See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/236332608

New Technologies Shaping the E-Commerce Environment

Article in Revista Economică · November 2012

CITATION READS
1 6,661

2 authors, including:

Eduard Alexandru Stoica

Lucian Blaga University of Sibiu
46 PUBLICATIONS 203 CITATIONS

SEE PROFILE

All content following this page was uploaded by Eduard Alexandru Stoica on 01 June 2014.

The user has requested enhancement of the downloaded file.

 Revista Economică Supliment nr. 3/2012
Marketing, Commerce and Tourism and a New Paradigm of Change

NEW TECHNOLOGIES SHAPING THE E-COMMERCE ENVIRONMENT

STOICA Eduard
Ph. D. Student Teaching Assistant, Faculty of Economic Sciences, Lucian Blaga University of Sibiu, Romania,
eduard.stoica@ulbsibiu.ro

BROTE Ioan Victor

Ph. D. Student, Faculty of Engineering/Department of Computer and Electrical Engineering, Lucian Blaga
University, Sibiu, Romania, victor.brote@ulbsibiu.ro

Abstract: The rapid growth of new technologies brings forth advances in speeds and the capabilities of
both wireless devices and networks, determines continuous increase in customer expectations and forces e-
Commerce companies to acknowledge customers as their most important asset. User-customization is increasingly
common in electronic commerce while future speculation of mobile commerce benefits could generate more revenue
to a wide range of industries.

Key words: broadband, e-commerce, enterprise, mobile, technology

JEL classification: O 33, L 81

1. Introduction
Customer Lifetime Value (CLV) models are usually used in the field of conventional marketing
to evaluate the lifetime value of customers in conventional businesses, but new adaptive models could
provide online marketing the necessary and unique methods for maximizing revenue in e-Commerce
sites. However the model is designed and whatever the methods, customer behavior and customer value
prediction techniques are highly relevant.
As a low-cost and flexible technology, web services present significant potential for the online
industry by enabling, in the long term, development of on-demand business processes that may
revolutionize e-commerce. Madhusudan (2005). The highly dynamic nature and the openness of the
environment, while imposing major requirements on a web service, determines an increasing demand for
web applications and sustains a continuous growth in worldwide adoption of commercial applications. E-
Commerce companies must realize the importance of being able to measure the value of their web
customers; the ability to accurately predict the value of a company’s customers has a large impact on the
ability to intelligently influence business process policies and IT related decisions and might prove a
decisive advantage in achieving competitive gains over other market players. Etzion, Fisher, Wasserkrug
(2005)

2. Online ordering
It is of the utmost importance for enterprises to be visible on the Internet. In 2011, seven out of
ten enterprises in the EU27 had a Website or a Homepage, but only two of which had one that allowed
online ordering, reservation or booking options available. The highest percentage of enterprises offering
"shopping cart" functionality and software on an online shop was for enterprises in "Travel agency, tour
operator reservation service and related activities" (58%), followed by enterprises in the
"Accommodation, food and beverage service activities" (35%), while 12% of all enterprises in the EU27
conducted sales via a website. Giannkouris, Smihily, Eurostat, Statistics in Focus 65/2011 (2011)

Table 1: Percentage of enterprises having a web site or homepage (all enterprises, without financial
sector – 10 employees or more)
GEO/TIME 2009 2010 2011
European Union (27 countries) 67 69
/
Romania 35 34
Source: Eurostat, Statistics in Focus 65/2011

379
 Revista Economică Supliment nr. 3/2012
Marketing, Commerce and Tourism and a New Paradigm of Change

The Eurostat News Release (2011) stated that less than 20% of EU enterprises have a website
offering online ordering. According to the Eurostat surveys, in January 2011, 69% of enterprises in the
EU27 had a website, while17 of them made available to the users an online ordering, booking or
reservation options and forms. Giannkouris, Smihily, Eurostat News Release 185/2011 (2011)

Table 2: Percentage of enterprises where the website provided online ordering or reservation or booking, e.g.
shopping cart (all enterprises, without financial sector – 10 employees or more)
GEO/TIME 2009 2010 2011
European Union (27 countries) 16 17
/
Romania 11 10
Source: Eurostat, Statistics in Focus 65/2011

