When ecommerce first started, business Web sites simply set up their business models to work like brick-an-mortar stores. Basically, ecommerce just followed the old models set forth by traditional retailing. All that is changing now as technology improves and the consumer demands more innovation. From product recommendations to text message alerts on your cell phone, ecommerce is changing the way business is conducted online. The New York Times describes Ideeli, a clearinghouse for high-end goods:

The site sells just three or four products over the course of a week, which members can preview. They then stand by for e-mail or text messages saying when a specific product has gone on sale. …

Shoppers who want to increase their odds of scoring a bargain can pay $8 monthly to shop an hour earlier than general members.

Ideeli is only available to members who are invited by other members, or by the ecommerce retailer (open memberships available until tomorrow). The idea is to galvanize the consumer by offering only a limited number of products. Members get the text message, and then they race others to buy the scarce product for a great price. The bargains are great, and the scarcity factor means that all the available product usually sells out — and many consumers end up empty-handed. But they still keep coming back, hoping to score a great deal on high-end products.

Ideeli’s success supports the findings that high-end shoppers look for deals. Indeed, Ideeli has built its entire ecommerce model on the fact that big spenders look for big discounts. And its exclusivity and the scarcity of its products is creating demand by excluding some people (which is not a common mass-marketing practice among traditional retailers). And paying a subscription fee for first dibs? That’s not exactly standard retail practice.

But most of all, the Ideeli ecommerce model illustrates the importance of technology. Ecommerce is evolving to make online shopping a more personalized experience. If you are still operating like a brick-and-mortar store, your ecommerce business may find itself in trouble.

Tags: ecommerce, ecommerce Web site, online retailers, online shopping,
new business models, ideeli, ecommerce business models