Consumers as subcontractors on electronic markets

With the Internet, the relation between the consumer and retailers will change dramatically. Customization will mean that retail businesses in electronic markets will need information about the preferences of consumers to alter products competitively. Consumers, in turn, will invest time and energy in establishing relations with certain retailers; retailers will collect and process consumer-derived information easily and cheaply using information technology. The economic literature on transaction costs suggests that, as a result, consumers may become locked into certain relationships with retailers. Consumers may ultimately become dependent subcontractors to retailers.