The number of enterprises offering services online via a website varies significantly between E.U.
states. In January 2011, 93% of all enterprises registered in the Nordic Member States Finland had a
website, those in Denmark and Sweden both had 89% website coverage, while the lowest percentages
were encountered in Romania (34%) and Bulgaria (45%). At the same time, online ordering and booking
services facilities availability ranged between 9% in Cyprus and Portugal and 33% in the Czech Republic.
Giannkouris, Smihily, Eurostat News Release 185/2011 (2011)

Figure 1: Enterprise turnover on e-commerce

Source of Data: Eurostat, Code: tin00110

2.1. Self-serving customers

Online customers are not only online viewers of digital content but active suppliers of labor and
knowledge to the service creation and production process. Customer participation is “the degree of
consumer’s effort, mental and physical, necessary to participate in production and delivery of service”
Silpakit, Fiskin (1985). Self-service involves the discovery by customers of their own needs, thus
benefiting by getting exactly what they want in a process under their control that improves the likelihood
of actual purchase. Kamis, Stern, Ladik (2010)

2.2. Information Privacy

Since the dawn of the new millennia, information privacy has been recognized as an important
concern no matter the discipline – be it computer science, management, law, or consumer behavior. 87%
of Internet users admitted, for a 1999 survey, their concern with threats to their privacy while using the

380
 Revista Economică Supliment nr. 3/2012
Marketing, Commerce and Tourism and a New Paradigm of Change

Internet; Culnan, Armstrong (1999). Similar results have been presented by other credible studies. As the
process of digitalization of personally identifying information continues the dissatisfaction with the
privacy and security status quo is likely to increase while the costs of acquiring, storing and transferring
such information will decline. Thus, some organizations are now taking privacy into consideration in the
early stages of the product design process while balancing the advantages and disadvantages between
maximizing the benefits from collecting customer information and implementing user privacy
preferences. Poindexter, Earp, Baumer (2006)

Figure 2: Individuals using mobile phones to access the Internet

Source of Data: Eurostat, Code: tin00117

2.3. Traffic, Performance and Efficiency

Due to the booming Internet usage for commercial endeavors, E-commerce has become a
significant element of today’s economy, considering that online shops constantly offer state of the art
information about products and services, both to users and businesses, ranging from personalized
shopping to automated interaction between corporations. In spite of increasing power of e-commerce web
servers, online shops have been unable to e-commerce sites have been unable to improve their level of
service provided to the users. This is why focusing on server performance has become both desirable and
necessary. Vallamsetty, Kant, Mohapatra (2003)
As the number of Internet users and online shoppers increases network traffic is dramatically
spiking, leading to a delay of service in e-commerce systems highly probable due to the inefficient use of
system resources, repeated requests for the same object and a large segment of bandwidth being occupied,
resulting in decreasing customer satisfaction. For an overall improvement in e-commerce system data
flow efficiency it is recommended a network traffic distribution between users, as opposed to high
investments in improving individual system performance., by making available a user-centered interface
capable of providing real-time, adaptive product information. Ko, Leem (2004)

2.4. Adaptive software

Regardless of application domain, user-adaptive software systems have already proved to be
highly effective. Although ample evidence of personalization going mainstream in e-commerce,
personalized systems that include customer relationship management are poorly represented.

381
 Revista Economică Supliment nr. 3/2012
Marketing, Commerce and Tourism and a New Paradigm of Change

Personalization, in general, has been reported to provide benefits throughout the customer life
cycle by drawing new visitors, turning visitors into buyers, increasing revenues, increasing advertising
efficiency, and improving customer retention rate and brand loyalty. Fink, Kobsa (2000)
3. New technology
Market competition, typically responsible for service diversity, and technology competition,
which sustains evolution of advanced services, influence each other and make enterprise decisions even
harder. As new technologies, products, and services take hold of our daily life, it is possible to have
billions of dollars revenue impact for a single company.
The telecommunication industry is a fast-paced and constantly innovating environment that is
undergoing serious changes due to regular technology substitution and technology usage trends, while the
potential to gain revenue from new products becomes clearer and crucial to companies. The constant
growth of online retail businesses has become a challenge; according to Forrest Group, US online retail
sales reached 175 billion dollars in 2007 and were projected to grow to 335 billion by 2012. Au, Duan,
Jiang (2012)

