Session 6 Flashcards
Why E-Commerce is Different
ubiquity global reach universal standards increase richness interactivity information densiity personalization/customization social technology
ubiquity:
shopping can take place anywhere
global reach
the Internet increases the number of customers national boundaries
universal standards
communication between different systems are seamless, lower entry/search cost
increase richness
the Internet increases the depth, detail, and scope of the information
interactivity
more interactions with customers
information density
reduces information cost and information asymmetry higher cost/price transparency
personalization/customization
individualized commerce
social technology
user-generated content (popularity of Yelp & trip advisor) Amazon top reviews & fake news
Types of e-Commerce
Business to customer (B2C) products and services directly to individual customers (Wal-Mart)
Business to Business (B2B) sales of goods and services to other business (alibaba.com)
Consumer to consumer (C2C) indiviudals using the web for private sales and exchange (ebay.com)
Reduces information asymmetry
reduce information asymmetry (car sellers knows the car, buyer does not know the same info. today with Internet we have the info.
greater flexibilty
reduced search cost/transaction cost
lower menu cost
greater price discrimination
dynamic pricing
reduces (or increases) switching cost
example costco –> sams club cost of switching, research, etc.
stronger network effects
the value of a product to one suer depends on how many other users there are
Digital Market
reduce information asymmetry offers greater flexibility reduce (increase) switching costs delays gratification increase market segmentation has stronger network effects more disintermediation
