E-commerce has been around for a long time. It started with Phil Brandenberger, a man who purchased the first online product - “Ten Summoner's Tale” studio album from Sting in 1994. Twenty seven years later, in 2021, online commerce took over the market. It is estimated that e-retail sales worldwide will soon grow up to 4,8 trillion dollars. E-commerce is progressing so significantly that it may soon be serving 2.14 billion people.
It simply became an integral part of our life and a significantly more profitable business model than brick-and-mortar stores. This article will show you the most significant of online shopping, from a customer, as well as business point of view.
What is E-commerce?
Other terms for e-commerce include electronic commerce, internet commerce, or online commerce. It refers to all activities that involve buying or selling goods and services online. Simply, it has the same concept as brick-and-mortar stores, only all the transactions and interactions happen through the internet. You can purchase various products, from clothes or sports equipment to software solutions and other services.
E-commerce does no longer happen mostly on laptops. Nowadays, mobile devices are in the lead. This year, mobile commerce is expected to cover more than half of all online sales activities.
Important note: Don't confuse e-commerce with e-business, since these two terms are not synonyms. E-commerce includes the transaction of products and services solely, while e-business covers all aspects of internet business operations.
#1 B2C - Business to Consumer: We put this model first since it is the most popular one. In the case of B2C e-commerce, sales happen between business and consumer. For example, if you buy swimwear via Shein, you just made a B2C e-commerce purchase.
#2 B2B - Business to Business: It defines a model where a business is selling either products or services to another business. CloudTalk counts as a B2B e-commerce model since we offer software solutions to other companies.
#3 C2B - Consumer to Business: Simple model. An individual person sells services or products to a company. Here, we can mention freelancers, such as writers, photographers, etc., but, for example, also influencers, promoting branded products on their channels.
#4 C2C - Consumer to Consumer: This model refers to one individual person selling a product or service to another individual person through the internet. For example via platforms like eBay or Etsy.
#5 D2C - Direct to Consumer: The newest e-commerce model, where a brand sells directly to their end customer without going through distributor, wholesaler, or retailer. A popular example is subscriptions or selling via social platforms, such as Facebook, Instagram, or Pinterest.
Yet, in this blog, we will be talking solely about the first two models - B2C and B2B.
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The Advantages of E-commerce For a Customer
E-commerce ensures customers can find everything needed in one place, without a necessity to even get up from the couch. This is probably one of the greatest advantages of online shopping. Why walk among store shelves and search for products when all you need is a couple of clicks from you?
Here is our selection of the most significant advantages e-commerce brings to customers:
Choose From Wide Range of Goods
E-commerce allows customers to choose a product or service they want, from any supplier, anywhere in the world. You have a much wider choice than in brick-and-mortar stores. And the freedom to browse without any stress or hurry is priceless.
You can also get a big variety of products since there is no space limitation with e-commerce. The traditional store has boundaries that allow it to offer only a limited quantity of goods.
However, e-commerce stores may have their limitations elsewhere. Although you can choose from a much higher number of products online than offline, it does not necessarily mean that the online product is actually in stock. If it isn't, you have to wait for a few days.
Enjoy Simplicity and Comfort
Customers can buy any product from any e-commerce in the world without having to leave their workplace or home. Due to bad weather, economic and health situations, or any other reason, many people cannot go shopping. A great showcase is a Covid19 pandemic when brick-and-mortar stores were closed for months.
E-commerce is convenient for buying goods or services without creating physical limitations. It requires just a few clicks from the comfort of your home to gain the merchandise.
There is also no need for cash. You may simply fill in credit or debit card details and make an immediate payment.
Products offered over the Internet are generally cheaper than those in the shops. So, you can save your money. Costs incurred by a provider of products or services in cooperation with an intermediary are paid by the customer. When there are no middlemen, the customer may not have to spend that much.
Saving time is one of the major benefits of e-commerce. Customers can order anything you need online, even groceries to cook. E-shops are open 24/7/365, so you can shop at any time. There is no issue with ordering in the evening or even during the night.
The period required to choose, buy, and pay for an online product is 15 minutes or less. Products are often delivered within a maximum of one week, but it can be days or hours, depending on a sort of service. If you order goods that are heavier, the delivery person will bring them to your doorstep.
Get Detailed Information
The Internet is used as the main tool for making e-commerce transactions. It allows customers to search for product information, compare prices and benefits and ultimately evaluate whether it is really worth the money.
Everything that you need for making an informed decision is literally there, on the tip of your finger - reviews from other users, tools comparing websites or prices, product descriptions, usage videos, etc.
There is also warranty information that contains product descriptions and other details. All customers therefore may be fully aware of the conditions before purchasing the product. This way, a change of any dispute regarding guarantees or other matters drops to minimum.
