Functional risks are the risks that a product will not have the features desired by the customer. Quality risks are that the product will fail during use. Obsolescence risks are that the product will lose value as new and better versions are brought to the market. Electronic commerce offers a number of ways to reduce these customer risks. Similarly, other customers reviews and publication on the Internet of their product experiences can be used by potential buyers to limit quality risks.
Some firms are even able to offset obsolescence and functional risks by providing online upgrades.
Selection and delay risks threaten to waste customers time and incur opportunity costs. Customers usually confront selection risk when they go to a store seeking to purchase a specific product. Limited shelf space or delayed restocking may mean they will not have a satisfying range of options from which to choose. But electronic commerce can also reduce customers selection risk for physical stores, by allowing them to review the selection they will encounter on the shelves prior to making the trip to the store. Revealing information about the inventory status also helps customers manage their delay risk the risk that a product or service will not arrive or be available in a timely manner.