Home and leisure

A large proportion of the machines we take for granted at home are controlled by microprocessorsmicroprocessor: an integrated circuit that contains all or most of the individual elements of a central processing unit (CPU), including:

• microwave ovens
• washing machine
• dishwashers
• central heating boilers

Entertainment

Activities we do in our leisure time are increasingly dependent on information technology, such as:

• watching digitaldigital: data measured at discrete intervals, eg a digital watch typically moves from displaying one second to the next without displaying the values in-between or satellite TV
• watching videos and DVDsDigital Versatile Disc (DVD): used to store data, eg a movie
• playing computer games
• listening to music on CDCompact Disc (CD): used to store data, eg music CD and MP3 players
• browsing the InternetInternet: a global network connecting millions of computers

Online booking

Online bookings are growing as fast as online shopping. Theatre, cinemas, concerts, air tickets, train tickets, hotels and package holidays are all available on the webweb: includes all of the web pages accessible via the Internet, often at cheaper prices than buying them from high street shops. Bookings can be made across the world by Internet connectionInternet connection: a computer's or another internet-enabled device's connection to the Internet.

Advantages

• instantly find out availability
• book out of office hours
• pay and receive confirmation (via emailemail: electronic mail - a message written or typed on a computer and sent electronically rather than by post) immediately
• lower prices - access to a greater number of retailers increases competition and prices fall

Disadvantages

• risk buying from a websitewebsite: a web page or group of web pages hosted on one web server and viewed in a web browser setup to scam money out of customers, ie the tickets never come
• even when buying from genuine websites, the tickets may not arrive in the post in time (where confirmation email cannot be used).
• websites may not be able to cope with high demand (making them inaccessible)

Loyalty cards

The larger stores offer customers loyalty cards. When the customer shops at the store they're awarded a set number of points depending on how much they spend. The loyalty card stores their points. One point is commonly worth 1p with a point awarded for each pound spent.

Points can be converted into vouchers that provide discounts on products or services.

Each customers' loyalty card has a unique card number linked to a databasedatabase: a structured collection of records or data stored in a computer system which stores information about them (provided by the customer when they signed up) and their purchases.

How do they work?

Swiping a loyalty card is an example of data capture. Every time the customer visits the shop the card is swiped, reading the unique number. This identifies the customer whose points total, stored in the database, is then updated. The tills use barcodes to identify each item bought.

Targetting customers

When a customer signs up they provide basic details such as their name and address.

Loyalty cards provide companies with information about customer spending habits. This information can be used to target customers generally or specifically.

Product placement

If customers frequently buy bread and milk together, these items may be put nearby each other for customer convenience or, farther apart forcing the customer to walk through the entire store (in the hope they buy additional items along their way).

Vouchers

If a customer frequently buys beans, vouchers offering money off beans will be sent to them (further increasing their loyalty), rather than for products they rarely buy.

Mailing lists

Can be used to send out tailored advertisements. For example, someone who regularly buys garden magazines might be sent special offers on garden products.

New stores

When customers sign-up they provide their address. This information can be used to see where the customers come from and identify opportunities for new stores.

The Data Protection Act

The Data Protection ActData Protection Act 1998 (DPA): legislation passed by parliament that governs the protection of personal data in the UK applies to the personal datadata: information without context, eg a list of students with numbers beside their names is data, when it's made clear that those numbers represent their placing in a 100 metre race, the data becomes information gathered by the schemes. The mailing lists which supermarkets gather from loyalty cardsloyalty cards: Given to customers by the larger stores, often supermarkets. Points are added to the card with each purchase that result in discounts at a later date. can also be sold to other advertisers as long as Data Protection law is followed. Find out more about the Data Protection Act in the legal framework section.

Electronic money and electronic commerce

Most companies pay their employees via bank transfer, from the companies account to the employees'. It's now rare to be paid in cash.

Goods and services are usually paid for with electronic methods of payment, for example:

• direct debit
• standing order
• debit cards (Switch/Delta)
• smart cards
• online bank transfers

Electronic Commerce

Electronic Commerce or e-commerce is the selling and buying of goods or services over the InternetInternet: a global network connecting millions of computers.

E-commerce has both advantages and disadvantages for businesses and customers.

Advantages for businesses

• Increased customer base – with a websitewebsite: a web page or group of web pages hosted on one web server and viewed in a web browser, a local store can have an international customer base.
• Cost effective – save on staffing a physical shop (or shops) and the associated costs, eg rent, electricity, gas, water etc.
• Services - for example, accountancy, lend themselves to being advertised online. Specifics on what's offered can be listed on the website, decreasing the need for real world consultation.

