Discuss How E-commerce Can Reduce Cycle Time , Improve Employees' Empowerment And Facilitate Customer Support

Reduce Cycle Time

Cycle time is the time where a process needed to complete from the beginning till the ending. For example, customers order process which including many sub-process such as order entry, assembly, inspection, packing and shipping. This system can helping reduce the cycle time by creating fast and direct system without wasting any valuable time. It means customers can immediately response from the sellers or the suppliers where the request to purchase the items on the system. Thus, E-commerce can reduce cycle time by eliminating the time taken to process in between supplier, intermediaries and customers. Customers can directly order the material needed no matter in what time and wherever they access to the internet because the e-commerce is operate everyday and anytime.

Improve Employees’ Empowerment

Employee empowerment is giving employees’ responsibility and authority to make decision about their work without supervision. We can use Electronic Data Interchange (EDI) to give employees have freedom and authority to access the transaction system or transparency barrier between employee and customer. Furthermore, employees can more understanding about the business and the transaction system or providing relevance feedback to customer. Thus, Employees who work under these circumstances are more productivity rather than those who work under tight supervise.

Facilitate Customer Support

E-commerce is a place where the firm can fulfill every customer with their different requirement. Furthermore, quality of service is much more emphasizing than physical product. Thus, e-commerce provide unlimited shopping hours for customer to place their order because e-commerce running 24 hours. Besides, E-commerce provides a wide range of technological solution and communication opportunity. Lastly, E-commerce provides excellent customer support system for company to attract more customers and retain current customers. The common tool in a company website is Frequently Asked Question (FAQ) that help to answer customer question about company product or services.

An example of e-commerce failure and its causes

E-COMMERCE FAILURE

An example of an e-commerce failure and its causes

First and foremost, in the e-commerce field, a notably large number of businesses were started to take benefit of the opportunities that the Internet provide. Yet, while many of these businesses are successful and profitable, the huge majority of them have had to shut down due to lack of profitable business activities. According to research, at least 210 Internet companies went out of business in 2000 (Webmergers.com 2000). In terms of business sectors, about 75% of the failed companies were in the consumer (B2C) sector and 30% were content providers.

There are several examples of well known Internet-based (e-commerce) businesses that failed. The list provided by Hinssen (2001) includes companies such as: Pets.com, Funiture.com, Bid.com, eToy.com, and Auctions.com. Other businesses include Boo.com, Toysmart.com, ValueAmerica.com, and Petstore.com. The major factor that worries business analysts and venture capitalists and other investors is that this trend is expected to continue - i.e., the majority of new e-commerce businesses are expected to fail.

The purpose of this write-up is to analyze the causes of the failure of the e-commerce businesses. Thus, we look at one of the e-commerce failure that is eToy.com.

For instance, eToy.com failed in e-commerce because of the founder of eToy.com previously worked for the Walt Disney Corporation, but had no experience with the retail toy industry. Generally management experience is considered to be one of the most important contributing factors to success or failure. Without previous experience, a business is more likely to fail. In the case of these online retailers, even though there was a wide range of experience among the leaders, it may have been the lack of specific industry knowledge that contributed to the failure.

Besides that, competition environment is one of the causes. The eToy.com was competing with companies such as Toys R’ Us that had not only an online presence, but also the perceived stable infrastructure of bricks and mortar. EToys.com strategy to offer more diverse products conflicted with the strong “toy store” branding they had created. The price wars and high customer acquisition costs also caused problems for this e-tailing.

Furthermore, customer service and poor demand forecasting also pose as a causes of failure to eToy.com. For example, in the case for the 1999 Christmas season, it decided to use a third party, Fingerhut, to fulfill orders. EToys.com described the outcome as a disaster. Seeing the disappointment on a child's face only once was enough for a parent to never buy from that company again. This electronic orders increased, particularly during the peak holiday season, eToy.com was unable to meet its delivery requirements due to its limited logistics capability and poor demand forecasting, and make eToy.com unsuccessful in e- commerce.

Finally, though the sites did offer toll free lines for customer services and attempted to have representatives in place for consumer contact, but this was not enough to create a feeling of trust and services.Thus, security and trust is another importantt factor to be considered in e-commerce businesses.

History and Evolution of E-commerce

Definition of Electronic Commerce

Electronic Commerce(EC) is the manner in which transactions take place over networks, mostly the Internet. It is the process of electronically buying and selling goods, services and information. Certain EC applications, such as buying and selling stocks and airline tickets on the internet, are growing very rapidly, exceeding non-Internet trades.

EC is not just about buying and selling, it also is about electronically communicating, collaborating and discovering information. EC will have an impact on a significant portion of the world, affecting businesses, professions, and of course, people.

