Background

            The success in any business in the modern era is dependent on the extent to which the business s able to reach its customers. Attracting new customers and retaining the existing ones can be a challenge for many businesses thus affecting the level of profitability. For a business to have a considerable profit margin, it has to be better than its competitors in terms of customer satisfaction are. One of the most common modes of doing business is the use of electronic commerce where the goods and services are sold online. It ensures that the customers access the products anytime they want regardless of their geographical location. E-commerce contributes a lot to the GDP in an economy as well as increasing competition in the market, a fact that phases out the less efficient businesses (Belanger, Hiller & Smith, 2002). However, the privacy of the business affects its success where the customers fear that the personal information they give to the businesses may be misused. The advancement in technology such as the development of application programming interfaces (API) pose a great threat to the privacy of user information on the internet (Harrison, 2001). There is limited research on the solutions that are available for businesses so that they can ensure the privacy of customer information in e-commerce. This could probably be due to the little research that is available on the challenges that businesses face in e-commerce.

Problem Statement

            The mistrust between the seller and the purchasers in e-commerce limit the potential of the business. According to Fienberg (2006), about 80% of online clients have insecurities with their personal information, and this limits their online transactions. Privacy is a primary requirement in e-commerce, but it is a challenge with the current developments in technology. The privacy issues in e-commerce are responsible for reduced growth in online businesses.

Purpose Statement

            The study aims at identifying the primary challenges that online businesses face with regard to privacy. The study will be qualitative and will use the case study of Boo.com, an online company in Europe that failed to meet its objectives. Reviewing the case study will help other businesses, individuals who aim at starting online businesses learn the things they should do, and what they should avoid.

Research Question

To what extent does privacy in e-commerce influence customer satisfaction?

Conceptual Framework

            Among the best approaches to e-commerce is the click and mortar synergies. The approach focuses on the sources of synergy that requires the management to focus on the intangible and tangible properties owned by the enterprise that represent the competitive advantage of the business. The competitive advantage of the business is what determines its success (Weltevreden & Atzema, 2006). In the case of online businesses, the framework can help in solving trust issues with clients especially with regard to personal information (Corbitt, Thanasankit & Yi, 2005). The business needs to know how to avoid conflict in the systems as to enhance the trust of the customers. Finally, the business is assured of benefits such as enhanced trust by the customers and reduced costs that increase its profitability (Steinfield & Harry, 2002).

Source: (Steinfield & Harry,2002)

Significance of the study

Contribution to business practice

            The study will help the online businesses in learning about how to enhance customer trust. This will boost the performance of e-commerce thus increasing the flow of goods and services to the customers.

Implications for social change

            By stating the various risks involved in e-commerce regarding privacy, the society will gain knowledge on how to enhance the security of their personal information. The businesses will also learn about the implications of the customer thus boosting the trust of the customers.

Review of the literature

            The level of trust between the clients and the sellers in e-commerce is crucial to meeting business goals. The potential of businesses that operate online has increased due to the growth in the number of individuals who use the internet (Udo, 2001). About a third of Americans consume use the internet to get information about products such as the features, varieties and cost (Boritz & No, 2011). It is thus crucial for companies to embrace ways in which e-commerce can be improved so as to achieve its full potential (Moores, 2005). The techniques that boost confidentiality of personal information of clients should be improved so as to enhance customer trust and boost business (Joines, Scherer & Scheufele, 2003).

References

Belanger, F., Hiller, J. S., & Smith, W. J. (2002). Trustworthiness in electronic commerce: the       role of privacy, security, and site attributes. The Journal of Strategic Information     Systems, 11(3), 245-270.

Boritz, J. E., & No, W. G. (2011). E-commerce and privacy: Exploring what we know and            opportunities for future discovery. Journal of Information Systems,25(2), 11-45.

Corbitt, B. J., Thanasankit, T., & Yi, H. (2003). Trust and e-commerce: a study of consumer             perceptions. Electronic commerce research and applications, 2(3), 203-215.

D Harrison McKnight, N. L. C. (2001). What trust means in e-commerce customer relationships: an interdisciplinary conceptual typology. International journal of electronic        commerce, 6(2), 35-59.

Fienberg, S. E. (2006). Privacy and confidentiality in an e-commerce world: Data mining, data     warehousing, matching and disclosure limitation. Statistical Science, 143-154.

Joines, J. L., Scherer, C. W., & Scheufele, D. A. (2003). Exploring motivations for consumer        Web use and their implications for e-commerce. Journal of consumer marketing, 20(2),            90-108.

Moores, T. (2005). Do consumers understand the role of privacy seals in e- commerce?. Communications of the ACM, 48(3), 86-91.

Steinfield, C., & Harry Bouwman, T. A. (2002). The dynamics of click-and-mortar electronic commerce: opportunities and management strategies.International Journal of Electronic Commerce, 7(1), 93-119.

Udo, G. J. (2001). Privacy and security concerns as major barriers for e-commerce: a survey study. Information Management & Computer Security,9(4), 165-174.

Weltevreden, J. W., & Atzema, O. A. (2006). Cyberspace meets high street: Adoption of click-and-mortar strategies by retail outlets in city centers. Urban Geography, 27(7), 628-650.