Privacy policy features and protections in e-commerce websites

¶ … Privacy Protection Features Present

Privacy Policy of Website

This paper analyzes the privacy policy of e-commerce websites, and highlights the aspects that should be covered in order to benefit customers.

Privacy Policy of E-commerce Website

Important Features of Privacy Policy of E-Commerce Website

Cookies:

Payment Methods:

Social Security Number:

Customer Information Sharing:

Password Sharing:

Identity Theft:

Information Provided by Website

Comparison among Top E-commerce Websites

First Mover vs. Follower in E-Commerce

Network Effect

Switching Cost

Disadvantage of First Mover

Privacy Policy of Website

Throughout the major part of the last century, there has been a lot of development and advancement in the field of information and technology (Jing, 2009). Most of the business activities have shifted base from being orthodox setups towards the IT portals. This development has also given rise to certain issues which were not present with the business fraternity earlier. In the past two decades, there has been immense growth in the online business portals (Head and Yuan, 2011). E-commerce-based businesses have particularly flourished and prospered, and there have been several new entrants in this avenue. E-commerce-based websites have provided the target customers with a lot of options and convenience in term of products and services, and this whole development has benefited both customers and businesses (Syzmanski, Troy and Bharadwaj, 2005). New age customers are not particularly moving about in market place, as most of the modern day works and jobs are confined inside offices and on a work desk. Web-based shopping portals are the most sought after virtual showrooms and markets, which fill the gap between customer and business. Customers are provided with a lot of choice in terms of shopping and they do not need to leave their work desk for shopping, which saves a lot of time and money (Chahar and Niranjanamurthy, 2013).One of the biggest and most important factors in this new development of e-business is that of the security function which is associated and is an integral part of this whole web program. Businesses have a responsibility towards procuring the privacy rights of customers, in order to continue business practices ethically and also to sustain its functions (Goldfarb, Brent, and Miller, 2007).

Privacy Policy of E-commerce Website

There is a huge function involved with the privacy function of an e-commerce business, and this is mainly associated with the protection of certain consumer rights. It is understood that the e-commerce portals are a platform to conduct trade activities in digital world, and they provide a lot of approach and choice in terms of business functions. Each and every customer who is engaging in business through these websites is sharing certain form of information and other credentials (Head and Yuan, 2011). Privacy is one of the biggest issues that have arisen in the modern digital business scenario, which is why it is very important to ensure it. There are certain aspects associated with designing and maintaining a privacy policy for an e-commerce website, and all this aspects are to be covered completely in order to maintain ethical business functioning (Jing, 2009). Maintaining privacy begins with collecting the information form a customer in a most discreet and confidential way. Another aspect includes collecting only relevant and that information which is actually needed to complete the business transaction (Goldfarb, Brent, and Miller, 2007). Another important aspect of privacy policy is to store this information in the most secure and make sure that this information is not breached and accessed by unauthorized personnel. This also covers the terms that third parties and vendors are shared critical financial information. They are only provided general details in order to fulfill the transactions (Juan, 2006). This privacy policy maintains a complete exchange between all parties involved in business, including customers, vendors and delivery guys, and makes sure that information from one source remains intact, and is not shared to other source (Syzmanski, Troy and Bharadwaj, 2005).

Important Features of Privacy Policy of E-Commerce Website

Cookies:

There has been a lot of advancement in the area of online business and marketing, where the e-commerce related businesses have taken a leap forward in direction of specialization. Latest schemes and phenomenon in online marketing include providing the target audience with detailed and specialized (Jing, 2009). This is done by popping specialized advertisement on the WebPages, when the customer logs in the computer browser, these ads are related to searches that the customer had conducted in the recent past (Goldfarb, Brent, and Miller, 2007). This function is accomplished by the marketers by accessing cookies of customer's computer, which are accessed through internet connection. There are certain types of cookies in a system and these cookies are both temporary and permanent. The temporary ones are discarded once the connection is lost or the computer is rebooting, whereas the permanent ones are stored in computer and can be accessed through internet connection (Chahar, Niranjanamurthy, 2013). This is very helpful for marketers, however they have to ensure the privacy in this action, and ensure that none other database or personal cookies are not accessed on the customer's computer (Head and Yuan, 2011).

Payment Methods:

When there is trade involved in any form, there has to be an exchange of money and funds between the buyer and the seller (Chahar, Niranjanamurthy, 2013). Similarly, e-commerce also involves exchange of funds and this is done through various sources of digital money transfer. Two of the most popular ways of exchanging funds is either through internet banking or through credit/debit cards, which transfer funds from buyer to seller almost instantaneously (Head and Yuan, 2011). This is very critical function as far as the confidentiality of the transaction is concerned, and the seller has to ensure confidentiality of financial information provided by the buyer. This is one of the fundamental parts of the whole privacy function, because if the information pertaining to financial credentials of an individual is compromised, it can cause serious financial loss or harm to the customer (Goldfarb, Brent, and Miller, 2007).

Social Security Number:

One of the most important credentials of an individual is the social security number, upon which several other functions depend (Juan, 2006). The whole being of an individual rests upon SSN, and it is a part of most privacy policies, to not to share the SSN, until and unless necessary, because the security of this number cannot be compromised at any cost (Syzmanski, Troy and Bharadwaj, 2005).

Customer Information Sharing:

There is a certain amount of personal information which is shared with the merchant by the customer (Head and Yuan, 2011). Business websites extract maximum possible information from the customer, in order to use it in their future marketing functions and in order to run effective campaigns in terms of market targeting. This information cannot be shared without permission of the customer, and should be maintained in such a way (Goldfarb, Brent, and Miller, 2007).

