Online Goods and Services Flashcards
What is online shopping?
This refers to the buying and selling of goods and services using websites accessed through the internet. The items can be physical, ie books, films etc. or non physical like music downloads.
How do online shops work?
Website displays the goods for sale
Customer places items in virtual shopping basket
Check out
Payment is made and confirmed
Goods and services are dispatched and delivered to the customer
Features of online shopping?
Can sort and search for goods Images of products provided 24/7 availability Comparison of prices to similar products Suggestions of future purchases Customer reviews of products Comparison sites Bookable delivery service, ie for food.
How do online booking systems work?
Booking system displays available events
Selection of seat/flight/holiday and placement in virtual shopping basket
Customer enters personal details
Payment is made and secured
Confirmation email ticket sent and customers print the ticket
Advantages of online shopping for customer
Greater choice because there is no geographical limitation
Can shop all day, every day
Find best prices using comparison websites
Do not need to leave the house
You have the right to return the goods for any reason within 7 days of delivery unless good are customised
You can read other people’s reviews of the product
Disadvantages of online shopping to the customer
You need internet access and computer skills
You cannot pay using cash
You cannot see or touch products and you cannot try them on
Delivery fees usually apply
You need to submit personal info through a website
Risk of not receiving goods or having personal details stolen on fraudulent websites
Impact of online shopping on businesses
Online businesses can be located anywhere- do not need to pay expensive high street rental prices
Smaller staff require- saves money
Do not display stock- carry a greater range of products
Attract customers from all over the world
Impact of online shopping on lifestyles
Easier access for people with physical disabilities or young children
More choice for people in remote areas
Reduced carbon footprint
Available any time for people who work unsocial hours
How do online auctions work?
Seller and bidder create online accounts
Seller supplies a description and photograph of an item for auction
The bidder with the highest bid at a scheduled time wins the item
The bidder is obliged to buy the item they have won in the auction
The seller and bidder exchange emails to arrange payment and delivery
Features of online auctions
Can search for items you want
Bidders can see status of their bids
Changes can be made before the scheduled end time
Users of the auction service can rate each other
Sellers can choose to make an item available for purchase immediately rather than have bidders bid for it
Secure payment is arranged by the auction site
Advantages of online auctions
Ability to search for good required
Community of users which builds trust by rating both buyers and sellers
Third party payment options for secure payment
Large number of sellers= More competition= Prices being lowered
How does online education and training work?
Student creates online account and selects his or her courses
Teaching material is provided on a website
Assignments submitted and returned to students electronically
Features of online education and training
Interactive teaching material
Communities of students interacting online
Provides personalised learning
Students work from home
How do online information services work?
News reports are written by newspaper and TV companies- made available online for free or by subscription
Users access websites to read the news of select news using RSS feeds
Features of online information services
Easy to search for and sort news items Up to date news available worldwide Review news items from different sources- some may be biased or make up untrue stories Allow users to select news News presented in text, images and videos Extra content provided for subscribers Users can add comments Users can subscribe to content
How do online banking and other financial services work?
User creates a secure online bank account
Money can be transferred electronically into the account
Payments can be made to other accounts
Features of online banking and other financial services
View up to date bank account details View all transactions Pay bills online Create new bank accounts Secure access provided Offers promotions to online customers
How does online gaming work?
A central server runs the game software and streams each player’s position and actions to all players over the internet
Players require a high bandwidth, low latency connection to the internet to avoid lag when gaming
Features of online gaming
Players select game and create online accounts
Players can interact with each other as well as computer opponent
Some games store data such as graphics and sound LOCALLY on player’s computers
How does streaming work?
User selects TV programme/film
Presses play
Programme continually sent from server and streamed over the internet
Player buffers (stores) some data in case of delays in data arriving
Programme plays
INTERNET REQUIRED FOR THE WHOLE PROCESS+ a high bandwidth and low latency connection improves performance of streaming device
How does downloading a film or TV programme work?
