Chapter 10: E-Commerce: Digital Markets, Digital Goods Flashcards
E-Commerce involves
digitally enabled commercial transactions between and among organizations and individuals
Unique technology features of e-commerce
- ubiquity (meaning common) (everywhere, everyone)
- global reach
- universal standards
- richness (supports video, audio, and text messages)
- interactivity
- information density
- personalization/customization
- social technology
E-Commerce is becoming increasingly
social, mobile, and local
Digital markets are/have
- more transparent than traditional markets
- reduced information asymmetry
- lower search cost, transaction costs, and menu costs
- the ability to change prices dynamically based on market conditions
- foster market segmentation
- stronger network effects
Disintermediation (takes place)
- removal of organizations or business process layers responsible for certain steps in the value chain
- benefits the consumer
Digital Goods
(e.g. music, software, video, etc.)
- can be delivered over a digital network
- once a digital product has been produced, the cost of delivery is extremely low
Major types of E-Commerce
- B2C (f.e. barnesandnobles)
- B2B (f.e. ChemConnect)
- C2C (f.e. Ebay)
principal e-commerce revenue models are
- advertising
- sales
- subscription
- free/fremium (free services for basic services but charging for ‘premium’)
- transaction fee
- affiliate (websites are paid as ‘affiliates’ for sending their visitors to other sites in return of a referral fee)
Long-tail marketing
- ability to reach a large audience inexpensively
- strategy of targeting a large number of niche markets with a product or service (example rec. on amazon)
Behavioral targeting
- tracking online behaviour of individuals on thousands of websites and within apps
- thus privacy concerns
- programming ad buying
- native advertising
Native advertising
- placing ads within social network/ newsfeed or traditional editorial content , such as newspaper article
Wisdom of crowds
- large number of people can make better decisions about topics and products than a single person
Crowdsourcing
- leverage external resources, e.g. for innovation (customer-designed products) and funding (crowdfunding)
- the practice of turning to a body of people to obtain needed knowledge, goods or services
Electronic data interchange (EDI)
- computer-to-computer exchange of standard transactions (e.g. invoices, purchase orders, etc.)
Net marketplaces (e-hubs)
- provide a single, digital marketplace for many buyers and sellers
- can be B2C (amazon)
- can be B2B (thomasnet.com)
- can be C2C (eBay)
Private Industrial networks
link a firm with it suppliers and other strategic business partners to develop highly efficient and responsive supply chains
M-Commerce (mobile commerce) is especially well suited
location-based applications and providing personalised location-based marketing
M-Commerce is the
fastest growing type of B2C e-commerce and represented about 38 percent of global e-commerce in 2018
M-Commerce’s main areas of growth
- mass market retailing (amazon, eBay, etc.)
- sales of digital content (music, tv, etc.)
- in-app sales to mobile devices
Mobile phones are also being used for
- mobile bill payments
- banking
Most important challenges of building e-commerce presence
- developing clear understanding of business objectives
- knowing how to choose the right technology to achieve those goals
E-Commerce presence includes 4 areas
- websites
- social media
- offline media
E-Commerce presence map
requires firms to consider the four different types of presence, with specific platforms and activities associated with each
S-Commerce (social e-commerce)
- shoppers make their purchases within social media platforms
- intrinsically connected with social media marketing
