Stages of e-Business Evolution

The world of e-business has matured as a result of two factors:

1. cultural acceptance of electronic distribution, and
2. technology evolution.

It is important to recognize the stages of e-Business evolution. The model below is a useful tool for consulting engagements, as it allows you to determine in which stage a prospective client lies. Is this company advanced or is it at the beginning of its evolution? The six stages of e-Business include:

1. Static
2. Interact
3. Transact
4. Enact
5. Relationship management
6. Contextual management

E-Business stages are cumulative and each stage builds upon the last. The specific stage an organization is in varies depending upon the goals and objectives of the e-Business.

1. Contextual Management: Contextual Management is not simply a front-end concept, it is a separate back-end environment focused on capturing, maintaining persistence, and applying contextual information
2. Relationship Management: Relationship management: The top layer in the e-Business model. Relationship management allows e-businesses to tailor the content for the website to the customer needs through personalization, profiling, 1:1 marketing and customer support.
3. Enact: Enact: e-businesses in the enact stage utilize the real time capabilities of the web including integrated ordering , real-time processing and supply chain integration.
4. Transact: e-businesses in the transact stage are beginning to tap into the potential of ecommerce. Transact sites allow order placement , payment processing and order management
5. Interact: Interact: e-businesses in the interact stage use the web in a slightly more interactive way than companies in the static stage. Customers can provide feedback and check on the pricing and availability of items
6. Static: Simply looking at the web as an advertising medium for the brick and mortar stores. These sites have not interaction and generally consist of little more than a company's product information and FAQ's

The specific stage an organization finds itself in varies according to the goals and objectives of the e-business.

The development of e-business can be divided into several stages, each characterized by distinct drivers that influence e-commerce engagement. Here's an overview of these stages:

1. Emergence (1990s - Early 2000s):
   • Technological Innovation: The advent of the internet and the World Wide Web provided the foundational technology for e-commerce.
   • Early Adopters: Tech-savvy consumers and pioneering businesses began to explore online transactions.
   • Basic Online Presence: Businesses established simple websites primarily for information dissemination.
2. Exploration and Expansion (Early 2000s - Mid-2000s):
   • Improved Infrastructure: Advances in internet speed, security protocols (SSL), and online payment systems (e.g., PayPal) made online transactions more viable and secure.
   • Increased Consumer Trust: Enhanced security measures and better user experience led to growing consumer confidence in online shopping.
   • Diversification of Offerings: e-businesses began to offer a wider range of products and services online, beyond just information and basic sales.
3. Consolidation (Mid-2000s - Early 2010s):
   • Market Maturity: The market saw the entry of large players like Amazon and eBay, leading to increased competition and market consolidation.
   • User-Centric Design: Websites became more user-friendly, with improved navigation, better search functionality, and personalized experiences.
   • Mobile Commerce (m-commerce): The rise of smartphones and mobile internet access spurred the growth of mobile commerce, allowing consumers to shop on-the-go.
4. Integration and Innovation (Early 2010s - Late 2010s):
   • Omni-Channel Presence: Businesses adopted an omni-channel approach, integrating online and offline channels to provide a seamless shopping experience.
   • Social Media Influence: Social media platforms became significant drivers of e-commerce, facilitating direct sales and brand engagement through social commerce.
   • Big Data and Analytics: Businesses leveraged big data and analytics to understand consumer behavior, personalize marketing efforts, and optimize inventory management.
5. Personalization and Customer Experience (Late 2010s - Early 2020s):
   • Artificial Intelligence (AI) and Machine Learning: AI and machine learning technologies enabled advanced personalization, predictive analytics, and improved customer service through chatbots and virtual assistants.
   • Augmented Reality (AR) and Virtual Reality (VR): AR and VR technologies began to enhance the online shopping experience, allowing virtual try-ons and immersive product demonstrations.
   • Subscription Models: The popularity of subscription-based e-commerce models grew, providing consumers with personalized and convenient recurring deliveries of products.
6. Digital Transformation and Sustainability (Early 2020s - Present)
   • Pandemic Acceleration: The COVID-19 pandemic accelerated the adoption of e-commerce, pushing businesses to rapidly digitalize and expand their online operations.
   • Focus on Sustainability: Increasing consumer awareness about sustainability is driving businesses to adopt eco-friendly practices, such as sustainable packaging and transparent supply chains.
   • Advanced Logistics and Delivery: Innovations in logistics, such as drone deliveries and same-day shipping, are enhancing the efficiency and speed of e-commerce fulfillment.

Each of these stages has been driven by a combination of technological advancements, changing consumer behavior, and evolving business strategies, leading to the dynamic and rapidly growing landscape of e-commerce we see today.

• Baby Boomers: 1946-1965: During 2016, DistributedNetworks conducted an international study on consumer behaviors and preferences related to online shopping. The research was largely based on an online survey of 18,947 consumers living in more than 49 countries. The respondents were between the ages of 17 and 67, each having purchased at least one consumer product online in the past 12 months. In addition to scrutinizing their online shopping behaviors, preferences, and decision processes, the study also explored plans of consumers for future online purchases, factors affecting trust and loyalty towards certain brands, and their sentiments and attitudes towards the companies that they do, or do not choose to buy from.
• Generation X: Born 1966-1981: The ultimate purpose of this research was to provide consumer goods and retail companies with the global and local insights into the specific behaviors and preferences of the customers they want to target. By understanding the uniqueness of different customer segments, companies can tailor their online strategies for maximum success. The depth of the data collected for this study makes it possible for companies to analyze and forecast the behaviors and preferences of their customers by geography, generation (Millennials, Generation X or Baby Boomers) and product category.
• Millennials Born: 1982-2001: The number of ways to filter and classify the data is too copious to summarize in a single report, so in the following sections we provide an overview of the global results, highlighting the most significant or interesting trends and comparisons among the major demographic groups and product categories. Executives interested in receiving more detailed insights are invited to contact KPMG to have a member of our team filter and analyze the full set of data according to your specific requirements or target markets.

The next six lessons will describe each stage and its representation in e-Business transformation.