"It's about digital self-determination and self-service"
Professor Wippermann, online shopping is booming and it seems as though the momentum of e-commerce will pick up speed over the next few years rather than slow down. What drives people out of shops and onto the web?
Wippermann: The e-commerce boom is only one aspect of a more widespread phenomenon. For an increasing number of people, the internet represents a technical tool to use their time as effectively and efficiently as possible. Time is central in how people sort out their private lives - because time is the most precious of all resources.
It also explains why having more time means more happiness in our modern society. It's a very rational approach to take and covers every area of people's personal lives, including managing relationships, planning trips and also shopping. But we are also familiar with another type of internet user. In the USA there are studies showing that more and more people - particularly young people - browse the web out of boredom, or just for fun.
Online shopping, regardless of the type of internet user concerned, seems to have been embraced by the wider public quite some time ago. What repercussions does that have for the way suppliers and retailers interact with their potential customers?
Wippermann: Many internet lovers are experiencing something that could be described as "situative intelligence", with "digital self-determination and digital self-service" being key words. The internet has democratised our access to information. Especially in its mobile form, the internet affords users new ways to compare prices and product ranges.
Using location-based services, we can use GPS to take advantage of customised offers depending on where we happen to be. Suddenly the transparency provided by the internet puts us on equal footing with companies that used to take advantage of their informational edge. And that is far form the whole story. There are also new organisational opportunities that originate from individual customers without company involvement initially.
So-called "shop mobs" enable interested shoppers to spontaneously organise a shopping community, with the goal of securing the best discount they can. The internet thus makes it possible to create a majority and form a network. It's an idea that changes companies. Some have already taken note while others are not yet willing to admit how immersed in a digital world they already are.
Has the balance of power between consumers and producers or retailers already shifted permanently?
Wippermann: The transformation from a seller's market to a buyer's market can't be stopped and the internet is the decisive reason behind this fundamental change. Companies will consequently have to reorganise themselves and change their culture. They will have to satisfy their customers not only in stores, but also virtually. But a lot of the former major players are not yet able to do just that and so are stuck in a classic defensive situation, constantly chasing the rapid pace of the changes transpiring in the private sphere.
What does a successful e-commerce strategy look like?
Wippermann: Companies have to try to anticipate changing consumer habits or, at the very least, to keep up with them. The textbook example is Amazon. Initially it was just an online book store but it has since broadened its scope massively. It shows that it is no longer about belonging to certain sectors or market segments, but rather gaining and securing customer loyalty by providing true added value. That is what is meant now when people talk about "customer centricity."
Customer centricity, democratising information, digital self-determination. That all sounds almost too good to be true. What is the price consumers have to pay for the pleasure of limitless shopping?
Wippermann: Accessing information on the web is never for free. We always trade something in exchange, often without being aware of it - namely our privacy. Everything we do on the web leaves traces behind and exposes something about us. I don't want to downplay the danger of abusing information. But I believe that in Germany we talk far too much about the risks of web 2.0 and not enough about its possibilities. Once true added value is offered and recognised - and only then - consumers are willing to alter the boundaries to their preciously guarded privacy, to the benefit of the companies they're dealing with.
Take Google Street View, for instance. Roughly two years ago, the service unleashed broad public protests. In the meantime a lot of people who had the exterior of their homes blurred out have changed their minds because Google Street View pictures are now integrated into navigation systems and have become cool. To put it succinctly, we are seeing a reinterpretation of privacy due to the influence of web 2.0.
Looking towards the future, where does all this end? Are we going to see complete two-way transparency between companies and consumers and absolute dependency on our digital assistants?
Wippermann: I would definitely put it more positively. People are just beginning to explore the spectrum of new opportunities and recognise their value, which - as I already mentioned - is ultimately about buying time, and thus happiness. I'm convinced that everything that can be delegated to software will eventually disappear from our day-to-day lives in the long term. People will no longer organise their basic needs themselves; instead they will outsource these tasks - at the best available terms, and based on their personal needs. It's to be expected that this development will naturally push e-commerce into new dimensions.