Coping with a swirl of choices

In the more likely scenario, "it would be Ford Motor Company selling you a car directly, not CarsDirect.com," he adds. Existing banks are likely to gain customers by offering free electronic checking, making business increasingly difficult for online companies like CheckFree.

This reengineering of existing companies takes time, even in the best of circumstances. Throw in bureaucratic resistance and the prospects of slimmer profits for some players, and industry transformation can slow to a crawl.

Take real estate. Mr. Atkinson is studying how the industry could halve the transaction costs for buyers and sellers. For example, buyers who search online first typically spend one-third the time with a real estate agent that non-Internet buyers do, he says.

That's one reason eRealty.com offers buyers a 1 percent rebate when they use one of its agents. (Sellers also get a break.) But more can be done to shave costs, Atkinson insists.

For example, if property records were available online, title searches could be done quickly by computer and title-insurance costs would be slashed. Home buyers would like that. But the title companies, which make their money searching paper records and issuing insurance policies, understandably aren't too keen on the idea. So change is slow.

Every business could use a little Internet spark, even the coffin industry. Online casket companies offer their wares for 40 percent to 60 percent less than traditional mortuaries charge.

But the latter are fighting back. In some states, they've gotten laws passed that keep online outfits from setting up stores (although they can still sell online). Many mortuaries effectively have frozen out the online supplier by offering rebates to families who choose to buy a casket from them.

Industry resistance "is as strong as ever," says Kevin Gray, president of Direct Casket Inc., based in New York and California. So he's taking a new tack: cut-rate funeral services that offer similar savings to his caskets.

Over time, of course, such obstacles will likely fall to competition, new industry standards, or government action. And consumers will reap the benefits. In fact, their position in the economy is already changing and becoming more powerful.

"The consumer is now a coproducer," Atkinson says. For example: An individual booking an airline flight online is really doing what a reservation agent used to do. Since the airline no longer pays a salary or commission for someone to do that work, it can pass on some of that savings to the consumer in the form of a discounted fare.

Expect more such online discounts as retailers expand consumer choice. Of course, too much choice has its drawbacks. "You are so overwhelmed with choice, you become a consumer surfer," warns Mr. McKenna. Add the tidal wave of unsolicited e-mail (known as spam) to the already high level of junk mail, TV ads, billboards, and so on and the effect can be crushing.

"There's a constant barrage of messages trying to get your attention and convince you of something," McKenna says. By one estimate, the average individual is exposed to 8,000 to 10,000 commercial messages a day.

Call it New Economy smog – one of the unintended consequences of the revolution now taking place on a store shelf near you.

• This is the second installment in an occasional series. Part 1 ran Sept. 9.

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