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The Future of E-Commerce

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PCQ Bureau
New Update

Declining costs, increasing functionality and the usage of access devices like PCs connected to the Internet and Web-enabled mobile phones, the declining price of Web servers, advances in programming technologies and technologies that simplify usage of computers by ordinary people will drive the changes in e-commerce and define its future. Here are some of the changes that we can anticipate today.

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Location-based marketing: Currently e-Commerce is synonymous with PC and browser-based interaction. However, in the near future Web-enabled mobile phones and other handheld devices will become a common, if not dominant mode of accessing e-commerce apps. Commerce applications will by then evolve to track the location of mobile consumers using GPS service. The location information will then be used to guide the consumers to nearby stores. If the consumer requests a service, say a taxi, drivers in the vicinity can be alerted. 

Dr Manoj Kumar, Director, IBM India Research Laboratory

Natural language interfaces: In developing countries PC penetration in homes is likely to stay below that of developed countries with a large part of the population still unfamiliar with the Web. To reach the masses, commerce apps will have to rely on mobile phones, handheld devices and kiosks. Speech-based natural language interface is the logical choice and e-commerce applications will adopt these interfaces. The e-commerce applications will also exploit the ability of computers to translate text from one language to another to simplify the deployment of the applications in multiple languages, a desirable thing for countries like India with diverse native languages.

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Consumer preferences and interests: Even though the Internet makes it possible to search through a very large collection of items, searches require effort and consumers stop their search before reaching the optimal selection. Data-mining techniques applied to past purchase histories and browsing patterns will allow e-commerce systems to learn the preferences and interests of consumers. E-commerce sites will thus show advertisements and sales promotions relevant or applicable to a particular customer.

Moving on to the Internet: It is reasonable to believe that the prevailing commerce process is in an equilibrium where changes that increase their complexity cost more than the additional profits they result in, or the decreases in complexity reduce costs less than the lost profitability. As parts of the commerce processes move to the Internet, the costs are reduced and benefits change. One of Internet’s important benefits is its ability to reach a wide consumer audience. As a result e-commerce processes will change to reach a new equilibrium point, perhaps become more elaborate to increase the mutual benefits for the market participants, creating a more efficient market. For example, stores may liquidate their inventories through online auctions rather than aggressive price reductions. 

Barter and government presence: Reservations for air or train travel, or hotel bookings are classic examples of existing commerce activities that have moved online to take advantage of reduced costs and increased reach. However, more exciting are the opportunities we can imagine in the future, examples that we don’t see today like barter of second hand books or music between the books and music lovers, regional markets for second-hand automobiles etc. Government regulations require its own commerce activities to be widely publicized open to public scrutiny. Internet achieves this objective at low cost and therefore we should expect government procurement and sales also to move online.

Dr Manoj Kumar, Director, IBM India Research Laboratory

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