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What is Web Commerce?

Dale Marshall
Dale Marshall

Web commerce is the carrying out of business transactions on the Internet, or the world wide web. Some of these transactions essentially adapt the mail-order model to the Internet, where consumers select items from a catalog and pay for them online rather than mailing in an order form and check. In other cases, web commerce involves transactions that would never take place either in a traditional retail venue or in a mail order environment, such as paying for and downloading individual songs onto an MP3 player.

Most traditional retailers have established some sort of Internet presence where consumers can browse their inventories and make purchases. These websites often mimic their hard copy catalogs, though, prompting critics to complain that the new technology is being used as a way to perpetuate the same old marketing models. Some retailers have responded by discounting online purchases, reasoning that web customers’ purchases shouldn't include the same markups that support a brick-and-mortar store’s overhead.

Man climbing a rope
Man climbing a rope

Another approach is the integration of the Internet with real-time shopping in stores. Using Internet-capable phones, consumers can comparison shop while in a store and also access discount coupons online for use at the checkout counter. A consumer who finds discount coupons online can download those coupons onto her phone, displaying them at the checkout for scanning and application of the discount.

Web commerce carries the solution to a problem that’s confronted retailers for ages: how to shorten the gap between successful advertising and the purchase. Traditionally, advertising takes place in a number of venues, but no matter how successful, the consumer usually can’t act on it right away and make a purchase. Broadcast and print advertising wind up having a dual purpose, then — persuading the consumer to make the purchase, and also reinforcing earlier advertising. Web commerce bridges this gap — when viewing an ad on the Internet, consumers have the opportunity to follow a link directly to a website where they can conclude the purchase.

Many consumers resist web commerce because it lacks the immediacy of shopping in a traditional store. Often, these customers are also uninterested in mail order shopping. When they make a purchase decision, they want to have their new possession in hand, not wait for it to arrive in a few days. Some retailers offer these consumers the opportunity to select and pay for their purchase online, and then drive to the nearest outlet to pick up the purchase, bypassing long lines in the process.

Another significant drawback of web commerce is crime. Identity thieves are constantly trying to hack into individual transactions as well as into retailers’ customer databases. Some retailers have been accused of deceptive online sales practices, such as taking customers’ payment data and then “selling” them goods they didn’t order. On the customer's side of the transaction, retailers must always be alert to the possibility of criminals placing orders using stolen identities. Merchandise sent in fulfillment of these orders is usually unrecoverable, and represents a significant risk of loss to retailers.

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