Successful product characteristics for electronic commerce: a taxonomy of transaction types

There is no generally accepted definition of what electronic commerce is, nor how to classify different types of electronic transactions. Without a clear definition or taxonomy, it is bound to be difficult to organize electronic commerce-related research activities. Neither is it possible for organizations to frame their electronic commerce strategies to address such issues as product promotion, payment arrangements, customer support and product delivery/distribution. In this article, we develop such a taxonomy and to offer a definition of electronic commerce. First we review certain demographic profiles of Internet/Web users. We then assess a selected group of Web domains/sites that have attracted the most attention in the media, characteristics of the products and services the sites deliver. A few lessons in consumer behavior are drawn from the experiences in alternate media such as home-shopping TV and catalog shopping. Based on these, we define electronic commerce as consisting of transactions conducted on the Internet between buyers and sellers, with or without the aid of an intermediary, in which invoicing is completed electronically and payment with a credit card is authorized using a secure server (Level I.1) or by e-mail (Level I.2). We conclude by discussing the management implications of our taxonomy, including the potential value of Internet telephony.