Customer Specific Transaction Risk Management in eCommerce

Increasing potential for turnover in e-commerce is inextricably linked with an increase in risk. Online retailers (e-tailers), aiming for a company-wide value orientation should manage this risk. However, current approaches to risk management either use average retail prices elevated by an overall risk premium or restrict the payment methods offered to customers. Thus, they neglect customer-specific value and risk attributes and leave turnover potentials unconsidered. To close this gap, an innovative valuation model is proposed in this contribution that integrates customer-specific risk and potential turnover. The approach presented evaluates different payment methods using their risk-turnover characteristic, provides a risk-adjusted decision basis for selecting payment methods and allows e-tailers to derive automated risk management decisions per customer and transaction without reducing turnover potential

Evaluating e-commerce trust using fuzzy logic [article]

Trust is widely recognized as an essential factor for the continual development of business to customer electronic commerce (B2C EC). Many trust models have been developed, however, most are subjective and do not take into account the vagueness and ambiguity of EC trust and the customers’ intuitions and experience when conducting online transactions. In this article, we develop a fuzzy trust model using fuzzy reasoning to evaluate EC trust. This trust model is based on the information customers expect to find on an EC Website and is shown to increase customers trust towards online merchants. We argue that fuzzy logic is suitable for trust evaluation as it takes into account the uncertainties within e-commerce data and like human relationships; it is often expressed by linguistics terms rather then numerical values. The evaluation of the proposed model will be illustrated using two case studies and a comparison with two evaluation models was conducted to emphasise the importance of usin fuzzy logic

Evaluating trust in electronic commerce : a study based on the information provided on merchants' websites

Lack of trust has been identified as a major problem hampering the growth of Electronic Commerce (EC). It is reported by many studies that a large number of online shoppers abandon their transactions because they do not trust the website when they are asked to provide personal information. To support trust, we developed an information framework model based on research on EC trust. The model is based on the information a consumer expects to find on an EC website and that is shown from the literature to increase his/her trust towards online merchants. An information extraction system is then developed to help the user find this information. In this paper, we present the development of the information extraction system and its evaluation. This is then followed by a study looking at the use of the identified variables on a sample of EC websites

eEnabled internet distribution for small and medium sized hotels: the case of hospitality SMEs in Athens

Advances in information and communications technologies (ICTs) have strategic implications for a wide range of industries. Tourism and hospitality have dramatically changed by the ICTs and the Internet and gradually emerge as the leading industry on online expenditure. The Internet revolutionised traditional distribution models, enabled new entries propelled both disintermediation and reintermediation and altered the sources of competitive advantage. This paper explores the strategic implications of ICTs and the perceived advantages and disadvantages of Internet distribution for small and medium-sized hospitality enterprises (SMEs). Primary research in Athens hotels demonstrates the effects of the Internet and ICTs for secondary markets, where there is lower penetration and ICT adoption. Interviews and questionnaires identified a number of strategies in order to optimise distribution. The analysis illustrates the strategic role of ICTs and the Internet for hospitality organisations and Small and Medium-sized organisations in general. Most hotels employ a distribution mix that determines the level and employment of the Internet. The paper demonstrates that only organisations that use ICTs strategically will be able to develop their electronic distribution and achieve competitive advantages in the future

B2C eCommerce Strategy and Market Structure: The Survey Based Approach

This paper follows two objectives: (i) It demonstrates the merits of the survey based approach to B2C eCommerce characteristics and company strategy, and (ii) it presents empirical evidence of the crucial importance of size and marketing investment in B2C eCommerce markets. It presents econometric estimates of the effects of company characteristics and company strategies on the performance of Viennese B2C eCommerce companies in 2001. We provide econometric analysis of three dependent variables in turn: (i) number of B2C eCommerce customers in 2000, (ii) number of B2C eCommerce employees in January 2001 and (iii) revenue growth rate in 2001. The models do explain the data quite well: Size as well as endogenous sunk costs emerge as the main success factors. Furthermore, the results of nonparametric tests are presented. They mostly confirm the econometric evidence. We also show that the quantitative results are consistent with the qualitative results of the surveys. Finally, we argue that the survey based approach to B2C eCommerce is a method that provides reliable and consistent data, and that it complements the approach based on prices and consumer behavior commonly applied.B2C eCommerce, empirical evidence, success factors, endogenous sunk costs, market structure

B2C eCommerce Strategy and Market Structure: The Survey Based Approach

This paper follows two objectives: (i) It demonstrates the merits of the survey based approach to B2C eCommerce characteristics and company strategy, and (ii) it presents empirical evidence of the crucial importance of size and marketing investment in B2C eCommerce markets. It presents econometric estimates of the effects of company characteristics and company strategies on the performance of Viennese B2C eCommerce companies in 2001. We provide econometric analysis of three dependent variables in turn: (i) number of B2C eCommerce customers in 2000, (ii) number of B2C eCommerce employees in January 2001 and (iii) revenue growth rate in 2001. The models do explain the data quite well: Size as well as endogenous sunk costs emerge as the main success factors. Furthermore, the results of nonparametric tests are presented. They mostly confirm the econometric evidence. We also show that the quantitative results are consistent with the qualitative results of the surveys. Finally, we argue that the survey based approach to B2C eCommerce is a method that provides reliable and consistent data, and that it complements the approach based on prices and consumer behavior commonly applied.B2C eCommerce, empirical evidence, success factors, endogenous sunk costs