E-Commerce Research IssuesIT and Travel / Tourism • Leading B2C sector -30% of online spending in...

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E-Commerce Research Issues

Hannes Werthner

eCTRL, Trento, ItalyEC3, Vienna, Austria

Just Business ?

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Werthner, EC-DEXA 2001 3

Content

• Introduction

• E-commerce – some numbers and observations

• Future: Ambient Intelligence

• Issues for Research


Technology Trends• From computer to a global media machine (broad uptake

by society)• Mobile computing• Drivers

– Computing power doubles every 18 months – transmission capacity every 12 months – IP addresses every 6 - 9 months – 30 Mio. Chips per year are produced for PC’s, > 250 Mio.

go to other devices

• “Disappearance of PC”• But no linear development - order and disorder

technology, services, structures

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And .. • Integration and Differentiation

--------- > Complexity

• Convergence (also industries) and „cross overs“

• Information and Network economy– Importance of digital products and information as part of

economic activities (Bell 1973, Tapscott 1998)– Increasing interdependencies of (economic) actors

• “Prosumption” - from „Customer-focused“ to „Customer-driven“

• Acceleration of change - innovation & research

• „Digital Divide“


E-Commerce development

2000

Sal

es

2000 2010

Sal

es

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Consumers: Retail sales in the USA

5,0

6,0

7,0

8,0

9,0

10,0

Q4 1999 Q1 2000 Q2 2000 Q3 2000 Q4 2000 Q1 2001

Bn.

US

D

0,0

0,2

0,4

0,6

0,8

1,0

% o

f tot

al r

etai

l

E-Commerce Sales % of total sales

US CensusBureau of the Departmentof Commerce(http://www.census.gov/mrts/www/current.html)


And• Growing user confidence in online spending (42% of

US online users intend to shop online in next 3 months – Yahoo!/ACNielsen June 2001)

• NRF/Forrester retail index increase of 24% - June to July (August 2001) – after a previous drop

• Internet traffic continues to grow – at same pace (Roberts, August 2001)

• Well positioned B2B market places are successful (e.g., Covisint)

• However, numbers inconsistent (B2B e -commerce estimates in USA range from Bn. 100 to Bn. 1200 U$)

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Where are we?

Technologytrigger

Peak ofinflatedexpectations

Troughofdisillusionment

Slopeofenlightenment

Plateau ofproductivity

e-commercetoday?

e-commercetoday?

‘Realistic’perspective?

Stockmarketperspective

Exp

ecta

tion

Technologytrigger

Peak ofinflatedexpectations

Troughofdisillusionment

Slopeofenlightenment

Plateau ofproductivity

e-commercetoday?

e-commercetoday?

‘Realistic’perspective?

Stockmarketperspective

Exp

ecta

tion

Exp

ecta

tion


E-commerce and e-business

• E-commerce covers all transaction phases (search, negotiation, agreement, settlement) - by means of electronic networks (?) - as well as dedicated infrastructure and generating activities within firms, with suppliers and customers (OECD)

• E-business includes e -commerce , but also covers internal processes. It is focused on internal processes, the way its processes are handled, and the way people work (US Chamber of Commerce)

• Statistics are not consistent, what we would like to know:– Economic data: Aggregates with respects to (new sectors),

turnovers, international exchange, employment data,...– structural features: (business) relationships plus their changes– penetration in households and society, different media used, …

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IT and Travel / Tourism

• Leading B2C sector - 30% of online spending in USA (TIA)• estimated that by 2007 30% of b2c transferred to the

Internet (Schuster 1998) – at moment approx. 2.5 - 3 %• Substantial change in consumer behavior and market

structure - travelers are adapting well to online technology –with impact on other distribution channels

• Airline and destination information sites have seen online traffic rise 27% for leisure, and 10% for business travellers.

• The online sale of air tickets by the top 10 airlines in the US doubled in 2000 – they made approx. 10% of their revenue from online sales, but Southwest Airlines made 26%

• And a real jump in August 2001 ( Cyberatlas August 2001)


IT and Travel / Tourism (2)

• In 2000 93% users searched for travel information online, compared with 66% last year / USA

• Europe: 13 Mio. travels initiated via the Net – but paid offline (approx. 3.5 %) - 3,8 Mio. booked and paid online.

• Some destinations rather well – Austria (13 % versus 5%)

• Concentration: In Europe the top five online travel agencies have 59% of the online travel agency market, in the USA the top five 85% (Expedia and travelocity 30%)

• Electronic market place was driven by newcomers/intruders, now strong competitive response

• Dynamic nature of the market– New intermediaries / market players have emerged over the

last five years – 3 generations of systems in 4 years

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Features of the Industry

• Tourism industry among the leading industries • 1 Bn international tourists in 2010• Worldwide networked industry • Worldwide demand side (different context, non-frequent

users)• Information business

Relax and have fun !!!

Winners take it all

Acamic& Huberman 1999Number of users

Pro

port

ion

of W

ebsi

tes

Small number of domains (6) per session (Montgomery & Faloutsos, 2001)

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New Structures

new marketswith new players

Supplier

Consumer

relative fixed Network structure


The Future - Ambient Intelligence

• Many (inexpensive) computing devices - can exchange data very fast

• Integration of fixed and mobile communication (seamless)

• Link devices to the basis infrastructure (embed them in our surrounding)

• Incorporate value added services

• Devices should understand the people they serve

➠ Integrated and intelligent platform for the delivery of Services and Applications (in Europe)

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Ambient Intelligence“Everything becomes the intelligent Interface”

Convergence of

• Ubiquitous computing and communication

• Intelligent user-friendly interfaces

Systems should be

embedded, personalised, adaptive, and anticipatory

Access anywhere, at any time, for everybody

Users are in the foreground

Challenges: to build technologies and systems (almost invisible), which are trustful and embedded in our life


Interaction

• today– lean -forward (tense, concentrated)

• tomorrow– laid -back (relaxed, enjoyable)

Have Fun!

