Some disadvantages and constraints of e-commerce include the
following.
Time for delivery of physical products . It is possible to
visit a local music store and walk out with a compact disc, or a bookstore and
leave with a book. E-commerce is often used to buy goods that are not available
locally from businesses all over the world, meaning that physical goods need to
be delivered, which takes time and costs money. In some cases there are ways
around this, for example, with electronic files of the music or books being
accessed across the Internet, but then these are not physical goods.
Physical product, supplier & delivery uncertainty . When
you walk out of a shop with an item, it’s yours. You have it; you know what it
is, where it is and how it looks. In some respects e-commerce purchases are
made on trust. This is because, firstly, not having had physical access to the
product, a purchase is made on an expectation of what that product is and its
condition. Secondly, because supplying businesses can be conducted across the
world, it can be uncertain whether or not they are legitimate businesses and
are not just going to take your money. It’s pretty hard to knock on their door
to complain or seek legal recourse! Thirdly, even if the item is sent, it is
easy to start wondering whether or not it will ever arrive.
Perishable goods . Forget about ordering a single gelato ice
cream from a shop in Rome! Though specialized or refrigerated transport can be
used, goods bought and sold via the Internet tend to be durable and
non-perishable: they need to survive the trip from the supplier to the
purchasing business or consumer. This shifts the bias for perishable and/or
non-durable goods back towards traditional supply chain arrangements, or
towards relatively more local e-commerce-based purchases, sales and
distribution. In contrast, durable goods can be traded from almost anyone to
almost anyone else, sparking competition for lower prices. In some cases this
leads to disintermediation in which intermediary people and businesses are
bypassed by consumers and by other businesses that are seeking to purchase more
directly from manufacturers.
Limited and selected sensory information. The Internet is an
effective conduit for visual and auditory information: seeing pictures, hearing
sounds and reading text. However it does not allow full scope for our senses:
we can see pictures of the flowers, but not smell their fragrance; we can see
pictures of a hammer, but not feel its weight or balance. Further, when we pick
up and inspect something, we choose what we look at and how we look at it. This
is not the case on the Internet. If we were looking at buying a car on the
Internet, we would see the pictures the seller had chosen for us to see but not
the things we might look for if we were able to see it in person. And, taking
into account our other senses, we can’t test the car to hear the sound of the
engine as it changes gears or sense the smell and feel of the leather seats.
There are many ways in which the Internet does not convey the richness of
experiences of the world. This lack of sensory information means that people
are often much more comfortable buying via the Internet generic goods – things
that they have seen or experienced before and about which there is little
ambiguity, rather than unique or complex things.
Returning goods. Returning goods online can be an area of
difficulty. The uncertainties surrounding the initial payment and delivery of
goods can be exacerbated in this process. Will the goods get back to their
source? Who pays for the return postage? Will the refund be paid? Will I be
left with nothing? How long will it take? Contrast this with the offline
experience of returning goods to a shop.
Privacy, security, payment, identity, contract. Many issues
arise – privacy of information, security of that information and payment
details, whether or not payment details (eg credit card details) will be
misused, identity theft, contract, and, whether we have one or not, what laws
and legal jurisdiction apply.
Defined services & the unexpected. E-commerce is an
effective means for managing the transaction of known and established services,
that is, things that are everyday. It is not suitable for dealing with the new
or unexpected. For example, a transport company used to dealing with simple
packages being asked if it can transport a hippopotamus, or a customer asking
for a book order to be wrapped in blue and white polka dot paper with a bow.
Such requests need human intervention to investigate and resolve.
Personal service. Although some human interaction can be
facilitated via the web, e-commerce can not provide the richness of interaction
provided by personal service. For most businesses, e-commerce methods provide
the equivalent of an information-rich counter attendant rather than a
salesperson. This also means that feedback about how people react to product
and service offerings also tends to be more granular or perhaps lost using
e-commerce approaches. If your only feedback is that people are (or are not)
buying your products or services online, this is inadequate for evaluating how
to change or improve your e-commerce strategies and/or product and service
offerings. Successful business use of e-commerce typically involves strategies
for gaining and applying customer feedback. This helps businesses to
understand, anticipate and meet changing online customer needs and preferences,
which is critical because of the comparatively rapid rate of ongoing
Internet-based change.
Size and number of transactions. E-commerce is most often
conducted using credit card facilities for payments, and as a result very small
and very large transactions tend not to be conducted online. The size of
transactions is also impacted by the economics of transporting physical goods.
For example, any benefits or conveniences of buying a box of pens online from a
US-based business tend to be eclipsed by the cost of having to pay for them to
be delivered to you in Australia. The delivery costs also mean that buying
individual items from a range of different overseas businesses is significantly
more expensive than buying all of the goods from one overseas business because
the goods can be packaged and shipped together.
