The emergence and development of e-commerce #
E-commerce (e-business) is all types of business activities carried out by people using computer, communication and network technologies, covering everything from advertising, raw material supply, logistics management to product sales and after-sales services. People often equate the concepts of e-business and e-commerce and translate them both into e-commerce, but e-commerce focuses more on electronic transactions. It refers to the realization of electronicization of trade activities at all stages of the entire trade process, emphasizing transactions and cooperation between enterprises and external parties.
The scope of e-business has expanded a lot. It uses the Internet to electronize business processes of all business activities. In a broad sense, it refers to the use of various electronic tools to engage in business activities; in a narrow sense, it refers to the use of the Internet to engage in business activities. It includes business-to-business (B2B) interactions, business-to-employee (B2E) interactions, business-to-government (B2G) interactions, and business-to-customer (B2C) interactions using Internet protocols and related technologies. The application of e-commerce has profoundly changed the business world, and has also changed the business content and operating models of many enterprises.
The term e-commerce was widely recognized by the public through some IBM advertising campaigns in the 1990s. It emphasized the shift of business activities and methods in the direction of e-commerce and asserted that Internet technology would have a revolutionary impact on major business processes (Li, 2007).
The U.S. government has also realized early on the huge promotion effect that the Internet may have on economic development. In 1995, then-President Clinton described the Internet as “the engine of future economic growth,” proposed e-commerce policies and global business frameworks to encourage investment in e-commerce, and enacted the Internet Tax Freedom Act (ITFA). The bill was in effect from 1998 to 2001 and exempted online purchases from transaction taxes.
In 1999, Andy Grove, then president of Intel Corporation, asserted that within five years, all companies would adopt Internet technology, otherwise they would cease to exist (Symonds, 1999 ). Many companies have followed this trend and chosen e-commerce, using the network not only for B2C, but also for B2B interactions, etc., and have gained a series of significant competitive advantages, using electronic transactions to reduce costs, and using e-commerce to improve the efficiency and flexibility of enterprises.
With the support of policies, e-commerce has lived up to expectations and achieved the above predictions. In 2009, commissioned by the Interactive Advertising Bureau, Harvard Business School professors John Deighton and John Quelch collaborated to complete a study titled “Economic Value of the Advertising-Supported Internet Ecosystem.” The study shows that the direct economic value created by Internet services for the United States is estimated at $175 billion (2009). There are 1.2 million people directly employed in the Internet industry, who build or maintain Internet infrastructure, promote Internet applications, and provide online advertising and other business activities. The research report pointed out: “Over the past two decades, the Internet has become the focus of social and economic life. Today, the Internet is a mature and indispensable part of the national economic development of the United States. It is not only a vital infrastructure, but also inspires entrepreneurship and promotes social change.”
The corporate sector is gradually introducing e-commerce, such as using the Internet for advertising, marketing, providing free trials, online banking and stock trading and other services. In contrast, there are also some companies that were created using the Internet as a platform in the Internet era, such as aggregators, online auction models and barter models. The aggregated website model extracts the prices of products from multiple websites and provides a one-stop information service, allowing users to shop around on one website and choose the most cost-effective transaction; the auction model (such as eBay) allows sellers to auction their products online; The barter model used to be the most primitive form of market exchange. Now, with the online version, people exchange items ranging from clips, old appliances to villas, etc., effectively exchanging and utilizing the use value of idle items.
Speed, convenience and low cost are the main advantages of e-commerce. Online shopping has pushed retail business to a new level, extending business hours for merchants. Online stores are open 24 hours a day, 7 days a week. Customers can also use desktop computers, tablets and mobile phones to “shop” and shop at any time and anywhere with Internet access (such as at home or on the road). According to the product catalog on the website, customers can quickly find the products and inventory they need and order immediately. E-commerce companies send advertisements by e-mail, which can inform potential customers of product information faster than mail and TV advertisements, and recipients can also feel the satisfaction of purchasing the product immediately.
Part of e-commerce inherits the extensibility of the World Wide Web. Traditionally, advertisements based on phone books or billboards require a lot of investment to be seen by more people. Online advertising is different. In addition to some necessary threshold costs, it does not require much additional cost. Spread information to a large number of netizens across the country and around the world. Online stores are virtual. They do not require a facade store in the downtown area and are no longer limited by their own warehouse inventory. They can directly mail products from suppliers to customers, which makes it easier for e-commerce companies to increase the categories of products and expand the scale of operations.
The flexibility of the network brings great agility to sales efforts. Market information and quotes can be quickly updated through online advertising, and online interactive applications can replace company employees to interact with customers. A website with a good experience can greatly enhance the company’s impression among customers.
E-commerce has changed the work processes of many companies and the relationship between companies and employees. The corporate intranet allows employees to obtain current information in a timely manner, and can serve as a channel for daily communication between human resources departments and employees. Using the Internet, employees can obtain the data and information they need even outside the office and work remotely. It can also make it easier for the company to outsource work to others when needed. Business-to-business and business-to-government interactions such as procurement, bidding, supply chain management and approval processes can also be easily handled through the Internet. Technologies such as web conferencing allow companies to easily communicate remotely with customers and partners, reducing travel expenses, saving time, and improving efficiency.
