Online shopping

Online shopping, a form of e-commerce, is the buying of goods or services through sellers over the internet. There are various types of online shops that simulate "real life" shopping experiences including online auctioning (Ebay), site-hosted personal storefronts (Etsy), and physical stores that host their own online storefront. Through secure socket layer encryption customers are able to communicate credit card information and other sensitive data safely and securely. Products are delivered using shipping services such as UPS or USPS.

History

Online shopping has been an implementable and bankable idea since the inception of end-user information systems. Videotex, a two-way messaging service displayed through television monitors, was the first medium for the idea of implementing "teleshopping". Companies in the UK (Prestel, Oracle, Viewdata) and companies in the USA (The Source and Compuserve) did much research in the field of videotex. The concept of "teleshopping" (shopping at a distance, not to be confused with infomercials, a form of television shopping) was introduced by Michael Aldrich in 1979. It was not referred to as "on-line shopping" because there was no Internet at the time. The original system developed by Aldrich's team was not based in computers but in telecoms and consumer electronics industries, and was initially only used for business-to-business transactions (B2B). In 1990s with the mass installation of home computers, business-to-consumer (B2C) commerce began.

Tim Berners-Lee invented the World Wide Web in 1990. This provided the avenue for business-to-consumer transactions, allowing the average consumer to browse content posted on the World Wide Web in their own homes. In 1994 the internet browser Netscape introduced Secure Socket Layer encryptions, which allowed for the secure transmission of messages over the internet. This meant transactions were able to take place through the World Wide Web without risk of stolen information. The same year Pizza Hut began to offer the online ordering services, with many companies after following suit.

Amazon

In 1995 Amazon.com began to package and sell books online. Amazon was able to outclass the local bookstore by providing a larger and more complete selection through their online store. While it initially only sold books, the company's endgame was to sell every product "from A-to-Z." In 4 and a half years, Amazon.com became the most recognized online retailer by online shoppers. In 1999, Jeff Bezos, founder of Amazon.com, was named person of the year by Time Magazine for popularizing online shopping.

Online Auctioning

The same year Amazon began to sell books online, 1995, Pierre Omidyar and Jeff Skoll started an online auctioning company called eBay. The company made it's goal to connect people, and not to sell them things like any other online shop. Customers are able to browse through items by category and place bids on timed auctions. Originally only selling collectibles from customers, eBay branched out, forming partnerships with companies such as Disney, GM, and Sun, which allowed these corporations to auction off items on their website. The wide variety, and repetition, of products now allows buyers to find the lowest possible price they can.

How to shop

Payment

Customers generally pay for goods and services online through credit/debit cards. Other methods include PayPal (an online money transferring site), in person transactions (however this defeats the purpose of online shopping), or other money transferring websites (Skrill, Paymate). In addition to the cost of the products purchased, customers generally must pay for the shipping of the product as well, unless the shopper buys over a certain amount through a company that provides free shipping (however some companies, such as Zappos.com, exclusively offer free shipping).

Delivery

For physical items, customers need to provide their name and address for delivery. Shipping options are arranged by speed of delivery. Next day and two-day shipping options are available, however the cheapest and most common option is 3 to 5 business day shipping. The cost to ship an item also increases with weight and size. Items are generally shipped through United Parcel Service (UPS), however items that can be packaged in envelopes can be sent through United States Postal Service.

Return

The return policies on items can vary from company to company. In most cases companies accept returns, but the customer will pay for the return shipping cost. Returns seem to be more of a hassel for online shopping compared to returning an item to a store because it requires work from the customer to pack the item, take it and pay for the shipping and then it is safe to get a tracking number, otherwise you will not know if your item arrives back to the vendor and then are left without proof of having shipped it.

This part of the process also seems to be more cumbersome for the vendors also, because they can get all kinds of items shipped back to them and if an item was worn or damaged how are they to reject the return if it is just shipped to their door. In this case the customer gets more benefit of the doubt.

Ethical concerns

Online shopping has taken the physically taxing process of browsing and human interaction out of the business-consumer equation. However with ease of process comes a lack of security within business transactions. Customers are generally not able to pay for shipped products with physical cash and must give their credit card information to websites from which they are purchasing. Because of this, customers usually only place online orders from reputable sources, such as Amazon or Zappos.com. In addition to credit card information, full-name, address, and phone number are also divulged to these companies. Though it is generally secure to trust the seller with sensitive information, certain hackers are also interested in this information and will target companies for it. This may not be as big of an issue with the advent of SSL, however before Netscape had implemented this security system online shopping was not a common practice.

Wrong Product Delivery

There are several situations that could occur in which the consumer would receive the wrong product. This often occurs when the orders are filled by hand and a mistake is made in the online retailer's warehouse. A warehouse worker may ship the wrong item completely or may ship the correct item in the wrong size or color. Consumers will likely not know a mistake was made until the product arrives. Usually, the online retailer will take responsibility for returning the incorrect item and will ship the correct item as soon as possible. However, in some cases, this may not completely correct the problem. For example, a consumer who purchased an item for a specific event or as a gift, may not receive the replacement item in time.

PS3 credit card hacking scandal

In 2011 Sony had to temporarily shut down its Playstation Network online services because an unauthorized person had hacked their systems and had access to vital customer information. Credit card information, purchase history and other profile information were all at possible risk. Sony shutdown their online network for a month and hired an outside security firm in order to investigate the security breach. . Sony was initially hit with criticism after it was alleged that customer credit card data and other sensitive information was stored unencrypted on the network. Sony later said that such sensitive data was encrypted and not in plaintext.

Quality Assurance

Many people feel insecure about online shopping because every online transaction they make runs the risk of getting scammed. Anonymous sellers can easily post a fake picture of a new item and after they've received payment, send a used or broken item. Additionally, shipping quality and return policies are also difficult for the buyer to ensure when dealing with online transactions. On the other hand, sellers also run the risk of receiving bad payments especially on auction sites like Ebay. On smaller shopping sites, it's difficult to tell how safe the transaction will be and what the quality is like. Larger sites like Ebay and Amazon.com use seller rating systems and customer reviews to help ensure both good and bad quality sellers are recognized. They also have buyer reviews which indicate how reliable the buyer is and how often they actually go through with a final transaction.

Negative Impact on Independent & Local Businesses

Another criticism of online shopping is that small businesses and local stores suffer as more and more people continue to shop online, from major retailers like Amazon and Overstock.com. There are several arguments for why traditional shopping can be viewed as more beneficial than online shopping. These include that even though online shopping makes the consumer more educated, but most people still actually go to an offline store to make purchases. However, the social aspect of shopping cannot happen online, most people shop with friends at malls or at other physical locations. Also, customer service will almost always be better at an offline traditional shop rather than an online store, and is more immediate. Finally, there is no true replacement for seeing and touching the item you are about to purchase, mostly for clothing and other accessories, not as much for technology related purchases, such as music and software/hardware though necessarily.

See Also

• Etsy
• Ebay
• Amazon.com
• iTunes Store

References

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