Commerce in the Information Age: E-Business
The introduction of the Internet in the mid 1990s changed the way the world communicated. People were suddenly able to access a wealth of information and websites from all around the world. The Internet has had a major effect on businesses, which had to adapt to the new challenges and opportunities offered by the Internet. The electronics industry in particular was drastically changed with the introduction of e-business practices. Retailers of electronic goods were faced with a vast increase in competition, and customers had the chance to purchase goods for the lowest possible price.
Electronics Industry Before E-Business
Before the widespread popularity of the Internet, consumers could only purchase electronics from retail outlets such as Best Buy, Circuit City, Wal-Mart, or through a mail order catalog. A customer's choice was limited by type of products that were carried by stores located around their general area. If a customer could not find an item in the local region, they would have to order the product from a mail order catalog, or travel to another city that contained a store that stocked the item they were hoping to purchase.
By only having access to stores in their local area, customers also had to settle for the prices offered by the local retail outlets. This meant that the consumer could not choose from many different stores to find the best price, but instead had to pay whatever the stores charged.
Consumers were also faced with a lack of available information and knowledge about electronic products before the Internet. The main source of information about products came from the salespeople working in the retail outlets, or the information provided by mail order catalogs. This proved to be problematic because most customers would only obtain product information from sales pitches, instead of objective and impartial sources. If a consumer wanted objective information about an electronics product, a trade or enthusiast magazine could be used. These magazines provided some information about electronics products, but they did not supply consumers with the vast amount of detailed information that can now be found on the Internet. Also, relying on magazines for information about consumer electronics was expensive and inefficient when compared to the current amount of information that can be found on the Internet for no cost.
While consumers of the electronics industry had a lack of choice and information about products, the sellers of consumer electronics had different challenges and opportunities before the Internet age. Before the Internet, retail consumer electronic stores faced much less competition with rivals. Competition consisted mainly of other retail stores in the area, so less focus was needed for attracting customers to the stores. Because consumer electronics could be purchased from a variety of stores, it was still necessary to keep prices low and to maintain a high level of customer service, but the competition was restricted to a city or town, instead of the entire planet.
Electronics Industry After E-Business
The introduction of the Internet changed the world in many ways. Business were forced to compete not only with the their region or area, but with the entire world. Consumers were provided with a huge amount of information along with seemingly infinite places to purchase electronic goods.
Effect on Consumers
Consumers benefited greatly from the services provided by the Internet. Consumer electronics could be purchased from a huge variety of websites, and website portals such as newegg.com used a directory of Internet retailers to provide the customer with the lowest possible price. Goods could often be found for much cheaper on a website than at a retail outlet.
Consumers could also use web auction sites such as eBay to purchase used consumer electronics at a reduced price. eBay made it possible for people to find rare or discontinued products, and consumers could also easily find current electronic goods for purchase. This is an example of how the Internet increased the amount of choice consumers had when shopping for consumer electronics.
When purchasing goods from websites, the cost of shipping is usually the responsibility of the customer. Few web retailers handle the costs of shipping the goods, and instead have the customer pay to have their products shipped to them. By doing this the retailer saves costs, and the consumer is usually provided with a choice of speedy delivery at a premium price, or slower delivery at a cheaper price. Paying for shipping can be both positive and negative. If the price for a product is lower after shipping on a website than it is at a retail store, then the customer saves money. However, if the customer has to pay the same price that a local store would charge, the shipping costs would make it more expensive to buy online. Some customers may prefer the convenience of online shopping and pay the extra amount for shipping if they feel the overall online buying experience is easier than going to a retail store.
Effect on Retailers
The web also changed the way that sellers of consumer electronics conducted business. Brick and mortar retail stores had to compete with organizations from around the globe, instead of other stores in town. Most large retail operations introduced their own websites to sell goods to consumers in order to compete with online only companies such as Amazon. Some brick and mortar used their websites to provide unique services. An example of this is Circuit City, which implemented a system where customers could pay for items online, and then stop by a local Circuit City location to pick up their item. This saved money on shipping costs for the customer, and made ordering online more convenient for some consumers.
Retailers also used the web and networking technology to better manage inventory levels in their brick and mortar stores. By managing inventory levels using technology, overhead costs can be reduced while ensuring that products are always available for customers to buy.
Conclusion
E-business has greatly changed the way that consumer electronics are bought and sold. These changes have brought new opportunities and challenges for both businesses and consumers. Consumers have a greater choice of places to purchase products, and retailers face increased competition and new business models.