encyclopedia

Online shop

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An online shop, Internet shop, webshop or online store evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or in a shopping mall. It is an electronic commerce application used for B2B or B2C.

Contents

1 Steps when buying online

2 Using an online shop

3 Means of payment

4 Setting up a shopping cart system

5 Security issues

6 History

7 See also

Steps when buying online

Browse product categories
Put items into shopping cart
Checkout (Login, edit personal data and choose means of payment)
Confirm order
Logout

Alternatively to this shopping cart system a recurring user could be recognized again by storing a "Cookie" on his computer. That way he can purchase an item by just clicking on it without having to login and edit the credit and shipping information again. Amazon.com was granted the United States Patent Number 5,960,411 for this method - the famous Amazon "One-Click Patent".

Using an online shop

One can move about the online store by using a web browser to browse the product categories and then placing the selected items into a virtual shopping cart (or market basket).

Upon checking out of the store it is required to log in. When visiting the store for the first time one normally has to register by choosing a username and a password. Furthermore one must provide this type of information:

Name
Address
Delivery or shipping address (can be different from the address)
Telephone number
Means of payment
Delivery speed and method (post, courier and logistics service, etc.)

After editing the personal data a confirmation page is displayed so that the online shopper can approve, change or abort his order.

When a user has completed his session he can logout.

Means of payment

Credit card
All kinds of Electronic money, Ecash (or digital money)
Pay by mobile phone
Cash on delivery (C.O.D.)
Cheque
Money transfer / delivery on payment
Postal money order

Setting up a shopping cart system

Simple systems allow the offline administration of products and categories. The shop is then generated as HTML files and graphics that can be uploaded to a webspace. These systems don't use an online database.
A high end solution can be bought or rented as a standalone program or as an addition to an ERP program. It is usually installed on the company's own webserver and may integrate very well into the existing supply chain so that ordering, payment, delivery, accounting and warehousing can be automated to a large extent.
Other solutions allow the user to register and create an online shop on a portal that hosts multiple shops at the same time.
Open Source solutions can be adapted and installed on a webspace.
There are also commercial systems that can be tailored to ones needs so that the shop does not have to be created from scratch. By using a framework already existing software modules for different functionalities required by a webshop can be adapted and combined.

Security issues

User and payment data is encrypted by SSL when it is transferred on the Internet. Quality seals can be placed on the Shop webpage if it has undergone an independent assessment and meets all requirements. The purpose of these seals is to increase the confidence of the online shoppers. But the existence of many different seals foils this effort to a certain extent. Customers are afraid of credit card fraud, which has happened even at large online shops. Privacy of personal information is also a big issue. In spite of Privacy Guidelines of the OECD, for example, privacy violations still occur and hamper eCommerce from developing to its full potential.

History

1990: Tim Berners-Lee wrote "The WorldWideWeb browser" using a NeXT computer.
1994: Netscape released the Navigator browser in October under the code name Mozilla. Pizza Hut offered pizza ordering on its Web page. The first online bank opened. Attempts to offer flower delivery and magazine subscriptions online. "Adult" materials were also commercially available very soon. Netscape 1.0 in late 1994 introduced SSL encryption that made transactions secure.
1995: Jeff Bezos launched Amazon.com and the first commercial 24 hr. internet only radio station "Radio HK" started broadcasting. Dell and Cisco began to aggressively use Internet for commercial transactions.
1996: eBay was founded.
1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.
1999: business.com was sold for US $7.5 million (purchased 1997 for US $150,000) The peer-to-peer filesharing software "Napster" was launched.
2000: The dot-com bust.
2001: Merger of AOL and Time Warner.
2003: Amazon.com: first-ever full-year profit.