You are required to determine and evaluate strategies that build and maintain trust in consumers towards online shopping so that they are attracted to purchase products and perform repeat purchase.
Your report should include the following:
1. Assessing in which way organisations obtain competitive advantage by utilizing e-commerce?
2. Analyse in which way organisations attract customers through social media to buy their products online and to promote sales?
3. Critically analyse the strategies that organisations use to build and maintain trust in consumers towards internet shopping?
E-commerce, a term which is the acronym of electronic commerce, refers to the methods of trading of products and/or services by the utilization of computer networks, more precisely the Internet. The various technologies that facilitate the processes of electronic fund transfer, mobile commerce, processing of online transactions, the management of supply chains and/ or automated system of collection of data can be considered as processes that fall under the broader spectrum of electronic commerce. Electronic commerce systems generally use the internet for at least some of the activities that form a part of the life cycle of the transaction, while the rest of the functionalities can be performed by the utilization of other technologies. In this report, an in detailed analysis of electronic commerce systems has been made, the emphasis being given on the strategies that are used by various electronic commerce sites so that they are able to build a sense of trust among their customers and maintain it (Loshin and Vacca, 2004).
Any business that is about to conduct electronic commerce must employ at least one or all of the activities mentioned in the following section:
1. Maintain an official website for the purpose of online shopping, that is,
2. Participate in various online marketplaces which facilitate the process of business deals between two or more business houses and / or business with the customer.
3. Business to business selling and buying.
4. Collection of data using social media and/ or other internet based technologies and the proper utilization of this data.
5. Interchange of electronic data between business units.
6.Performing the operation of branding and/ or marketing by performing electronic communication with the potential customers (Tutorialspoint, 2015).
When organizations utilize the facilities of electronic commerce, the following competitive advantages can be achieved:
1. The employment of a powerful electronic commerce system enables an organization to conduct their business in those parts of the world where the company could not possibly set up physical business centers (Schneider and Perry, 2000). Focusing on the regional market might at first be advantageous to any business concern, but in the long run might prove to be restrictive to the growth of the business. This is the primary reason behind the interest that most of the business organizations express these days in setting up electronic commerce facilities. Another advantage of the utilization of electronic commerce is that services can be provided to the customers located at any place in the world, without setting up any satellite offices at those locations (Karakaya and Stark, 2013).
2. The product catalog maintained in the electronic commerce websites are generally able to provide much more effective and in depth information regarding the products that are being manufactured and/ or sold by the organization. This unique feature of electronic commerce sites no doubt adds to the competitive advantage of the organizations that employ such technologies (hbr, 2015).
3. In the past few years, electronic commerce sites have gained the ability to personalize the offers that they make available to their customers (Turban, 2000). Customers are provided with their last purchase history, and/ or links to similar products based on their search items: such facilities are no doubt helpful to the regular customers of an organization. The efforts that the organization put in towards the personalization of the services that they make available to their customers help them to earn loyalty (Clemons, Kauffman and Weber, 2010).
The Amazon.com is considered as the most widely used electronic commerce site of the world: the organization is US based and dedicated websites that provide service to large parts of Europe and Asia(Amazon.com, 2015). The website has a huge group of loyal customers who blindly rely on the services provided by the organization. Amazon.com is an ideal example of an e-commerce site that had implemented all the strategies that have been mentioned in this report so as to gain the trust of the target customers and retain it.
Most companies and organizations these days actively utilize the social media so as to make their online presence felt by their potential customers. Organization generally create accounts on social media sites like that of Facebook, twitter, LinkedIn, etc and encourage their customers to communicate with them and to actively take part in such discussions that would be helpful in enhancing their products and/ or services even further(Kauffman, Li and van Heck, 2010).
The following section provides the insight to some of the strategies that are adopted by various organizations to attract potential customers:
Organizations primarily indulge in extensive research to determine which social media site is more frequently used by their target customers. The results of this research provide them with the ideas regarding which social media to focus on in order to grab the attention of a larger number of potential customers. In the next step, the organizations actively notice the activities that their potential customers take in such that they can come up with activities would be able to attract their attention.
Social media sites particularly Facebook allows the organizations to promote their products on the account pages of the users, a feature known as Facebook offers. Facebook offers can be directly created from the home page used by an organization, and can be created by any organization, irrespective of the fact that whether they have an online business or their operations are entirely offline based. Besides this utility, Facebook also provides the utilities of generating traditional digital branding advertisements. Although such promotional activities can achieve a wide range of objectives, yet most organizations use these features to attract their potential customers. Such offers are often hyper-texted so that users having genuine interest in these products able to visit the websites of the organization for further details (Cho, 2010).
The social media accounts used by the organizations are often used to keep in touch with those customers who had already subscribed for e-mail notifications. While most customers opt for periodic notifications, the organizations use this strategy to make them aware of the various available offers on a daily basis. Hosting an exclusive promotion and/or contest section on the social media account page is the most frequently used strategy adapted by organizations to generate interest among the social media users.
Last but not the least, most reputed organizations maintain an official company profile in social media site like that of LinkedIn. The various operational detail of the organization are provided in such profiles, along with the details of the corporate hierarchy that is maintained in the organization. Such profile are continuously updated so as to grab the attention of various corporate clients who themselves maintain official organizational profile in such social media sites.
The Boo.com is considered as a failure in the industry of electronic commerce: within a year of its inception, the organization failed due to lack of proper promotional activities and communication with their customers. This electronic commerce site aimed at selling branded clothes to their target customers: however, poor promotional strategies and wrong decision of not using social media sites for promotional purposes led to the failure of this organization.
