E-Commerce, E-Business and Online Shopping

It began as an act of rebellion- a Boston Tea Party moment. Every Friday night we had loaded the children into an estate car at our home in Colgate and journeyed to the supermarket for the weekly shop. And then I thought –this is crazy! Why don’t they deliver it to me?

So I connected my 26” domestic colour television to a real-time transaction processing computer via a domestic telephone line, put together a shopping transaction program and waited for someone to buy my idea. It was 1979. The IBM PC didn’t exist, nor Microsoft and the Internet was 11 years away. The idea today is called online shopping and it is probably the largest part of e-commerce.

The rationale for the system was very simple. Transportation costs were going up [they still are!]. Telecom costs were coming down [they still are!]. It would soon be more sensible, more convenient, quicker, easier, with more choice and more competition to buy online than travel to a physical shop provided you did not wish to touch, smell, taste, hear or try your prospective purchase. The shopping system would need infrastructure- networks, security, payment systems and a universal human interface [PC, phone] that anyone could buy and use. As the infrastructure grew so would the volume of sales, as night follows day.

In 1979/80 there was no consumer market for online shopping but there was a big business market. Companies could afford to set up their own networks if there were business benefits and this is when volume e-business began. We sold many systems. E-Business turned traditional trading models on their heads. In retail, a shop is a conjunction of time, space and place. In business, selling took place in warehouses, showrooms and on buyer’s premises, again a conjunction of time, space and place or through telesales requiring the buyer to be in attendance. Online shopping destroyed the old conjunctions. Commerce could take place 24/7. Neither buyer nor seller needed to be in attendance together to complete a transaction. A buyer connected to a seller’s computer could not be talking to a competitor at the same time. A seller could change terms, conditions and offers instantaneously. IT had become not just a formidable front-of-house business tool, it had become a competitive advantage.

In the 1990s businesses urgently re-organised to meet the challenges of the new technology. By 2000 new businesses hastily built specially for the technology appeared, leading to the DotCom boom and bust. In the last decade E-Business has come of age. Everyone uses it; a sensible business case can be made; experienced staffs are available; the technology is mature and proven; the number of potential customers continues to expand worldwide exponentially; the pace of technological innovation has not slowed – smaller, faster, smarter, cheaper. Finally, the accessible depths of knowledge, experience, research and tools have taken some of the risks out of the business. The central business challenge of finding and keeping customers, creating customer satisfaction and making a profit from that satisfaction remains, of course, as difficult as ever. E-Business is a bit like learning a foreign language. You haven’t learned until you think in that language. Where is it going? Look at the average 6 year-old! In the language already! Everything is digital. Virtual reality is nothing special. Simulation is fun. All information and communication is a few taps away. 3D is scary but it could teach you to play games or drive a car. The only thing for sure is that there will be great change and the winners will be those who grab the board and ride the waves rather than wait to be washed away.

Michael Aldrich, June 2010

Published in Sussex Enterprise Magazine, Summer 2010