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e-Commerce 89.3 e-Commerce Models and Applications 1585

89.3 e-Commerce Models and Applications

The US Department of Commerce views B2B e-Com-

merce as dealing with manufacturing and wholesale

activity, and B2C e-Commerce as dealing with retailing

and the service industry [89.6].Basedonthiscatego-

rization, the total volume of e-Commerce transactions

in 2004 amounted to US$1951 billion, representing

a14.4% increase over the previous year, and compris-

ing roughly 10% of the total value of US shipment,

sales, and revenue. The lion’s share of the e-Commerce

market in dollar terms is in the B2B segment, amount-

ing to 93% or US$1821 billion. However, given its

intrusion into virtually every single aspect of our daily

life, B2C e-Commerce remains perhaps the most vis-

ible and easily recognizable face of e-Commerce. We

ﬁrst discuss the B2C e-Commerce market, followed

by the B2B e-Commerce market. We then discuss

the small but rapidly emerging C2C e-Commerce

market.

89.3.1 B2C e-Commerce

The B2C e-Commerce market has continued to grow

with recent estimates being as high as US$210 billion

for 2006, an increase of 20% over the previous year, and

projected to reach US$330 billion in 2010 with an esti-

mated 55 million online shopping households in theUS.

In dollar terms, the largest B2C e-Commerce product

line is travel, with approximately 35% of the market at

US$70 billion. This is followed by computer hardware

and software atUS$17 billion, automotiveequipment at

US$16 billion, and apparel at US$ 14 billion [89.5]. We

now examine some of the more important segments of

the B2C e-Commerce marketplace: online retail shop-

ping, online banking, and electronic learning.

Online Retail Shopping

This is perhaps the most visible face of e-Commerce

– the online selling of a wide range of retail goods

and products such as clothing, clothing accessories,

electronic devices, electrical appliances,computer hard-

ware and software, books and magazines, food and

beverages, health and personal care items, sporting

goods, music and videos, and ofﬁce equipment and

supplies. Apart from retail goods, the major services

sold online include those related to computer systems,

publishing, securities and commodity contract interme-

diation/brokerage, and travel arrangement/reservation.

In recent years, retail e-Commerce sales registered an

annual growth of 25% compared with 4% for total re-

tail sales; however, it still is only a small fraction of

total retail sales, at around 2% in 2004 [89.6]. Interest-

ingly, two of the product lines projected to experience

the highest market growth are cosmetics and pet sup-

plies [89.5].

Based on Internet trafﬁc rankings, the most popu-

lar online shopping site is Amazon (Fig.89.3)having

a global reach of around 1.8% of measured Internet

users [89.42]. With annual revenues of US$10.7 bil-

lion in 2006, this Fortune 500 company lists thousands

of new and used items at its website, spanning the en-

tire retail product spectrum. Apart from the wide array

of products, Amazon incorporates a number of person-

alization features such as one-click buying, customer

and editorial product reviews, gift registries and cer-

tiﬁcates, wish lists, and restaurant and movie listings.

Other major online shopping sites include those of Tar-

get, Wal-Mart, Best Buy, New Egg, and Tiger Direct.

What are the factors that inﬂuence the adoption of

online shopping by consumers? Research has indicated

that the design of the website in terms of navigation,

convenience, usability, reliability, responsiveness, se-

curity and privacy, as well as the quality of support

services such as order fulﬁllment, help desks, and return

policies affect user adoption [89.33, 35]. The website

should be attractive and have a social presence through

rich descriptions and graphics, particularly in the case

of products having amusement value [89.43]. The use

of virtual-reality technologies serves to minimize the

problems associated with the user being unable to touch

and feel the product. This is particularly true in the case

of high-experiential products where customers need to

learn more about the product and experiment with it be-

fore making the purchase [89.37]. Also, a badly styled,

incomplete, and erroneous website results in a negative

impression regarding the quality of an online store, and

the resulting lack of trust drives customers away from

the store [89.39,44].