Researchers are of the opinion that trust should be considered as a step by step process using which the customer and the organization creates an exchange value. Each time the organization encourages the target customers to provide some personal information, they should also be provided with some awards in form of services and/ or products. The mutual give and take policy should be repeated for sometime in order to gain the trust of the customers that will be based on this collaboration (CHAWDHRY, MASERA and WILIKENS, 2014).
The security policies that are adopted by ecommerce sites in general to secure their sites include the following, measures:
1. Choosing secure ecommerce platforms.
2. Using secure connections for online checkouts
3. Setting up system alerts that would beactivated in case ofsuspicious activity
The electronic confidence measures adapted by an organization must be able to meet the various requirements of the consumers regarding the Terms and Conditions incorporated by the organization. The measures should be adapted such that the facilities are available to the customers in various stages of the economic transaction that takes place: both during the transaction and after the transaction (Akin and Singh, 2015).
The measures that are adapted to deal with requirements of the customer before a transaction occurs include the process of making the benefits of insurance available to the customer, utilizing such security measures that have a reputation in the market and can be trusted, and the incorporation of codes of conduct to be followed by the representatives of the organization, such that the consumer gains an overall trust on the electronic marketplace in general (Zhao, 2005).
The measures adapted by organizations to provide services to the consumer during the process of a transaction include the provision of trust seals, providing warranties on the products that are being sold, use of mechanisms that are able to provide security to the financial transactions that occur in between the customer and the organization and utilizing mechanisms such that the delivery channels can be traced by the customers. The organizations should provide implement processes using which the customers can provide feedback and/or rating regarding the services that were provided by the organizations and / or the products that were sold. Such policies help in the process of increasing the consumers’ trust towards that particular vendor and/or organization, which in turn will only increase the brand value of the organization.
The post transaction measures adapted by organizations are o general types: measures exist using which the customers can be provided some satisfactory solution in case any problem arises after the transaction takes place and/ or to provide the customer solution to the concerns that most customer have regarding the protection of any digital asset. Organizations need to provide security measurements to the customers that would be able to prevent fraudulent activity and provide protection to the assets.
The legislative assembly of the United Kingdom had introduced a set of regulations; commonly known as the Electronic Commerce (EC Directive) Regulations 2002. These regulations have helped in the implementation of the EU's Electronic Commerce Directive 2000 into UK law, which is considered as one of the first set of rules/ regulations implemented regarding internet security of electronic commerce sites. The US government has also implemented a set of such laws, for ensuring the security of data and digital contents that are being used by electronic commerce sites, namely The Anticybersquatting Consumer Protection Act or the ACPA, Children’s Online Privacy Protection Act or the COPPA, The Electronic Signatures in Global and National Commerce Act or the ESIGN, and so on.
In this paper, the various aspects that are associated with the operational functionality of an e-commerce site have been discussed in details. In the first part of the report, the fundamental principles of electronic commerce have been provided. The benefits of using a ecommerce site has been mentioned in the next part, along with the example of the most successful and widely known ecommerce site. In the next two sections, the different strategies used by organizations so as to attract their customers and to retain their trusts have been discussed and critically analyzed. The various international laws that ensure the security of the data collected by such e-commerce sites have also been mentioned in the last part of the report.
1. Akin, S. and Singh, R. (2015). Building consumer trust. [online] Available at: https://epubl.ltu.se/1653-0187/2005/04/LTU-PB-EX-0504-SE.pdf [Accessed 1 Jul. 2015].
2. Amazon.com, (2015).Amazon.com: Online Shopping for Electronics, Apparel, Computers, Books, DVDs & more. [online] Available at: https://www.amazon.com/ [Accessed 1 Jul. 2015].
3. CHAWDHRY, MASERA, and WILIKENS, (2014). Strategies for Trust and Confidence in B2C E-Commerce.COMMUNICATIONS & STRATEGIES. [online] Available at: https://www.digiworld.org/fic/revue_telech/436/CS45_CHAWDHRY_MASERA_%20WILIKENS.pdf [Accessed 1 Jul. 2015].
4. Cho, S. (2010). Perceived risks and customer needs of geographical accessibility in electronic commerce.Electronic Commerce Research and Applications, 9(6), pp.495-506.
5. Clemons, E., Kauffman, R. and Weber, T. (2010). Introduction to the Special Section: Economics of Electronic Commerce.International Journal of Electronic Commerce, 15(1), pp.75-78.
6. hbr, (2015). [online] hbr.org. Available at: https://hbr.org/2012/05/to-keep-your-customers-keep-it-simple [Accessed 1 Jul. 2015].
7. Karakaya, F. and Stark, S. (2013). Online Trust: Strategies to build confidence from a business perspective.Journal of advanced management and research, 1(1).
8. Kauffman, R., Li, T. and van Heck, E. (2010). Business Network-Based Value Creation in Electronic Commerce.International Journal of Electronic Commerce, 15(1), pp.113-144.
9. Tutorialspoint, (2015).E-Commerce Advantages. [online] Tutorialspoint.com. Available at: https://www.tutorialspoint.com/e_commerce/e_commerce_advantages.htm [Accessed 1 Jul. 2015].
10. Loshin, P. and Vacca, J. (2004). Electronic commerce. Hingham, Mass.: Charles River Media.
11. Schneider, G. and Perry, J. (2000). Electronic commerce. Cambridge, Mass.: Course Technology.
12. Turban, E. (2000). Electronic commerce. Upper Saddle River, NJ: Prentice Hall.
13. Zhao, Y. (2005). Dispute resolution in electronic commerce. Leiden: Martinus Nijhoff Publishers.
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