Eight unique features of E-commerce technology
The distinguishing capabilities of e-commerce technology.
Learning Objectives
- List all eight unique features of e-commerce technology.
- Explain the business significance of each feature.
- Differentiate e-commerce from traditional commerce using these features.
- Apply the features to real e-commerce scenarios.
Explanation
E-commerce is unlike traditional commerce in eight ways: it is everywhere, global, uses shared standards, can carry rich messages, is interactive, increases information density, can be personalized, and supports social content creation.
E-commerce technologies provide a number of unique features that have impacted the conduct of business. These eight features both challenge traditional business thinking and help explain why there is so much interest in e-commerce. Prior to e-commerce, marketing and sales were a mass-marketing, salesforce-driven process; consumers were passive targets of advertising campaigns and were trapped by geographic and social boundaries.
The first four features describe reach and standards. Ubiquity means e-commerce is available just about everywhere, at all times — liberating the marketplace from physical space into a marketspace. Global reach means technology crosses cultural, regional, and national boundaries far more conveniently than traditional commerce. Universal standards means Internet and e-commerce technical standards are shared by all nations — lowering market entry costs and search costs. Richness refers to the complexity and content of a message; e-commerce can integrate video, audio, and text in a single marketing experience.
The next two features describe interaction and information. Interactivity allows two-way communication between merchant and consumer, similar to a face-to-face experience. Information density refers to the total amount and quality of information available to all market participants; e-commerce vastly increases density, reduces information collection and processing costs, and improves currency, accuracy, and timeliness. The growth in density reduces information asymmetries among consumers and merchants.
The last two features describe personalization and the social dimension. Personalization means merchants can target marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases. Customization means changing the delivered product or service based on a user's preferences or prior behavior. Social technology — the eighth feature — allows users to create and share content with a worldwide community, providing a unique many-to-many model of mass communication unlike the broadcast (one-to-many) model of older media.
Key Points & Important Terms
Key Points
- •Eight features: ubiquity, global reach, universal standards, richness, interactivity, information density, personalization/customization, social technology.
- •Ubiquity creates a marketspace beyond physical marketplace.
- •Universal standards lower market entry costs and search costs.
- •Information density reduces information asymmetries.
- •Personalization targets messages; customization changes the product.
- •Social technology enables a many-to-many model of mass communication.
Important Terms
- Ubiquity
- E-commerce is available just about everywhere, at all times, creating a marketspace.
- Global reach
- The total number of users or customers an e-commerce business can obtain, across national boundaries.
- Universal standards
- Technical standards shared by all nations, lowering market entry and search costs.
- Richness
- The complexity and content of a message — video, audio, and text combined.
- Interactivity
- Technology that allows two-way communication between merchant and consumer.
- Information density
- The total amount and quality of information available to all market participants.
- Personalization
- Targeting marketing messages to specific individuals based on name, interests, and past purchases.
- Social technology
- E-commerce technologies enabling user-generated content and many-to-many mass communication.