FRICTIONLESS ECOMMERCE IS A MYTH.” DO YOU AGREE? WHAT ARE THE IMPLICATIONS FOR MARKETERS OF YOUR CONCLUSIONS?
E-commerce is the most rapidly expanding sector of the economy throughout the world so far this century. Its growth is exponential with the internet population taking less than a year to double in some countries while it has taken the world population just under 40 years to double in size (Reynolds 2002). E-commerce can be technically defined as a purchase for which the ‘order was placed online, not the payment itself or the delivery channel employed’ (Reynolds 2002). Its growth has been largely fuelled by the rapid growth in the internet population, ‘in 1995, only about 7 percent of the adult American population had Internet access, by 2005 that number had increased to 67%’ (Scott-Morton 2006). This familiarity with internet usage, coupled with a movement away from the relatively slow dial up connections to the far faster broad band which grew at an astonishing 34% in 2004 led to e-commerce becoming a viable and popular option for consumers to do their shopping. E-commerce has allowed totally new business enterprises to appear for example photo sharing and printing sites which allow consumers to share photos and which generate their revenues from printing (Scott Morton). Existing firms have also thrived in the new environment and have experience further growth and diversification for example online orders of groceries such as Tesco’s online.
E-commerce is opening up new sectors to firms to exploit such as online photo albums which generate their revenue through services such as printing or photo mugs as well as giving firms a far wider market on which to market their products. Other areas which do not sell consumers a product are also benefiting from ...