IV. Effect on Consumers and Businesses
Increased competition and a lack of time and space constraints gives the consumer more power than ever before, creating a consumer-centric environment.
Imagine you want to buy a camera. If you go to a store, you can look at all the cameras they have and decide which camera has the features you want. If you can't afford what you want, you might get in your car and drive to another store. But that takes time and effort, so you're likely to just buy the camera and do something more fun with your day.
Now think about buying a camera on the Internet. You could go to the Web sites of Kodak, Nikon and Pentax and see which cameras have the features you want. Then, you could go to another site and read product reviews by other consumers. Or, you could plug in the camera you want into a search engine and see who's offering the best price. Or, you could just go to overstock.com or refurbdepot.com and browse the discounted cameras for one that has the features you want.
This type of reduction in the cost of searching for products makes the Internet a consumer-centric business environment, one that is focused on the needs of the consumer. Traditional business have to make adjustments to their business strategies in order to attract and keep customers.
(Hoffman and Novak)
Before the Internet came around, you couldn't sit around at midnight in your pajamas and buy a plane ticket for your boyfriend in Minneapolis for the next day. Now you can. The lack of constraints of time and space on e-commerce makes this possible. Businesses that do not update their services to capitalize on this lack of constraint, by offering 24-hour service for instance, fall behind other businesses.
Technology allows for more communication between consumers and new ways of doing business. Reverse-price mechanisms, name-your-own-price services like Priceline, allow consumers more choices. Auctions such as Ebay allow consumers to sell their own products. D-commerce allows quick access to music and computer programs, either sold by businesses or traded (often illegally) between consumers.
(Penn State Institute for the Study of Business Markets)
What do you know about it?
How does a consumer-centric environment challenge businesses?
V. The Future: The Experts and You
Here are some expert opinions on the future of e-commerce. What do you think the future will hold?
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