Warehouse needs more staff to manage, supervise and organize, thus the condition of warehouse environment will be concerned by employees. E-commerce brings convenience for customers as they do not have to leave home and only need to browse website online, especially for buying the products which are not sold in nearby shops.
Consumers also gain power through online shopping. They are able to research products and compare prices among retailers. Also, online shopping often provides sales promotion or discounts code, thus it is more price effective for customers. Customers can also review and track the order history online. E-commerce technologies cut transaction costs by allowing both manufactures and consumers to skip through the intermediaries. This is achieved through by extending the search area best price deals and by group purchase. The success of e-commerce in urban and regional levels depend on how the local firms and consumers have adopted to e-commerce.
However, e-commerce lacks human interaction for customers, especially who prefer face-to-face connection. Customers are also concerned with the security of online transactions and tend to remain loyal to well-known retailers. This process is inconvenient as customers need to pack and post the goods. If the products are expensive, large or fragile, it refers to safety issues. In , E-commerce generated 1. Only 35 percent of North American cardboard manufacturing capacity is from recycled content. The recycling rate in Europe is 80 percent and Asia is 93 percent.
Amazon, the largest user of boxes , has a strategy to cut back on packing material and has reduced packaging material used by 19 percent by weight since Amazon is requiring retailers to manufacture their product packaging in a way that doesn't require additional shipping packaging.
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Amazon also has an person team researching ways to reduce and improve their packaging and shipping materials. E-commerce has been cited as a major force for the failure of major U. Many companies have turned to sales promotions and increased digital efforts to lure shoppers while shutting down brick-and-mortar locations.
E-commerce has grown in importance as companies have adopted pure-click and brick-and-click channel systems.
Types of B2B Application Integration
We can distinguish pure-click and brick-and-click channel system adopted by companies. E-commerce may take place on retailers' Web sites or mobile apps , or those of e-commerce marketplaces such as on Amazon , or Tmall from AliBaba. Those channels may also be supported by conversational commerce , e. Conversational commerce may also be standalone such as live chat or chatbots on messaging apps  and via voice assistants.
The contemporary e-commerce trend recommends companies to shift the traditional business model where focus on "standardized products, homogeneous market and long product life cycle" to the new business model where focus on "varied and customized products". E-commerce requires the company to have the ability to satisfy multiple needs of different customers and provide them with wider range of products. With more choices of products, the information of products for customers to select and meet their needs become crucial. In order to address the mass customization principle to the company, the use of recommender system is suggested.
This system helps recommend the proper products to the customers and helps customers make the decision during the purchasing process. The recommender system could be operated through the top sellers on the website, the demographics of customers or the consumers' buying behavior.
However, there are 3 main ways of recommendations: recommending products to customers directly, providing detailed products' information and showing other buyers' opinions or critiques. It is benefit for consumer experience without physical shopping. In general, recommender system is used to contact customers online and assist finding the right products they want effectively and directly.
From Wikipedia, the free encyclopedia. Type of business industry usually conducted over the internet. Conversational commerce : e-commerce via chat Digital Wallet Document automation in supply chain and logistics Electronic tickets Enterprise content management Group buying Instant messaging Newsgroups Online banking Online office suites Online shopping and order tracking Pretail Print on demand Shopping cart software Social networking Teleconferencing Virtual assistant artificial intelligence Domestic and international payment systems.
Main article: Supply chain management. Alternative payments Comparison of free software e-commerce web application frameworks Comparison of shopping cart software Comparison of payment systems Customer intelligence Digital economy E-commerce credit card payment system Electronic bill payment Electronic money Non-store retailing Paid content Payments as a service Types of e-commerce Timeline of e-commerce South Dakota v. Wayfair, Inc.
