Whatever happened to disintermediation?

Two key questions were discussed in the evolution of electronic markets over the years. How will future traffic on the World Wide Web and Internet affect each segment of an industry value chain? Will electronic markets provide new and innovative areas of opportunity for retailers, producers, and consumers as well? Electronic markets are unique virtual organizational forms and evolve through the automated mediation of market transactions. Consequently, we observe that traditional industry chains potentially lose their relative importance since business can be carried out faster and often with more and new opportunities. The developments have shown that consumers profit from an increased access to a vast selection of goods, which in turn will cause a restructuring and redistribution of profits among the stakeholders along the virtual value chain. There will also be an evolution from single-source sales channels to electronic markets. In particular, electronic markets may lower coordination costs for producers and retailers, lower transaction and distribution costs, or eliminate retailers and wholesalers entirely, as consumers directly access manufacturers. In the same way as electronic markets make disintermediation possible, disintermediation may suggest the deployment of electronic markets as they function as a form of eventual reintermediation in this context. Consumers’ full access to the market will absorb an issue that policymakers need to explore.