The role of e-commerce in influencing consumer behavior has increasingly become evident and has been adopted as one of the most preferable business media.
Electronic Commerce refers to the process of purchasing and selling of product information and services through a computer network (Kalakota & Whinston, 1996).
Furthermore, Bloch, Pigneur and Segev (1996) further described it as any form of business transactions that is carried out over a digital media. In this regard, with the growing use of internet as a global network, e-commerce has established its role in influencing supply chain relationships in terms of marketing, product accessibility, and promotional campaigns as well as presenting business portfolios.
According to Mentzer et al., (2001) a supply chain can be described as three or more business association directly linked from a source to a customer through the flow of products, services, finances, and information. These relationships vary from single transactions to complex mutually dependent relationships. Moreover, the main objective of these supply chain’s management is to establish a close working relationship that would increase competitive advantages of the parties involved in the supply chain. In this regard, e-commerce has offered an avenue through which this can be achieved, (Ganesan, 1994).
E-commerce and the internet has been referred to as “the next business revolution” by Palmisano (1998) in “There’s no business like e-business”, Directors and Board. Palmisano has observed that the connection between networks, computers, consumers and businesses for the principle rationale of selling goods, services and information can be used to heighten shareholder income as compared to the conventional business methods. Moreover, e-commerce plays an integral part in cutting costs, contributing to the growth and expansion of markets as well as maximising profitability. E-commerce also matches the utilities provided by traditional methods exemplified by delivery, credit facilities, selection of payment model and personalised assistance.
On the consumer’s side, e-commerce helps regulate impulsive buying and spending, Hunt (2000) in “The Lights Are on but No One’s Home; Revolution”. This is attributed to the fact that to the complexity of some of the online store in regard to the purchasing procedures. This in turn reduces post-purchase behaviors related to regret and dissatisfaction. Furthermore, internet has increased accessibility of products by the consumers while expanding the market values. A consumer is able to explore among the large number of products and services offered with ease and convenience hence making information search and evaluation easy. The suppliers on the other hand do not have to maintain a visible inventory, increasing service quality in terms of efficiency, effectiveness and speed.
In conclusion, e-commerce (internet) has established itself as the leading trend towards influencing consumer behaviour. It holds the essence of consumer behavior which will define future business strategies. Just as Sanchez (1993) once observed in strategic flexibility, firm organisation, and managerial work in dynamic markets: “a strategic-options perspective”, Advances in Strategic Management, e-commerce will offer successfully dynamic product markets leading to competitive success in stabilising markets.
By Nicole Papadopoulos – 1house
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