October Retrieved 1 January The Guardian. Retrieved 17 June IDG Enterprise. Retrieved 28 March The first pilot system was installing in Tesco in the UK first demonstrated in by Michael Aldrich. Study mode. BBC News. Retrieved 8 March GS Brown. Archived from the original on 15 May Retrieved 21 December Conrad Geiger. Archived from the original on 8 September Retrieved 20 March The New York Times. Sunday Business. Retrieved 16 July Procedia - Social and Behavioral Sciences. Sino Foreign Management. Archived from the original on 23 February Retrieved 3 September Donnelley Acquires Business.
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Archived from the original on 2 May Retrieved 4 March The Guardian report. Retrieved 18 June Internet Retailer. Tech In Asia. Retrieved 17 September Retrieved 13 February Even though CloudCraze has built its technology on the Salesforce platform, the needs it addresses have very little overlap with the areas where Demandware's technology has excelled. CloudCraze caters for businesses with complex price books and discount structures, from industrial manufacturing to chemicals distribution, Grady explains.
How these businesses split their inventory, the volume of orders they handle, the way they price specific customer contracts, or their support for subscription payments or different payments types — all of this is beyond the scope of a retail commerce platform. Similary, CloudCraze wasn't engineered for the highly promotional, highly merchandized product sets that Demandware excels at.
Bringing those consumer-world approaches into B2B selling will help companies reduce their costs, find new customers, or bring new products to market, says Grady:. It's early innings, but these B2B companies are deploying B2C tactics where it makes sense and seeing big returns. Equally important is integration to the rest of the Salesforce portfolio, he adds. Digital commerce can extend the self-service functionality of Service Cloud for example. There's also a natural fit with the configure-price-quote CPQ capabilities of the Salesforce Quote-to-Cash product, which CloudCraze started working with even before its acquisition by Salesforce in late This will continue to be a big focus now that CloudCraze is part of Salesforce, Grady confirms:.
If you look at the broader product conversations happening in Salesforce today, we're probably spending as much time talking about CPQ and commerce B2B, as about B2B and B2C commerce together. Closer integration across the different functions involved in the B2B customer relationship will make for a more seamless experience, says Grady. The product portfolio consists of more than one million items for maintenance, repair and operations. The company achieved USD 1. At the beginning the sales were generated primarily by mail order cards and catalogue. Some years later the company began to operate over-the-counter as well.
Grainger recognised the opportunities of technological changes rather early. Four years later the corporate website was launched and in customers started to order in the internet. On the website of Grainger customers can easily search and compare products, create personal lists, review orders and invoices of the past two years, control and allocate costs to their own cost centres.
All these features allow customer to reduce paper work and consequently administrative costs. This type of marketplaces is usually used for purchasing indirect goods on long-term basis. The value of goods sold by e-distributor is relative low, whereas the transaction costs concerning these products are relative high due to purchasing frequency. So e-distributors may add value to buyers by increasing efficiency in procurement Lichtental and Eliaz, E-procurement companies charge percentage for each transaction and fees for using the network.
They are operated by an independent third party and considered to be independent Laudon and Traver, In comparison to e-distributor, e-procurement net marketplaces offer additional services to both buyers and sellers like automatic purchase orders, sourcing, invoicing and payment, catalogue creation, content management, order management, shipment, etc. At the same time they add value by offering customers a convenient access to a wide selection of diverse suppliers, pricing offers, coupled with product information and services Berthon et al.
For instance, Ariba. Ariba offers not only a network for buyers and sellers, but also a great number of specific customised services, such as management information and communication tools within the system. They may include reporting, automated messaging, and web meetings. Also marketing and sales data can be consolidated into one reporting system for easy access, analysis, and decision making. So it may help companies to make a right choice of their future partners.
Company also helps to drive contractual compliance between sellers and buyers. Validated invoices can be transported directly to ERP-system of buyers or into a payment system Ariba Inc. As described in this example, e-procurement net marketplaces add value for both parties, which are involved in the process.
Figure 6 E-procurement scheme see online version for colours Source: Laudon and Traver 3. They serve vertical market within single industry. Independent exchanges charge a commission for each transaction and any buyer or seller is allowed to participate there. The main advantage for buyers is lower prices due to strong competition in independent exchanges. Sellers benefit by receiving an easy access to potential customers Albrecht et al.