User selects TV programme/film
User downloads entire file from server to their computer
User presses play
Programme plays
INTERNET ONLY REQUIRED TO FIND AND DOWNLOAD PROGRAMME
Why do organisations operate online?
Work from any location
Can sell to people around the world
Overheads are usually lower for online shops so they can be more profitable than high street shops
Online shops can, therefore, be able to afford to sell products cheaper and still make a good profit
Advantages of operating online for retailers
No need to distribute goods to shops
Easy to make changes to products and prices
Customers only need a web browser, an internet connection and means of paying electronically
Inexpensive way to reach new markets
Minimal start up time and investment needed- can be set up from home
Organisation can be located wherever it likes
Disadvantages of operating online for retailers
Skilled staff are required to develop and run an efficient website
Ensuring online payment security is difficult
Need a delivery service and the facilities to handle returns
Customers limited to those with access to internet and those who can pay electronically
If retailer has high street shops too, they may find high street shops suffer and have to close down because they cannot compete with online shop.
What is transactional data?
Info collected about a sale or purchase
Stored in databases which can be searched and sorted
What is the commercial value of transactional data?
It is extremely valuable to organisations you buy from because:
It allows the organisation to keep a record of your purchases
Allows your delivery to be tracked
Contains a rich source of info about customer shopping habits and preferences
What transactional data is collected?
Purchase price
Unique reference number given to each transaction
Details of items purchased
Delivery tracking data that displays delivery status and location
Personal info from your online account
Date and time of the purchase
What is transactional data used for?
To understand customers’ buying habits and see trends in sales
To produce a more personalised experience- show other goods you might be interested in
Targeted advertising campaigns and to produce personalised adverts
To create personalised marketing such as coupons for products that customers are likely to purchase
To track delivery of goods
Why do organisations use internet advertising?
Can be targeted at certain customers
Stats can be gathered
Cheaper than traditional advertising, for example TV adverts
It reaches a wide range of customers
Reaches customers faster than traditional ads
How does internet advertising with search engines work?
Ads are displayed when customers search using key words
Google Adwords allows the advertising company to pay google when people click on their adverts- cost per click
Key words have to be carefully chosen and the advert carefully worded to make people want to click on it
How does internet advertising using social networking work?
Many social networking sites use the info they have about users to target particular ads at them
Organisations pay FB to display ads on particular users’ pages and FB can select customers by location, age and interests
What is viral marketing?
When an organisation creates interesting and entertaining content that makes people want to pass it on to their friends via social media, email and texting
How does viral marketing work?
Interesting and entertaining content (such as a video) is created that people will want to share
Content is spread by people sharing content with their friends
Similar to a spread of a “virus” between people
Why is viral marketing used?
Content may spread very quickly- Goes viral
Cheap- organisation does not have to pay for adverts
Memorable content- people will remember brand name
What is online targeted marketing?
Concentrating online advertising on the groups of customers who are most likely to buy a product
How does targeted marketing work?
Online organisations collect and combine online data from:
Cookies stored on your computer- browsing habits
Transactional data
Social networking sites
Microblogging sites
Personal info from online profiles
Use that data to send ads just to those users whose age, gender, interests or previous purchases may incline them to buy the suggested product
Personalisation techniques
Personalised emails, specific- maybe special occasion reminders- sent to your email address.
Based on past browsing and searching on other websites, alternative products and favourite categories and recommendations based on your browsing history and other items you may have purchased.
How can you avoid targeted marketing?
Opt out of sharing your personal info with other organisations when creating online accounts
Delete cookies
Be careful with the personal info you add to online profiles
What are the four methods of paying online?
Credit/Debit cards
Online Bank Transfer
Third party payment processors
Online Coupons and online gift vouchers/e-Vouchers
How do debit cards work?
Let the customer pay by taking money directly out of their account
How do credit cards work?
Allow customer to borrow money which they then have to pay back at a later date with interest
What details do you give when you pay online?
Card number
Expiry date of card
Cardholder’s name
Credit Card Verification code
How can you make sure a website is secure?
