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The Main Components of E-Commerce

The Main Components of E-Commerce

Some field experts would consider all business deals and activities that are being conducted using modern Telecommunication and Information Technology methods as E-commerce. World Wide Web, mobile phones, fax and TV are some of the methods people use to conduct business nowadays. However, this article is going to focus primarily on the components of E-commerce for an Internet business being the most popular platform for E-commerce activities.

All E-Commerce sites have three components. The first is some type of catalog. A catalog can vary from just a few items to a complex presentation of thousands of products. The nature of the firm’s operation determines the type of catalog required. In every case, customers should be able to find the products of interest. Photos and product information are important in creating appealing online catalogs.

Second, each site must have some type of shopping cart to assist consumers as they select products. Again, the shopping cart can range from just checking a circle for an item when only a few products are offered to more complicated shopping carts that keep records of multiple purchases.

Third, each site must establish some way for customers to make payments for the things they purchase. For consumers, this normally is a credit card system. For business to business operations, payments are normally made through a voucher system. In other situations, a bill is generated or a computerized billing system is used so that the invoice goes directly to the buyer. In more trusting relationships, the invoice is added to the customer’s records without a physical bill ever being mailed.

In spite of the fact that such systems are already in place, many consumers are still wary of purchasing products over the Internet. There are two reasons for this reluctance: (1) Security issues and (2) Purchase behavior habits.

(1) Security Issues:

Consumer fears about security are based on worries about credit card number being stolen. Others are concerned about fraud where a retailer takes the money but does not ship the merchandise. Both can cause people to resist making Internet purchases.

To resolve these problems, a review of the past may be helpful. When telephone orders were first encouraged by email order firms, people were hesitant because of fears about giving out a phone or credit card number to a stranger they couldn’t see. Now, nearly everyone is willing to provide the information while placing orders on the phone. Also, it wasn’t that many years ago that credit card holders expressed anxiety about various store employees stealing those numbers. Originally, customers were instructed to – – take the carbon – – from a credit card purchase to make sure it was torn into shreds in order to prevent an employee from using the credit card number later.

The same pattern is likely to follow with internet shopping. As consumers become accustomed to using the Web, fears about giving out credit card information will be no greater than they are for telephone orders or credit card sales. IBM and Master Card have created a series of independent television commercials designed to calm and reassure people about the quality of their Internet security program; however, these efforts are set back each time a major virus is turned loose. Also, the Verified by Visa program is designed to create additional security for online credit card purchases.

(2) Purchasing Habits:

The second issue has strong ramifications regarding the ultimate success of E-commerce. Currently, many customers are most comfortable when they buy merchandise at retail stores. Some are also comfortable buying through catalogs. It will take time to change these habits, especially the preference for retail shopping.

At the retail store, consumers can view and touch the merchandise. They can inspect it for defects and compare brands. Clothes can be tried to make sure they fit. In addition, the customer can see how the clothing item look while being worn. Changing these habits requires the right kinds of incentives. Consumers and businesses must have valid reasons for switching to making purchases via E-commerce instead of traditional methods (at the retail store or following a call from a salesperson). To overcome this handicap, many E-commerce firms are trying to develop incentives that will attract customers to make purchases in this new format.