3.1. IT payoff
E-business technologies are in their inception, representing investments in innovative and state of
the art information systems. These investments have many potential uses, such as enhancing customer
marketing and sales relationships or facilitating the acquisition of the input goods to production.
Evaluating the return on investment for IT systems has always been a difficult task, even when
the evaluation concerned the domain of only one firm. The dynamic nature of today’s e-business
technologies may emphasize the unavoidable issues regarding IT payoff investment. Added to the already
difficult equation, the less quantifiable variables of trust, loyalty make it almost impossible to establish a
specific payoff from technology investments in e-business.
One pertinent question arises, one that expects a certain answer: “Does technology make the e-
business, or does technology follow the e-business organizational and information needs?” Strassmann
states that “There is no relationship between expenses for computers and business profitability,”
Strassmann (1990), thus suggesting a lack of connection between money spent and performance of
information systems, while using his own developed algorithm that calculates IT as a function of firm
revenue, generating IT expenditure data but also causing validity questions for his IT payback
conclusions. Strassmann (1998)
No one is able to determine for sure if IT payoff is dependent or not upon technology investments
or innovations, but the answer to the evaluation of this e-business problem is bound to be found, due to
the increasing number of e-business platforms that make use of cross-functional tools and inter-
organizational e-business networks. Kleist (2003)

4. Mobile broadband
Enterprises use the internet for a wide spectrum of purposes, which includes the presentation of
information on a website, offers and online sales or shopping facilities to users and interactions with
public authorities. By January 2011, 95% of EU27 enterprises had access to the internet, while 87% of
them had a fixed broadband connection for internet access, a 3% increase compared to the year 2010.
However, a significant increase in mobile broadband usage by EU27 enterprises, between 2010 and 2011,
has been observed, from an average of 27% to 47%.
“The highest shares of enterprises with mobile broadband access in 2011 were found in Finland
(77%), Sweden (67%) and Austria (65%), and the lowest in Romania (15%), Latvia (23%) and Poland
(24%). More than 90% of all enterprises in Slovakia (94%), Lithuania and Finland (both 92%) and
Sweden (91%) reported that they used the internet to obtain information from public authorities' websites
in 2010, while it was less than half of enterprises in Romania (47%) and the Netherlands (48%).”
Giannkouris, Smihily, Eurostat News Release 185/2011 (2011)

Table 3: Internet access, fixed and mobile broadband connections by enterprises, January 2011
(% of enterprises)
Internet Connection Fixed broadband connection Mobile broadband connection
2010 2011
EU27 95 87 27 47
Romania 79 54 8 15

382
 Revista Economică Supliment nr. 3/2012
Marketing, Commerce and Tourism and a New Paradigm of Change

4.1. Mobile Technology

Multitasking has become the daily skill necessary for any modern enterprise to survive in the
business environment. By converging the Internet and mobile technology, two of the most heterogeneous
technological forces in modern ICT, into a ubiquitous mobile Internet service, our daily routines and
business methods will forever change.
The two most distinctive attributes of mobile Internet technology are mobility – enabling
communication, financial transactions and entertainment, on the move, via wireless Internet access - and
personalization – a mobile device stores confidential data regarding personal identity, conferring mobile
devices and their applications’ distinctive value, compared to desktop and wired devices, both for work or
leisure time.
Due to the omnipresent characteristic of mobile devices mobile users are able to access any
service, at any time, from any place – as long as a quality and constant Internet connection is available.
Mobile value can be summed up by three properties: ubiquity, real time services and accessibility.
These unique features offer service providers and e-commerce entrepreneurs the opportunity to
benefit and generate revenue by implementing new technologies and online services and enable mobile
users to enjoy a variety of new and upgraded multimedia mobile services. Mobile devices are personal
items, containing personal information and preferences, making it easy to approach a potential customer
or suggest possible acquisitions. Location discovery is also essential; by carrying user identity and
allowing device tracking, it proves useful when providing a mobile user with information regarding sales,
promotional offers or retail locations based on the user’s geographic position. Kim, Hwang (2010)
Figure 3: Individuals using mobile phones to access the Internet via 3G

