Electronic Commerce and the Local Merchant: Opportunities for Synergy Between Physical and Web

Much of the rhetoric about Web-based electronic commerce focuses on its use in reaching global markets. Yet not all businesses can or should target global audiences. The literature on electronic commerce to date does not provide adequate guidance about the ways that local merchants can exploit synergies between their local physical presence and electronic commerce on the Web. In this paper, potential synergies, such as using a combined physical and virtual presence to improve trust, help consumers manage risk, meet diverse shopping preferences, and taking advantage of natural physical-virtual complementarities, are developed. We follow with a brief empirical analysis that illustrates the relative lack of use of these synergies among small and medium sized enterprises having a physical presence in a local market. We conclude that there is a mismatch between electronic commerce rhetoric and the capabilities of many local businesses, and policy makers may need to take a more local approach to electronic commerce in order to prevent it from becoming a threat to local economies.