Online stores that provide value-added mechanisms

such as searchengines serve to enhanceshopping enjoy-

ment, particularly for customers who are not looking to

purchase a speciﬁcproduct [89.28]. Positiverecommen-

dations from prior customers via a consumer-reputation

facility serve to reduce decision-making time and en-

able customers to make better decisions [89.38]. Above

all, the most important factor that could make or break

adoption of an online shopping site is customer percep-

tion of trust in the online shopping merchant [89.35,

39, 45]. As this aspect is relevant in all segments of

Part I 89.3

1586 Part I Home, Ofﬁce, and Enterprise Automation

Fig. 89.3 Amazon website

e-Commerce, we deal with it separately in a subsequent

section.

Online Banking

Online banking is one of the fastest growing In-

ternet activities with about 43% of Internet users

(63 million adults) banking online on a regular ba-

sis [89.46]. It has been estimated that the average

total assets of an Internet-only bank is US$ 3.5 billion

compared with US$1 billion for all banks [89.47]. Cur-

rently, online banking portals provide an array of ser-

vices to customers including typical banking activities

such as transferring funds, advancing loans, ordering

checks, and downloading information about check-

ing/savings, interest/dividends, loan payoffs/balances,

and share/checking balances. Based on Internet trafﬁc

rankings, the most popular US banking site is that of the

Chase Bank (Fig.89.4), having a global reach of around

0.02% of measured Internet users [89.42]. Other major

players include Bank of America, Citibank, US Bank,

and Wachovia Bank.

What are the important factors that inﬂuence cus-

tomer adoption of online banking? These fall into

two broad categories: individual characteristics and

user perceptions of the online banking website. In

the former category, factors include demographics re-

lated to income, age, and gender, prior computer

experience, computer self-efﬁcacy, technological back-

ground, subjective norms, innovativeness, adaptability,

and awareness of online banking beneﬁts [89.29, 48,

49]. In the latter category, factors include usefulness,

enjoyment, usability, convenience, accessibility, and

relevance of the website [89.29,50].

Although the size and growth of online banking has

been impressive, it has not outpaced the growth of the

Internet or other e-Commerce activities due to the trust

gap [89.46]. Despite the technical advancements that

have led to the safe and secure transmission of sen-

sitive information, a sizable portion of Internet users

still have reservations regarding the security and con-

ﬁdentiality of online banking transactions, and hence

do not trust online banking sites [89.30, 45]. The trust

barriers could be overcome by incorporating privacy

and data protection technology into banking website

design, proper authentication of users, informing users

regarding secure online banking practices, and provid-

Part I 89.3

e-Commerce 89.3 e-Commerce Models and Applications 1587

Fig. 89.4 Chase Bank website

ing redressal mechanisms [89.29,30]. Indeed, trust is an

issue that is of concern not only for online banking, but

for e-Commerce as a whole, and is dealt with in a sub-

sequent section. See Chap. 91 for additional content on

automation in ﬁnancial services.

Electronic Learning

Electronic learning, or e-Learning, is one of the fastest

growing segments in the B2C e-Commerce domain. It

primarily consists of the delivery of educational con-

tent to individuals or groups of learners via the Internet

and WWW, as well as through organizational intranets

and extranets [89.51]. Perhaps the most pervasive form

of e-Learning is distance education, wherein univer-

sities provide online course content and teaching to

students on a global basis. In addition, business orga-

nizations use electronic learning for employee training,

certiﬁcation, and upgrading skills, so much so that the

corporate e-Learning market is estimated to be nearly

US$10.6 billion in 2007 [89.52]. Currently, the ma-

jor players include WebCT and Blackboard (Fig.89.5),

Desire2Learn, Dokeos, Skill Soft, Epic, and Learning

Steps.

What factors inﬂuence the success of e-Learning?

The e-Learning success model posits that the over-

all success of an e-Learning initiative depends on

attaining success at every one of three stages of e-

Learning system development: design, delivery, and

outcome [89.53]. An empirical study supports the

model and ﬁnds that action research methodology can

be instrumental in promoting the development of suc-

cessful e-Learning systems by iterating through cycles

of diagnosing, action planning, action taking, evaluat-

ing, and reﬂecting.