Smarterwork illustrates this kind of net marketplaces, which offers mostly services. Smarterwork specialises on linking companies and qualified service providers together. They provide staff for a concrete project and their own facilities, like PC, software and office space. Such projects may be conducted in different areas, like the internet services, marketing, web design, legal and tax services, etc.
It means that a company can employ qualified specialists just for one project. As soon as the project is over the contract between employee and the company will be also ended. It means that the company can save fix costs on personnel dramatically. Moreover, by providing the necessary facilities Smarterwork allows the buyers to save the costs in this area as well.
In practice it works like following. The buyers post the project description on the web site of Smarterwork and receive the quotes. Based on information concerning price, reputation and rating of a person buyers can choose the appropriate service provider.
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After the project is over and the final approval of the project is done, the buyer and seller evaluate each other and give feedback. As soon as it is done, the payment follows Smarterwork, In such case the sellers can reach their clients easily, negotiate on prices and conditions. The buyers will use Smarterwork to achieve many different service provides and to be secure that the quality of the services provided by seller is on a high level.
The transparent feedback and ratings secure the high quality of provided services. That adds value to the exchange, so that the counterparts prefer to use it. They serve vertical markets and bring together a great number of suppliers with a small number of very large buyers. They are used to form long-term relations for purchasing direct goods. The main goal of industry consortium is to unify supply chains within the whole industry, across many tires through common data definition, network standards and common platforms. Buyer and seller have to pay fees to enter consortium.
Industry consortiums are usually used by automotive and chemical industry, where the number of suppliers is huge and market force belongs to buyer Johnson and Klassen, As mentioned by Johnson and Klassen , p. The scheme of industry consortia is presented in Figure 8. Here such marketplaces as Exostar. They bring companies from healthcare industry together to create new efficient processes and reduce errors in the healthcare supply chain. GHX customers can save money by connecting to GHX and using complementary software solutions to automate procurement processes.
In addition, GHX plays critical role in facilitating collaboration among trading partners through which companies can address common issues and opportunities for improvements. Figure 8 Industry consortia scheme see online version for colours Source: Laudon and Traver 3. It sets the rules, establishes control mechanisms and invites firms to participate in its network. Private industrial networks focus on strategic direct goods and services and are interested in long-term relations. Private industrial network helps companies to develop efficient purchasing and selling business processes, demand forecasting, conflict resolution, and resource planning.
It increases supply chain visibility and achieves closer buyer-supplier relations Cullen and Webster, ; Laudon and Traver, Private industrial network makes sense when there is an opportunity for competitive advantages and there is no public or industry sponsored marketplaces or they are inefficient Johnson and Klassen, Today private industrial networks form the largest part of B2B e-commerce.
For example, some years ago Volkswagen Group introduced the Group Business Platform see Figure 9 as a tool for communication and cooperation with its suppliers in order to optimise processes and improve the quality level. In this case, the goal of the company was not just to find partners, but also to integrate their suppliers into all business processes, such a procurement, logistics, quality, technical development, and sustainability.
The basis for that communication is the internet, the data is exchanged through a coded connections and a common interface is used. Every supplier for car manufacturers, which conforms the special requirements of VW Group, can make an application to enter the private industrial network Volkswagen Group, The role of e-commerce in B2B markets of goods and services 59 Figure 9 Private industrial network scheme example of VW Group see online version for colours Source: Volkswagen Group 3.
Now these dimensions will be deeply described and analysed. E-commerce enables the cost reduction during every stage of the buying process, namely, before, during and after the purchase Luckey-Reiley and Spulber, Based on technological change a less costly way to carry out these processes was found. It was discovered that there are new methods which can be used and certain business activities can be completely restructured Borenstein and Saloner, Before purchase e-commerce reduces costs for searching for suppliers, product quality verification and negotiation.
