Page 42 - Electronic Commerce

Introduction to Electronic Commerce

Sophisticated Analysis of Large Datasets
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Companies that do business online found that they could track the detailed behavior of
customers as they navigate the company Web site. They also found that they could store
large amounts of this information and use it to improve their operations and interactions
with customers. The availability of so much data, which was available to physical
companies only through expensive surveys and focus groups, was a major force in the
development of sophisticated software tools for analyzing large amounts of data. The term
big data is used in business to describe very large stores of information such as that
collected by online sellers about their customers. The highly sophisticated tools for
investigating patterns and knowledge contained in big data are called data analytics.
Companies that store large amounts of data about their customers’ behavior on their
Web sites can combine that information with their existing data about customers’ past
purchases to predict the kinds of products, services, or special offers in which each
customer might be interested. You will learn more about how companies use big data to
tailor their product offerings, advertising, and marketing strategies to groups of customers
and even individual customers in Chapter 4.
The study of data analytics, which includes the development and use of statistical
software to detect patterns in big data and the modeling of customer behavior, has
become a popular subject area at many universities around the world. You will learn more
about the use of data analytics in managing customer relationships in Chapter 4 and the
software used to perform these activities in Chapter 9.

Integration of Tracking Technologies into B2B
In the first two waves, Internet technologies were integrated into B2B transactions and
internal business processes by using bar codes and scanners to track parts, assemblies,
inventories, and production status. These tracking technologies were not well integrated.
Also, companies sent transaction information to each other using a patchwork of
communication methods, including fax, e-mail, and EDI. In the third wave, Radio
Frequency Identification (RFID) devices and smart cards are being combined with
biometric technologies, such as fingerprint readers and retina scanners, to control more
items and people in a wider variety of situations. These technologies are increasingly
integrated with each other and with communication systems that allow companies to
communicate with each other and share transaction, inventory level, and customer
demand information effectively. You will learn more about how these technologies are
integrated with B2B electronic commerce in Chapter 5.
Figure 1-4 shows a summary of these and other key characteristics of third-wave
electronic commerce as compared to those discussed earlier regarding the first and
second waves.

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