Password Sharing:

One practice which many website companies in e-commerce follow is that of an individual ID and password provision, which is provided to each customer (Syzmanski, Troy and Bharadwaj, 2005). This password has to be kept confidential by the customer, and also has to be included in the privacy policy, in order to protect the information of the customer. There has to be strict follow up and confirmation policy when the password is lost or forgotten by the customer (Head and Yuan, 2011).

Identity Theft:

Identity Theft is one of the most common and popular type of cybercrimes which is committed by hackers and offenders on the web space. In this function the identity and other credentials of an individual are stolen and digitally used on another platform, which is not authorized by the individual (Juan, 2006). Websites need to maintain high level of security in order to protect interests of customers against this crime (Chahar, Niranjanamurthy, 2013). Strengthening of internal information structure is required by the business website, and it also includes implementation of stricter IT protocols and codes of conduct which are to be followed by each personnel (Head and Yuan, 2011).

Information Provided by Website

The information provided by the website to the customers is also covered under the privacy policy and it has to be made sure that the whole information is precise and correct (Juan, 2006). There is a certain communication which has to be conducted between both parties; customers and the trade website, and all of it cannot be made public or publically declared by the website (Goldfarb, Brent, and Miller, 2007). This means that e-commerce portals are bound to maintain privacy in their information function in order to maintain a discreet communication portal. The public declaration regarding certain aspects associated with the trade can affect the privacy or the customer, and it is not very comfortable position for the customer to be in. This can also bring a bad name to the business and can lead to bad word of mouth regarding its business process, which is a great loss (Syzmanski, Troy and Bharadwaj, 2005).

Comparison among Top E-commerce Websites

Based on the above aspects of privacy policy, the following table compares the privacy policies of top 4 e-commerce websites, and provides ratings on the scale of 1-5 for better explanation. These four e-commerce websites are all big names which include large functions, and are namely; amazon.com, ebay.com, walmart.com and bestbuy.com.

Cookies

5

4

5

3

Payment

5

5

3

4

SSN

5

4

4

4

Customer Information

4

4

5

3

Password

4

3

4

5

Identity Theft

5

4

4

5

Website Information

4

3

5

3

Network Effect

There is great effect of networking in this direction, and it is necessary to maintain the network function being the First-mover. With network, it is meant to maintain reciprocity and a positive vibe with the stakeholders and all parties involved in business. There is a vast collection of individuals and parties which are involved in a business function, and this is only understood, if positive business is carried out, by satisfying customers in right earnest, maintaining high standards, then the network grows stronger and very effective in terms of business (Kerin, Peterson, 2012). A lot of further planning and existence depends upon this network function, and business websites spend a lot of time and resources in strengthening this network function. This network also includes the stakeholders involved in business and great rapport needs to maintain with all these stakeholders, if the benefits of First-mover are to be sustained for a longer period of time (Kerin, Peterson, 2012).

Switching Cost

In an active market, almost every customer is always yearning for something new and new concept intrigues a customer the most, which is why it is a great pull factor and a great motivator. First-movers have this great advantage in terms of curiosity and attractions which is prevalent in the market among general customers. Whenever there is a new product or service is launched in the market, there is a great curiosity among customers to try this new concept. Most of the customers are automatically pulled towards trying this concept or product, due to an uncontrollable emotion associated with newness (Kerin, Peterson, 2012). This concept is known as that of "switching cost" and this is one of the major reasons for success of first mover, which is why, these concepts are benefitted. Another aspects associated with the switching cost function is the maintenance of high quality of service and high efficiency of service in order to sustain the advantage. Switching cost is involved in every market and every customer base, across segments, and this one of the reasons the marketing campaigns which is planned around launch of a product are designed to instigate the emotion of "Switching" among general masses (Kerin, Peterson, 2012).

Disadvantage of First Mover

Apart from the benefits, there are certain disadvantages which are associated with the concept of first-mover, and this is the reason, start-ups are planned with utmost care. Although there is a lot of anticipation involved around a first-mover, it is also true, that there is an extensive and critical evaluation which is conducted in the market about the new concept (Kerin, Peterson, 2012). There is a huge comparison which is conducted among the old and new concepts and due to this reason; there is a possibility of the new concept being shunned, if it does not complement its anticipations. Another part of a new concept is that it is required to examine the whole market and the opportunities it provides to the customers. When there is limited network and connectivity, there is a very fair chance, that the concept cannot sustain its course of business and lose out soon. New concept does not enjoy the loyalty of the market, and it is thoroughly practical reciprocity with the market. It gets back, what it provides to the market (Kerin, Peterson, 2012).

Examples of First Mover & Market Follower in E-commerce

This is the case of one uncrowned king in e-commerce segment and the one close competitor, which copies almost all strategies and styles of the former (O'Connor, 2013). The biggest leader in worldwide e-commerce segment is amazon.com, with a long and glorious legacy as an online retail website, and the follower is walmart.com. Although Wal-Mart itself has a long legacy of retailing in terms of stores and supermarkets, it entered into the online retail division in the year 200, when amazon.com had already established itself fully since 1994. Beginning as an online store for books, Amazon has always re-invented and re-administered its plans and strategies for the market, maintaining its position of a market leader and "first-mover." It has always remained at the top of the list, enjoying all the advantages of first mover, so much so that it is still bigger than the next one dozen online retailers in the list (Worstall, 2013). Walmart.com has always been known to copy many strategies of Amazon, such as "lockers," which has been a hallmark of Amazon (O'Connor, 2013). Still, it cannot beat Amazon in terms of output and market stats, which have been in favor of the first mover in this regard. Major advantage for Amazon in this segment is the undue customer loyalty and dependability, which is vested upon Amazon by the market, as it continues to rule the roost in terms of online market (O'Connor, 2013).