E-commerce

Even in the very first days of the internet, e-commerce emerged with quick success. E-commerce is online buying and selling (electronic commerce), done via email and the web. This can be B2B (business to business) or B2C (business to consumer). E-commerce has developed a great deal over the past 20 to 30 years. In the beginning, it was just B2B online sales, with B2C shopping systems coming along later.

The popularity of ecommerce has led to demand for easy online payment systems like PayPal and Amazon’s one click. Ecommerce has revolutionised the customer experience. Since the introduction of smartphones, e-commerce has thrived even more.

So, how has ecommerce changed the transaction landscape?

There are many advantages for businesses that have arisen from ecommerce. Businesses can avoid the disadvantages of having a bricks-and-mortar store. They save money on rent as they do not need a shop floor in addition to warehouses, and they do not need to rent in central business districts where rent is higher. They also save money on staff as they do not need anyone to handle customers in store - the web page itself acts as a customer service tool.

There are also no geographical limitations. Businesses can sell to anyone, anywhere – not just those local to them. Upselling is more effective as web pages can direct customers to items that are similar to what they are purchasing/have purchased, rather than the usual tactic of trying to sell half price sweets at the till.

Companies can gain a good reputation from ecommerce as online reviews are common to online shops. If customers are positive about their product, then other consumers are more likely to buy. This is also a benefit as it encourages companies to produce good quality products. Plus, some products can go viral because of customer opinions – much like the recent rise of ‘send your enemies glitter’.

Anyone can set up online retail with ease, meaning that the selling of products to the consumer market is accessible to anyone. This opens up the market and allows more than just highly wealthy companies to sell to interested consumers.

Ecommerce has also benefitted consumers. With social media and reviews, companies have been forced into increased accountability. Customers can now talk in a shared space about products, meaning that companies are accountable to their mistakes and must rectify them in order to remain reputable.

There are lower prices for consumers due to competition, not being limited by geography, and lowered rent costs for the companies being passed on. There is no queueing in ecommerce – no waiting around. Just order what you want and it will come to you.

There is also the opportunity for easy price comparison, and without ‘shoe-leather costs’ – meaning you can shop around without having to physical go to the shops and using up your time getting there. Price comparison in ecommerce is an easy process.

Ecommerce fits around our modern lifestyles – many people do not have the time to wander around the shops. Ecommerce is not limited to opening hours or how far away the shops are. You can shop anytime, anywhere. You do not have to physically be in the shop to buy what you need.

Consumers are also given more choice of products because they can buy from anywhere on the global market. They get more choice in what to buy as they are not limited by location and physical shops.

Smartphones have allowed consumers unprecedented uses for ecommerce. While watching TV, or in the cinema, you might see an advert for something you want. Instantly, you can pick up your smartphone and buy it! No need to wait around, no delay in which you could forget. Smartphones have allowed a wave of new ecommerce.

But, there are also some drawbacks to ecommerce. We lose the opportunity to experience products in real life before we buy them. This may mean that sometimes, we do not really know what we are buying, leading to disappointment when the product arrives. This consumer dissatisfaction is bad for consumer and business alike.

A problem unique to ecommerce is that you lose custom if the website crashes. This can be frustrating for the consumer and the business if their website fails. This could be anything from a bad re-direct link to issues in the payment system, and can cause a range of problems that reduce sales.

Ecommerce is also less secure than real world purchasing. There is no guarantee that you will receive what you expect, or that you will receive your purchase at all. While there are laws in place to protect you from online fraud, the problem still persists.

Ecommerce has led to the loss of some stores that could not compete in the online world, but previously did well in high street retail. An example of this is stores selling books, CDs, DVDs and games (like HMV). These stores have suffered from ecommerce as they cannot compete with the low prices of online-only stores like Amazon.

However, many high street stores have sought solutions that help to combine online and offline commerce. They find ways to link their high street stores to their websites. Stores like the Apple Store manage to draw in customers despite their ecommerce routes. They make sure that the in-store experience cannot be replaced by online shopping, and ensure that the online and offline stores complement each other.

Ecommerce had changed the world, mostly for the better.