Due to relatively little (or no) face-to-face interac-

tions with an instructor, an electronic learning program

may not provide the same amount of instructor guid-

ance as opposed to a conventional classroom teaching

or employee training session. Given this, an important

factor that can inﬂuence effective use of an electronic

learning program is self-regulation – the capability of

an individual to take charge of his/her learning path.

Self-regulation requires time-management skills, self-

motivation, an ability to set and meet performance

goals, and an ability to effectively organize, rehearse,

and encode information [89.54–56].

Part I 89.3

1588 Part I Home, Ofﬁce, and Enterprise Automation

Fig. 89.5 Blackboard website

Apart from individual characteristics, technological

features of an e-Learning system, such as its quality

and reliability, availability, ﬂexibility, convenience, and

level of interactivity, can inﬂuence its adoption [89.57,

58]. If a human instructor is part of an electronic learn-

ing system, care must be taken to ensure that his/her

presence is felt frequently in the online environment,

providing timely, detailed directions, and making extra

effortsto reach out to and interact with users [89.57,59].

Also recommended is matching the technology with

the nature of the course content, thus courses that need

creative thinking would be better served with technol-

ogy having higher degrees of interactivity than courses

that can be learned by rote [89.54]. See also Chap.73,

Automating Serious Games,andChap.85, Automation

in Education/Learning Systems, for related content on

electronic learning.

89.3.2 B2B e-Commerce

With a value of US$1821 billion in 2004, the B2B

e-Commerce market dwarfs the B2C segment. It

comprises 93% of the e-Commerce market, and ap-

proximately 20% of the overall B2B market [89.6].

Major areas of concentration include food, textiles,

petroleum, chemicals, machinery, computers and elec-

tronics, automotive, paper, and pharmaceuticals. We

now discuss various B2B market mechanisms with the

help of examples.

B2B transactions can be categorized based on the

actual mechanisms that are required to execute the

transaction. These in turn can be categorized based

on connectivity and purpose. The former refers to

the number of players (i.e., buyers and suppliers) in-

volved in a transaction, and the latter refers to the

intention of the player initiating the B2B transac-

tion [89.60]. The number of players involved in a B2B

transaction may be one-to-one, one-to-many, many-

to-many, and any-to-any. The common example of

one-to-one is via an extranet, where a buyer interacts

with a particular seller. An example of one-to-many

connectivity would be an auction, where the seller

puts up a product for bidding, and potential buyers

bid for the product until the ﬁnal price is reached.

A corollary of the one-to-many category would be

the many-to-one, or the reverse auction, wherein mul-

Part I 89.3

e-Commerce 89.3 e-Commerce Models and Applications 1589

Table 89.4 Cullen and Webster B2B e-Commerce model (after [89.60])

Category Connectivity Purpose Technology Interaction

Individual trading Open Selling WWW Direct

Collaboration Open Selling WWW Intermediary

Marketplace Open Selling/buying WWW Intermediary

Proprietary sales Restricted Selling/integrated Extranet Direct

Private exchange Restricted Integrated Extranet Intermediary

Aggregation Open Buying WWW Intermediary

Intranet/EDI Restricted Integrated Intranet/EDI Direct

Restricted bid Restricted Buying Extranet Direct

Reverse auction Open Buying WWW Direct

tiple sellers quote among themselves and the lowest

quote is accepted. The many-to-many scenario in-

volves multiple buyers and sellers, wherein each could

form alliances resulting in buyer and seller organiza-

tions. They could interact through a neutral exchange

platform provided by an intermediary where the re-

quirements of the buyers and sellers could be matched.

In the any-to-any scenario, there could be one or many

sellers or buyers, an example being e-Hubs hosting

electronic marketplaces that facilitate interaction be-

tween buyer(s) and seller(s) [89.60–62]. Connectivity

may also be viewed as open or restricted/closed. Open

transactions can be accessed by all players involved

whereas restricted/closed transactions are limited to

speciﬁc players, generally those having membership

privileges [89.60,61]. Thepurpose of engagingin a B2B

transaction may be for selling, buying, or integrated ex-

change. The last includes multidimensional activities

such as exchange of commercial documentation or op-

erational information.