The value of GIS in business applications #
Business activities often require answers to “where” questions, such as where are the best customers located? Where should the new store be located? How are sales jurisdictions divided? GIS technology can answer these questions more effectively than any other information technology. It integrates multiple geographical and other business-related data for spatial query or analysis, and can express the answers to these questions in an easy-to-understand visual form-a map. GIS can add spatial dimensions to business data and help people discover spatial patterns and relationships that are often invisible in static digital tables and charts. It is an important analysis and decision support tool needed for business operations and management (Pick, 2008)
Enterprises are gradually realizing the value of GIS. For example, some public utilities and communications companies initially used GIS to manage their equipment and materials, but later discovered that the application of GIS is not limited to this, but can also be expanded to other business areas such as marketing and customer service. Insurance companies use GIS for risk management and cost estimates to more accurately determine premium quotas in different regions. To implement the Community Reinvestment Law, some banks and financial institutions use GIS to identify development areas, and they find that GIS can help them with marketing campaigns, mission planning, facility management, and post-merger asset integration for specific goals. Hospitals use GIS to manage financial and human resources, help hospitals make development plans and conduct market publicity, thereby improving their ability to operate business and serve customers.
The connection between retail and GIS is clear. Retail companies use GIS for market analysis to discover the location of their best customers, potential customers with similar characteristics, and markets that are not yet saturated. They can also use GIS to see where competitors are located, where their existing branches are, and where their suppliers are located. For a company, deciding to open a new store is a very important matter. Before investing in building a store, the company can first analyze its existing and relatively successful branches, and then use similar indicators to select other locations., determine its sales area, simulate the operating effects of these locations, attract customers from competitors, avoid diverting customers from its existing branches, and select the best location.
The data integration and analysis tools provided by GIS have become critical to the insurance industry. From the late 1990s to the early 2000s, analysts at Partner Reinsurance Ltd. used customized desktop GIS software to calculate risk ratings for business types such as automobiles, homes, and businesses in counties and zip code areas. For example, to estimate the possible risks posed by hurricanes, analysts superimpose the geographical range covered by the policy with the historical hurricane path layer, calculate expected losses and draw a loss curve, and then accurately price various types of insurance based on this.
GIS continues to be introduced into business decision-making processes, promoting the integration of Business Intelligence (BI) software and GIS. BI software organizes detailed and scattered information to provide support to decision makers. Originally developed to provide competitive advantages to large companies such as Fortune 500 companies, BI software has grown into a multi-billion dollar industry. Its early functions were relatively simple, such as simple reporting and query capabilities, but now it has rich functions integrating modern data warehouse technology, online analysis and processing technology, data mining and data display technology. BI tools can be used in risk analysis, customer analysis, site selection, domain management, market analysis, and customer relationship management (CRM). Users can easily extract “who”,”what”, and “when” data from these aspects, but when it comes to the element of “where”,BI tools seem to be powerless. The reason is not that there is no spatial data-many companies collect a large amount of customer address information, but the lack of spatial concepts. For example, analyzing the needs for certain types of services and products within an area, or issues such as selecting a location for a new store, are essentially geographical behaviors. Based on the geographical location framework, integrated analysis can be performed between different data sets. GIS professionals have long recognized this problem, but the business community, especially BI software, has only recently realized the value of integrating GIS technology. Organic combination of BI and GIS adds new analytical capabilities to solve the “where” problem. Combining demographic and customer consumption data with location-based internal data allows deeper analysis and easier understanding of customers and market needs, improve work processes, reduce management and procurement expenses, and reduce investment risks.
Perhaps the term “seeing is believing” should be more accurately expressed as “seeing is understanding”. Only when people have a deep understanding of things can they have “insight”. People have a tendency to be visually oriented. BI software can display information through charts and graphs. Without maps and geographical background, its display ability is limited, and a lot of information may be buried.
Maps can compress a large amount of information into a single visual image, and their indicative effect is obvious. To give a typical example, when someone asks you for directions, if you just tell him where to go, how far to go, and how many turns he needs to turn, the person asking for directions is often confused. And if you grab a piece of paper and draw a map on it, people asking for directions will often be enlightened and quickly understand the route and direction. On the interactive map, a lot of valuable information can stand out and be understood by people, thereby giving full play to the role and value of BI.
BI and GIS complement each other, and using the two together can unearth additional information to support more sound decisions. Many large retailers have recognized this principle and used GIS to predict demand and allocate resources, plan maintenance and cargo distribution routes, improve work efficiency, reduce overtime, increase profits, and gain a competitive advantage in fierce market competition.
Before the emergence of WebGIS, the commercial application of GIS was mainly limited to large and wealthy commercial organizations using desktop GIS software and completed by GIS professionals. Although this has been very successful in integrating commercial data resources, solving space-related problems, and optimizing previously impossible business operations, the application of GIS is still very limited. Many other commercial organizations cannot afford or will not use desktop GIS software. It is difficult to understand the application potential of GIS and the huge benefits it can bring.
The emergence of WebGIS liberates GIS, reduces the technical difficulty and economic cost of using GIS, and can greatly expand the application of GIS in business. Using the SaaS model or cloud GIS model, business organizations can use GIS without installing special hardware, data and software locally, which facilitates the application of WebGIS in business. WebGIS has a simple interface and can be mastered and used by front-line employees to senior managers without requiring too much training. Mobile devices allow employees to use GIS at any time and where they have access to the Internet, making full use of and leveraging the value of BI, thereby creating greater economic benefits.