To put it simply, with e-commerce, you can find all the product details online while goods that are physically located in the store may not have this option.
You can also modify their orders online and track the delivery status. If there is any doubt about product handling, you may contact the company, for example through tools like Live Chat.
Advantages of E-commerce For a Business
There are countless of them. From less financial investment to worldwide selling possibilities, e-commerce is a huge deal in the world of business.
Let's go through the most significant benefits that online sales can bring to your company.
#1 Lower Your Costs
Saving finances is definitely one of the biggest benefits of e-commerce for any business.
When you open a brick-and-mortar store, you may need thousands of dollars. You pay for a space, a rent, maintenance, stock and various services. Not mentioning store signs, inventory, sales equipment, store design, etc. Many times, the costs are so high that it simply doesn't pay back the money you invested. If you don't receive enough profit, there is no ROI.
E-commerce stores don't require any of the above mentioned items. It needs significantly less investment, which makes online sales a great opportunity also for individuals and small scale sellers. If you are just starting with e-commerce, you can use hosted solutions, such as Shopify to create an ecommerce website. All functions are already there, you just need to customize the information.
A lower need for staff members is another benefit of e-commerce that saves money. You can sell by yourself or, if you need help, here comes additional advantage - all your employees can work fully remotely. That makes it easier to find talents, since they can be located wherever.
#2 Use Affordable Marketing
With e-commerce, businesses save a significant amount of money and time on advertising. No need for printed catalogues. Thanks to the advantages of online shopping, you can truly show off your product - easily, quickly, creatively and affordably. For example, via website videos, pictures, infographics, Google Adwords or social media - either through free organic posts or through paid advertising.
Also, branding is more affordable with e-commerce. Online, your logo can be made by yourself or a professional graphic designer, yet it's still cheaper than manufacturing an actual physical logo.
#3 Collect Customer Data Insights
If businesses wish to achieve an exceptional customer experience, they simply need customers' data. It reveals all their likes, dislikes and needs in order to tailor the best products, services, campaigns, or even exceptional e-commerce customer support.
Online world is a goldmine of data insights that you would never get in brick-and-mortar stores. During purchasing or subscribing to promotional materials, customers provide their name, phone numbers, email addresses, demographic data and more. You may then analyze these data in analytical tools, such as Google Analytics or HubSpot.
This accumulated information can also help with retargeting advertising to attract leads who haven't purchased yet, or to email potential customers that left your store before purchasing, reminding them that their “shopping card” is full.
Note: Even though e-commerce generates an incredible amount of useful data, you should always act ethically while collecting them. Don't forget to keep a GDPR in mind. And if you collect sensitive data, do your best to protect it.
#4 Reach New Customers
Even if they don't always purchase, around 87 % of people start their shopping journey online. They are browsing, reviewing prices, comparing different services and so on. These are all your potential customers.
While brick-and-mortar shops are more or less tight to their location, in case of e-commerce stores, no geographical borders apply, which significantly widens a number of business leads. You can sell to anyone in the world, by a single click on your website.
Businesses may also use different channels for reaching out to a unique audience. On social media, you have a chance to find a whole new demographics. These leads would probably never reach your business through a search engine, because they are not actively looking for your product, but they may do so after discovering you on social media.
#5 Make It Easy To Scale Up
A huge benefit of e-commerce - an online store never closes. That allows the profit to rise constantly. It also provides an opportunity to reach those who are too busy to shop in normal store opening hours.
Selling online non-stop is simple. Even though your human customer service agents may be sleeping, sales automation assures that your store works 24/7/365. Any day and any time a customer makes a purchase, automation software sends a confirmation email about placing the order.
Disadvantages Of E-commerce
Although it may seem like the ideal way to get what you need, e-commerce also has its disadvantages that can discourage the buyer, such as:
- Impersonal approach: The customer does not communicate with the seller face to face, which may cause doubts or distrust. Some customers are therefore more cautious when buying over the Internet and prefer personal contact. That way, they can talk to the seller, see the goods, touch them or try them on.
- Additional costs: Another disadvantage of online shopping may be that customers often pay for customer shipping or packaging.
- Longer waiting time: As we mentioned, shopping online means waiting. Customers cannot “walk into” the online store and take the product immediately, as it is in the case of brick-and-mortar shops. Waiting time can take days, but it may also be several weeks, if the product is not in stock.
- Uncertainty: If consumers fall into a trap of unreliable sellers, they can get a product that doesn't match their order or even not receive it at all. Customers may therefore be concerned whether e-commerce is safe.
Just be cautious. If you do business with well-established e-shops and find all information before you make an order, all shortcomings will be eliminated and you will enjoy only the benefits.