Situated Electronic Commerce: Toward A View as Complement Rather than Substitute for Offline Commerce

Abstract

The adoption and use of electronic commerce by many firms was shaped by a number of assumptions about how it adds value to economic exchange. Many of these assumptions have direct relevance for the interaction between e-commerce and geography in that they emphasized the ability of e-commerce to transcend distance and reach into markets without physical presence. The belief in this ability was based on the immediacy of electronic transmission and the distance-insensitive tariffing applied to packet-switched IP networks, the presumed efficiency of transaction automation over in-person interaction, and the view promulgated by network economists that electronic commerce is highly subject to network effects that reward rapid growth in the number of users. As a result, many firms entered the online arena without adequate attention to the role of geography in shaping commercial exchange patterns. This paper argues for a view of e-commerce as situated within a particular social and geographic context, enabling services that complement a firm's physical location, work in concert with other modes of interaction and exchange, and emphasize pre-existing exchange partners. A review of business- to-consumer and business-to-business electronic commerce research is provided in support of this situated perspective.