E-commerce as a Revenue Stream
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User experience of e-commerce
E-commerce give customers the freedom to purchase items from anywhere.
According to a February 2001 Business
2.0 report, 55 percent of users enjoy online shopping because
there are no salespeople involved. In a December 2000 study, it is also
indicated that "anyone with access to a credit card would buy over the
Net." Based on such phenomena, it is safe to say that interactivity, which
is more secure than ever and saves the need of a middleman during an online
transaction, has played a major role in boosting the growth of e-commerce.
Compared to traditional retailing, users also cited the following reasons
as to why they prefer online shopping:
| Convenience | 84% |
| Saves time | 72% |
| Avoids crowds | 64% |
| Allows more time to research | 61% |
| Lower prices | 60% |
Among these top five reasons, at least two of them cannot
be provided by traditional retailing, and they can only be enhanced by
the interactivities offered by the Internet. Therefore, interactivity
is a significant revenue partner for sites that have adopted e-commerce.
The downside is that e-commerce sites are inundated with traffic during
major holidays. In 1999, AMR Research, a market analysis firm specializing
in logistics, reported that the peak in online orders during the holiday
season came around Dec. 11, whereas the shipping activity peaked the week
of Dec. 20, indicating there was a delay in preparing orders.
"Two years ago, it was acceptable, even impressive, to send an e-mail
confirming the order had been received,'' said Ashley Deaton, manager
of logistics services for the European division of Kurt Salmon Associates,
a consulting firm. "Now, the customer wants to know where that order is
in real time.''
Customers also want more information about the status of their Internet
orders than they expect with catalog orders.
This sheds light on the fact that e-commerce requires a different outlook
on building a logistics network. Products ship from the company to the
customer. The store no longer plays the intermediary, according to a January
2000 article in the Journal of Commerce.