Innovations in Electronic-Commerce and How do these Innovations Affect the Retailer - Dissertation Example

This revolution has taken over the reins of the world from the previous revolution which was the industrial revolution. In contrast to the industrial revolution that was characterized by mass production and mass consumption, store stuffed with inventory, ads placed everywhere and rampant discounts, the information age has turned up with a proposition that promises to lead to more accurate levels of production, more targeted communications and more relevant products and pricing.

Companies in this new paradigm are expanding the scope of their business by entering new marketplaces which are located in different geographical regions. This initiative is being facilitated by technological advancements in the areas of transportation, shipping, and communication. In addition to this, companies in this new paradigm are finding it easier to purchase products and services from suppliers who were previously not known to them. Consumers similarly can also purchase products or services from providers located in different regions.

To complement these technological advancements, many countries have taken the initiative to deregulate their industries in order to create greater competition and growth opportunities. As a result of this change, companies operating in different industries are competing to provide better and differentiated services to their customers and by doing so build a loyal customer base. Much of these above-mentioned changes stem from the government’s policies of deregulation and liberalization. In order to respond efficiently to these changes, companies that were previously public limited have converted into private ownership and management. This transformation has drastically improved their efficiency.

This new operating paradigm has also created intense competition for previously national brands, which are facing hostile attacks from domestic and foreign brands. This has led to the rising of promotional budgets of the companies as a result of which profit margins of these companies are shrinking exponentially. The companies that are part of the retail industry are being further pounded by the powerful retail chains that are giving them limited self space and bringing out their own private brands to compete with national brands.
This new paradigm is also witnessing the convergence of different industries which is the result of the blurring of the boundaries of different industries. This intersection of previously distinct industries is providing new opportunities for companies operating in these industries. The convergence of different industries is being fuelled by the emergence of innovative digital technologies.

Consumers are avoiding products that are considered by them to overmarket themselves. In this intense competition, small retailers are facing intense competition and pressure from the growing power of retailers and category killers. These small retailers are facing competition from catalog houses, direct mail firms, newspapers, magazines, TV advertisements, home shopping televisions, and e-commerce marketplace over the internet. To counter these competitive forces small retailers are focusing on building in-house entertainment sources like coffee bars, lectures, documentation, and live performances. They are trying to market their customers a unique outing experience rather than an extended product assortment (Ahuja, 2011).

Another phenomenon of this information age was the Dot.com boom that although ended in failure, managed to bring successful business models on the business front.