The second, more important wave of innovation crests when companies find ways to use the technology to completely change the original process. This is when technological change has its greatest and finest impact. That we are still in the midst of the first wave of electronic commerce, or e-commerce, is obvious. Companies build online stores and then advertise in an attempt to herd customers into them. High-volume sites charge the advertisers for access to eyeballs.
Consumers search for companies, and companies struggle to be found.
The second wave is now just coming into sight, but when it crests, merchants aren't going to like what they see. Over the next few years the breakthrough success stories in e-commerce will be those that seek to lower transaction costs and effort for the buyer, not the seller. For 30 years, we've been using technology to benefit merchants. By lowering the cost of selling or streamlining the process, merchants bought solutions based on their expected rates of return. Today, companies are encouraged to move to the Web as a distribution network for similar reasons.