(memorize these)

6.
7.
4.
5.
1.
2.
3.
Ubiquity
Global Reach
Universal Standards
Richness
Interactivity
Information Density
Personalization/Customization


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.




Available everywhere
Built into other devices
Hidden, but still there

Why is ubiquity good?


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


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.

 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.


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.

 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 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?





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.



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




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?



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.


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.


It seems like a contradiction that ecommerce has more opportunities for personalization then, umm, going to a store and buying an item faceto-face with a cleck.

How can e-commerce permit or enhance personalization and customization.


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?



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.