Features of e-commerce

(memorize these)

7 features of e-commerce
1.
2.
3.
4.
5.
6.
7.

Ubiquity
Global Reach
Universal Standards
Richness
Interactivity
Information Density
Personalization/Customization

Why study these feature?

To some extend, these features are unique

to e-commerce and explain why this
technology has change the world so much
more than other technologies
Do these technologies have any of 7
features?
Phone, electricity, cars, planes

Yes, but not all 7.

Ubiquity
Available everywhere
Built into other devices
Hidden, but still there

Why is ubiquity good?

Ubiquity
Ubiquity lowers transaction costs for
the consumer/buyer.
How so?

Think about buying gifts last

Christmas
Think about the fact that gas costs
$2.40/gallon

Related Concept

Cognitive Energy mental effort

needed to complete a task.
Ubiquity reduces cognitive energy.
Humans tend to seek options that
require the minimum cognitive energy.
Consider the mental effort needed to
buy your book online vs. hunting for it
at various book stores.

Global Reach

e-commerce technologies enable a

business to easily reach across
geographic boundaries.
Its really easy to understand how
this feature can benefit business and
consumers.

Global Reach

While e-commerce can reach across geographic

boundaries, can it reach across demographic
boundaries.
Demographics

age
income
race
gender
religion

There is one demographic boundary that

technology can reach. Luckily, business doesnt
have an interest in reaching this group.

Universal Standards

e-commerce is made possible through

hardware (Internet) and
software/content (World Wide Web)

The Internet In its infancy, the

architects developed standards that are
now globally recognized (TCP/IP)
The World Wide Web Standards are
becoming #1 priority (XML, HTML, etc.)

Universal Standards

Universal standards can greatly influence

market entry costs.
How so?
Consider the cost of bring goods to a market
Consider the cost of setting up a virtual,
web-based store, vs. a real brick-mortar
store?

Universal Standards
Standards make it much easier to build
business from existing technologies.
This reduces entry costs
You can setup an e-commerce website
for about $10/month in technology
overhead costs.
By reducing entry costs, there is a lot
more competition.

Related Concept

Price discovery - can the consumer/buyer

find prices easily, with minimal cognitive
energy.
Since e-commerce is built on standard
technology (XML, HTML), its really to integrate,
aggregate, and summarize information.

Standardization Low Entry Cost More completion.

Standardization Info. integration More price discovery opportunities.
More competition + price discovery opportunity = lower consumer prices

Richness
Advertising and branding are an
important part of commerce.
e-commerce can deliver video, audio,
animation, etc. much better than other
technologies (billboards, signs, etc.)

However, its about as rich as television

technology.

Comparison: Airplanes enable global

reach, but how about Richness?

Interactivity

Consumer/user can interact with the

content.
Here is where Web technology kicks
TVs ass!

TV is a passive activity
Engaging consumer/user is a powerful
feature.

Information Density

The e-commerce technology

reduces information costs
raises the quality of information

How does the technology reduce costs?

How does it raise quality.

Consider the old way to share information,

i.e., paper, mail, voice communication, etc.

Personalization/Customization

It seems like a contradiction that ecommerce has more opportunities for

personalization then, umm, going to a
store and buying an item face-to-face
with a cleck.
How can e-commerce permit or
enhance personalization and
customization.

Customization Example
1992: Dr. B buys Compaq computer
at CompUSA.
2007: Dr. B buys a Mac Pro computer
at www.apple.com
Which product is more customized?

Personalization Example
Dr. Bs 3-year old son is watching
Sponge Bob and sees an
advertisement for Polly Pocket. BTW,
he hates Polly Pocket or anything pink
for that matter.
Dr. Bs 3-year old son is play the Bob
the Builder Game on noggin.com and
suddenly a pop-up ad for the Talking
Bob the Builder appears.