Commerce, in all its forms, is based strongly on a communication foundation. E-commerce, particularly, boasting increased interactivity and multimedia functionality, depends, by definition, largely upon a transfer of both commodities and meaning between two or more parties in order to satisfy its transaction process. Both commercial investment and consumer interest in online advertising and other e-commerce models has been increasing significantly during recent years. This enthusiasm has already taught the industry a variety of lessons, not the least of which is the fact that this medium is unlike any other, and yet shares similarities with many.
Since the medium is still in its infancy, at least in terms of its diffusion throughout society, it currently faces the adversity associated with 'proving its worth' to consumers, who have stated concerns regarding the security of transactions, individual privacy and the lack of traditional physical references. (Stats: Electronic Commerce in Australia, p.15, 1998) This latter concern also relates to the sense of emptiness that purveyed the cold, inactive Web in its early years. Currently, e-commerce outlets such as Amazon.com and BigNote are working to foster a sense of community, participation and humanity, encouraging interactive communication with and between their potential customers. (The Economist, p.2, Feb 1999) A similar provision could be used to abolish or lower user concerns in other areas.
At present, the key elements of Internet commerce are advertising, information dissemination and corporate communications, all of which depend on communication to succeed at even their most basic levels. (Stats: Electronic Commerce in Australia, p.24, 1998) Utilising the Net's communication properties to their full potential, online commerce can traverse the mass and direct coverage arenas by providing large-scale personalised service, fulfilling the three criteria for successful advertising as identified by the Internet Advertising Bureau.
The concept of a networked 'global marketplace' materialises in the diagram presented below. This diagram shows that e-commerce agents are able to communicate a wide variety of information to consumers, who may, in turn, effectively 'shop around' with the click of a mouse button before conducting the transaction with the broker whose communication was most effective. Directly after purchase, the broker may provide support and relationship management – even before the product or service has been delivered. This model reveals the degree to which e-commerce is dependent on communication in the absence of tangible form and local environmental factors.
This environmental adaptation is developing slowly, as brokers begin to understand that e-commerce works differently than traditional localised commerce. Such an adaptation lowers overheads and increases competition for online retailers, who are forced to offer greater personal service and lower response times in order to differentiate themselves from the plethora. (The Economist, p.3, 1999) This indicates yet another communication triumph. The Economist's Survey noted that customer testimonials are a better draw than discounts in this service-oriented realm. As a result, the commercial balance of power on the Net shifts from the merchant to the consumer. (The Economist, p.2, 1999) A great example of this is Amazon.com's system of customer interaction and information provision, which has grown into a evolving community of book readers, authors and publishers, each of whom have he ability to comment on various publications. One author, Kev Grossman, recently published an article outlining the influence of Amazon.com's facility, which is scanned by professional critics, authors, editors and publishers. This proves again that communication, from a variety of sources, plays an invaluable role in determining the success and reputation of e-commerce outlets. (Grossman, Terrors of the Amazon)
This qualitative, marketing strategy is also employed by a number of other companies, many of whom have realised that their tangible products are not a Web-friendly commodity. A significant element of e-commerce, therefore, rests entirely in the sphere of communication. That is, a number of e-commerce sites, while possibly offering products for sale, are more adamantly focused on increasing brand recognition and providing valuable, in-depth information that may influence purchases in the 'real world'. It could be argued that this classifies as e-commerce since a decision has been formed to make a purchase while online, though the actual exchange has taken place in the physical realm. (The Economist, p.1, 1999)
In a similar vein, it has been noted that specialised information, which was once the exclusive province of particular organisations, is going public and becoming a commodity unto itself. Stats: Electronic Commerce in Australia, for example, noted that a large degree of government sales to consumers and businesses were information-based, while businesses that provide information or a service, whose digital form makes such ideal for the Web, comprise a large degree of all business-to-consumer sales. (Stats: Electronic Commerce in Australia, p.2, 1998)
All this shows us that, as Amazon.com founder Jeff Bezos noted, the quantitative changes imposed by the Internet as a medium are becoming "...so profound that they become qualitative," effectively changing the way businesses interact with their potential customers. (The Economist, p.2, 1999) A global marketplace and technology allowing a large degree of client personalisation transforms advertising and e-commerce models to one in which information and interactivity become a commodity in industrial competition. This is Bill Gates' "friction-free Capitalism" (The Economist, p.1, 1999), this is Wiley's "Brave New World" (Brett Wiley, NCT address, 1999), this is communication-dependent commerce.
Written by Joshua Smith. © 1998
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