Amazon and E-commerce

1
Amazon and E-commerce

• Prof. Ian Sommerville
• ifs_at_cs.st-andrews.ac.uk
• Room 1.32. Ext 3279

Course web http//www.cs.st-andrews.ac.uk/ifs/Te
aching/CS1005/index.html
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
Todays lecture

• An introduction to Amazon
• Principles of e-commerce
• Amazon automation

4
Amazon

• Started in 1995 as (probably) the worlds 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
Bank system
Get order information from customer
Validate card payment
Fail
Reject order
OK
Set link from stock database
Add order to out of stock queue
No
Check stock level
Reduce stock level by order amount
Yes
Put order onto processing queue
Update customer information
Order processing
15
Order processing
Get order from orders queue
Locate goods
Update customer information
Create fulfilment orders
Send orders to fulfilment centres
Confirm order by email to customer
Fulfilment
16
Fulfilment
Create customer despatch order
Generate pick list
Pick items from shelves
Send despatch for packing
Pack despatch order
Send items for despatch
Update customer information
Charge customer CC
Update order status
Confirm despatch by email to customer
Order complete
17
Order information
18
Summary

• Amazon is the worlds 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
  .htmlWhyPriv

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 Amazons system
  that collects and maintains information about
  what you have bought? What would be the
  disadvantages of this (for you and Amazon?)