Analysis2
E-Commerce in Retail Sector.3
Customer Information..4
Improved Marketing Techniques5
Security Issues7
Conclusion8
References..10
E-Commerce & Retail
The emergence of the internet and of computing technology in general over the last generation or so has had drastic and dramatic effects on all of society including both the personal and business realm. Indeed, these new technology has made it easier to spend money, work and so forth in a way that makes one’s home life and work life blend together in many ways. However, this report will focus more on how e-commerce has come into its own as part of this new technology and internet paradigm and the impact it has had on businesses in the retail sector. In addition to that, the implications that have come along with that shift including security concerns, how customer information is used, the marketing techniques that are commonly used and so forth will all be discussed. While so much of what comes with this new e-commerce retail movement is good, there are also a lot of risks that have or could manifest themselves.
Analysis
E-Commerce in the Retail Sector
As noted in the introduction, the emergence of internet and other technologies associated with information technology in general have led to a paradigm shift when it comes to how society works and operates. This includes how money is moved, how much people can do while out and about, the emergence of mobile technology such as smartphones and tablets and so forth. While there are many industries and groups that have taken full advantage of this, the retail industry in particular has emerged as one of the primary ways that many people are impacted by to one degree or another. Rather than being tied down to using the cash and checks of the past, the options that exist now including online use of debit or credit cards, the use of third party payment providers (e.g. PayPal) as a means to facilitate payment and the use of smartphones and other applications to render payment. Much of this will be covered more later in this report (Sawmy & Damar-Ladkoo, 2015).
At a more basic level, the way in which money changes hands has evolved greatly. This is true for back-office things like payments to vendors and it is also true when it comes to how money exchanges hands between the business and customers. In the past, the two main methods of payment that were used for years were cash and checks. Debit and credit cards came along but the online use and tracking of those cards was rather limited for a good amount of time. Making payments online and online checking started to emerge and flourish. However, this emergence made money easier to steal and this obviously necessitated some new technological and other solutions. Again, what precisely has happened in more recent times and what led up to the same will be covered in the security section of this report (Sawmy & Damar-Ladkoo, 2015).
Customer Information
While brick and mortar firms have used and utilized customer information as a mean to market for some time, it is the online retail firms like Amazon and Wayfair that have made it a science. Indeed, brick and mortar firms like Kohl’s and a few others have used membership and loyalty programs to market products. However, these programs were always inefficient and ineffectual to a large degree. Some customers made the efforts worth their while but others did not. Amazon and Wayfair changed this in a big way and they did so in a way that is not pushy or over the top. The key is the use of tracking cookies and history of searches on the online portals while people are shopping. What people search for and what they look at are continuously tracked and looked at and are then used as a means to market similar products or services. For example, if someone looks at the first Iron Man movie, Amazon will offer all three of the Iron Movies as a bundle and will present a singular price for all three. Similarly, movies that are also in the same spheres as Iron Man, as comic book movies and the Avengers universe in particular, will be cross-marketed as well. This will occur in a non-pushy way on the listings looked at but it will also occur on the main page of Amazon after logging in (Sun & Li, 2011).
The tracking cookies mentioned earlier come into play when those customers then go to websites go to sites that Amazon advertises on. Indeed, someone may be at a secondary website but they will see an ad that displays the product that they were looking at on Amazon. Wayfair and other websites do the same thing and in much the same way. Some people are paranoid or at least wary of tracking cookies and so forth and they will use malware/antivirus software to delete or limit them. Web browsers offer this as well on an optional basis. However, most customer do not care or do not fully realize what is going on. To state the obvious, Amazon and Wayfair (and sites like them) are able to market products all of the time and this holds true even if the person in question is not on the Wayfair or Amazon sites (Sun & Li, 2011).
Improved Marketing Techniques
In addition to the product suggestion and shopping tracking methods mentioned above, it is also clear that e-commerce and marketing improvements have made it much easier and efficient to advertise products. Indeed, the brick and mortar stores of yesteryear were only able to market to people in so many ways. This was especially true if they could not get people inside their doors. Other than being able to show people products on the sales floor, they would have to somehow push people to their website, reach them through circulars in the newspaper or through mass-mailing campaigns. For more than one reason, cold calling prior or potential customers and door-to-door sales was off the table due to it simply being ineffectual when it came to in-store retail and the fact that many to most people are annoyed by such sales tactics. In short, firms are able to market their wares online using ads and emails and much of this advertising is “opt-in” or unobtrusive in nature. The current marketing paradigm when it comes to both online and brick/mortar outlets, if done right, is the method used above. Any sort of advertising that seen as annoying and over the time will lead to bad feelings and animus from the prospective customers a lot of the time. As such, retailers have shifted to less overt means by going through social media, internet sites in general (as mentioned before) and very efficient and elaborate cross-marketing campaigns and methods when the people do come to their site. Of course, if someone comes across something that they really want, they can buy it. If not, it is not the least bit difficult to just ignore it and move on to something else (Lyus, Rogers & Simms, 2011).
