Online shopping

'Online shopping is a form of e-commerce (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 to purchase products. These products are then delivered to the indicated location using shipping services such as United Parcel Service (UPS) or FedEx.

History

Online shopping has been a 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 and 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 English innovator Michael Aldrich in 1979. It was not referred to as "online 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 the 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.

E-commerce

Amazon

In 1995 Amazon.com began to package and sell books online. Amazon provided a larger and more complete selection through their online store that put pressure on local retailers who were unable to stock a selection as diverse as what was available to Amazon. 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. Now, Amazon has taken over Whole Foods and is shutting down other bookstores and replacing them with their Amazon Books. They sell everything and adding very minimal shipping costs and times, there is no reason to not use this online shopping website. With various retail websites that allow customers in Europe, SouthEast Asia, and South America to also purchase goods, Amazon is able to slowly capture the entire world's e-commerce market. After acquiring Whole Foods in 2017, Amazon rolled out an initiative called AmazonFresh which allows customers to purchase fresh produce and other goods and have them delivered straight to their door. As part of this, Amazon is disrupting the grocery industry by making 2-hour grocery delivery a viable option for those living in Dallas, Cincinnati, and Virginia Beach . Initiatives like this are changing the way consumers buy groceries similar to how people altered the way they purchased books and popular electronics. With Amazon Prime, customers can pay a small fee of $99 dollars a year to receive benefits such as free 2-day shipping on select prime products, unlimited photo storage, and access to select movies, kindle books, and music. This deal also changed the shipping industry, as other distributors must compete with the 2-day shipping as this is a large convenience factor Amazon customers. Today, Amazon continues to acquire big players in the consumer goods market to provide goods and services to consumers at the most competitive price and delivery speed.

Online Auctioning

The same year Amazon began to sell books online, 1995, Pierre Omidyar and Jeff Skoll started an online auctioning company known as eBay. The company made a goal to connect people, and not to sell items in the same fashion as other online shops. Customers are able to browse through items by category and place bids on timed auctions. eBay started off only selling collectibles from customers, until they formed partnerships with companies such as Disney, GM, and Sun. eBay 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.

Process of Online Shopping

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). Customers can also user gift-cards online to complete their purchases. This option can be a more protected option as no personal credit card or debit card information is inputted on the website. Most transactions online are conducted through a credit card or debit card and websites have strong privacy settings to ensure that customer's personal data is protected.

Delivery

For physical items, customers need to provide their name and address for delivery. Shipping options are arranged by the 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 hassle 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 they are left without proof of having shipped it. Most companies provide free returns to customers if they claim the product was wrongly sent or damaged. In this case, the customer simply prints the pre-paid return label that the company sends them and sends back the items(s). In other cases where the customer must pay for their own return shipping, the company will deduct the shipping cost from the amount they are required to refund the customer. 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 process of browsing and human interaction out of the business-consumer equation. 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. Customers usually 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 before Netscape had implemented this security system online shopping was not a common practice.

Wrong Product Delivery

There are several situations that could result in the customer receiving the wrong product. This often occurs when the orders are filled by hand and a human 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 not know a mistake was made until the product arrives. In such cases, the online retailer will take responsibility for returning the incorrect item and will ship the correct item as soon as possible. However, 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 on time.

PS3 credit card hacking scandal

In 2011, Sony Corporation had to temporarily shut down it's PlayStation Network online services because an unauthorized person 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 shut down 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. Credit card hacking is a common problem, but the issue becomes more prominent online where hackers can hack a site and obtain private information with a click of a button. This is a concern for many online shoppers, as they are unsure if their credit card numbers and home addresses are protected from those searching to take advantage of such information. Although companies take extreme measures to protect their customer's information, security breaches still occur and are detrimental to a companies' reputations, as it was for Sony for a short period of time.

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. Sellers can also take a customer's money and refuse to ship the product that they bought. In these cases, customers began to distrust the website and seller and stop buying their products. Fortunately, 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

As a result of Online shopping, small businesses and local stores suffer as more and more people continue to shop online from major retailers like Amazon and Overstock.com. In the past years, physical foot traffic at malls has been on a rapid decline, causing many stores to close multiple locations. . Department stores like Macy's have had to shut down dozens of locations due to the decreasing mall traffic. Popular children's toy retailer, Toys R Us recently filed for bankruptcy and shut down online stores. Online stores are thriving because of its convenience. Stores like Walmart have offered services such as same-day pickup and price match to Amazon as a result of the prominence of online shopping. As a result of closings, many people lose their jobs as they were reliant on the store job. Thousands of jobs close as a result of store closings.

Dropshipping

Dropshipping is the use of the e-commerce website generator Shopify to create an online store that sells a curated selection of cheaply made products at marked up prices. These shops are advertised on social media accounts, often offering free or discounted products.

Negative Impact on the Environment

The rise of online shopping has increased the number of products shipped around the worldwide. This has raised concerns about this phenomena’s environmental impact. According to the United States Environmental Protection Agency (EPA), transportation is the leading cause of greenhouse gas emissions. 23% of greenhouse gas emissions are caused by medium and heavy-duty trucks - which are largely used for shipping. Before online shopping was popular, goods would be shipped to brick-and-mortar stores, which were clustered close together allowed these shipping trucks to easily deliver goods while traveling less distance between stores. However, with the popularization of online shopping, shoppers have goods shipped directly to their residential address causing an inefficiency in shipping and an increase in greenhouse gasses. Furthermore, shipping goods to residential areas increases congestion, higher noise levels, and frequent wear on infrastructure.

See Also

• Etsy
• Ebay
• Amazon.com
• iTunes Store

References

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