Drivers of the Internet Economy

There are many varying drivers of the internet economy. Some of them being: information produces the greatest value, distance does not matter, speed is of the essence, people are the key assets, network growth increases value, marketers deal on a one-on-one basis, demand can more accurately be predicted, cost patterns change, consumers now have the power, and an information economy is characterized by choice and abundance (Roberts, 2008). I have found that internet drivers have a lot of a lot to do with consumer behavior because it is the consumer who now has the control over marketing efforts as the bar is constantly being raised by competing businesses.

Information produces the greatest value has proven to be a huge driver in the internet economy. For example, a website like CarsDirect.com not only provides multiple options on where the customer can purchase their car, but also provides researched information on the vehicle that the customer is considering. This enables the customer to make a more well-rounded decision for such a large purchase.

Additionally, distance does not matter anymore! Consumers are now able to find the products and services they need, from the comfort of their own home. One great example is distance learning. For me, being able to pursue my degree online enables me to work full-time while supporting my family. If I did not have the option to do what I am doing, I don't believe that I would be able to find the time to go to classes on campus every week.

Instant gratification is something that us a as consumers are being spoiled with. With options like iTunes that allow us to almost instantly access music, books, movies, and TV shows, or Comcast's On Demand which allows us to instantly rent a movie without having to leave the house, are just a few examples of how speed is of the essence.

I am a firm believer in happy employees make happy customers. The fourth internet driver, people are the key assets, rings true in this context. Skilled and knowledgeable employees are the only assets that employers know could leave them and not return (Roberts, 2008). Thus, if you treat your employees right, they will treat your customers right. Strong and knowledgeable workers are key assets to any company.

Network growth increases value and shows how fast the internet enables businesses to decrease costs and increase productivity. This allows businesses to increase their value with the use of internet. Pretty soon, all of our appliances are going to be connected digitally and will further increase value. For instance, OnStar, which connects vehicles to an online security system that will notify the police if you are in an accident. It's these types of ideas that will continue to change how we live and do things and will further increase our productivity not only for businesses, but also for consumers.

Furthermore, Marketers can now deal with customers on a one-to-one basis. Similar to OnStar being able to connect directly with the consumer through the vehicle, FedEx also offers the consumer to schedule shipments and track packages. Because this information is all done over the internet, FedEx is able to store the information in a more cost effective way, versus calling which would cost time and money (Roberts, 2008).

Not only can marketers deal with the consumer on a one-to-one basis, but demand can now be predicted with greater accuracy. Demand is the desire of customers for goods or services for which they wish to purchase or use. A great example of a company that is able to predict demand is Wal-Mart as they utilize radio-frequency IDs to track inventory digitally, which they automatically orders more when stock begins to get low. This is just one way that companies are predicating demand with greater accuracy.

Cost patterns are also drivers of the internet economy. To illustrate, Amazon.com offers ebooks at a lower price than the physical copies. Ebooks enable the consumer to not only access their purchase instantly, but there are decreased transaction costs both for the customer and Amazon. The consumer doesn't have to pay for shipping, and Amazon doesn't have to use any resources to process the purchase and ship the book. More and more businesses and customers are recognizing the benefits of these types of cost patterns.

I feel that the most important driver is consumers having the power in an information rich channel. Since consumers have applications to assist them in making purchases online, for example Google Shopper, they have the power to find the best price online for the item that they are looking to purchase. I use Google Shopper all the time to price compare; this type of application gives all the power to us as consumers because it creates more instances of competition.

The last driver, information economy is characterized by choice and abundance, illustrates that the consumer is looking for businesses that give them options in regards to price and quality. As stated earlier, the internet enables the consumer to price compare in many different sites.

In sum, the opportunity the internet provides us as both a consumer or entrepreneur an endless array of options for the future.


References

Roberts, M. L. (2008). Internet Marketing. Mason: Southwest Cengage Learning.
Khalifa, Mohamed; Limayem, Moez. Ebscohost, Retrieved January 2th, 2012 Communications of the ACM, Dec2003, Vol. 46 Issue 12, p233-239, 7p