Information Technology Reference
In-Depth Information
APPLICATIONS
E-commerce and m-commerce are being used in innovative and exciting ways. This section
examines a few of the many B2B, B2C, C2C, and m-commerce applications in the retail and
wholesale, manufacturing, marketing, investment and finance, online real estate services, and
auction arenas.
Retail and Wholesale
E-commerce is being used extensively in retailing and wholesaling.
Electronic retailing
,
sometimes called
e-tailing
, is the direct sale of products or services by businesses to consumers
through electronic storefronts, which are typically designed around the familiar electronic
catalog and shopping cart model. Companies such as Office Depot, Wal-Mart, and many
others have used the same model to sell wholesale goods to employees of corporations. Tens
of thousands of electronic retail Web sites sell everything from soup to nuts.
Cybermalls are another means to support retail shopping. A
cybermall
is a single Web
site that offers many products and services at one Internet location—similar to a regular
shopping mall. An Internet cybermall pulls multiple buyers and sellers into one virtual place,
easily reachable through a Web browser.
Sears, the company that pioneered the use of the mail-order catalog back in the 1890s,
is making a major investment in B2C e-commerce, employing more than 100 technology
workers to improve its online sales. It ranks as the second largest mass merchant retailer online
with recent sales of $2.6 billion (Amazon.com is ranked number one). With the number of
unique visitors per month growing at over 20 percent, Sears is the second fastest growing site
among mass retailers (Costco is ranked number one). Some industry experts believe that
Sears.com may turn into a cybermall that sells all kinds of products and competes with
companies such as Amazon.com.
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A key sector of wholesale e-commerce is spending on manufacturing, repair, and opera-
tions (MRO) goods and services—from simple office supplies to mission-critical equipment,
such as the motors, pumps, compressors, and instruments that keep manufacturing facilities
running smoothly. MRO purchases often approach 40 percent of a manufacturing company's
total revenues, but the purchasing system can be haphazard, without automated controls. In
addition to these external purchase costs, companies face significant internal costs resulting
from outdated and cumbersome MRO management processes. For example, studies show
that a high percentage of manufacturing downtime is often caused by not having the right
part at the right time in the right place. The result is lost productivity and capacity.
E-commerce software for plant operations provides powerful comparative searching capa-
bilities to enable managers to identify functionally equivalent items, helping them spot
opportunities to combine purchases for cost savings. Comparing various suppliers, coupled
with consolidating more spending with fewer suppliers, leads to decreased costs. In addition,
automated workflows are typically based on industry best practices, which can streamline
processes.
electronic retailing (e-tailing)
The direct sale from business to
consumer through electronic
storefronts, typically designed
around an electronic catalog and
shopping cart model.
cybermall
A single Web site that offers many
products and services at one
Internet location.
Manufacturing
One approach taken by many manufacturers to raise profitability and improve customer
service is to move their supply chain operations onto the Internet. Here they can form an
electronic exchange
to join with competitors and suppliers alike, using computers and Web
sites to buy and sell goods, trade market information, and run back-office operations, such
as inventory control, as shown in Figure 8.6. With such an exchange, the business center is
not a physical building but a network-based location where business interactions occur. This
approach has greatly speeded up the movement of raw materials and finished products among
all members of the business community, thus reducing the amount of inventory that must
be maintained. It has also led to a much more competitive marketplace and lower prices.
Private exchanges are owned and operated by a single company. The owner uses the exchange
electronic exchange
An electronic forum where
manufacturers, suppliers, and
competitors buy and sell goods,
trade market information, and run
back-office operations.
