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Five major differences between the early years of e-commerce and today's e-commerce?
à What are five of the major differences between the early years of e-commerce and today's e-commerce?
The major differences between the early years of e-commerce (the Innovation stage), the period between 2001-2006 (the Consolidation stage) and today's e-commerce (the Reinvention stage) are:
· During the Innovation stage, e-commerce was primarily technology-driven. During the Consolidation stage, it was primarily business-driven. Today's e-commerce, while still business-driven, is also audience, customer, and community-driven.
· During the Innovation stage, firms placed an emphasis on revenue growth, quickly achieving high market visibility/market share. During the Consolidation stage, the emphasis was on building profitable firms. Today, audience and social network growth are being emphasized.
· Startups during the Innovation stage were financed by venture capitalists, while those in the Consolidation stage were primarily financed by traditional methods. Today, startups are once again being financed by venture capitalists, albeit with smaller investments. In addition, many large online firms are now entering the market, and acquiring early stage firms via buy-outs.
· During the Innovation phase, e-commerce was, for the most part, ungoverned. In the Consolidation stage, there was a rise in the amount of regulation and governmental controls by governments worldwide. Today, there is extensive government regulation and surveillance.
· The Innovation stage of e-commerce was characterized by the young entrepreneurial spirit. During the Consolidation stage, e-commerce was primarily dominated by the retail giants. Today, large purely Web-based firms are playing a major role.
· The Innovation phase was characterized by an emphasis on deconstructing traditional distribution channels and disinters mediating existing channels. During the Consolidation stage, intermediaries strengthened. Today, there are proliferations of small online intermediaries that are renting the business processes of larger firms.
· "Perfect markets" in which direct market relationships with consumers, the decline of intermediaries, and lower transaction costs resulted in intense competition and the elimination of brands, are being replaced by imperfect markets. Imperfect markets are characterized by a strengthening of brand name importance, increasing information asymmetries, price discrimination, and network effects.
· The early years of e-commerce saw an infusion of pure online businesses that thought they could achieve unassailable first mover advantages. During the Consolidation period, successful firms used a mixed "bricks-and-clicks" strategy, combining traditional sales channels such as physical stores and printed catalogs with online efforts. Today, there is a return of pure online strategies in new markets, as well as continuing extension of the "bricks and clicks" strategy in traditional retail markets.
· The early years of e-commerce were dominated by the first movers. In the Consolidation stage, e-commerce was dominated by the well-endowed and experienced Fortune 500 and other traditional firms. Today, first-mover advantages are returning in new markets as traditional Web players catch up.
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