Source of Data: Eurostat, Code: tin00117

4.2. M-commerce
An increasing number of mobile devices and dedicated applications are being deployed via fast,
cheap broadband networks, due to the fast pace of developing wireless and mobile technologies. As a
direct consequence, the new trend of mobile applications usage is quickly catching on and attracting users
into areas such as m-shopping and m-payment, among others.
The market opportunities are obvious and expectations for mobile commerce are quite high. This
is why organizations that have yet to implement m-commerce as a distribution channel for financial
operations and customer satisfaction through the modern infrastructure will do so in the near future.
383
 Revista Economică Supliment nr. 3/2012
Marketing, Commerce and Tourism and a New Paradigm of Change

Innovations in the field of mobile technology have determined complex global business systems.
As a recent developed field, m-commerce business models are different and difficult to manage; this is
why organizing these new technologies and services into a viable and balanced business model is an
intricate task, one of an important nature for both organizations and researchers. The future directions of
m-commerce development depend on understanding its key components and their potential to generate
revenue.
The rise of m-commerce and the wireless Internet are considered to be the new wave in the
communications industry. “m-commerce can be defined as any transaction with a monetary value—either
direct or indirect—that is conducted over a wireless telecommunication network” Ngai, Gunasekaran
(2007). Some researchers claim that m-commerce is an extension to e-commerce; others oppose this
terminology and refer to m-commerce as a completely different field with significant potential and unique
capabilities. “Due to the unique characteristics possessed by mobile commerce, business models which
have proved viable for e-commerce, not necessarily fit for mobile commerce” Wong, Hiew (2005).
Furthermore, the m-commerce user plays a threefold role i.e. of a technology user, a network member, as
well as a consumer, therefore to fully understand the user adoption of mobile commerce all the three
perspectives have to be integrated.
As a quick path towards m-commerce success, organizations tend to choose innovative,
interesting, attractive applications or, quicker still, to modify and adapt an existing e-commerce
application for the mobile environment. There is no doubt, m-commerce cannot and should not be taken
into consideration as a new e-commerce channel or as a substitute to online shopping via desktop
computers. Organizations must take m-commerce to the next level by avoiding existing models and by
researching towards the ideal m-commerce model. Sharma, Gutiérrez (2010)

5. Conclusions
The last decade has brought forth an exponential increase in use and development of new
technologies. From digital audio players, data compression, data storage hardware or software tools to
portable media players, smartphones and Tablet PCs – all of which have played an important part for
information society and human society, in general – human imagination has been driven by necessity and
desire to improve and ease access to knowledge. In the 21st century, information available free of charge
and restrictions is the same as being able to access the Internet. Due to the dynamic rhythm of day-to-day
activities and business transactions, mobility, personalization and interactivity have become vital
attributes to any endeavor, be it personal or enterprise, and the key directions and purpose for any new
model or technology meant to innovate the way we think about our lives.
M-commerce is a promising and relatively new field resulted due to technological developments
in wireless communication and mobile computing. There are numerous advantages, applications and
success factors suggesting a wide adoption of mobile devices adoption, even though some of those
implementations are bringing uncertainty to the game, but without an in-depth analysis over the
possibility of developing sustainable m-commerce business models and a profound understanding of
probable effects of mobility upon e-business there can be no advances towards developing dedicated and
adaptive business models. This is why success depends on business model innovation and adoption of
innovating and new technologies or services.
No matter what, m-commerce will continue to influence the conventional methods of doing
business, telecommunication and mobile technologies will keep emerging to handle more and enhanced
features and services, the demand for accessing the Internet on an anywhere will keep flooding the market
with high computing powers and display provisions leading to increased business capabilities through
mobile phones.

