E-commerce and digital communication have reshaped who a business can sell to and how it talks to everyone who matters to it — but neither comes free of risk.
Back in 3.1.1 you met the idea that businesses operate in a constantly changing environment, and technology was one of the four pressures driving that change. This topic goes deeper into two specific technological shifts AQA wants you to understand: the rise of e-commerce and the growth of digital communication.
Neither is optional to ignore. A business that doesn't adapt to how customers now shop and how stakeholders now expect to be communicated with risks losing ground to competitors that do — but adapting brings its own costs and risks too. What makes technology different from some of the other external influences you'll meet in 3.2 is speed: a change in the law might take years to arrive and be well signposted in advance, but a competitor launching a slicker app or website can shift customer expectations within months, leaving slower-moving rivals suddenly looking outdated.
Crucially, technology doesn't just change how existing businesses operate — it changes who can compete at all. A small independent business selling on an online marketplace can now reach the same national audience as a much larger rival, something that was far harder to achieve through a single physical shop alone.
E-commerce is the buying and selling of goods and services over the internet. For many businesses, it's no longer an add-on to a physical shop — it's the entire business model. Within e-commerce, m-commerce (mobile commerce) refers specifically to buying and selling through a smartphone app or mobile-optimised website, which now accounts for a large share of all online shopping.
The wider market access point is worth unpacking further, since it's the reason so many small businesses have embraced e-commerce. A single independent shop might realistically reach a few thousand local customers; the same shop selling through its own website, or through a marketplace, can reach millions of potential customers across the country, without the enormous cost of opening additional physical branches to do it.
That said, the "24/7" benefit only holds if the technology behind it actually works. Every one of these benefits assumes reliable websites, secure payment systems and functioning delivery networks — when any of those fail, the whole advantage can disappear at once, which is exactly why the drawbacks column matters just as much as the benefits.
Digital communication covers the tools businesses use to exchange information electronically — with customers, employees, suppliers and other stakeholders (see 3.1.4) — instead of relying purely on face-to-face conversation, phone calls or paper letters.
Fast, low-cost communication with customers, suppliers and staff at scale — often automated for things like order confirmations or newsletters.
Public-facing marketing and direct customer service, often in real time, with replies visible to every other customer watching.
Face-to-face style meetings with staff or suppliers without travel costs or time, now standard for many remote and hybrid working arrangements.
Quick, informal updates between employees or with customers placing orders — increasingly used by small businesses to take bookings directly.
Social media deserves particular attention, since it works differently to the other channels here: a customer complaint handled badly over email stays largely private, but the same complaint handled badly on a public social media post can be seen — and shared — by thousands of other potential customers within hours. This is exactly why many larger businesses now run dedicated social media customer service teams, treating the channel as seriously as their phone lines.
It's also worth noting that adopting digital communication isn't automatic for every business — some make a deliberate choice to step back from it, usually because the drawbacks above (misread tone, constant notifications, reputational risk) are judged to outweigh the benefits for that particular brand.
Drag each statement into the correct category for a business adopting new technology.
State two examples of digital communication used by businesses.
Structure guide: two correctly named examples — 1 mark each, no explanation required.
State and explain two benefits to Priya of launching an e-commerce website for Lantern & Co.
Structure guide: state a benefit grounded in the case study (1 mark), explain it (1 mark) — repeated twice over.
Analyse how using social media and email newsletters might affect Lantern & Co's relationship with its customers.
Structure guide: a single developed line of reasoning grounded in the case study (eg: social media lets Priya reach customers directly and immediately with news of new stock → this could rebuild the connection lost as high-street footfall has fallen → encouraging customers to visit her website or shop again → but only if she responds quickly and personally, since poor engagement on social media can just as easily damage the relationship).
Recommend whether Priya should prioritise investment in her e-commerce website or in digital communication tools like social media. Justify your answer using the case study.
Structure guide: a "recommend" question needs a justified judgement — weigh the wider market access an e-commerce site could bring against the lower-cost, faster relationship-building digital communication offers, specifically for a small boutique with falling footfall, before reaching a clear final recommendation.