This being said some areas of e-commerce are becoming successful new ventures on the net. Throughout this essay we will look at what e-commerce is, how it is being used and who is using it. It will also be considered whether e-commerce will ever replace bricks and mortar retailers or will e-commerce disappear? E-commerce is a business that is run on the internet rather than from a bricks and mortar location. E-commerce uses computer networks and telecommunications to conduct its business as it has no face to face contact with its customers.
It can be argued that e-commerce is a more effective way of doing business. (NOIE, 2000) This is because it does not require all the overheads and staff required in a bricks and mortar business. However E-commerce is more complicated than it may first seem, more is involved than the simple transfer of funds over the internet. For an online business to be a success it must be planned, established and run as if it were a bricks and mortar business. E-commerce ends with the buying and selling of goods and services over the internet. (Mitchell.J, 2000)
Marketing of goods and services, formation of customer relationships, presentation of goods and services for consumers to brows, transfer of funds and after sale customer care must all be established and maintained. E-commerce can be conducted in a Business to business (B2B), Business to Government (B2G) or Business to consumer (B2C) way. B2C e-commerce is an area of significant growth. Many Australians are choosing to use the internet to make purchases. A study conducted by NOIE revealed that in 2002 54% of Australians had access to the internet in their home.
Although online consumption is not one of the highest ranking activities conducted by Australians on the internet it is an area that is growing. (NOIE, 2000) One specific area of growth is the use of online banking. (DCITA, 2001) Consumers enjoy the convenience of doing their banking from home on the internet rather than traveling to the bank and standing in line waiting to be served. The most popular online shopping category in Australia however is travel and its related services. Consumers enjoy browsing online for the best deal and creating their own holiday packages.
Purchasing travel online also cuts out added fees such as the travel agents commission if flight and accommodation are bought directly from the source rather than through a representative. In a study conducted by NOIE it was found that between 2000 and 2003 there was an increase of 452%in online travel purchase. (DCITA, 2001) This is a hugely significant amount. Other high ranking consumption products on the internet included; books, computer software, computer hardware, music and videos, clothing and share trading. (DCITA, 2001) There are a number of reasons why people choose to use e-commerce rather than traditional bricks and mortar.
These reasons are the convenience of the internet, the global scope the internet has to offer and the ease of access. In an increasingly fast passed world convenience is increasingly important. E-commerce provides consumers with the convenience of shopping from home at any time of the day or night, this removes opening hours, travel and queuing as well as spending time looking for a specific good or service. Consumers can log on to the internet conduct a search for the product they wish to purchase and then purchase online quickly and efficiently. Time poor people are using the internet more and more to purchase goods and services.
In the lead up to Christmas 1999 Australians spent $150 million on gifts online. (NOIE, 2000) Most of these purchases were made by people who did not have the time to shop at bricks and mortar retailers during business hours. This change in access makes it easier for consumers to find the time to shop; it also helps to take the stress out of shopping. E-commerce also provides consumers with access to a global market. Previously consumers had limited channels for obtaining international goods they wish to purchase E-commerce has created ease of access to international goods and services.
Never before has it been so easy to purchase from overseas. Due to the global nature of the internet consumers can brows through what retailers have to offer throughout the world, easily make purchases and have the goods they choose posted to them. This has provided consumers with a new scope of choice which is much bigger than anything offered before. Not only does this ease of access globally mean that Australians can purchase goods and services from around the world, it also means that the world can now easily purchase goods from Australia.
E-commerce has opened Australia up to potential consumers that did not exist previously purely due to the inability to access the goods and services available. Due to the internets ease of access e-commerce has opened up a whole new world to people with disabilities, specifically disabilities that inhibit a persons ability to move easily to and from shopping areas. (DCITA, 2002) The internet is easy to use in the home environment and offers an alternative to people who find it difficult to shop at bricks and mortar retail outlets.