History and Evolution of E-Commerce

Originally, e-commerce meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) in year 1970 which allowing businesses to send commercial documents like purchase orders or invoices electronically. In year 1980s, the development and acceptance of automated teller machine (ATM) and credit cards were the types of e-commerce. However, in 1990s, the Enterprise resource planning system (ERP), data warehousing and data mining were also included in e-commerce. When the Web first became well-known among the general public in 1994, many journalists and pundits forecast e-commerce would soon become a major economic sector. However, it took about four years for security protocols (like HTTPS) to become sufficiently developed and widely deployed. Subsequently, between 1998 and 2000, a substantial number of businesses in the United States and Western Europe developed rudimentary web sites. Recently, the E-commerce was being defined as the process buying and selling over the Internet using electronic payment services.

Timeline

1990 - Tim Berners-Lee wrote the first web browser, WorldWideWeb, using a NeXT computer.

1994 - Netscape arrived and providing users a simple browser to surf the Internet and a safe online transaction technology called Secure Scokets Layer.

1995 - Two biggest names in e-commerce are launched which is Amazon.com and eBay.com.

1998 - Electronic postal stamps can be purchased and downloaded for printing from the Web.

1999 - Retail spending over the Internet reaches $20 billion, according to Business.com.

2000 - The dot-com bust.

2003 - Amazon.com had its first year with a full year of profit.

Relater Link:

http://wiki.media-culture.org.au/index.php/E-Commerce

An example of an E-Commerce success and its causes

INTRODUCTION

KB Toys is the second-largest retailer of toys in the United States which consists of approximately 1,300 smaller mall-based toy stores in all 50 states in US, the American Territory of Guam, and the Commonwealth of Puerto Rico.
Due to their smaller retail space, KB stores do not carry sporting goods, the company is focus on video products, which account for 25 percent of overall sales. The company was purchased in 1996 by Consolidated Stores Corporation, a leading value retailer specializing in toys and closeout merchandise. In 1998, KBkids.com is started to market KB merchandise online.

KBTOYS.COM & ITS SERVICES

KBToys.com is a "click-and-mortar" business which operates more than 1,300 KB Toys retail stores in all 50 states, the American Territory of Guam, and the Commonwealth of Puerto Rico. It's one of the few E-commerce ventures that lets customers return items to the brick-and-mortar stores. KBToys.com was officially launched in late June and is less than eight months old, but it attracts millions of visitors and is consistently rated as a top performer. The website for reference is http://www.kbtoys.com. At the website, a shop cart symbol could be found out on the top of the website which enable consumers to place their selected products into it. Besides, order information such as cancel or check an order, returns or exchange could be found on the website too. Consumers can choose to pay their bills through coupons, gift cards, mail-in rebates or paypal. Other than that, birthday club, newsletter, and wishlist can also be signed-up if consumers wish to do so.

Besides selling to individual consumers, KBToys.com is also targeted on business entities by introducing KBTOYS gift card. Gift card is redeemable in any KBTOYS stores and its website. With purchase amount of US$1000.00, a volume discount will be given.

In 1999, KBToys.com received top points from an e-commerce market research firm, the Gomez Advisors, in the categories of customer confidence, overall cost, and bargain shopping. Softletter Wall Street Journal rated the site as the 'best overall' online toy retailer. In a little more than four months online, KBkids.com increased its business more than 400 percent and twice ranked among the five biggest gainers on the NextCard eCommerce Movers index.

WHY KBTOYS.COM IS A SUCCESSFUL E-COMMERCE WEBSITE?

1. The web page is clean, full of attractive graphics, easy-to-use shopping-cart and check out functions which make consumers convenient and comfortable when using the website. The graphics that used are able to attract the eye to products.

2. The website provides an excellent search capabilities which comb through 10,000 products to help customers find what they are seeking. The search engine match the product title with age group, price, short description and a link to more details.

3. The privacy policy that provided by the website securing customers information online remains private. The website use Secure Sockets Layer (SSL 128-bit) encryption to scramble customer personal and credit card information as it travels over the Internet during the checkout process on the web site.

4. KBToys.com make it easier for customers to compare and contrast toys that sold on the website because it is not easy to compare each toys by just looking at multiple toys.

5. The website supplying variety types of products such as toys & games, video games, party supplies, electronics and movies & videos. Moreover, the toys are categorized based on age group such as from 0-12 months till 17+ years old, based on types such as action figures, arts & crafts, outdoor play, science, sport and etc which make customers convenient when selecting toys that suited to their needs.

Useful links:
1. http://www.kbtoys.com
2. http://www.linkedin.com/companies/kb-toys
3. http://www.bizrate.com/merchant/coe__mid--908.html