The reason, as you shall see, is that e-commerce technology is different and more powerful than any of the other technologies we have seen in the past century. While these other technologies transformed economic life in the twentieth century, the evolving Internet and other information technologies will shape the twenty-first century.
Prior to the development of e-commerce, the process of marketing and selling goods was a mass-marketing and sales force-driven process.
Below are the Six Unique Features of E-commerce technology that make some good reasons for you to start your own e-commerce business.
In traditional commerce, a marketplace is a physical place you visit in order to transact. E-commerce, in contrast, is characterized by its ubiquity: it is available just about everywhere, at all times.
It liberates the market from being restricted to a physical space and makes it possible to shop from your desktop, at home, at work, or even from your car, using mobile commerce. The result is called a marketspace—a marketplace extended beyond traditional boundaries and removed from a temporal and geographic location.
From a consumer point of view, ubiquity reduces transaction costs—the costs of participating in a market. To transact, it is no longer necessary that you spend time and money traveling to a market. At a broader level, the ubiquity of e-commerce lowers the cognitive energy required to transact in a marketspace.
2. Global Reach
As a result, the potential market size for e-commerce merchants is roughly equal to the size of the world’s online population. The total number of users or customers an e-commerce business can obtain is a measure of its reach.
In contrast, most traditional commerce is local or regional—it involves local merchants or national merchants with local outlets.
Television and radio stations, and newspapers, for instance, are primarily local and regional institutions with limited but powerful national networks that can attract a national audience.
In contrast to e-commerce technology, these older commerce technologies do not easily cross-national boundaries to a global audience.
3. Universal Standard
One strikingly unusual feature of e-commerce technologies is that the technical standards of the Internet, and therefore the technical standards for conducting e-commerce, are universal standards—they are shared by all nations around the world.
In contrast, most traditional commerce technologies differ from one nation to the next. For instance, television and radio standards differ around the world, as does cell telephone technology. The universal technical standards of the Internet and e-commerce greatly lower market entry costs—the cost merchants must pay just to bring their goods to market.
With e-commerce technologies, it is possible for the first time in history to easily find many of the suppliers, prices, and delivery terms of a specific product anywhere in the world, and to view them in a coherent, comparative environment.
Unlike any of the commercial technologies of the twentieth century, with the possible exception of the telephone, e-commerce technologies allow for interactivity, meaning they enable two-way communication between merchant and consumer. Television, for instance, cannot ask viewers any questions or enter into conversations with them, and it cannot request that customer information be entered into a form.
In contrast, all of these activities are possible on an e-commerce Web site. Interactivity allows an online merchant to engage a consumer in ways similar to a face-to-face experience, but on a much more massive, global scale.
5. Information Density
E-commerce technologies reduce information collection, storage, processing, and communication costs. At the same time, these technologies increase greatly the currency, accuracy, and timeliness of information—making information more useful and important than ever.
As a result, information becomes more plentiful, less expensive, and of higher quality. A number of business consequences result from the growth in information density. In e-commerce markets, prices and costs become more transparent. Price transparency refers to the ease with which consumers can find out the variety of prices in a market; cost transparency refers to the ability of consumers to discover the actual costs merchants pay for products.
Merchants can target their marketing messages to specific individuals by adjusting the message to a person’s name, interests, and past purchases. The technology also permits customization— changing the delivered product or service based on a user’s preferences or prior behavior. Given the interactive nature of e-commerce technology, much information about the consumer can be gathered in the marketplace at the moment of purchase.
To learn more about how you can use e-commerce to bring in more income so you can fulfill your dreams and destiny, get our “Starting Your Own Ecommerce Business Training Guide” today.