The concept of connectivity and purpose can be

extended to include aspects such as the facilitating

technology and the interaction type [89.60]. Examples

of facilitating technologies are the WWW, extranet,

Intranet, and EDI. Interaction may be direct be-

tween the buyer and the seller, or may involve an

intermediary, wherein a third party mediates the trans-

action. Based on connectivity, purpose, technology, and

interaction type, the Cullen and Webster model cate-

gorizes e-Commerce transactions into nine operational

categories: individual trading, collaboration, market-

place, proprietary sales, private exchange, aggregation,

intranet/EDI, restricted bid, and reverse auction (Ta-

ble 89.4) [89.60].

Individual Trading

This type of transaction has open connectivity, involves

selling, uses the WWW, and is direct. The typical ex-

ample is a single supplier selling to other business

organizations. This model is very common in the main-

tenance, repair, and operations (MRO) industry. An

example is Grainger, which provides access to more

than 800 000 products from such categories as ad-

hesives, fasteners, hardware, lighting, motors, power

transmission, and hydraulics [89.63].

Collaboration

This category is viewed as being open, involves sell-

ing, uses the WWW, and involves an intermediary. As

opposed to individual trading, collaboration involves

multiple organizations that converge onto a common

platform run by an intermediary organization. These

are common in the pharmaceutical, chemical, and mo-

tor industries. For example, in February 2000, major

automakers collaborated to create Covisint [89.64], to

address escalating procurement costs and inefﬁcien-

cies within the industry. Covisint currently supports

over 30000 organizations in the global automotive in-

dustry spread across 96 countries and having over

266000 users. See Chap. 88 on Collaborative e-Work,

e-Business, and e-Service for a more thorough collabo-

ration discussion.

Marketplace

The marketplace category is open, involves both selling

and buying, uses the WWW, and involves an intermedi-

ary. The intermediary provides a common platform for

buyers and sellers to sell commodity and standardized

products. An example is ChemConnect [89.65]which

Part I 89.3

1590 Part I Home, Ofﬁce, and Enterprise Automation

provides a third-party commodity exchange platform

for the chemical industry [89.60].

Proprietary Sales

This category of B2B transactions tends to be restricted,

involves selling and integrated exchange, uses an ex-

tranet, and is direct without involving an intermediary.

It mainly involves the sale of sensitive goods such as

military equipment, prescription medicines, ﬁrearms,

and the like. To engage in a proprietary sales trans-

action, the buyer or seller must posses some form of

membership, certiﬁcation, or clearance from a govern-

ment agency. Cullen and Webster point to Wolverine

Supplies [89.66], which provides ﬁrearms to law en-

forcement ofﬁcers in Canada as representative of this

category.

Private Exchange

This category is restricted, involves integrated ex-

change, uses an extranet, and involves an intermediary.

The typical examplehere isthe case where a buyer orga-

nization has long-term supply-chain relationships with

supplier organizations. Cullen and Webster cite the ex-

ample of Elemica [89.67], which provides a platform

for a range of integrated supply-chain activities in the

chemical industry.

Aggregation

The aggregation category is open, involves buying, uses

the WWW, and involves an intermediary. Here, smaller

buyer organizations group together to negotiate with

a seller organization so as to obtain economies of scale

that they would not otherwise have obtained. Power-

spring [89.68], a third-party intermediary in the power

industry that provides a platform for gas suppliers to

bid competitively for aggregated power demand, is rep-

resentative of this category [89.60].

Intranet/EDI

This category is restricted, involves exchange of trading

information, uses intranet/EDI, and is direct. Transac-

tions are typically one-to-one between the buyer and

seller, and are typically conducted by large organiza-

tions having a number of repeat orders.

Restricted Bid

As the name indicates, the restricted bid category is re-

stricted, involves buying, uses the extranet, and is direct.

Only a limited number of selected suppliers are allowed

to bid for a product required by the buyer, resulting

mainly in time savings. The National Health Services

in the UK uses this approach in procuring some of its

supplies [89.60].

Reverse Auction

The reverse auction is open, involves buying, uses the

WWW, and is direct. For example, XSAg [89.69]pro-

vides a reverse auction in the agricultural chemical

industry. The buyer lists the product requirements in-

cluding the asking price and quantity on the XSAg

website, and potential sellers bid for the business.