Disadvantages for businesses

• Increased competition - competition once limited to other local shops is now on an international scale.
• New comers – consumers may be reluctant to buy from a company they haven't heard of.
• Slow adoption – companies whose competitors already have an online presence may find it hard to gain market share.

Advantages for customers

• Increased convenience – customers can find what they're looking for without leaving their home.
• Greater choice - customers are no longer limited to shops nearby and can even buy from abroad.
• Cost effective – competition on an often international scale means prices are cheaper/more competitive.
• Product details – greater wealth of information available online than what a member of staff is able to provide in-store.
• Customer reviews – many sites allow customers to review products or services they’ve purchased, increasing buyer confidence.

Disadvantages for customers

• No human interaction - some people prefer to buy their goods or services in person.
• Returning goods - can be inconvenient (arranging postage) and expensive (if it is a large/heavy item).
• Fraud - a website may take your money, but have no intention of delivering the goods.
• Stock issues - the product may be out of stock, or if ordered and later found to be out of stock, a substitute product may be sent instead.

Online banking

All highstreet banks offer online banking and some banks are exclusively online with no highstreet branches.

Services

A customer with access to online banking can:

• check their bank balance
• view/print current and previous bank statements
• pay bills online, ie setup direct debits and standing orders
• setup new, separate accounts for specific purposes, eg savings
• transfer money between their accounts and to other people's

Customer benefits

• Convenience - banking when it suits them, 24 hours a day, 365 days a year from any computer with an Internet connectionInternet connection: a computer's or another internet-enabled device's connection to the Internet.
• Higher interest rates - savings banks make through reduced staffing, fewer premises and increased automation mean they can offer higher interest rates.
• Increased market awareness - visit all the banks and find out what interest rates they offer online.

Customer concerns

• The closure of small, local branches or reductions in opening hours.
• The security of online banking, specifically hackinghacking: to gain unauthorised access to a computer and credit card fraud.
• Staffing reductions.

As banking becomes increasingly reliant on technology these concerns are set to increase.

Shopping online

Nearly everything available on the highstreet or in shopping centres can also be found online. For example, supermarkets offer home delivery of goods ordered through their websitewebsite: a web page or group of web pages hosted on one web server and viewed in a web browser.

Digitaldigital: data measured at discrete intervals, eg a digital watch typically moves from displaying one second to the next without displaying the values in-between downloadsdownload: the transfer of a file or files from one computer connected to the Internet to another are now common too. Items previously sold on physical media (CDsCompact Disc (CD): used to store data, eg music CD, DVDsDigital Versatile Disc (DVD): used to store data, eg a movie, books) can instead be downloaded directly to a customer's computer or handheld device.

Buying goods online

The process for buying goods online commonly involves:

1. browsing through the online catalogue
2. adding items to the virtual basket
3. visiting a virtual checkout
4. choosing payment and delivery method
5. order confirmation
6. shipping confirmation (via emailemail: electronic mail - a message written or typed on a computer and sent electronically rather than by post or sms)

Advantages

• Convenience - shop from any computer with an Internet connectionInternet connection: a computer's or another internet-enabled device's connection to the Internet any time while avoiding the need to travel, pay for parking, queue in-store etc.
• Greater variety - more shops online than any highstreet or shopping centre.
• Cheaper goods - increased competition between retailers (for some on a global scale) brings down prices.
• Accessibility - those with a disability that limits their mobility can choose to have goods delivered.
• Comparability - using the Internet it's easy to research products or services very thoroughly, comparing prices and product details in order to get the best deal.

Disadvantages

• security concerns surrounding payment by credit card over the InternetInternet: a global network connecting millions of computers
• not being able to physically inspect the goods before purchase
• goods getting damaged during transport
• goods not arriving in time or at all
• concerns over what information retailers are storing about customers, eg buying habits

Accounts and security

The first time a customer buys goods from a retailer online they are asked to create an account. The sign-up process typically asks for:

• emailemail: electronic mail - a message written or typed on a computer and sent electronically rather than by post address
• password
• telephone number
• delivery address
• billing address
• payment details

The details stored in the account are protected by the customer's email address (which acts as their username) and password. Storing this information means returning customers do not need to re-enter it.

Security

Goods are typically paid for using a credit or debit card. During the payment process communication between the retailers websitewebsite: a web page or group of web pages hosted on one web server and viewed in a web browser and the bank takes place over Secure Sockets Layer (SSL), a technology that encrypts (scrambles) datadata: information without context, eg a list of students with numbers beside their names is data, when it's made clear that those numbers represent their placing in a 100 metre race, the data becomes information.

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