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EU Research Policy Statement

• Gap on the ICT market widens between Europe and US

• EU trade deficit in this area increases

• Gap in R&D expenditures

• Europe 20 Bn. Euro (10/10) per year

• USA 60 Bn. Euro (20/40) per year

„.... make Europe the most competitive and dynamic knowledge-based economy in the world ...“Lisbon Summit, Spring 2001

and ......


Ambient Intelligence Scenarios 2010• Scenarios serve to provide insights into the technical (and soci al &

political) aspects • Food for thought

• Some necessary characteristics permitting the societal acceptance:

– Facilitation of human contact – Need to build knowledge and skills for work – Privacy, Trust and confidence – Long term sustainability (psychological, societal & environmental) – development should be within human control and enjoyable

• Scenarios structured along following differentials:– Economic / personal efficiency versus sociability/humanistic drivers – Communal versus individual as the user orientation driver

• Four „technical positive“ scenarios, are in a temporal sequence

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Scripts

Efficient

Sociable, humanistic

IndividualCommunity

Efficient


IndividualCommunity

1. Mariapersonal ambientcommunicatorsbusiness lady, business demand, incremental

1. Mariapersonal ambientcommunicatorsbusiness lady, business demand, incremental

2. Dimitriosconnectingpeople andexperiencing identities„Bilateral“youthculturechangesin behaviorprice a barrier?

2. Dimitriosconnectingpeople andexperiencing identities„Bilateral“youthculturechangesin behaviorprice a barrier?

3. CarmenTraffic optimisationcommunity infrastructure,infrastructure developmentbehavior: acceptingride shares?

3. CarmenTraffic optimisationcommunity infrastructure,infrastructure developmentbehavior: acceptingride shares?

4. Annette and Solomonsocial learning by connectingpeople and creatinga community memory„Multilateral“social vision fostering communicationLife through sharedinterest

4. Annette and Solomonsocial learning by connectingpeople and creatinga community memory„Multilateral“social vision fostering communicationLife through sharedinterest


Efficient

Community


Individual

• Multifunctional and reconfigurablewired and wireless sensor networks

• Large scale database: distributed and dynamic smart materials (smart cars/ wearables)

� advanced tagging and goods,�

smart micro payment systems

Carmen

� Interactive aids for negotiating goals and challenges in groups.

�

Aids for reviewing experiences� Content design facilities�

Community memory�

Projection facilities for light and sound, visualisation tools

Solomon and Annette� Humanised interfaces (speech

recognition), ubiquitous interfaces

�

Reliable authentication� Integrated devices (micro

payment back up)

Dimitrios

• biometrics� Ad-hoc network management�

Agent technologies: personal agents,

� Negotiations/micro payments�

Augmented objects� Security, privacy and trust technologies

Maria

Technology View

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Requirements

• Seamless mobile/fixed web based communication infrastructure

• Very unobtrusive hardware

• Dynamic and massively distributed device networks

• Natural feeling human interface

• Privacy, dependability, fault tolerance and security


Key Features of Business Landscape

• Initial premium value niche markets in commercial or public applications where enhanced interfaces are needed to support human performance in fast moving or highly delicate situations (e.g. financial dealing room, the political negotiating table).

• Start -up and spin -off opportunities from identifying potential service requirements and putting the services together that meetthese new needs.

• High access -low entry cost based on a loss leadership model in order to create economies of scale (mass customisation).

• Self -provision models – based upon the network economies of very large user communities providing information as a gift or at near zero cost.

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E-commerce Research Issues

• Markets– Dynamic Market Structures and Pricing - Market

Design (Simulation and Model Checking)• E-shops, malls, collaboration platforms, value chain

integrators, auctions ...• Combinatorial auctions, multi-attribute auctions, multi-

stage auctions, negotiation support systems, ...• Rationality axiom?

– Business models in local / global context– Monitoring and forecast (business / policy /

technology) – scenario, delphi methods soft and hard skills


Research Issues – cont.

• Harmonization– System integration & interoperability – Overabundance of information – Semantics - ontology engineering, highly domain dependent– No central power instance strong enough to impose one

(semantic) standard (?)– How to create it, how to communicate it, who owns it? – Which frameworks to use?

• Fault tolerance– Guarantee that systems work at some minimum level

but: experiences with project and error free code– “Long” history of Software Engineering / formal methods /

quality assurance (ISO 9000) vs. open software

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Supporting the User

?

?

?

> I’d like to relax in a quiet place

> I need also a good hotel; maybe similar to “Grand Hotel Fasano ” at Lake Garda .

> Is there something closer to the city center?

> But, maybe I would also like to have some fun, are there some things to do?


Research Issues – cont.

• Users– Analysis of behavior (both on - and off-line)– Language– Decision modeling

• Different devices (PC vs. Mobile)• Example: Recommendation systems – case based

reasoning• But rather static – dynamic component?• Different types of decision making

– Emotional and motivational aspects

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Thank you for your attention

• Web is penetrating society and all our life• The Internet / Web based e -commerce is more

than just “linear support” of business transactions

• Example of Travel & Tourism (but also others) demonstrates that fun and conversation are essential

Conclusion

E-Commerce Research IssuesIT and Travel / Tourism • Leading B2C sector -30% of online spending in...

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