Suppliers that meet the asking price and other buyer re-

quirements win the contract immediately upon bidding.

The federal government also uses reverse auctions,

through dozens of federal organizations such as the

General Services Administration, the Department of

Homeland Security, the Department of State, and the

Department of Defense [89.70].

89.3.3 C2C e-Commerce

The consumer-to-consumer (C2C) e-Commerce mar-

ket is dominated by online customer auctions, wherein

auction providers actas intermediaries providinga com-

mon platform for buyers and sellers to engage in the

selling and purchase of retail goods. With US$15 bil-

lion in sales in 2004 [89.71], the size of the C2C

online auction market is minuscule compared with the

B2C and B2B markets; however it has spawned one

of the greatest success stories of e-Commerce: eBay

(Fig.89.6). Apart from eBay, the other major player in

this area is Ubid [89.72].

Auctions may be seller auctions or buyer auctions;

in the former the seller initiates the transaction by

listing an item for sale, and in the latter the buyer

initiates the transaction by posting purchase require-

ments [89.73]. Buyer auctions are more prevalent in the

B2B market, whereas the seller auction dominates the

C2C e-Commerce market. There are different auction

formats. In the most common type of auction (called an

English auction), buyers bid among themselves, and the

winning bid goes to the highest bidder. A variation to

this is the Dutch auction, where the seller starts off with

an asking price, which is lowered until some participant

is willing to accept the price [89.74]. This is commonly

used for selling multiple items. Variations to straight-

forward auctioning could include a Buy it Now option,

wherein the seller speciﬁes a price at which a buyer

could purchase the item and truncate the auction. Apart

from facilitating auctions, such sites also allow cus-

tomers to sell their items at a ﬁxed price as well as to

advertise them. There might also be provisions for spe-

Part I 89.3

e-Commerce 89.4 Emerging Trends in e-Commerce 1591

Fig. 89.6 eBay website

cialized individual sellers to exhibit and accept bids for

their range of products at their own storefronts [89.75].

What are the factors that inﬂuence sellers and buy-

ers to take part in online auctions? The low cost of

entry and negligible transaction costs compared with

other retail channels make online auctions very attrac-

tive. More importantly, there is immediate access to

a sizable customer base [89.76,77]. On the part of the

buyer, factors such as ease of use and convenience of

using online auctions, as well as potential savings, at-

tract users to online auctions. Apart from these, one

other interesting ﬁnding was that customers indulge

in online auctions for hedonic beneﬁts, such as the

fun, entertainment, and emotional value derived from

bidding processes [89.78]. The popularity, reputation,

responsiveness, and integrity of online auction sites are

important to buyers while choosing betweenonline auc-

tion platforms [89.31].

89.4 Emerging Trends in e-Commerce

Against this background of B2C, B2B,andC2C

e-Commerce markets, we now consider some emerg-

ing e-Commerce applications: mobile commerce,

telemedicine, and fee-based information delivery.

89.4.1 Mobile Commerce

One of the rising trends in the e-Commerce realm is

that of mobile commerce (m-Commerce) wherein e-

Commerce activities that were hitherto conducted using

ﬁxed-wire Internet are being facilitated by wireless In-

ternet access using devices such as mobile phones,

laptop computers, and other portable electronic devices.

The driving forces behind m-Commerce include the

explosive growth of the mobile phone population and

the development of more powerful, sophisticated, and

secure wireless technologies. The number of global

cellular subscribers is projected to reach 4billion in

2008 [89.79] and there are 262.7million wireless

users in the US, accounting for a penetration rate

of 84% [89.80]. Although mobile shopping remains

the major m-Commerce activity, other spheres include

banking, information delivery, marketing, and airline

ticketing. In particular, mobile banking is witnessing

Part I 89.4

1592 Part I Home, Ofﬁce, and Enterprise Automation

tremendous growth and the number of mobile banking

customers in the US is expected to exceed 40million by

2012 [89.81].

