In today’s modern commercial era, relying solely on a physical storefront is no longer a viable strategy for most businesses.
This is when e-commerce comes into play. E-commerce is when you sell goods or services to your customers or other businesses online. Consumer preferences have shifted, with a growing inclination towards the convenience of shopping from the comfort of our homes. What was once considered a competitive advantage has evolved into an essential component for the survival and success of businesses in today’s digital landscape.
Basics of E-commerce
To go into more detail, e-commerce, short for “electronic commerce”, is when you sell your product on an online platform. Most businesses will use e-commerce and a physical store, but some businesses have decided to focus on using e-commerce to sell their products.
The main two types of e-commerce are:
B2C – This is business to customer, where you sell directly to individual consumers, normally in small quantities. These are often impulse purchases. The prices of goods are fixed at a certain rate.
B2B – This is business to business, where you sell to other businesses in large quantities. These can be long and thought-out purchases. The price will have a fixed rate but will be lowered with greater purchases.
C2C – This is customer to customer, where one customer will sell to another customer in small quantities. These are often impulse purchases. The prices will not have a fixed rate and have room to move.
It is important to understand the differences between these types of e-commerce as it is crucial for businesses to tailor their e-commerce strategies effectively to their specific target audience.
Benefits of e-commerce
E-commerce offers a multitude of benefits that have revolutionised the way businesses operate and consumers shop. The benefits are so essential to a modern business that it is impossible to ignore, for example:
24/7 Availability – Online stores operate around the clock, providing customers with the flexibility to shop at any time, increasing your sales window.
Low operating cost – Operating an online store often involves lower overhead costs compared to maintaining a physical storefront, including rent, utilities, and staffing.
Personalization – E-commerce platforms can collect and analyse customer data to provide personalised shopping experiences and targeted advertisements and discounts.
Security – Online buying is evolving. Such technology as tokenization – the future of consumer protection – is based on tokens first developed by Visa, which reduce the risk of theft of transaction data by replacing payment card data with a unique identifier (token) and adding a unique code (cryptogram) for each transaction.
You may also have seen Click to Pay icons on online websites, which means you can enjoy a secure checkout experience—all without having to remember a password. Click to Pay allows consumers to make online payments without repeatedly entering card numbers and passwords. The functionality of this button is designed to meet advanced technologies, including device verification and biometrics to protect transactions. Fast, simple digital checkouts reduce friction, which can help to lower cart abandonment and increase conversions.
Analytics and Insights – E-commerce platforms can offer analytics tools to track customer behaviour, sales trends, and website performance, helping businesses make more data-driven decisions.
The challenges that come with e-commerce
While e-commerce contains an array of benefits, it does have some challenges.
For example, it can be quite hard to manage an e-commerce operation and a physical store at the same time, technical issues can slow down or potentially stop business for periods of time, and completion can be tough as many other businesses are trying to get the attention of online shoppers.
If you are thinking about setting up an e-commerce store, rest assured that these challenges are manageable with the right strategies and dedication.