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The Internet of Things (IoT): Shaping the Future of E-commerce

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Besides computers, tablets and mobile phones, what other items in your home could be connected to the internet? The answer might be far more than you imagine: refrigerators, cupboards, coffee machines, washers and many other household appliances. In March 2015, Amazon, the global e-commerce giant, unveiled to its selected Prime members a wi-fi connected Amazon Dash Button that could be attached to home appliances and allowed consumers to make online orders automatically simply with the push of a button. This innovation eliminated regular e-commerce shopping steps and made speedy and convenient online shopping possible. In July 2015, Amazon brought this Dash Button to all its Prime members for US$4.99 each, accelerating the implementation and adoption of the Internet of Things (“IoT”) in the e-commerce sector.

The IoT was defined as a worldwide information infrastructure in which physical and virtual objects were uniquely identified and connected over the internet. These inter-connected devices generated and communicated big data dynamically, enhanced operational efficiency and created new business opportunities for various industries. The e-commerce sector was no exception to the booming IoT development trend. The IoT would expand the scope and depth of e-commerce by linking people, smart devices and objects that were offline in the current e-commerce business model, generating unprecedented big data on product performance and on customer behavior and experience, involving more communication and action, and ultimately shaping the future of e-commerce.

How would the IoT change current e-commerce models? What business transformations could companies undergo to integrate the IoT with existing e-commerce platforms and create new business models and competitive advantages?

Learning Objective:

1. To summarize how the IoT will change the current e-commerce model. 2. To discuss the advantages, disadvantages and limitations of adopting the IoT in e-commerce. 3. To explore factors that affect the widespread and in-depth adoption of the IoT in e-commerce. 4. To discuss what business transformation companies could undergo to integrate the IoT with existing e-commerce systems and create new business models and competitive advantage.

Year of Publication: 2015
Ref. No.: 15/561C
Discipline: Management of Information Systems, Production & Operations Management, Strategy & General Management
Industry: Internet Software and Services, Internet Retail, Retail & Wholesale
Country: China (People's Rep. of)
Company: Alibaba, Zara, Inditex, Amazon
Languages: English
Pages of Text: 15