It is crucial to point out that the advantages of e-commerce can be used by sellers as well as by buyers. During these stages B2B e-commerce gives an opportunity to minimise the coordination costs, concerning information and communication. For the buyers e-commerce reduces the search costs, connected with time and efforts in finding products, services and information about them. And hence, it reduces costs of search for potential suppliers Borenstein and Saloner, It gives a relative inexpensive opportunity to compare products, prices, quality, etc.
Hence, e-commerce may lead to increased transparency of the markets. In the past business information was limited and difficult to collect. Now, the internet provides a large amount of information regardless of its location, time zones and it enables companies to customise it.
It makes it easier and quicker for organisations to find the most suitable business partner Andal-Ancion et al. For example, initial search for a product can be done using search engines. They search automatically through millions of documents in the internet by key words, entered by user. The users can search across many sites, states, countries very quickly and efficient. Also comparison sites can be used, which enable comparison of product categories by attributes and price.
Web bots and intelligent agents can be also named as mechanisms to facilitate search in the internet. Web bot combs sites for prices each time the request is done, whereas intelligent agent seeks out prices and features and negotiates on price for purchase Borenstein and Saloner, Another method to search for information is online catalogues.
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They provide an opportunity to search products and their features in one single place. Moreover, e-commerce gives flexibility in dealing with information and provides greater interactivity in comparison to printed catalogues or phone calls. For sellers the internet creates value due to reduced cost of transferring many types and amount of information. It is getting to be an effective information transmission channel, which also provides an opportunity to customise information based on different target groups. Though initial investments in running business via e-commerce involve high fix costs, the marginal costs of providing transaction information to market participants appear to be near zero Luckey-Reiley and Spulber, Very detailed information can be provided at low costs and extreme economy of scale can be achieved.
This point is especially important when the size of potential market to be served increases. If via e-commerce a large audience is reached, the costs per contact are getting to be really low in comparison to other communication methods Borenstein and Saloner, During the first stages of purchasing process also communication expenses can be saved, such as travel and phone costs, costs of physical space for meetings. E-commerce enables effective asynchronous communication.
Access to information every time the customer needs it can be secured; especially it is valuable when different time zones are involved Borenstein and Saloner, Moreover, negotiation and decision costs can be reduced as well. Time normally taken by customers to negotiate can now been used for other purposes as intelligent agents transact and negotiate on the customers behalf. Online bidding can achieve similar results. For examples, GE in purchased USD one billion from 1, suppliers over the internet and there is evidence of a substantial increase since. Significantly, the bidding process for the firm has been cut from 20 one to ten days Berthon et al.
The next steps of purchasing process involve ordering, shipping and invoicing. For these process steps the operating costs may be reduced. The average cost per order transaction is about 50 dollars Borenstein and Saloner, Processing a purchase order in customer service means paperwork, manual data entry, phone calls, faxes, approval requests. That leads to high personnel expenses. Online transactions can reduce these costs by factor of five to ten Luckey-Reiley and Spulber, When a customer makes an order online, the number and time of interactions will be reduced, causing significant time savings.
Since the number of interfaces is reduced, the probability of making mistake in the order entry may be lower during the order entry process the most mistakes are done during the transfer of information from customer to representative of selling company. Hence, a number of complaints could sink. Additionally, the improved information flows lead to lower levels of inventories for both parties. As soon as customers prefer ordering online the cost saving on distribution will be potentially very high. That leads to cost reduction connected within store space, stocking, shelves maintenance, theft, rent and selling costs Borenstein and Saloner, At the next stage in the procurement process, the electronic invoice can be generated, causing savings on paper and manual work.
Previously, customers had to wait to receive statements of accounts and then checked them for correctness. Electronic ordering and billing allow buyers to check statements in real time Berthon et al. Online payments can also positively influence cash management and consequently the liquidity of a company. Furthermore, after sales are done, e-commerce gives an opportunity to customers to manage their orders, provides information on accounts, invoices, deliveries.
