E-commerce, whose long form is electronic commerce, involves the buying and selling of products online. It is supported by electronic business, which is any kind of commercial transaction that includes sharing information online. The three areas of electronic commerce are online retailing, online auction and electric markets.
The term “e-business” is often used in place of e-commerce. There is also online retail selling (e-tailing). Over the decades, airlines have invested in technology and e-commerce websites are not an exception.
The following are technologies related to electronic commerce:
- Online transaction processing
- Mobile Commerce
- Supply chain management
- Automated data collection systems
- Electronic data interchange (EDI)
- Electronic funds transfer
- Internet marketing
- Inventory management systems
In 1979, Michael Aldrich demonstrated the first online shopping system. In 2012, online sales surpassed the $1 trillion mark for the first time in history. Global retail e-commerce sales reached a whopping $2.304 trillion in 2017.
E-Commerce in Modern Times
Contemporary e-commerce can be categorized into business based on the types of goods sold and business based on the nature of the participant. Big companies and financial institutions utilize the internet for the exchange of financial data. This enables international and domestic business transactions to take place.
Mobile commerce, which is also called m-Commerce, was described by Kevin Duffey in 1997 as the delivery of e-commerce capabilities directly into the consumer’s hand through wireless technology. In other words, M-commerce is the buying and selling of goods and services through wireless mobile devices. Read more about that here.
The following are some of the applications related to electronic commerce:
- Instant messaging
- Conversational commerce
- Social networking
- Digital wallet
- Electronic tickets
- Online banking
- Domestic and international payment systems
- Shopping cart software
- Virtual assistants (Artificial intelligence)
- Online shopping
- Order tracking
- Online office suites
The online market has so gained much popularity in Europe and the United States, it has become an important tool for small and large business to engage customers/clients, apart from making sales. Mobile devices are playing a huge role in the realm of electronic commerce. Studies have revealed that information technology (IT) and cross-border electronic commerce are boosting the growth and development of enterprises.
Role of E-commerce in the Airline Industry
E-commerce has become ubiquitous in present times. It is almost impossible to browse a website without seeing ads or links to e-commerce sites ― all looking to get a share of what’s in your bank account. It is a fact that airlines were among the first to set up e-commerce websites. As stated at the beginning of this article, airlines have invested greatly in technology over the decades. It was in the 1990s that airlines started to adopt online sales channels.
Airlines already had the knowledge of data collection and the infrastructure of mainframes then. This made the transition to online channels easy. Eventually, another source of flight information was made available to customers apart from the travel agent’s office, airline ticket counter and phone lines.
Presently, people can get information about flights and make transactions online, while avoiding the stress of visiting the traditional airlines reservation agent. This saves time and money. Before the option of online purchases, most airline tickets were sold through airline reservation agents. Buying from them makes the tickets cost more because agent fees are included.
Technological advancement in e-commerce has helped the airline industry to reach potential customers worldwide. The airline industry’s distribution channels have been greatly transformed. Online sales of tickets have greatly increased over the years.
It is important for airlines to understand how electronic commerce can enhance their business transactions. Travelers and tourists who browse topdreamer.com will find ways of getting a discount from airlines operating e-commerce websites. More airlines are now utilizing electronic commerce for direct marketing in order to cut distribution costs and make tickets prices cheaper. They don’t have to pay commissions to travel agents.
Transaction costs have also been reduced in invoicing systems and automatic ordering. Reduction in the use of paper for transactions (especially for tickets) have been greatly reduced. Customers can print their tickets by themselves after the transaction has been completed.
Airlines make use of the sites to promote and build their brand. The channel has enhanced the value of the airline industry in terms of timeliness, convenience and competitiveness.