Impacts of Technology (U2)
Applied IT (Year 11)
What is E-commerce?
E-commerce refers to the purchase and sale of goods & services over the internet by making use of online platforms (e.g. eBay, Amazon) to conduct commercial transactions.
Implications of Improved Digital Communications
Improved digital communications, thanks to the rapid advancement of the internet, mean businesses can facilitate faster, more effective, and more efficient communication with consumers. For businesses, this allows them to acquire more customers globally as well as improve their marketing strategy by taking advantage of more comprehensive data insights on their customers (e.g. preferences, online shopping patterns) to personalise ads.
On the other hand, customer experience and satisfaction will also be enhanced by offering customers the option to shop from the convenience of their own homes anytime (which was invaluable during the pandemic, especially for those who were vulnerable). Additionally, customers will also benefit from having access to a wider variety of communication channels with the business, such as automated chatbots, live support chat, and social media.
The availability of 24/7 communication has both positive and negative implications for businesses. While the flexibility it grants customers to shop anywhere, anytime will provide a global reach to customers in different time zones, it places a burden on the business and its employees. Businesses will be expected to provide responsive customer service, which means they will need to operate on a 24/7 basis in order to respond to customer inquiries outside of regular office hours, thus negatively impacting the work-life balance of employees. This can be more of a problem for smaller businesses operating within one country or a small geographic region, as multinational corporations (e.g. Amazon) will have employees available globally to respond to customer inquiries during different times of the day during their respective office hours.
Online Retail Opportunities
The rise of e-commerce has provided new opportunities for entrepreneurs and small businesses to enter the market more easily and compete against larger and more established enterprises. This is due to the declining need for physical stores, which has allowed businesses to invest less in real estate and employees, thus lowering overhead costs (i.e. rent, labour). With more businesses in the market, competition will increase, and prices are bound to become more competitive as consumers can simply compare prices across websites and pick the cheapest option.
Online retail has also eliminated geographic borders, presenting businesses with the opportunity to reach new customers overseas. This global reach will likely help businesses expand their customer base, thereby increasing sales and revenue.
However, businesses will need to ensure they can provide fast, reliable, and cheap delivery to maintain customer satisfaction and remain competitive in a highly competitive e-commerce industry. Businesses with a solid track record of delivering their products in a prompt and efficient manner are more likely to attract customers to place orders with them.
Issues of Dependency upon Electronics and Visual Communications
Being reliant on technology will inevitably lead to occasional technical difficulties. This can be in the form of server crashes or disruptions to connectivity that can seriously hinder day-to-day business operations. In more serious cases, technical complications can escalate to cause privacy and security concerns, such as cyber-attacks or data leaks which can result in the loss of confidential business information as well as damage the business’s reputation and relations with customers. Consumers are also at risk of having their personal data sold to third parties or falling victim to scammers posing as legitimate businesses.
With more business activities transitioning online and the number of physical retail outlets declining, businesses need to prioritize their online platform and enhance their online presence through social media to stay connected with their customers. This will help counteract the potential increase in distance between customers and businesses due to a reduction in face-to-face interactions, but it may also result in additional developmental costs to build or upgrade their website (e.g. implementing customer support services such as chatbots & help desks) as well as ongoing expenses to maintain it.
Moreover, as previously discussed, the shift towards and dependency on e-commerce will negatively affect the well-being of employees due to the need for 24/7 availability. Concurrently, the traditional retail industry will experience a significant reduction in job opportunities.
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