Consumers can purchase just about anything on the Web, including groceries, opera tickets, hardware, software, cars, and shoes. Electronic commerce is expected to reach between $200 to $550 billion by the year 2002. Many reasons exist for this phenomenal growth, including speed, convenience, information gathering, and competition.

Assume for a moment that you wish to purchase a computer. Using the traditional shopping approach, you would visit several stores to comparison shop, read reviews in consumer magazines, and visit with friends. This shopping approach would result in several hours, if not days, of your time. Once you have selected your computer, it is quite possible that the computer will need to be special ordered, again resulting in a time delay. An attractive, more expedient shopping alternative for you is electronic commerce. With a few clicks of your mouse, you can view the Web sites of several hardware retailers, resulting in access to more locations and the lifting of geographical restrictions imposed by the traditional approach to comparison shopping. Perhaps the biggest advantage is convenience. Since the online stores are open 24-hours, 7 days a week, you can check product availability, general product information, delivery times, and current pricing at any time and without leaving your home.

While electronic commerce is expected to continue its growth, several obstacles must be overcome. For instance, consumers are still fearful of providing credit card and personal information over the Internet, have problems locating the online stores, and can have a difficult time actually making the purchase or returning an item. Businesses must address these issues if they are to succeed. A business should provide its customers with the capability to perform secure transactions; this capability can be implemented via a Secure Sockets Layer. In order to attract customers, a business must advertise. This requires a business to identify sites from which it can attract its customers and make arrangements with those sites for advertising space. A business should provide a shopping cart for its customers and provide the necessary information about how a customer can return a product and receive a refund.

Businesses can reap several advantages from electronic commerce, including the elimination of geographical barriers, reduced costs, increased sales, and the ability to build customer profiles. By selling its products and services over the Internet, a company can essentially sell to the entire world, and hopefully increase its sales. Cost reductions can be achieved since the business does not have to operate a physical store 24-hours a day, incurring overhead costs, such as labor, rent, and utilities. While electronic commerce can reduce costs, significant increases in costs can occur, resulting from the establishment of an electronic commerce site, building traffic to its site, and building a brand name. Companies are recognizing the definite advantages of building customer profiles. Visitors leave an electronic trail of information when they visit a Web site. Much information can be gained from a Web site visitor just by tracking his movements through the Web site and monitoring the purchases that he makes. This information can then be used internally to build better marketing campaigns or can be sold externally to other companies.

Attracting customers and encouraging them to purchase from your company's Web site is of paramount importance. Companies can attract customers by offering low prices, an easy-to-navigate site, a secure transaction site, the ability to download pages quickly, and by keeping the site current. On the other hand, a company can discourage traffic by promoting spamming, using lots of graphics requiring significant download times, and requiring mandatory registration. Check out the following sites to see if electronic commerce is for you:

http://www.hallmark.com        http://www.gateway.com

http://www.wal-mart.com        http://www.landsend.com

http://www.groceryshopping.net   http://www.usa-flowers.com

Points to Ponder:

1. What products or services are you most likely to purchase online?

2. What products or services would you not purchase online? Why?

3. What types of businesses are likely to be hurt from electronic commerce?