Organizations tend to use m-Commerce in con-

junction with their traditional ﬁxed-wire Internet-based

outlets so as to provide increased ﬂexibility and con-

venience for customers, and to cater to a younger and

more technology-savvy customer base [89.82]. Major

airlines such as American, Delta, and United provide

reservation services through mobile devices apart from

ﬂight and weather-related information [89.83]. The suc-

cess of m-Commerce depends on a variety of factors:

an organization’s ability to integrate existing systems

into a mobile environment, development and use of de-

vices that are easy to use and similar to already existing

devices, value addition over and above that provided

by traditional e-Commerce, and providing customers

with relevant, inexpensive, and context- and location-

sensitive service [89.83].

89.4.2 Telemedicine: e-Health

The American Telemedicine Association deﬁnes tele-

medicine as the use of medical information exchanged

from one site to another via electronic communica-

tions. Currently, about 2000 medical institutions around

the USA are connected through the Internet and other

high-speed transmission lines. Of the approximately

200 telemedicine networks in the USA, more than half

provide regular clinical services to patients, the oth-

ers being used for research and education. Apart from

the Internet, there are private networks linking hospi-

tals, video systems for real-time patient consultation,

and WWW-based patient service. Over 50 different

medical specialties, including major ones such as car-

diology, dermatology, ophthalmology, and pathology

actively use telemedicine in the diagnosis and treatment

of diseases [89.84].

Telemedicine facilitates the digital transmission of

patient images (or teleradiology), wherein x-rays, com-

puted tomography scans, magnetic resonance images,

and digital images of pathology specimens can be sent

worldwide for diagnosis and consultation [89.84, 85].

Videoconferencing equipment at physician and patient

sites facilitates real-time consultation, especially be-

tween urban and rural locations. Using appropriate

peripheral devices, it is possible for the physician to ex-

amine internal organs and reach an accurate diagnosis

and treatment plan, resulting in time and monetary sav-

ings. Recent advances in this ﬁeld include telesurgery,

where a surgeon in one location can control a robot in

another location via communication networks [89.85].

89.4.3 Fee-Based Information Delivery

Fee-based information delivery services provide infor-

mation to consumers for a payment. The information

may be broad as in the case of New York Times provid-

ing news analysis through New York Times Select, or

may be narrowly focused as in the case of Wall Street

Journal providing ﬁnancial news, or eHarmony provid-

ing potential partner information. Such services used

to be free, with their major revenue source being ad-

vertising; however as this model became unsustainable,

information service providers have shifted to a fee-

based model. Most information delivery sites have free

content and fee-based premium content.

What is it that motivates customers to pay for ma-

terial that could perhaps be obtained through other

channels? Research indicates that it is the perceived

beneﬁts in terms of money, time, decision-making, and

learning that attract users to fee-based information de-

livery. Also, customers tend to choose services that they

perceive to be of high quality, are convenient, and pro-

vides added value over information delivery through

alternative channels [89.32,34].

89.5 Challenges and Emerging Issues in e-Commerce

The electronic commerce movement is still in its early

stages. The big outlinesare apparent, but thereare many

opportunities and challenges.Its futuredevelopment de-

pends on treatment of numerous issues. Examples of

these include trust and legal issues.

89.5.1 Trust and e-Commerce

An important factor that inﬂuences B2C e-Commerce

adoption is the user’s perception of whether the online

merchant or website can be trusted [89.45]. Recent sur-

Part I 89.5

e-Commerce 89.5 Challenges and Emerging Issues in e-Commerce 1593

veys have indicated that less than one-half of Internet

users actually trust e-Commerce websites, with primary

concerns involving the integrity and trustworthiness of

online merchants, and the related issue of the safety and

security of online transactions [89.86, 87]. The result-

ing trust gap is one of the primary reasons that could

impede the growth of B2C e-Commerce [89.46].

What is meant by trust in B2C e-Commerce? Trust

has been conceptualized primarily across two dimen-

sions: faith in humanity and vulnerability [89.45]. The

faith in humanity conceptualization encompasses the

implicit faith that human beings have in the integrity,

benevolence, and goodwill existing in the world around

them, and the belief that it extends to the e-Commerce

world. Thus, a user believes that he/she can rely on

a promise made by the online merchant and, in case

of problems, it would act toward the user with hon-

esty and benevolence [89.30,88,89]. The vulnerability

conceptualization pertains to the readiness of users to

be vulnerable to the actions of the online merchant,

wherein the user is fully aware that he/she might have

only limited or no inﬂuence over the actions of the on-

line merchant [89.45,90,91].