URL changes to https
Change in the colour of the address bar (usually green)
Padlock symbol
“Norton Secured” adds further layer of authentication
How does online bank transfer work?
Customers can make online payments directly from their account to other accounts as long as they know the bank account details of the organisation they are paying
How do online banks keep customers safe from online fraud?
They check bank accounts to make sure there is no unusual activity
They provide secure encrypted web services
They use login protection schemes such as PINsentry
How can online coupons and eVouchers be used?
The recipient creates an online account and enters the unique reference numbers given on the eVoucher or coupon
What do third party processors do?
They are trusted organisations who stand between customers and retailers so payments are not made directly
The buyer creates a third party payment account with details of their debit/credit card- this info is never shared with retailers
Buyer pays the third party who holds money until payment is authorized
Once payment is authorized, the third party transfers it to the seller
Consumer rights under UK law
Purchased item must be of satisfactory quality, fit for purpose and as described.
If the item is faulty, it has to be replaced, repaired or money refunded
Consumer rights when shopping online
If buying from a UK-based retailer, you have the same rights buying online as you do buying in a shop, eg. faulty items can be returned
What is the cooling off period?
Orders placed online can be cancelled, for any reason, up to seven working days after receiving items and a full refund of money paid will be made
What does the cooling period not apply to?
Personalised goods
Perishable goods- food, flowers
CDs/DVDs/software where seal has been broken
Newspapers, magazines and other reading material excluding books
Gaming, betting and lotteries
How does locally installed software work?
User obtains software on DVD or downloads from internet and installs software on computer or file server
Advantages of locally installed software?
Works without being online
You have the license to use the software
You control access to the computer so security is good
Disadvantages of locally installed software
Takes up a large amount of file space
Must download and install upgrades and patches to fix bugs
All data is stored locally so it must be backed up
How does hosted software/software as a service (SaaS) work?
User logs in through internet to use software when needed and the software runs on a web server over the internet
Advantages of hosted software
Software does not take up any file space your computer
Allows users from different parts of the world to work on the same document at the same time
Disadvantages of hosted software
Cannot work without internet connection
Not as secure due to possibility of hosting company being hacked
Response time depends on network speed
What is proprietary software?
Developed by a company and usually requires payment to use on your computer or online, eg. Microsoft Word
What is open source software?
Developed by volunteers who gradually improve it and it is free to use on your computer or online, eg. Open Office
How can commercial software producers make users want to buy their software rather than using SaaS or open source software?
Make their products more appealing and of better quality by including more features and functions
Provide “bundled” software, ie. it is already installed on new computers and laptops
Provide technical support, help services and training materials
Use copyright to protect their products to stop similar free products being offered as a software service
Offer their own versions of SaaS
What is local data storage?
Files are stored on the digital device you are using
What is online data storage?
Files are stored on a server elsewhere which you access through the internet. Referred to as “in the cloud”.
Advantages and disadvantages of local storage
+You have control over access to your files and the security of the data
+Data can be accessed quickly
+You do not need an internet connection to access data
- You are responsible for keeping data safe
- Difficult to share data with others
- Data needs to be backed up
Advantages and disadvantages of online storage
+Data is available anywhere as long as you have internet connection and a browser
+Some online data storage services are free
+Easy to share data with others
+Data is backed up for you
- Need to trust the organisation storing your data will keep your data secure
- Online data storage may not be reliable
- Need a good internet connection to get access to your data
- Less control of your data as you do not know where your data is stored
What is a search engine?
A computer program that searched for web content that contains or is tagged with key words you have entered into the box. It searches it’s indexes and displays a list of the content that is matched
Search techniques
More key words to narrow down search Search by type of object you are searching for, eg. image, news, etc. Use advanced search facilities Search by date/language Use more than one search engine
How to check the validity of search results
Look at URLs to check results come from a trusted organisation
Check that the info is up to date
Look at the summary to see if the website contains relevant info
Look at summary to see if there are any spelling mistakes or preview website to check if it looks professional or If it is full of ads
