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Features of e-commerce

Features of e-commerce. (memorize these). 7 features of e-commerce. Ubiquity Global Reach Universal Standards Richness Interactivity Information Density Personalization/Customization. Why study these feature?.

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Features of e-commerce

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  1. Features of e-commerce (memorize these)

  2. 7 features of e-commerce • Ubiquity • Global Reach • Universal Standards • Richness • Interactivity • Information Density • Personalization/Customization

  3. 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.

  4. Ubiquity • Available everywhere • Built into other devices • Hidden, but still there • Why is ubiquity good?

  5. 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

  6. 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.

  7. 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.

  8. 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 doesn’t have an interest in reaching this group.

  9. 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.)

  10. 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?

  11. 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.

  12. 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

  13. 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?

  14. Interactivity • Consumer/user can interact with the content. • Here is where Web technology kick’s TV’s ass! • TV is a passive activity • Engaging consumer/user is a powerful feature.

  15. 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.

  16. Personalization/Customization • It seems like a contradiction that e-commerce 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.

  17. 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?

  18. Personalization Example • Dr. B’s 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. B’s 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.

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