Amazon and E-commerce

1. Amazon and E-commerce Prof. Ian Sommerville ifs@cs.st-andrews.ac.uk Room: 1.32. Ext: 3279

2. Objectives To introduce e-commerce and perhaps the most advanced e-commerce system in the world, the Amazon system. When you have completed the course, you will: Understand the general principles of e-commerce Have experimented with the Amazon e-commerce system Know how complex computer systems support Amazon's e-commerce operations Have been introduced to cloud computing, where applications are delivered as a service, accessed through a web browser

3. Today�s lecture An introduction to Amazon Principles of e-commerce Amazon automation

4. Amazon Started in 1995 as (probably) the world�s first Internet book seller. Quickly diversified to become an online general store selling books, DVDs, computers, kitchenware, etc. etc. Excellent example of the notion of E-commerce The most technologically advanced Internet store. Reliant on advanced technology to manage an enormous number of products and tens of millions of customers Rents space on its technology platform to other online stores

5. Amazon demo

6. Class exercise 1 Go to Amazon (http://www.amazon.co.uk) You are looking for ipod speakers with a built-in digital radio. Find out what Amazon offers What do buyers of these speakers think of them? How can you sell stuff on Amazon?

7. Commerce The exchange of goods and services, usually for money Buyers Those who want goods and services Producers Those who create goods and services Sellers Those who offer goods and services to buyers.

8. E-commerce The process of buying and selling goods using the Internet rather than through phone/mail order or through a physical shop Sellers create an on-line catalogue and integrated ordering system. Goods are despatched by mail to buyers First e-commerce site is thought to be the International Stamp Exchange, created in 1985 but e-commerce did not really take off until the mid-1990s, with the growth of the Internet

9. Benefits of e-commerce Reduces retailers costs because: Fewer people involved in the transactions so lower salary costs No need to pay for printing and distributing costly catalogues Usually based on out of town warehouses. Lower property costs compared to town centre shop Increases potential market There are no geographical limitations on customer base Removes time limitations on shopping Integrated selling and marketing More customer information so marketing can be targeted

10. E-commerce systems Computer support for Product display (the web site) Marketing (emailing customer base) Ordering (automated shopping cart) Payment (usually credit/debit card; Paypal) Stock control and purchasing Fulfilment Getting the goods to the customers This cannot yet be completely automated

11. Class exercise 2 Look on http://www.johnlewis.com for an alternative approach to e-commerce Find out if they sell the same ipod speakers as you found on Amazon and how much they cost Look at the way that John Lewis presents information about products. Is Amazon better? Look at http://www.tesco.com for another way to present an online shop

12. Amazon automation Amazon can only be successful because it has automated practically all of the e-commerce processes Amazon relies on a very advanced, distributed (worldwide) computer systems to ensure that goods can be ordered and despatched, 24/7 and that positive sales messages can be delivered to customers When you order something from Amazon, people are usually only involved in selecting the goods you want for despatch from the warehouse and in delivering them to you (fulfilment process)

13. Workflow The distinct steps involved in some work process Usually represented graphically to present a view of how some initial stimulus or input, �flows through� the system in a series of processing stages Generally, organisations have tried to use computer systems to automate stages in the workflow so that the number of people involved in the process is reduced. Automation also allows more throughput as computers work faster than people Amazon has completely automated much of the e-commerce process

14. Initial ordering

15. Order processing

16. Fulfilment

17. Order information

18. Summary Amazon is the world�s largest on-line retail e-commerce site Amazon is totally dependent on advanced computer technology to deliver an efficient service to customers State-of-the-art computer science is used to implement Amazon systems Next lecture Amazon technology Recommender systems Cloud computing

19. Tutorial work The tutorial on Friday is intended to introduce an aspect of e-commerce that is of increasing concern to some people, namely information privacy. You should do the following before the tutorial Create an account with Amazon and have a look at the information that is associated with an account Are you happy that Amazon is collecting information about users, their preferences and purchases? Read the following Introduction to Dataveillance and Information Privacy http://www.anu.edu.au/people/Roger.Clarke/DV/Intro.html#WhyPriv

20. Tutorial discussion The theme of the discussion is information privacy. What is privacy? Why is privacy important? Is information about buying habits a threat to privacy? Can you think of situations where someone might prefer that their buying and browsing habits are not revealed? Should governments have the right to demand that information maintained by people like Amazon should be released to them? (they do have this right in the US). Should you be able to opt-out of Amazon�s system that collects and maintains information about what you have bought? What would be the disadvantages of this (for you and Amazon?)