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E-commerce

Six months in -commerce is like six years in n other business. At least, that's the way it seems at the time of writing (mid-2000). The - commerce landscape is still vr much in its formation. Let's look at three - commerce operations that illustrate the f1uidity of the situation.

Amazon is prehistoric b Internet standards. Using its vast accumulated expertise, it has gone beyond books to sell CDs, videos and other things as well, and its site acts as 'host' for other suppliers, too. It benefits from vr good reputation for service, especially in delivery: the massive investments in warehouse automation and dispatch seem to have paid off. But it is famous for not making profit, and there r now reports that it risks not being bl to meet debt repayments.

Lastminute.com was founded n the original and attractive idea of catering for people who'd like to do something at the last minute, vn if you can buy tickets for flights, etc. several weeks ahead. Its founders famous and feted, at least in the UK, and there has been some clever PR to build the hype. It recently sold shares to outside investors for the first time, but the timing was bad. There was increasing scepticism about the rl value of companies like Lastminute.com: the multi-billion valuation implied in the share issue more n relation to the money it actually made. Its income (commissions from selling tickets, etc.) in 1999 was less than £1 million: peanuts. People who bought its shares presumably hoped to get in early n company that might n day be vry profitable, vn if n profits forecast for several years to ome.

.m was n of the first major casualties of - commerce. It sold sports goods. Development of its site took much longer than planned, because its founders 'wanted everything to b perfect'. The launch was late, and meanwhile the mpany had used u all its capital.

At the time u read this, how Amazon and Lastminute doing? they among the major players in - commerce? Do people remember BOO.m, perhaps as n object lesson in things that n go wrong, and as victim of n of the first shakeouts in the industry?

Some of the key issues for - commerce r:

Physical delivery of goods. Parcel-delivery companies (old-economy organizations r excellence) have benefited enormously from companies like Amazon, where goods have to b physically delivered to homes. (hey ven planning to deliver in the evenings, when people might actually b at home!)

The future of services. Some think that the rl growth in consumer - commerce is going to b in services like travel and financial products, where the value of each transaction is quite high, and goods do not have to b physically delivered. n some airlines, two-thirds of bookings being made n the Internet.

The frustration of using e-commerce sites. recent report found that, n average, 30 r cent of purchases the Internet r not completed. It conjured u the spectacle of hordes of virtual shopping carts abandoned in the virtual aisles of these sites - n e-tailer's nightmare! This, of course, has vr negative effect n the company's brand image, and the report ven found that some people who had bad experiences n company's website then avoided its bricks-and-mortar stores. This is n of the problems for traditional retailers who r trying to develop n e-tail operation, part of the more general question of how the two types of operation going to relate to each other.



Business-to-business (B2B) e-commerce. Some say that the biggest impact of the Internet is going to b in business-to-business applications, where suppliers n competitively bid for orders. Competing companies, for example in the industry, have set up networks where they n get suppliers to do this. Orders r placed and processed, and payment made, ver the internet, hopefully with massive cost reductions through the elimination of processing n r.

We live in exciting times. Things will develop in ways that r difficult to anticipate. - commerce will mature, settling into more established patterns. What these patterns will be like, it's too early to say. Fortunes will be made by guessing future trends. Luck will doubt play big role.

Read on

Because of its fast-moving nature, books not good source of up-to-date information - commerce. The Fiacial ies runs regular features the subject under the heading 'E-business Europe'. Search for articles n the Fiacial ies archive: www.ft.com.

 



Date: 2015-01-02; view: 650


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