Virtual communities are social networks of individuals interacting through the internet on social networking platforms. Due to the recent massive increase in internet usage, virtual communities are starting to replace the "real" community. As pubs and traditional meeting places empty, chat rooms, blogs and social networking sites are filling up with people. Even those that are not internet savvy are being sucked in to the trend, people who would not normally consider this form of interaction are drawn in due to the increasing popularity of the medium and the social expectation that goes along with it.
These days, if someone is not on Facebook, then it is usually seen as something of an oddity, a quirky personality trait. A virtual business community will never be as popular, but it is important to look at the key factors which helped make Facebook a success.
Most members will log on as their first port of call on the internet because the site keeps them engaged (doing stuff) and it has mobile integration and email notifications to pull the users back when they are away. It also provides rewards in the behavioural sense. When users check their notification bar, they receive an update in acceptance within the community, or positive reinforcement as they find out who liked their comment, link or video.
To replicate these sorts of luring factors will enhance any virtual community's appeal and sustainability.
There are a few problems with social networking from both a business and evolutionary point of view.
There is clear evidence in our daily lives of the infringement of social networking (or "antisocial networking" as it has been referred to by those of a cynical persuasion).
The increasingly more frequent necessity to access Facebook and Twitter is a distraction that is proving both costly and time consuming to businesses. Their employees are constantly checking their iPhones and computers to read the latest Facebook/Twitter message when really they should be working/serving customers/putting out fires.
More importantly, the world becomes more and more robotic as people cut off from real world connections and begin to rely solely on a virtual stimulus, but surely the virtual community cannot completely replace the real life interaction of people?
Through third party marketplaces such as eBay and Amazon, buyers can purchase new and used goods sold directly by a third party company or individual.
Users can actually sell practically any item through websites such as eBay with no upfront cost at all, provided the item pricing is sufficiently low (eg £1 per listing). Although this may seem like a low figure, due to the auction format of eBay, the final sale price can increase dramatically if there is sufficient interest in the item and multiple bidders enter into what is known as a "bidding war". Add to that the postage charge, chosen by the seller, and it is certainly viable for an individual or would-be entrepreneur to make significant profits whilst paying no upfront capitol.
For more expensive items, eBay would charge a listing fee. For example, if the starting price was listed at £50, eBay would charge the seller a small fee (£1) to put the item up for auction. They also take a cut if the item sells; this is referred to as the Final Value Fee. eBay would normally take 10% of the final selling price, not including postage fees. Money transfer companies like PayPal will also take a small portion of the incoming amount if the payment is made through them. However, this commission is relatively small and more or less negligible.
One of the main disadvantages for selling large amounts of goods through third party marketplaces is the competition from the parent site. For this reason, companies like Macy’s, Buy.com and Gap have pulled their items out of Amazon Marketplace. The problem exists where the third party merchants sell the same items as Amazon.com, this means that the third party vendor is in direct competition with Amazon, providing them with valuable market information and paying them for the privilege.
Mobile banking, sometimes known as M-banking, is a term used to describe banking processes such as making payments, checking balances etc through the use of a mobile phone or PDA. In the past, mobile banking took place via SMS. Account holders could receive balance statements in the form of a text message from their bank. The introduction of smart phones has allowed users to carry out all their normal banking transactions through special client programs known as apps.
This means that customers can now transfer funds whilst on the move. It is even possible for users to receive updates on stock prices and perform stock trading when they are actually stuck in a traffic jam. As long as their phone can receive a signal, banking can be done from any location, meaning business can continue without the physical presence of a customer or bank employee.
Mobile banking is not completely free from limitation. One such problem that banks are faced with is the difference between the mobile phones themselves. Mobiles have different operating systems and capabilities. Some phones will support Java, others will be WAP enabled, more basic phones will be SMS only. Creating a system that is reliable and works across all platforms is certainly a challenge for the companies involved.
Possibly the main issue is the security of the mobile banking system. The system has to ensure that if the mobile phone is stolen, the thief cannot easily access the phone user’s details. The main way of stopping this is through user ID and password combinations.
However, this is not the only way that the data can become compromised. When a mobile banking customer taps the information into his or her phone and presses “send”, this information is transmitted to the bank wirelessly. The confidential data is effectively floating through the air and if not properly encrypted, or if the encryption is decoded somehow, then hackers can more or less pluck this information straight from the sky it is travelling through and get access to the customer’s funds.
ECommerce or electronic commerce simply refers to the buying/selling of products and services over electronic means such as the Internet. E-commerce has grown rapidly with the increased use of the internet by more and more people across the world. Websites such as eBay and Amazon obviously fall into this category, but so do any transactions involving telephone banking, ATM machines and credit cards.
One advantage of eCommerce, from the customer’s point of view, is that it effectively cuts out the middleman in the transaction. Whereas traditionally, the supply route goes manufacturer-wholesaler-retailer-customer, with e-Commerce the retailer can be cut out of the equation. This means there is more market transparency as the customer can be told through digital platforms what the wholesale price is, then buy the product without going through a middleman, so to speak.
With eCommerce there is also more encouragement for the individual or small business to sell goods at an affordable rate. Before the internet became widespread a person wanting to setup a shop would have to pay for the premises and expensive ground rent in order to run a viable sales business. Nowadays, an individual with no previous business experience can sell goods through the internet at a low cost. There are template systems which allow users to make a simple sales website with relatively small price tags (eg £20 per month). Third party marketplaces such as eBay and Amazon allow users to sell products through their site with little or no upfront costs to be paid.
With the growth of eCommerce, the gap between individuals and professional sales businesses has been bridged, allowing a greater number of people to join the market who would not normally have the opportunity to do so.