This also offers empowerment to individuals who previously relied on someone else to do their shopping for them or helped them to shop. These people can now have the independence of doing their own shopping online and the enjoyment of browsing through what different retailers have to offer. Although e-commerce is growing and offers many exciting new opportunities to consumers it is unlikely that it will ever totally replace brick and mortar commerce. There are many aspects of traditional bricks and mortar commerce that cannot be replicated online and as a result of this can never fully replace traditional commerce.
Some of these areas include the ability to try products, the social aspect of shopping the entertainment value in shopping, the instant gratification of shopping and the inhibiting effects of the internet. Consumers enjoy browsing through goods and services available to them. (ACS, 2001)This can be done online but not to the same extent as it can be taken to in bricks and mortar retailers. On the internet consumers can only look at a picture of the product they intent to purchase. In bricks and mortar retailers however consumers can make use of their sight, hearing, smell and taste as well as feel a product before they purchase it.
Due to the limitations of the internet in this stage of the purchase decision making stage there is more space for post purchase dissonance to occur. When people can use all their senses to make a purchase decision the decision is generally more definite. As well as using all five senses to assist in the decision making process consumers also have the chance to try the product they are thinking of buying in the bricks and mortar environment before they actually do. (ACS, 2001) This is generally not feasible over the internet.
Some software programs provide a demo for consumers to trial before they make a purchase, bulky products however cannot be trailed in such a way. Bricks and mortar retail has also become a social activity and a form of entertainment. (ACS, 2001) People meet to go shopping and enjoy the contact they have with people while undertaking this activity. This type of social interaction cannot be recreated in e-commerce. While there are other social activities that can be undertaken on the internet e-commerce does not provide a social aspect.
Many bricks and mortar centers of commerce have become entertainment hubs that attract tourists from around the world. Bricks and mortar retail also provides an instant gratification to consumers when they make their purchases and can take them with them. This is generally impossible through e-commerce because the goods need to be posted out to the consumer. (ACS, 2001) While e-commerce assisted some people with disabilities to become more independent it has also created new barriers especially for people who are vision impaired.
(Noonan, 1999) No technologies have yet been created to allow this group into the online world. This is a problem due to the fact that it limits these peoples opportunities to benefit from the many aspects the internet and e-commerce has to offer. The elderly is another group that has not been included fully in this e-commerce revolution. More training programs need to be designed to bring our older Australians online and teach them what e-commerce has to offer them. Many elderly Australians would find that e-commerce gave them a new independence if they knew how to use it.
Throughout this essay we will look at what e-commerce is, how it is being used and who is using it. It will also be considered whether e-commerce will ever replace bricks and mortar retailers or will e-commerce disappear? E-commerce is the online transfer of goods and services to consumers. As stated many Australians have taken to using e-commerce because of the convenience it offers to them, however some people including the elderly and those with disabilities are being left out to some extent. Although e-commerce continues to develop it is highly unlikely that it will ever totally replace bricks and mortar commerce.
The experiences that the two offer are so different that they are both used for different reasons. E-commerce is used for convenience where traditional retaile is often used as a social activity and a form of entertainment. E-commerce has not been adopted in Australia as readily as it has been in some other countries, it will however continue to provide consumers with the convenience of home shopping. Many Australians now would not want to go back to traditional commerce and be force to go into a bank to do their banking rather than simply logging on at home.
The e-commerce revolution will continue to grow but brick and mortar will also remain.
Noonan, T. (1999) Accessible e-commerce in Australia. Retrieved: November 23, 2004, from: http://www. bca. org. au/ecrep. htm Mitchell. J, (2000) The implementation of E-competent Australia 2000 for VET. Retrieved: November 14, 2004, from: http://www. flexiblelearning. net. au/nw2000/talkback/p71. htm The Australian Government Treasury. (2003)The internet and B2C E-commerce. Retrieved: November 14, 2004, from: http://www. ecommerce. treasury. gov. au/bpmreview/content/DiscussionPaper/03_Chapter2. asp