Directions:
- Go here to find out who is in your peer review group (Links to an external site.)Note the AM / PM tabs on the bottom of the sheet.Match the letters in column C.
- Go here to get their papers. (Links to an external site.)If it’s not sorted by name, click Name at the top of that column to sort
- Go here to get the peer review sheet (Links to an external site.)
Please complete this before class on Wednesday.
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Directions
Click “File -> Make a Copy” to make a copy you can edit and submit.
Use the bullet points to guide your comments.
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Intro / thesis
Thesis: There is a thesis statement that clearly states the main point of this
paper.
Purpose: The first paragraph tells the reader why he or she should care.
Overview: The first paragraph provides an overview of the details that follow.
Please put in your own words what the main point of this paper is:
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Comments:
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Body / analysis
Focus: Each paragraph in the body has a clear purpose, which contributes to the
main point of the paper.
Organization: The content of the body is organized in a logical manner.
Data / information: Each point is supported by data / information that is properly
cited.
Comments:
Conclusion / synthesis
Synthesis: The information that has been presented in the body is tied together,
and it is clearly explained how this information supports the thesis.
Conclusion: Concluding remarks may, for example, re-state the purpose (i.e.
why this matters).
Comments:
Colin Sprague
CS 408
Prof. Benedetto
13 February
Case Study 1
Recession Resistance and Mogul Moves: a Case Study of E-Commerce
In the last 20 years, we have seen our definitions of what is happening in the
“Information Age” change and contort. When the term was first coined, it seemed to be a way of
referring to the availability of free information available to the public through means like the
very young, not-so-accessible (yet) World Wide Web. Of course, as with any technological
renaissance, progress is going to start slow and short and explode into exponential growth. As we
see throughout the mid-late 90’s and early 2000’s, more information was available than ever to
anyone with access to a public library/home Internet connection. However, just parallel to the
groundbreaking, world changing technology of information systems, be it Wikis, scholarly
journals or other sources of knowledge, the concept and dominance of E-Commerce broke onto
the scene. Majorly made possible in 1991 with the public opening of the Internet by the Federal
Government of the U.S, E-Commerce is colloquially referred to as any retail transaction that
takes place entirely online. While this new format of sales took some time to become a trusted,
ideal source of purchasing for consumers, the technology that takes place behind the scenes of all
sales online, Electronic Data Interchange, known as EDI, was created around the late 1970s. At
this time, it was mainly used by progressive businesses to send their documentation of sales and
other retail related information electronically to their consumers (The Business Lawyer).
However early it emerged, it laid mostly dormant until the aforementioned period in the late 90s
where the roots of modern E-Commerce began to take shape.
1998 is generally regarded as the birth of consumer-based E-Commerce as we know it
today, mostly because from 1991-1997, the common security protocols that now surround every
website like HTTP were still being developed and perfected to a point where consumers would
feel like they are able to trust giving payment to websites that, at this time, still had little to no
background or reviews from reputable sources. Once these new security measures began to be
implemented across the Web, the use of the previously mentioned EDI and other technologies
regarding movement of payments over the Internet exploded. Shortly after E-Commerce was
finally starting to get its footing in 1999, the industry went through a crash that is unlike
something any other industry has had to go through in its infancy, the dotcom bubble popped. In
‘99, the most prominent idea of what an E-Commerce company looked like was Priceline, a
company that worked as a middleman to sell unsold airline tickets at an incredibly low price
(McCollough). In this age, market share was the name of the game. Often times, companies that
were just starting out their venture into the market would go out of their way to make sales or
transactions at a loss, leading to a fast paced, consumer retention based hierarchy. These
companies would pop up out of nowhere and go public within months. In the case of Priceline,
their IPO was initially valued at $16 per share, then on its first day of trading peaked at a high of
$88, later settling down to its equilibrium somewhere around $69. This huge surplus of money
into the company led its creator, Walker, to theorize about expansion into every market Priceline
could get its hands on. There was an idea held by many opening their new ventures into ECommerce that anyone could follow the Priceline model, startup with enough funds to sell at a
loss, gather market share, and profit eventually based on consumer retention and price
adjustment. While there were many different pieces that bursted the dot com bubble, they all
came together in late 1999 and early 2000 to cause the Nasdaq to drop by 34.2% as a result of all
of these different entrepreneurial ventures failing simultaneously (McCollough). Chiefly, Wall
Street began feeling a sense of caution regarding all of these new E-Commerce related stocks,
causing their valuation to fall and investors/shareholders to panic and dump what they have
before its value falls too low. This panic on Wall Street was the start of the short, but significant,
2001 recession.
