E-Commerce
Internet sales at DELL Computers exceeded USD 30 million per day in the second quarter of 1999, according to the company’s quarterly earnings report. Overall, Internet sales accounted for 40% of the Company’s total revenue in the second quarter of the year. DELL also reported that the use of the Internet to develop & support other sectors of the business had increased by close to 30%, specifically in the areas of business procurement, customer support & relationship management.
In March 99, IBM’s Online sales are generating revenue in the region of USD 1 billion per month. This compares to the total revenue of USD 3.3 billion, generated by the sale of IBM computers & online software. In addition IBM expects that selling over the Internet will reduce costs by USD 340 million. “An online transaction is 70-90% more cost effective than a transaction involving human”, according to Richard Anderson, G.M Enterprise Web Management at IBM.
In February 1999, Intel Corporation outlined its vision of a billion Internet-connected PC’s & millions of servers generating one Trillion $$ of annual e-commerce revenues within the next few years. By the year, Intel estimated that annual e-commerce industry revenues will top One Trillion $.
Does a business doing well in the traditional world need to make the transition to becoming an E-biz ? DELL & IBM are just two of thousands of businesses in US that have benefited from the transition. According to Internet Computing “ Consumer Shopping over Net will be $ 15-$ 20 billion by the year 2003” Forrester Research reports,” Service industries will be shaken up by the Internet, as $ 220 billion in sales moves on-line by 2003 “.
By the end of 2003, over 56% of all US households will have a personal computer with same amount of On-line penetration. As per EC Review “ Experts were predicting levels of e-commerce trade by consumers to in the $ 200-300 billion range within next 3-5 years. Now its been heard about trillion $ estimate being circulated.” The adoption rate of the Internet by the world’s population continues to skyrocket as the Internet becomes more important & Computer technology becomes faster & less expensive.
Global Reach : The internet is a global network of computers, so anyone from anywhere in the world can access information that’s put up on the web. There are no restrictions of geographical boundaries or time zones. It’s the medium with global reach & minuscule costs at the same time. Because of Global reach, niche products that could not have been efficiently marketed before because of limited local demand, can now have access to a market that has sufficient demand worldwide.
Convenience : The difference being that this doesn’t keep the usual business hours from 9 to 5, but open 24 hours a day, 7 days a week, 365 days a year. This is of enormous value to businesses that are targeting customers all over the world. A prospective customer can get information from the Company’s website all at their convenience, oblivious of the difference that exists in time zones.
Level playing field: The Internet offers a level playing field. Start-up companies, established Companies, small or big Companies all are treated equal on Internet. With a very basic amount required to create a website, & with proper steps to promote & make the site visible, a one-man company can earn more revenue as compared to a larger, more established company on the Internet.
Speed: Information on net is transferred very fast compared to traditional methods of transmitting data. An e-mail usually takes a few seconds to go anywhere in the world & cost hardly anything, while faxing or sending the same document by the post would be expensive, or involve huge delays.
Multimedia support: Unlike any other media, the Internet supports audio, video, print, graphics, & all that allows user to choose what he wants to see or hear.
Interactivity: Traditional Media forces information to customers, often making the customer passive observer. A website being dynamic offers two-say communication.
Customization: The Internet can be used to personalize information presented to the customer. Using tracking technology, customers can determine a customer’s tastes & preferences & highlight products or services that carter to his tastes the next time he visits the site.
Information dissemination: This is the basic purpose of any website to spread current & up-to-date business & product information to the outside world. So the prospective & new customers can find out more about the company’s line of business.
Sales: The entire transaction, right from locating merchandise to ordering & paying for it, can be done through Internet. According to study released 25% percent of online consumers believe that their Online shopping use will decrease the amount they spend on walk-in –type stores. The survey also said Online purchasing has increased to the total amount of money they have typically spent in a year on products & services.
Communication: The Internet helps improve communication with vendors, suppliers & partners, be it business communication or customer communication. Purchase orders & invoices can be sent inexpensively & quickly through the Net, eliminating the costs involved in overnight mail or courier services.
Customer Services: From FAQ’s to live customer service, customers can get all the help they need online enhancing customer services through quick information updates on website.
Market Research : Primary & secondary research can easily be conducted on the Internet. Primary research can be carried out in the form of surveys hosted on the company’s website. Secondary research includes developing research based on information already collected.
Recruitment : Most Companies have a recruitment section on their website. Here a potential employee can go through the site learning more about the kind of work they do, their structure, work culture & practices etc.. This way many companies can attract talent around the world, without incurring the traditional recruitment costs.
Collaboration : Based on Internet technology, an Intranet (that functions as a private Internet within the organization) & an extranet (that selectively links vendors, suppliers & business partners) can be used in tandem with the Internet, improving the efficiency of current systems & cutting down associated costs.
