Cybersecurity threats — hacking, data breaches and fraud can damage customer trust and lead to fines
High competition — online markets are saturated and price comparisons are instant
Logistics costs — delivery and returns can be expensive, especially for heavy or fragile goods
Website downtime — technical failures can mean lost sales and reputational damage
Cannot try before buying — high return rates for clothing, footwear and furniture
Digital divide — some customers cannot or will not shop online
Digital Marketing
Social Media Marketing
How businesses use it
Organic posts — build brand awareness
Paid advertising — targeted by age, location, interest
Influencer partnerships — reach niche audiences
Customer engagement — respond to reviews and comments
User-generated content — customers share their experience
Advantages over traditional ads
Lower cost than TV/newspaper ads
Highly targeted — reach exactly the right audience
Measurable — track clicks, likes, conversions
Two-way — customers can interact directly
Viral potential — great content shares for free
Advanced Technology
Big Data, AI & Digital Communication
Big Data
Massive datasets from customer behaviour
Used to predict trends and personalise marketing
Helps manage stock levels and reduce waste
Powers recommendation engines (Netflix, Spotify)
Artificial Intelligence
Chatbots for 24/7 customer service
Fraud detection in payments
Dynamic pricing (adjusting prices in real time)
Image recognition in quality control
Key concern: Collecting and using customer data raises issues of privacy and data protection under GDPR. Businesses must handle data lawfully and transparently.
Evaluation
Overall Impact of Technology on Business
Productivity gains — automation reduces labour costs and speeds up production and admin processes
New markets — e-commerce opens global markets that were previously inaccessible to small businesses
Disruption — traditional businesses (e.g. high-street retailers, travel agents, taxi firms) face existential challenges
Skills gap — businesses must invest in training as digital literacy becomes essential for all roles
Investment cost — keeping up with technology requires significant ongoing capital expenditure
Practice Question 1 of 3
A small clothing boutique sells exclusively via Instagram and its own website. A customer in Japan buys a dress at 2am. Which benefit of e-commerce does this best illustrate?
ALower cybersecurity risk
B24/7 global trading without physical stores
CAbility to show customers the product in person
DLower delivery costs to international customers
Correct: B. The sale happening at 2am to a customer in Japan illustrates two key e-commerce benefits simultaneously: 24/7 trading (outside normal business hours) and global reach (selling internationally without a physical presence in Japan). This would be impossible for a traditional bricks-and-mortar shop.
Practice Question 2 of 3
When a business uses algorithms to recommend products based on what a customer has previously bought, which technology is being used?
ASocial media influencer marketing
BBig Data and personalisation
CAbove-the-line advertising
DBatch production software
Correct: B.Big Data involves analysing large sets of customer behaviour data. When this drives product recommendations (as Amazon or Netflix do), it is personalisation powered by Big Data analytics. This increases the chance of additional purchases and improves the customer experience.
Practice Question 3 of 3
A supermarket launches an app with a loyalty card, personalised offers and online delivery. A rival without an app loses customers. This best illustrates:
AHow technology can create competitive advantage by improving customer experience
BThat technology always reduces costs for businesses
CThat B2B e-commerce is more profitable than B2C
DThat all businesses must operate exclusively online to survive
Correct: A. The app gives the supermarket a competitive advantage through improved customer experience (personalised offers, convenience of delivery). This shows how technology adoption can drive customer loyalty and market share. It doesn't mean technology always cuts costs (it often requires investment) or that all businesses must be online-only.