In order to enhance user trust in a website, mul-

tiple techniques have been examined by researchers.

Some of these are incorporated into website design,

including website design factors such as the use of

third-party assurance seals and certiﬁcates, hypertext

links from reputed websites and associations, and the

usability, usefulness, ease of use, and security control

of the interface [89.89, 90]. Using reliable and secure

technology and foregoing misleading language, images,

and complex terminology serve to enhance user trust

in a website [89.91, 92]. Another approach is educat-

ing the user by publicizing privacy policies, listing data

security precautions incorporated into the website, and

laying out procedures regarding compensation, dispute

resolution, and mediation [89.30,93]. Also, displaying

positive user feedback from online user communities

and providing fair and balanced information regard-

ing similar offerings from competing merchants can

serve to enhance user trust [89.94]. The perceived size

and reputation of the online merchant and user famil-

iarity and propensity to trust can also inﬂuence user

adoption [89.88]. Other researchers have pointed out

the need for governmental laws and regulation and

obtaining informed consent before using private user

information [89.92,95].

89.5.2 Legal Issues in e-Commerce

The e-Commerce market is global and constantly evolv-

ing with new and innovative business models and

products. As such, it is difﬁcult to structure and en-

force a uniform legal framework for conducting online

business transactions. Thus, care must be taken by both

businesses and consumers to ensure that either side

is knowledgeable about the purchase, payment pro-

cessing, and delivery mechanisms – as well as issues

relating to privacy and conﬁdentiality. The best prac-

tice would be to adapt the conventions followed in

traditional brick-and-mortar sales to the online environ-

ment [89.96].

It is recommended that the online business promi-

nently display the sale terms using simple and clear

language. Whena consumerpurchases aproduct online,

it is implicitly assumed that he or she has agreed to the

contract; however, it is a good practice to have the cus-

tomer explicitly accept or reject the contract terms. The

terms of the contract should be consistent with product

warranty and liabilityinformation. Inaddition, purchase

eligibility criteria related to consumer age, geographic

region, and product type must be displayed on the web-

site and enforced. These aspects might relate to local

and state laws, in which case the website content might

have be localized [89.96].

Policies relating to privacy and the use of per-

sonal data, fraud, misrepresentation, and nonpayment

should be prominently displayed on the website. En-

cryption tools must ensure the security of transactions

and comply with governmental regulations. Care must

be taken to ensure that there are no intellectual property

violations for products that are displayed for sale. Al-

though not legally mandated for nonfederal websites, it

is a good practice to ensure that the website meets or

exceeds accessibility criteria [89.97].

89.5.3 Outlook

We have discussed the evolution e-Commerce, re-

viewed its deﬁnitions, frameworks, and success pa-

rameters, and examined in detail the three popular

areas of e-Commerce. Given its growing importance

to consumers and businesses, as well as national and

world economies, it is gratifying to note that there

is a growing body of academic research address-

ing unresolved issues of e-Commerce. However, it

Part I 89.5

1594 Part I Home, Ofﬁce, and Enterprise Automation

must be pointed out that the overwhelming majority

of research is being conducted in B2C e-Commerce,

particularly in the online retail shopping segment.

Considering the fact that the B2B e-Commerce mar-

ket far exceeds the B2C market both in size and

turnover, we suggest that researchers take a closer

look at issues relevant to B2B transactions. To en-

sure that e-Commerce research remains relevant to

practice, it is important that researchers examine the

new and innovative trends in e-Commerce, such as

e-Health, m-Commerce (e.g., mobile banking), and

c-Commerce. Further research needs to be done on

trust- and privacy-related issues as well as on es-

tablishing a solid legal framework for conducting

e-Commerce transactions. Beyond transactions, there is

also need for advances in the development and appli-

cation of e-Commerce systems that support decision-

making [89.98].

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Part I 89