Steven L. Telleen, Ph.D.
Interaction Does Make A Difference
There are two major schools of electronic commerce strategists. The
sees electronic commerce as an extension of brick and mortar concepts
the virtual world. They specialize in identifying the tweaks and
electronic conversion requires or allows, never questioning that their
on how buyers and sellers find each other and interact might change
In fact, many are selling advice based on the principle that electronic
will amplify the very characteristics that are most at risk to be
as the new marketplaces begin to unfold.They find the dissolution of
comfortable marketing formulas and practices to be unthinkable. To
electronic commerce is about applying technology, not changing
foundation of the buyer-seller interaction.
truth is, many of today's marketing conventions are based on - and
dependent on - the lack of interactivity in traditional
Print media (starting with the printing press)
expanded our ability to distribute information over wider areas,
the writer no longer had to accompany the message, and a large number
messages could be created and distributed. In fact, the writer often
not aware of all the places the message found its way. It was the
of location transparent communication. While print did allow
at a distance, the interaction was slow and therefore of limited
in commerce situations. The main use of print was a one-way,
of information by sellers to large numbers of individually anonymous
buyers - mass markets.
Varients of mass market approaches remain the
of commerce today. Marketing programs are based on trying to identify
of buyers with similar buying criteria or characteristics (identifying
market segment) so they can be sold to without direct interaction. When
identified, the segment information is used to target information to
group and to collect "feedback" on unmet needs. As everyone figures
out, the game shifts to segmenting smaller and smaller markets to
unique differentiators. Most one-to-one marketing approaches in
commerce are an attempt to apply mass market approaches to the new
medium, rather than a shift in the buyer-seller paradigm.
This emphasis on markets evolved to compensate for
in bringing together buyers and sellers in a marketplace that lacked
interactivity. The importance of brand, for example, has been largely
due to the inability of buyers to share good information on location
and quality of goods and experiences.
The base was too distributed and the communication too inefficient, so
became a substitute for shared experience. And once established, brands
branding became more a function of investment in image than a function
shared collective customer experience. Granted consumer and public
affairs groups provided some shared customer experience, but both
buyers and sellers were burdened by the lack of location transparent
The early days of electronic communication only
this problem. Broadcast media expanded the location transparency of the
but actually reduced the interactivity between buyers and sellers, and
buyers with other buyers. The telephone extended both location
transparency and interactivity,
but was limited by its one at a time connection and its ability to use
one sense - hearing. Markets and branding not only became more
the power to control markets shifted heavily toward the sellers and
from the buyers.
A graphical version of this is seen below. If we
two axes, one for location transparency and the other for
we get a conceptual space that easily divides into four quadrants. As
can see, prior to the printing press, location transparency was low.
advent of the printing press raised the level of location transparency,
lowered the level of interactivity. Electronic media raised the
transparency even more, but did little for interactivity. Today's
models are all based on the technologies that cluster in or close to
upper left-hand quadrant. When the printing press catipulted us into
quadrant for the first time, some 450 years ago, the change in
completely restructured the way buyers and sellers came together,
in the large corporate "market making" culture of the last half
The Internet (today's backbone for electronic
catpults us into an entirely new quadrant - one we have never operated
before. There is good reason to believe this will change everything -
rather than amplifying the existing conventions of commerce.
This brings us to the second school of electronic commerce strategists.
see the potential for a major shift in the very foundation of how
and sellers are brought together.
will be so profound that over time the whole economy will
restructure - not as a virtual version of today's supply chains, stores
and malls, but as a virtual bazaar of custom
goods and services and electronic exchanges of commodity goods and
Nothing will have fixed prices - the
of instantaneous, location-transparent, interactive communication will
near frictionless marketplaces moderated by impartial computer
Individuals will become increasingly comfortable operating in these
and exchanges as both buyers and sellers of goods and services. This
that we all are sometimes buyers and sometimes sellers already is
down the conceptual separation of business-to-business and
business-to-consumer thinking. One is the process from the buyer's
perspective, the other from the seller's perspective. In the new model
both become marketplaces where buyers and sellers interact and easily
change roles from one to the other.
The shift in the communication space represented
is why the eBay model is more profitable than the Amazon model. EBay
the infrastructure to let anyone be a buyer or a seller on a moments
They are a utility, not a retail outlet. Companies like advoco and Monster Talent Market are
a similar model for bringing buyers and sellers together in the
and professional service marketplace.Companies like MetalSite are pioneering the concept
the supply side. For more examples see the "Auctions and Exchanges"
of EC Tools on this site.
This shift in communication also is why customer
processes at leading edge EC companies incorporate people back into the
Customers may want to service themselves much of the time, but they
the ability to talk back, and have immediate, interactive access to a
on their terms, when they feel the need. All aspects of commerce are
from the left side to the right side of the communication space
The world is changing, and pieces of the future
to be found everywhere. They remain fragmented, but integration is just
matter of time.
buyers and sellers have fears, habits and blind spots to overcome
before most marketplaces can
reach a critical mass to begin operating efficiently.
That is the big challenge now. When and how will
culture change - what dislocations will arise and how will we address
clinging to the tip of the iceberg