November 18, 2019 E-Commerce

Is E-commerce extremely important for your business?

November 16, 2019

To begin with, it should be noted that the sphere of eCommerce is much wider than the standard representation of it. It is not only the sale of goods or services via the Internet: you can earn on the percentage of transactions, data exchange, etc.

In addition, online commodity-money interactions have an extremely rich history, the roots of which go back to the middle of the last century. Today we will understand what e-commerce is, consider its types, categories, as well as advantages and disadvantages.

Definition of the term

E-commerce is commonly referred to as a business process (more broadly, the economic sphere) that includes trade or money transactions conducted through computer and electronic networks.

Back in the 1950s, American Airlines, in partnership with IBM, began to develop a unique system that automates the booking of seats in aircraft. The system exists to this day, is called SABRE – in due time it has essentially facilitated air flights for passengers, helping to orientate in tariffs, directions, etc. Today, SABRE uses more than 350,000 travel agencies around the world, 400 airlines, 100,000 hotels, 25 car brands, and 14 cruise routes.

In 1971-72, the famous ARPANET, a computer network developed by the U.S. Department of Defense in the event of nuclear war, was used to organize sales and purchases between students of the Stanford Artificial Intelligence Laboratory and the Massachusetts Institute of Technology. The monetary relationship produced through this network is one of the prerequisites for eCommerce. In 1979, English inventor Michael Aldrich demonstrated the first online shopping system that consisted of simple transactions between buyers and sellers.

Over the past two decades, the eCommerce market has been developing particularly rapidly, driven by the explosion of modern technology, the widespread availability of the Internet, the spread of social networks, and the evolution of Web 1.0 into Web 2.0.

eCommerce categories

Traditionally, e-commerce on the Internet is divided into three groups by consumer segment: B2B, B2C, and C2C. Some people name two more categories: B2A and C2A. Let’s consider all 5 types of eCommerce.

1. B2B: “Business for business”. The point is simple – one company sells something to another company. The Internet here is able to significantly optimize the processes: to speed up operations, relationships more transparent. Example – before your eyes.
2. B2C: “Business for the customer. Here, too, everything is obvious. The company sells directly to an individual. Often this format is used to sell goods (Customer Prices Suite extension for Magento 2 would be useful for your eCommerce in this case), sometimes – services (learning English through Skype, for example). This is where traditional online stores fit in, as well as a new trend – social trade (finding clients and selling in social media).
3. C2C: “Consumer for the consumer”. An interesting model involving trade relations between two people, none of which can be called a businessman. The resources that provide this opportunity are similar to something between a flea market and a classified newspaper. The most common format is online auctions. Buyer, they allow you to save money, selling – to sell unnecessary, pounding the money.
4. B2A: “Business for the administration”. The specific format, the essence of which is the interaction of the entrepreneur with some state structures (local, federal). An example is a tender or some bureaucratic operations that can be automated via the Internet.
5. C2A: “Client for administration”. The most exotic type of e-commerce on the Internet, actively developing today. The essence of the interaction of state organizations directly with people using certain services. The sphere is more of a social one. An example is the interactive portals of public service centers that exist in many cities.

Types of businesses

Western researchers identify 8 categories of e-commerce on the Internet.

1. Large retail business. Carry out direct internet sales. These companies have established delivery, payment processes, etc., before automatism.
2. Multifunctional online portals. We can call them aggregators of goods and services. Give the client access to the assortment of different brands, charge a commission or a fee for accommodation from the seller.
3. Narrowly specialized portals, occupied only in one sphere of the market.
4. Internet auctions. Allow the seller and buyers to “meet” to make a deal.
5. Cyber sites – are engaged in the distribution of intellectual and digital property (films, programs, literature).
6. Resources of collective purchases, wholesale discounts – unite people who want to save money by buying a large batch of goods for many participants.
7. Intermediaries for billing and repayment: utilities, insurance, medical care, for a certain percentage.

Usability in eCommerce

There are at least three useful tips or even trends, that will increase the usability of your resource.

1. Large images
   Quality visual content can be much more expressive than hundreds of words. A large image of a product (or anything related to it/its use) will reveal significant details of the offer, raise awareness of visitors – therefore, the level of their satisfaction. In short, correctly selected visual content can bring you a large additional income.

2. Сredible feedback
   Reviews are a very useful tool. The visitor can find answers to their questions without undue effort by looking at the opinions of other members of the same target audience. If you decide to post feedback on your resource, make sure that visitors see information about the author: age, gender. Or specific assessments of product characteristics: convenience, price, etc.

3. Discounts, promotions, coupons
   Stimulating sales by means of coupons, discounts is an old trend that goes almost out of the dawn of online shopping. Offer the client a discount for a birthday, for a certain amount of purchase, to coincide with a holiday or even give it to new users after registration – the possibilities are limited only by fantasy.

Pros and cons

Positive aspects

• Coverage of the audience, large scale;
• Optimization of standard costs;
• Opportunity to quickly bring a new product to the market;
• Personalization;
• Wide assortment and low prices (to consumers);
• Low cost of digital products.

Negative sides

• Until now, it is sometimes difficult to “legalize” online business and comply with all the requirements of the state;
• A factor of distrust among consumers who cannot “touch” the product.
• Widespread use of electronic fraud.

By the way, it is to increase the confidence of the audience working on many aspects of online marketing – and business as a whole. In short: quality service, social evidence, content marketing – all this should strengthen the trust of your customers to the brand.

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