The Role of ICT and E-Commerce in Delivering Customer Service
ICT and e-commerce have changed what customer service means. E-commerce is selling online, through a business's own website or a marketplace, and it removes the constraints of location and opening hours: a customer can buy at any time from anywhere.
Before you start
Make sure you're comfortable with these topics first:
Method
- Identify the customer's journey in the case: how they find the business, how they buy, how they receive the product and what happens if something goes wrong. Technology helps at specific points, so name them.
- Match the technology to the problem. Repetitive simple queries suit a chatbot or an information page; complex or emotional problems need a person.
- Analyse both sides of cost. Online service is cheaper per contact but requires investment in the system, and returns handling is a cost that physical retail does not carry in the same way.
- Bring in reach: e-commerce widens the market beyond the local area, which is often the largest single benefit for a small business.
- Treat data as a business asset with obligations. Purchase history allows personalised recommendations and better service, but the business must keep it secure and lawful, and a breach is a serious reputational and legal event.
- For a judgement, ask what the target customer values. Older or less confident customers, and complex or high-value purchases, may need human contact that technology cannot replace.
Worked example
Wren Garden Supplies runs one shop and answers around 900 customer enquiries a month by phone, each taking a staff member 6 minutes at a labour cost of 14 pounds an hour. It is considering a website with product information, stock levels and a live chat function, costing 9,000 pounds to build and 200 pounds a month to run. Analyse the decision.
- Cost the current position: 900 enquiries at 6 minutes each is 900 x 6 = 5,400 minutes, which is 5,400 / 60 = 90 hours a month.
- Convert to money: 90 x 14 = 1,260 pounds a month of staff time spent answering the phone.
- Estimate the saving. If the website's product and stock information answers even half of the enquiries, 45 hours are released, worth 630 pounds a month, against a running cost of 200 pounds, so the net monthly saving is around 430 pounds.
- Find the payback on the build: 9,000 / 430 is about 21 months on the enquiry saving alone, which is slow.
- Now add the benefit that actually justifies it: the website lets Wren sell beyond the people who can drive to one shop, and it is open when the shop is closed. That is new revenue, not a cost saving, and it is likely to dwarf the 430 pounds.
- Add the costs the question does not state: online orders need picking, packing, delivery and a returns process, which the shop does not currently do, and someone must staff live chat during opening hours or it becomes a source of complaints.
- Reach the judgement: judged only as a way to cut phone calls the website barely pays back inside two years, but judged as a route to a wider market it is likely to be worthwhile, so Wren should proceed provided it plans the fulfilment side rather than treating the website as a brochure.
Practice questions
Try each question, then tap to reveal the answer.
Q1Define e-commerce and give one benefit for a small business.Show answer
Answer: Buying and selling goods or services online. A benefit is that it removes the limits of location and opening hours, so a small business can sell nationally and take orders when the premises are closed.
Q2State two ways a website improves customer service without any staff involvement.Show answer
Answer: Any two of: product information and specifications available at any time; live stock availability; order and delivery tracking; frequently asked questions; self-service returns booking.
Q3Explain one benefit and one risk of using a chatbot for customer enquiries.Show answer
Answer: Benefit: it answers common questions instantly at almost no cost per contact and works outside staffed hours. Risk: it cannot handle unusual or emotional problems, and a customer trapped in a loop with a bot becomes more frustrated than if no service had been offered.
Q4A business handles 600 enquiries a month, each taking 5 minutes of staff time at 13 pounds an hour. Calculate the monthly labour cost.Show answer
Answer: 600 x 5 = 3,000 minutes = 50 hours. 50 x 13 = 650 pounds a month.
Q5Explain why social media complaints need a faster response than emails.Show answer
Answer: They are public, so every potential customer looking at the business sees both the complaint and how long it took to answer. A slow response is itself visible evidence of poor service.
Q6Give one operational cost that e-commerce creates which a shop does not have.Show answer
Answer: Any one of: picking, packing and postage for every order; a returns process including return postage and restocking; payment processing fees; the cost of maintaining and securing the website.
Q7Why must a business selling online take data protection seriously?Show answer
Answer: It holds customers' personal and payment details, and it is legally obliged to keep them secure. A breach carries fines and, more damagingly, destroys the trust customers must have to enter card details on the site at all.
Exam-style questions
Written in the style of a GCSE Business exam paper, with a full mark scheme.
Tayford Pet Supplies operates two shops and is considering launching an online store. Building it would cost 18,000 pounds plus 400 pounds a month to run, and it expects 300 online orders a month at an average value of 42 pounds with a 30 per cent gross margin. Packing and postage would cost 5 pounds an order and around 6 per cent of orders would be returned at a cost of 8 pounds each. (a) Calculate the expected monthly profit from the online store. (b) Calculate how long it would take to recover the set-up cost. (c) Analyse one non-financial factor Tayford should consider.
Show mark scheme
Tick each line you got. Your score builds from the marks on the scheme.
Nothing ticked yet - 9 available
Evaluate whether technology can fully replace human customer service.
Show mark scheme
Tick each line you got. Your score builds from the marks on the scheme.
Nothing ticked yet - 9 available
See real GCSE Business past-paper questions, with official mark schemes →
Free printable worksheet
Want more practice on paper? Download the the role of ict and e-commerce in delivering customer service worksheet pack - 6 pages of exam-style questions with a full mark scheme. One email opens every download in this browser for 14 days - no account, no card. Print it for personal and classroom use.
Next topics
Not quite what you needed?
Tell us what is missing on the role of ict and e-commerce in delivering customer service, or which topic to write up next. Every request is read, and we reply to every one.
Build a full practice pack.
This topic is one of hundreds in the library - pick the ones a student needs and generate a printable PDF in minutes.