6. References
 Madhusudan, T. (2005) An experience report on developing an automated web services platform.
Springer-Verlag, ISeB 3: 243–263, DOI 10.1007/s10257-005-0020-7.
 Etzion, O., Fisher, A., Wasserkrug, S. (2005) e-CLV: A Modeling Approach for Customer
Lifetime Evaluation in e-Commerce Domains, with an Application and Case Study for Online
Auction. Springer Science + Business Media, Inc., Information Systems Frontiers 7:4/5, 421–434.
 Kamis, A., Stern, T., Ladik, D.M. (2010) A flow-based model of web site intentions when users
customize products in business-to-consumer. Information Systems Frontiers 12:157–168, DOI
10.1007/s10796-008-9135-y.
384
 Revista Economică Supliment nr. 3/2012
Marketing, Commerce and Tourism and a New Paradigm of Change

 Poindexter, J.C, Earp, J.B., Baumer, D.L. (2006) An experimental economics approach toward
quantifying online privacy choices. Springer Science + Business Media, Information Systems
Frontiers 8:363–374, DOI 10.1007/s10796-006-9013-4.
 Vallamsetty, U., Kant, K., Mohapatra, P. (2003) Characterization of E-Commerce Traffic.
Kluwer Academic Publishers , Electronic Commerce Research 3:167–192.
 Ko, I.S., Leem C.S. (2004) An Improvement of Response Speed for Electronic Commerce
Systems. Kluwer Academic Publishers, Information Systems Frontiers 6:4, 313–323.
 Fink, J., Kobsa, A. (2000) A Review and Analysis of Commercial User Modeling Servers for
Personalization on the World Wide Web. Kluwer Academic Publishers, User Modeling and User-
Adapted Interaction 10: 209-249.
 Au, S.T., Duan, R., Jiang, W. (2012)A data mining framework for product and service migration
analysis. Ann Oper Res, 192:105–121, DOI 10.1007/s10479-011-0904-5.
 Kleist, V.F. (2003) An Approach to Evaluating E-Business Information Systems Projects. Kluwer
Academic Publishers, Information Systems Frontiers 5:3, 249–263.
 Kim, D.J., Hwang, Y. (2010) A study of mobile internet user’s service quality perceptions from a
user’s utilitarian and hedonic value tendency perspectives. Springer Science + Business Media,
Information Systems Frontiers, DOI 10.1007/s10796-010-9267-8.
 Sharma, S., Gutiérrez, J.A. (2010) An evaluation framework for viable business models for m-
commerce in the information technology sector. Institute of Information Management, University
of St. Gallen, Electron Markets 20:33–52, DOI 10.1007/s12525-010-0028-9.
 Giannakouris, K., Smihily, M. (2011) Internet access and use of ICT in enterprises in 2011.
Eurostat News Release 185/2011 - 13 December 2011 / http://ec.europa.eu/eurostat
 Giannakouris, K., Smihily, M. (2011) ICT usage in enterprises 2011. Eurostat, Statistics in Focus
65/2011, ISSN 1977-0316, KS-SF-11-065-EN-N, © European Union.
 Culnan, M.J., Armstrong, P.K. (1999) Information Privacy Concerns, Procedural Fairness and
Impersonal Trust: An Empirical Investigation. Organization Science, Volume 10, Number 1, pp.
104-116.
 Silpakit, P., Fiskin, R. P., (1985). ’Participatizing’ the service encounter: A theoretical
framework. Services marketing in a changing environment. Eds., Chicago, American Marketing
Association.
 Strassmann, P.A. (1990) The Business Value of Computers: An Executive’s Guide. New Canaan,
CT: The New Information Economics Press.
 Strassmann, P.A. (1998) What is Alignment?.Edited excerpt from The Squandered Computer,
Published in Cutter IT Journal.
 Ngai, E.W.T., Gunasekaran, A. (2007) A Review for Mobile Commerce Research and
Applications. Decision Support Systems (43), pp. 3-15.
 Wong, C.C., Hiew, P.L. (2005) Mobile Entertainment: Review and Redefine. Paper presented at
the IEEE 4th International conference on Mobile Business, Sydney, Australia.

385

View publication stats