What is Internet Commerce?
Internet Commerce is the use of the Internet for all phases of creating and completing business transactions. Various surveys suggest that the amount of business conducted online will increase ten-fold over the next few years, from around $500 million in 1996 to over $6 billion in 2000. However, this still represents less than 10 per cent of the business conducted by mail order.
In our view too much focus of electronic commerce to date has been put on carrying out the final transactional phases - the ordering and payment. While such a perspective is all right when there are established supply chains for regular and routine purposes, this overlooks the wider perspective. It is often said, that the formal placement of an order is preceded by as many as 30 previous information exchanges. Thus, in its broadest sense we view Internet Commerce as also including:
- The full sales and marketing cycle - for example, by analysing online feedback to ascertain customer's needs
- Identifying new markets - through exposure to a global audience through the World Wide Web
- Developing ongoing customer relationships - achieving loyalty through ongoing email interaction
- Assisting potential customers with their purchasing decision - for example by guiding them through product choices in an intelligent way
- Providing round-the-clock points of sale - making it easy for buyers to order online, irrespective of location
- Supply Chain Management - supporting those in the supply chain, such as dealers and distributors, through online interaction
- Ongoing Customer Support - providing extensive after-sales support to customers by online methods; thus increasing satisfaction, deepening the customer relationship and closing the selling loop through repeat and onging purchases.
This wider perspective of Internet Commerce - as an ongoing iterative relationship that uses email, discussion lists, and other Internet facilities as well as the World Wide Web - is the strategy of most successful 'Netrepreneurs'. As in other marketing, the main categories of Internet Commerce are business-to-business and business
Opportunities and Benefits
Those who trade via the Internet cite the following benefits:
- Timeliness - Your Web site is accessible round the clock. Email queries can be handled more expeditiously and completely than is often possible by mail or phone.
- Reduced Marketing Costs - Online catalogues are cheapre to produce and maintain that paper catalogues.
- Better Targetting - Internet communities are self selecting. People with particular interests tend to visit particaulr places in Cyberspace. Customers find you, rather than vice versa.
- Greater Market Reach - Distance is no object. Sending information or exchanging messages costs virtually the same as someone locally. You don't need to pay expensive courier bills.
- Reduced communications costs - With electronic networking it cost virtually the same to send a message to 100 people as to one.
- Improved After Sales Service - By providing online support, customers can serve themselves for many of the common post-sales information needs.
There are particular opportunities for those who have specialised markets, or wish to expand their market base without the cost of opening new offices. There are also opportunities created by the medium itself - for example for Internet intermediaries (directory and trading services), and novel ways of providing access e.g. kiosks in public areas.