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Features of E-Commerce

This document discusses 7 key features of e-commerce: ubiquity, global reach, universal standards, richness, interactivity, information density, and personalization/customization. These features help explain why e-commerce has changed the world more than other technologies. Ubiquity lowers transaction costs for consumers by reducing cognitive effort. Universal standards also lower market entry costs and facilitate price discovery by promoting competition. Personalization allows e-commerce to customize products and target ads more effectively than traditional commerce.

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Chande Mwageni
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103 views18 pages

Features of E-Commerce

This document discusses 7 key features of e-commerce: ubiquity, global reach, universal standards, richness, interactivity, information density, and personalization/customization. These features help explain why e-commerce has changed the world more than other technologies. Ubiquity lowers transaction costs for consumers by reducing cognitive effort. Universal standards also lower market entry costs and facilitate price discovery by promoting competition. Personalization allows e-commerce to customize products and target ads more effectively than traditional commerce.

Uploaded by

Chande Mwageni
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Features of e-commerce

(memorize these)
7 features of e-commerce
1. Ubiquity
2. Global Reach
3. Universal Standards
4. Richness
5. Interactivity
6. Information Density
7. 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 doesn’t
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 kick’s
TV’s 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 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.
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. 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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