The word “e-commerce” is trendy these days. Despite its prevalence, we are ignorant of its significance, owing in large part to the fact that it is known by a variety of different names.
Individuals engage in website promotion, search engine optimisation, affiliate marketing, and a range of other activities with the common goal of attracting people and selling a business’s products or services. The letter ‘E’ is only a convenient way to conduct business online. There are several distinct qualities of e-commerce that contribute to its enormous value, which I will discuss below.
When it comes to traditional commerce, a marketplace is a physical area where we go to transact our transactions. Customers are typically encouraged to visit a store and make a purchase when they see commercials on television or radio, for example.
It is possible to conduct business online practically anywhere and at any hour of the day or night because e-commerce is pervasive. You can shop from the comfort of your own home because it removes the market from the limits of a physical location. The market space that is produced as a result of this process is referred to as the market.
From the perspective of the consumer, ubiquity lowers transaction costs, which are the costs associated with engaging in a market. It is no longer required to spend time and money travelling to a market in order to complete a transaction. At a more general level, the widespread use of e-commerce reduces the amount of cognitive energy necessary to execute a transaction.
E-commerce technology, when compared to conventional commerce, enables commercial transactions to cross-cultural and national boundaries significantly more conveniently and successfully. In order to maximise profits for online merchants, the potential market size should be almost equal to the entire number of individuals that utilise the internet around the world.
Unusually for e-commerce technologies, one of their most distinguishing characteristics is that the technical standards governing the Internet, and thus the technical standards governing the conduct of e-commerce, are universal standards, meaning that they are shared by all countries around the world.
E-commerce technologies, in contrast to every other industrial technology of the twentieth century, with the probable exception of the telephone, are interactive, meaning that they allow for two-way communication between merchants and consumers, a feature that was previously unavailable.
Information Density and Richness
The Internet has considerably increased the amount of information that is readily available. Specifically, information refers to the total amount and quality of information that is available to all market participants, including consumers and retailers, in a given time period. It is possible to save money on information gathering, data storage, data transfer, and processing when you use e-commerce technologies.
Furthermore, these technologies dramatically improve the quality and timeliness of information, making it more important and critical than it has ever been in history. This results in more readily available, less expensive and higher-quality information being made available to the public. The information richness of a message is defined as the amount of complexity and content contained inside the message.
Customization is possible thanks to e-commerce technologies. A merchant’s marketing communications can be tailored to specific individuals by tailoring them to the person’s identity, interests, and previous purchases. Customization is also possible thanks to technology. Merchants have the ability to modify a product or service based on the preferences or previous behaviour of the user.
Using e-commerce technologies, retailers can learn a great deal more about their customers and exploit this information significantly more efficiently than they could previously. Online merchants can use this information to establish new information asymmetries, improve their ability to brand things, charge higher fees for high-quality service, and divide the market into an unlimited number of subgroups, each of which receives a different amount of money.