Business Essentials	Vol. 1,  No. 1   Winter 2000
	Critical Information You Need to Boost Your Bottom Line

Electronic Commerce Explained

Online business trade in Canada is expected to hit $218 billion in 2004.  The potential of the Internet as a global marketplace is forcing every organization to reevaluate its business strategies and is transforming the way organizations interact with customers and trading partners.

E-commerce provides many benefits such as reducing the cost of doing business, making transactions faster and more convenient, and most importantly, reaching a wide scale of potential customers in a global market. E-commerce also allows a business to better manage relationships with customers, by allowing them the tools to access the information and resources they want, when they want it.  

What is E-Commerce?

Electronic Commerce quite simply means conducting business online.  Selling goods and services directly to the consumer is Business-to-Consumer, or B2C e-commerce. Conducting transactions with other businesses, suppliers or trading partners is called Business-to-Business, or B2B e-commerce.  A retailer’s physical store is called Bricks-and-Mortar.  A combination of an on-line presence along with a physical presence is referred to as Clicks-and Bricks, or Click-and-Mortar.

The rise in popularity of e-commerce has resulted from a number of factors.  First, more sophisticated software allows automation of e-commerce processes: displaying products on the web, taking orders, processing payments online, and coordinating with inventory and shipping departments. Second, new encryption technologies provide higher security, which increases customer confidence and willingness to purchase online.  Third, high speed Internet access and fast download times permit merchants to use fancier graphics to showcase their products.  Fourth, large corporations are realizing the potential in B2B, and are creating huge industry-sponsored and third party web-based marketplaces.

Business to Consumer (B2C)

In the recent past, most e-commerce has involved Business-to-Consumer web sites, such as Chapters.ca, where merchants sell directly to the consumer. The 1999 Christmas season showed record volumes of online sales, but not all retailers were prepared for this response, or able to ship products on time to the consumers.   Online merchants learned valuable lessons about the necessity of ensuring customer satisfaction.

·    Create a shopping experience that not only attracts customers but also retains them in the long run.  Sites that most frequently provide the most appropriate products and services are rewarded with stronger customer relationships, resulting in improved loyalty and increased value. Knowing the demographics of your customers helps create a site that makes this possible.

·    Maintain a relationship with customers over time and offer them higher levels of customer service.

·    Offer customers a familiar and secure way to pay for their items.

·         Ensure that products are in stock and shipped on time.

Business-to-Business (B2B).

The e-commerce arena has expanded to include Business-to-Business, or B2B relationships as well. These sites create more efficient operations between two businesses that already have a relationship. Typically, a company has an Intranet, a privately maintained computer network that can be accessed only by authorized persons, such as members or employees of the organization.  An Extranet is an extension of a company’s Intranet, made available over the World Wide Web, enabling communication between the company and people it deals with, often by providing limited access to its Intranet.

B2B marketplaces and web-based exchanges are emerging in traditional industries where the buying and selling of commodity products is expensive and time consuming. B2B provides a way to automate the supply chain, the processes used to deliver goods to others who manufacture products or distribute them to consumers.

Success in the new electronic marketplace will go to the businesses that most effectively use Web-enabled technologies to enrich customer relationships, respond rapidly to changing market dynamics, reduce inefficiencies, and work congruently with other businesses to bring customized products and services to market quickly.  With a company’s access to individual consumers and large corporations alike, the Internet is posing a very lucrative investment for those willing to take advantage of its potential.

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Take a look at other features from Vol. 1, Winter 2000:

   Infogrinder Cuts through the Hype with E-Business Sense
   E-Commerce Explained
   Brave New Future of E-Business – an essay
   Customer Satisfaction Key to E-Commerce Success
   E-Commerce Success Stories – AOL
   Alphabet Soup - A Glossary

View other Newsletter Articles:
Volume 2:  September 2000                
    Wireless LAN's Provide Speed and Simplicity
    Which Internet Access Speed is Right for You? 
    Windows ME - a Smooth Program  (Review)
    Alphabet Soup - A Glossary

Volume 3: October 2000
    Customer Relationship Management Key to Success
    Wireless LAN's for the Small Office
    Logitech Cordless Keyboard and Mouse Review
    Application Service Providers Make Powerful Software Affordable
    Alphabet Soup - A Glossary

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