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Pearson (PEARSON)
Information Technology 2010 QCF
Unit 8 - e-Commerce
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The Impact of E-commerce on a Company (P1)
In this report, I will firstly go over some of the many benefits to creating an online shop for the company,
these benefits increase overall productivity, sales, audience, and additional opportunities. Firstly, an e-
commerce website over (or with) store sales means that games can be sold 24/7 as there is no closing time
for the internet, with no need for staff to participate in making sales, which may in turn save money. All
the transactions are done automatically from anywhere at any time as customer purchases are brought to
their doors, this goes on to the second point of a global audience and market.
The world-wide web really is global, so you can reach the homes of anyone in the world that has an
internet connection. This allows access to sell to people anywhere, rather than just the local territory of a
brick store which can only attract customers nearby, which also have to leave the comfort of their own
homes to reach the store. So clearly, an online store grants an unlimited audience and customer base and
can allow an e-commerce site to become popular without much cost at all. On the other hand, a traditional
store will consist of having to purchase or rent a property, stocking the shops and then paying for staff and
utilities like electricity so starting cost would be expensive. Online stores do not need staff, utilities, or any
particular location; all they require is the creation of the e-commerce site, described in the leaflet which
can be run by a single person with space for a server. The online opportunity offers a competitive edge as
brick-only shops that do not offer online accessibility and home delivery lose out on a large range of
customers and forces people to leave their homes, but a store with both brick and click access allows
flexibility for customers, equalling more sales.
Traditional stores require consumers to manually search through the merchandise or ask for assistance,
which is a disadvantage in a society where everyone wants everything to be quick, convenient, and easy.
Online stores provide a search bar for consumers to find/search exactly what they are looking almost
instantly with just their keyboard and/or mouse. Another benefit of e-commerce is the opportunity to take
advantage of fluid pricing, this means to increase or decrease prices quickly for different circumstances; for
example, if a certain item is selling quickly such as a new release of a game, the system itself or the
controller can increase the price at will for more profit. While at the same time, prices can be reduced to
clear the sales of something that is not selling well, along with being able to put items for discount sales as
you would be spending less on staff, utilities and rent, which in hand encourages customers to use the
online shop instead.
Before purchasing goods online, a user is asked to create an account (or a guest account), the purpose of
having customers as website members is not only for the ease of having their details ready to buy again,
but also to track what they are buying and looking at. This allows the site to show recommendations and
personalised webpages which can increase sales, brick stores are unable to do this unless they incorporate
membership cards, but only tracks their purchases and does not have the same effect. Finally the benefit
of e-commerce is the ability to have advertisements which are usually paid per click or watch, bringing in
more profit and availability to be sponsored. There are a few negatives of e-commerce such as costumers
not being able to take their purchases straight away but instead have to wait for the delivery so customers
may want items instantly, in which they may choose a brick store instead. Secondly, security issues are a
concern for consumers so they must know they can trust the website through security verification, a good
reputation and set security measures as shown in the following presentation. Video games are self-
explanatory (especially as a digital version) but if selling merchandise, many costumers like to try on and
see clothes and other items in person, making brick stores (with a click store) very beneficial.
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