The Evolution of E-Business

"The Evolution Of E-Business"

The growth of the Internet in the past 10 years has been phenomenal. Companies large and small have embraced the Internet as a tool that can potentially expand their business beyond the traditional boundaries, which can give them a competitive advantage in the market place. The Internet and E-business websites seemed to many companies in the mid nineties as an elaborate, expensive and unnecessary company brochure. But the rapid evolution of e-business and Internet usage has seen their opinion dramatically change. In fact, companies now realise that they must participate in the e-business revolution to succeed in the modern and complex business environment. In 1996, Forrester Research Institute, a major E-commerce industry analyst, predicted that Business to Customer sales would be a $6.6 billion business in 2000, up from $518 million in 1996. In 2000 Business to Customer sales in the United States were actually about $18 billion, or 1% of total retail sales. In addition to that it is predicted that total e-commerce transactions in the US is predicted to reach between $3-$7 trillion in 2004 alone. Using the figures as a yardstick it is easy to see how far e-business has come and how much people have embraced it in such a short period of time.

It might be fair to say that the BBS Marketing and E-Business degree program which I am currently studying is an indirect product that was created on the back of the E-business revolution.

The initial use of the Internet as a business tool was predominantly for marketing purposes, in the form of a public information website. The functions of e-business websites have now become much more complex and elaborate. Companies now use their websites for product support, customer service and retail sales and as a delivery channel for electronic goods and services. Businesses no longer use it for solely Business -to-Customer (BtoC) purposes. It is now widely used for Business-to-Business (BtoB) transactions also, in fact a Gartner e-commerce research group study, estimates that 14% of business to business transactions are currently made electronically, with that number expected to grow to 50% by 2009.

E-commerce applications were first developed in the early 1970s with innovations such as electronic funds transfer (EFT) in which funds could be routed electronically from one organisation to another. However this technology was limited to mainly large corporations and financial institutions. Then came electronic data interchange (EDI), a technology used to electronically transfer routine, which expanded electronic transfers from financial transactions to other types of transaction processing such as ordering. E-commerce basically came about in stages in the early 90s after the EDI and EFT technology was created. The stages were, The Communication stage, the Information stage and the Distribution stage.

The Communication phase (1993-1997) can be defined by the rapid adoption of e-mail. From AOLs carpet bomb approach, getting CDs in the mail, Cd at target, Cds with your washing powder, to Hotmails viral marketing, this marked a period where e-mail and Internet awareness spread infectiously, changing forever the way that people and businesses communicated. The next phase in the e-business revolution was the Information phase. This phase involved companies making websites that were specifically for information purposes, ie, what the company was about, and the products it supplied etc. This was know in industry terms as "brochure ware". I had first hand of brocuhureware myself. In first year in semester 1 we conducted a practical assignment in Internet Authoring". This assignment was to develop an information based website, using dreamweaver. Most of the information phase websites were functional but not that aesthetically pleasing. It was only through the involvement of marketing personnel was there much thought put in to the aesthetics of designing a website. Like any good company brochure marketing people wanted websites to be easy on the eye, in a bid to make consumers focus more attentively on it.

The information phase also spawned one of the biggest Internet phenomena, that was, the "Search Engine". Companies like Yahoo and Lycos initiated this marketing beast. The search engine allowed Internet users to find information they were seeking quickly. Some cynics believe it is now a case of that they help you find information that the highest bidding company wants you to find quickly. This is believed as company's can pay the relevant search engine host, money to appear higher up the list. Search engines seem to be an invaluable marketing tool for companies especially if you work it that your name appears top of the list (Inspiration Marketing).

The Distribution stage is phase we have already entered. It is the phase where you can communicate with customers 24 7 365 days a year. The Internet is the only channel that exists that is able to claim that. There are no barriers like closing time or staffing problems to contemplate. You can buy virtually anything over the Internet, e.g. I bought an authentic Japanese Officers world war 2 sword on it, "Don't ask!" the joys of impulse buying!

Online Shopping

The Electronic Shopping revolution has started and has already had a major impact on the shopping and retail scene. Shopping before the revolution consisted mostly of going physically to retail outlets, and enduring the tiresome stresses of shopping ques, lack of choice, excessive prices, and restricted opening and closing hours. The most convenient form of shopping was through mail-order catalogues or off satellite shopping channels.

Before I started college I had never conducted a transaction on-line, and I was if I remember correctly quite sceptical of doing so. I was under the perception, as a result of hearsay, that it was highly unsafe to buy-online and that credit card fraud was rife. It was only when I heard (in an internet authoring lecture in first year), that statistically you were safer giving your credit card details out on-line than giving them up at a restaurant. That aside I learned that banks now cover any credit card fraud committed to encourage usage, so there is no real personal financial risks involved in buying over the internet now.

I now conduct most of my shopping activity on-line. I have purchased everything from airline tickets to football jerseys, to even watches over the Internet successfully. This year I purchased all my Christmas gifts on-line. The main reason I would personally chose on-line shopping is convenience and price. I was able to buy all my gifts