Beyond that, there can be tiers of objects and products. For example, if someone looked at a movie and then looked at a new Blu-Ray player, there will be a row for that movie and ones similar to it as well as a row for Blu-Ray players that are in the same or similar price ranges. Even better, Amazon and Wayfair offer a lot of customizability when it comes to how the customer pages are set up including what is present, what is not present, what emails can be sent, what emails cannot be sent and so forth. While there are some things that the websites do not allow tinkering with, it is in their best interest to cater to the customer and their specific desires. Doing otherwise can lead to that person become disenchanted or dissatisfied with the experience on that site and that can lead to them trying to find different sites or stores to fulfill their needs (Lyus, Rogers & Simms, 2011).
Security Issues
When it comes to e-commerce and retail, the security lapse and problem that really changed things forever was what happened with TJX, the parent company of TJ Maxx. Indeed, the company was using wireless router technology to transmit sales data, including credit cards, from one point of the store to the other. As one might expect, that data was encrypted. Of course, using unencrypted internet would be terribly foolish to put it lightly. However, TJX still made a massive error in that they used what is known as WEP encryption, as opposed to WPA or other modern and unbroken ciphers. As one might expect, WEP encryption was indeed hacked and this was widely known at the time of the TJX hack. Beyond the idea that transmitting that information wirelessly when wired internet could easily have avoided all of this, they were using a wireless encryption cipher that was compromised and any adept information technology security professional would have and should have known that. Due to the lack of due diligence and competence of TJX, a lot of information was breached (Sturdevant, 2007).
The mess with TJX came to a head nearly a decade ago and the person that perpetrated that theft got a generation in jail. However, things have still been going wrong since then. For example, Home Depot, Target and a few other notable firms have all had their credit card data compromised in the last few years. It has gotten to the point where third party and encrypted pay providers have emerged as a solution to a problem that the retail community seems unable or unable to fix. This newer and more complete fix has emerged at the same time that the mobile revolution has come across. There are two main forms and both allow people to pay for products at point of sale places with their smartphone rather than having to have a physical card to swipe. One form is typified by Apple Pay and others like it. This technology uses what is called near-field communication and this methodology “talks” to the credit card terminal. The downside is that not all terminals have the part that “talks”. In that case, a traditional card must be used. However, Samsung Pay has offered a better alternative in that the same smartphones can be used but the “swipe” can be done on any terminal with a magnetic strip reader, which would be most of them. Regardless of what is used, the point of all of these is that the credit card information is extended to the point of sale in an encrypted and token-based way. This prevents the information from being reused later by those that would steal the information. No card is taken out of one’s wallet and thus cannot be lost or have its numbers copied and stolen. The cards are catching up as well in that there are now “chip” cards that can prove that the card is in the possession of the person buying a product. This has created a bit of an expense to retailers and their e-commerce expenses in that they have to get new card readers that have the slot for reading the chip. Even so, it is an improvement for everyone involved and protects the financial resources of the customers (Neiger, 2016).
Conclusion
In the end, the solutions exist out there to improve the e-commerce realm are improving but they are not perfect. Even so, things are getting better by the day and this should continue to happen. Eventually, technologies and concepts such as electronic currency (bitcoin) and such will nullify (at least mostly) the need for physical currency and cash-only retail paradigms. There are indeed still retails that are cash-only due to the ability for people to exploit paper-based payments such as money orders and checks. These same people often do not have the credit or history to get electronic and/or card-based payment methods. Even so, that should change over time as the retail and banking sectors more fully develop and evolve. Indeed, so much of the e-commerce options that retail relies on are driven and shaped by the banking sector so both of those two groups will have to be tracked and monitored in the coming years.
References
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Neiger, C. (2016). Apple Pay, Samsung Pay or Android Pay? What merchants want.
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