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Whenever the copy of invoice is needed it can be printed online instead of calling the customer service or customer administration departments and waiting for copies. Due to e-commerce also the enforcement costs can be abated. If a problem with supplier exists for example, it could concern warranty or delivery delay issues it would require expensive legal assistance in real world. Chat line, bulletin boards and online media offer an easy and inexpensive way of making suppliers listen and act according to the signed contract Berthon et al.
It acts as a dialogue simulator, facilitates interactivity and real time information exchange. Due to relative open information flows from both sides B2B e-commerce can be used in different perspectives facilitating the relationships between companies. Therefore it leads to sustainable profitable growth of both parties.
By increasing cooperation between buyers and sellers e-commerce may improve the customisation of offers, quality of products based on analysis on sales history and forecasts. It fosters the relations due to cooperation in supply chains. It is also important to mention that B2B e-commerce technologies can be used to build up and sustain competitive advantages for companies.
As B2B e-commerce need modifications and adjustments constantly, as infrastructure must be build up and managed over extended period of time. It is possible to conclude, that companies are going to build B2B e-commerce relations just with partners whom they trust and who have committed to the collaboration. So in the situations, when partners decided to invest in B2B e-commerce, it can be a competitively valuable capability over other companies or networks McAfee, Here a link to the commitment and trust concept of Morgan and Hunt, which was discussed in Subsection 2.
In e-commerce, the proposed framework is not just confirmed, but the value of trust and commitment is even more significant as in offline business. If a customer trusts online supplier he is even more committed to open communication and share of information Lancastre and Lages, Lee et al. Basic B2B e-commerce refers to sending and receiving order information, automated exchange of commercial document. It gives an opportunity to increase the speed and accuracy of document transfers, but it does not change operations with the partner for the company.
Collaborative e-commerce includes not just document exchange, being a new mean of communication, but also the partners adopt the B2B network to establish new interfirm collaboration. They also emphasise that the organisation which implements a collaborative form of e-commerce may offer a significant productivity improvements in comparison to basic form.
Collaborative B2B e-commerce tightly couples the business processes of the partner firms and hence increases the interdependences between the partners Lee et al. This idea is illustrated in Figure Information exchange can reduce the uncertainty and lead to more efficient decision making and investments. For example, based on daily information provided by retail partners manufactures can make production planning and inventory decisions.
This leads to more efficient management of production facilities and stocks. The role of e-commerce in B2B markets of goods and services 63 Furthermore, retail companies may profit from collaboration and achieve significant reduction of inventory levels and stock outs. Such narrow relations compel companies to adopt their local processes in order to collaborate in the network.
Obviously, that requires careful coordination, trust and support within chain partners Lee et al. Figure 11 Communication structure in two forms of B2B e-commerce see online version for colours Source: Lee et al. In the case of collaborative B2B e-commerce the establishment of new communication structure is needed. The traditional single point of contact is expanded into links between multi-level stages and departments. This direct communication enables to realise the performance improvements.
New trends in IT facilitate this process and point out the dynamic future development of this new way of doing business Tjoa and Quirchmayr, All these technical innovations and advances secure the future development of B2B e-commerce. B2B e-commerce has been promptly growing all over the world, as it is considered to be a medium to improve business efficiency. The use of the internet has a dramatic impact on both buyers and sellers as well as on the whole network of information, goods and financial flows.
According to the study conducted by McKinsey Global Institute in the internet embraces businesses, individuals, governments and entrepreneurs new business models, leading to radical innovations in accessing, using and delivering goods and services. The research demonstrates that the internet is now used in every country, in each sector and by most of the companies and counts for about 3.
If the internet were a sector, it would be bigger than energy or agriculture industries and its contribution to GDP would be bigger than those of Spain or Canada Pelissie du Rausas et al. Figure 12 illustrates this statement.
As well it has a great impact on the development of small and medium-sized enterprises SME.