11/23/2010

The Click and the Dead

The article, The Click and the Dead, talks about how the internet has changed the consumer market. “Everywhere people bemoan the replacement of the local and the quaint by outposts of big, homogeneous chains. But how true is the notion that the internet in particular has hastened the demise of some retailers, and that those it hurt were overwhelmingly small?” Before the internet and e-commerce, people would have gone to a couple stores and maybe called a couple more before buying a product. Nowadays people can shop online and, as predicted, people have become pickier in their selection-making process. Price has become a much greater issue because people can gather more information about products before buying. Competitive pricing has resulted in less efficient companies going out of business. If price is becoming more of an issue because of the internet then, in theory, companies that can achieve economies of scale have a better opportunity to survive because they can lower costs more than competitors. More often than not these are bigger companies or chains. There is hope for smaller retailers, however. If they can effectively market themselves as someone that provides a unique product they can meet very specific customer needs creating a better chance of success. Hopefully smaller companies can find a way to compete to ensure better products and lower prices.

3 comments:

Grant said...

The essence of this seems to be that the scale and availability of the internet has made price competition and in turn efficiency an essential to survival especially for smaller companies. It is clear that companies can survive and prosper they just have to adapt and find their niche. Therefore it is hard for me to sympathize with those who argue for regulations or programs to prevent this from occurring.

Dave said...

I've never quite understood the sentiment criticized here.

Someone who offers me a low price is doing me a favor. Why on earth do I owe anyone the right to be inefficient, and charge me a higher price?

Derek said...

I presented a study on technology and the rapidity of change that has been brought about mostly due to the internet. What I learned is that the generations afraid to utilize the faceless corporations are dying, and that consumers are becoming less afraid to purchase online. Usually purchases are still made in the store, but only after being validated online that the product being shopped is as low a price and as good as reviewed as possible. Internet or bust!