However grim the horizon may have seemed for E-Commerce believers, the future of the
technology and prospects of purchasing products on a growing, advancing Internet could not be
denied. At no point pre-recession, during the recession or post-recession was there any drop
whatsoever in the total amount of sales made on E-Commerce platforms. In quarter 1 of 2000,
the peak of the dotcom bubble, total sales made through online services was $5.691 billion,
seasonally adjusted (E-Commerce Retail Sales). The recessionary period for all of the U.S. is
marked by the Fed as being from early Q2 of 2001 to slightly after the end of Q4 2001. In that
time, the total sales via E-Commerce increased by ~$980 million, and from that place where the
dot com bubble had burst in Q1 of 2000, sales nearly doubled, increasing by a whole of 74% (ECommerce Retail Sales). For E-Commerce to put up numbers totaling nearly $10 billion
DURING a recession is absolutely unheard of. Having these numbers continue to go up despite
having every reason not to is a key point of why E-Commerce as it is is so special. It is 100%
recession proof. While the individual ratings of specific companies may shift and trend
downward during these periods, like that of Priceline, as a whole the market and structure that ECommerce is based on has forever been too strong and too promising to take a hit from what
other industries would consider one of the largest supply shocks possible. If an industry giant in
the brick and mortar retail sector was to see its valuation drop that significantly on Wall Street,
there could be ramifications that go as deep as bankruptcy or fiscal solvency. Looking at a data
set from the same time period, the 2001 recession, the whole of retail sales (excluding food
services) fell by a total of $5 billion. As I mentioned previously, during that same period, ECommerce increased by a factor of 23% (Advance Retail Sales). What this says to me is that
while most of the brunt of a recession falls onto retail markets, there will always be one survivor
that is strong enough to overcome the financial burdens, and that is E-Commerce.
While the sample size may not yet be large enough to determine if today’s E-Commerce
giants are as resistant to a recession or otherwise economic downturn as its predecessors, it is
clear through even just a basic eye-test of the graphs of retail sales both in E-Commerce and
overall that it was and likely still is too strong to be denied. There is no way of knowing for
absolutely certain at any point, but as of right now, the ability of the market as a whole to stand
strong in the face of a recession it created stands as prevailing proof that E-Commerce cannot
and will not be stopped.
WORKS CITED
Boss, Amelia H. “The Commercial Use of Electronic Data Interchange—A Report and
Model Trading Partner Agreement.” JSTOR, 1990,
www.jstor.org/stable/40687080?seq=1#metadata_info_tab_contents.
“Advance Retail Sales: Retail (Excluding Food Services).” FRED, 16 Jan. 2020,
fred.stlouisfed.org/series/RSXFS.
McCullough, Brian. “An Eye-Opening Look at the Dot-Com Bubble of 2000 – and How It
Shapes Our Lives Today.” Ideas.ted.com, Ideas.ted.com, 4 Dec. 2018, ideas.ted.com/aneye-opening-look-at-the-dot-com-bubble-of-2000-and-how-it-shapes-our-lives-today/.
“Commerce Retail Sales.” E, 19 Nov. 2019, fred.stlouisfed.org/series/ECOMSA.