E-Commerce – The Ultimate Revelation
Electronic Commerce commonly known as E-Commerce is the selling and buying of goods and services, or the delivery of funds or data, through the medium of an electronic network, mainly the internet. Transactions of these businesses mainly occur either as business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer or consumer-to-business. The terms e-commerce and e-business are mostly used interchangeably. The e-tail is a term which is also used many times as a transactional process that makes up online retail shopping.
Since the last 10 years, the utilization of e-commerce platforms such as eBay and Amazon has contributed to rapid growth in online retail shopping. In 2007, online retail shopping accounted for 5.1% of total retail sales; in 2019, e-commerce made up 16.0%, in 2025, this will be around 23.6%.
History Of E-Commerce
1990: WorldWideWeb Launches
The web browser launched, which became the catalyst for online shopping as users were getting what they were looking for and retailers were able to reach a broader audience.
1994: World’s First Secure Online Transaction was Made
10 years after the release of the Electronic Mail, Netscape 1.0 releases. Featuring a protocol “Secure Socket Layer (SSL)”, it keeps both the sending and receiving files of online transactions encrypted and safe from hackers. Many third-party credit card processing companies launch credit cards shortly after as the internet becomes a commercial place.
First secure online transaction by using encryption of Secure Socket Layer(SSL) takes place on 11th August, 1994, when Phil Brandenberger orders the Sting CD Ten Summoners’ Tales through the medium Net Market, as reported in the New York, America Times story “Attention Shoppers: Internet is Open.”
1998: PayPal Launches
Originally known as Confinity, PayPal is the tool used for money transfer. By 2000, it merged with Elon Musk’s banking company which marked its rise in popularity.
1999: Global E-Commerce reaches $150 Billion
At this time the e-commerce market reached a total of $150 Billion which was a big achievement but still this figure was to be grown more.
2005: E-Commerce Makes a Comeback
E-Commerce comes back from the big time, & Cyber Monday i.e. the Monday after Black Friday which is launched to accelerate many online holiday purchases. In addition, Amazon launched Amazon Prime, giving their users free 2-day shipping within the United States of America and expedited shipping of products of a consumer expectation. Today, there are around 142 million Amazon Prime members only in the United States of America.
2017: E-Commerce Remains Unstoppable
As mortar-and-brick sales reduce, global e-commerce transactions fly up, by making $29.267 trillion, including $25.516 trillion for B2B(business to business) transactions and $3.851 trillion for B2C(business to customer) sales.
2020: The COVID-19 Boost
Due to the coronavirus pandemic, many people were forced to shut down their shops, and lockdowns make it worse which keeps many citizens quarantined at home. To buy essential goods, people use online shopping. According to IBM’s U.S. Retail Index, Covid-19 pandemic accelerated the shift from stores to digital retail shopping by nearly half a decade.
Working Of E-Commerce
The E-commerce sector is totally about the internet, where consumers can utilize the online stores to browse through, purchase & order goods and pay online or services via their own internet-enabled devices like mobile phones & others.
When the order is placed through the internet, then the customer’s browser will establish a connection with the server hosting the online store websites. After this information about the order will be verified on to the central computer called as the order manager – then forwarded to databases that handle different levels of inventory, a merchant system that operates information of payment using different applications like PayPal & a bank computer before circling to the order manager.
To make sure that stored inventory and customer funds are adequate for the order to be processed this process is followed. When the order is validated, the order manager will acknowledge the store’s web server, which will then show an alert notifying the customer that their order has been successfully processed. The order manager will then transfer the order data to the warehouse, to dispatch the service or product successfully to the customer. At this point, tangible or digital products may be given access to the customer.
Platforms that entertain e-commerce transactions may involve online marketplaces that sellers easily sign up for, like Amazon.com; SaaS(software as a service) tools that permit customers to ‘rent’ online store infrastructures; or open-source tools for organizations to use in-house development for the management.
Types of E-Commerce
Business-to-business (B2B) e-commerce is known as the electronic interchange of products, services, or information between businesses rather than between consumers and businesses. Examples involve online directories and product and supply exchange websites. In 2017, Forrester Research showed that the B2B e-commerce market will be a market of $1.1 trillion in the U.S by 2021, accounting for 13% of all B2B sales.
Consumer-to-Consumer (C2C) is an e-commerce process in which consumers sell or buy products, services, and information with consumers only online. These transactions are commonly managed by a third-party that provides an online platform where these customers come for the trade.
Online auctions and classified advertisements are the best examples of C2C platforms, OLX is one of the platforms where these customers meet with each other.
Conusetions. This is just the opposite of the traditional commerce model.
A well-known example of a C2B platform is a market that trades royalty-free media, images, design, & photographs elements, like stock. One good example would be a job board.
Business-to-administration (B2A) is the transactions operated online between public administration and companies or various bodies of government. Many divisions of government use e-services or goods, especially when it comes to legal documents, registers, fiscals, employment, & social security. Businesses can provide these products electronically. B2A services have grown considerably in the past few years as investments have been made in e-government by the governments of many countries.
Consumer-to-administration (C2A) is the transactions operated online through individual customers & public administration or the bodies of government. The government sometimes purchases products or services from citizens of their country, but individuals frequently use electronic mode of purchasing products or services in the following aspects:-
- Education. Disseminating information, online lectures, etc.
- Social security. making payments, Distributing information, etc.
- Taxes. making payments, filing tax returns, etc.
- Health provides information about Making appointments, illnesses, making health services payments, etc.
Advantages and Disadvantages of E-Commerce
There are multiple advantages of using e-commerce and some of them are specified below:
- Availability – E-commerce sites are available 24×7, making visitors browse and shop at any time, anywhere. All the Brick & mortar businesses used to open for fixed hours and may even close on a particular day or for more than 1 day.
- Speed of access – While shoppers in a physical store can be slowed because of so many customers in his or her shop, e-commerce sites run quickly, the only main factor that is involved in the speed of e-commerce is the speed of the internet. Product pages and shopping cart pages load very fast, less than a second. A transaction in e-commerce can be slow but it’s still faster and even more secure in some cases as compared with physical stores.
- Wide availability – Amazon’s slogan was “Earth’s Biggest Bookstore.” They could claim this as they were an e-commerce site and not a physical store that had to keep each book on its shelves physically. E-commerce allows many brands to develop a wide range of products available online, which are then transported from a warehouse only after the online payment of that product is made by the consumer. Customers will likely have more satisfaction in getting what they want.
- Easy accessibility – Customers shopping at a physical store may face different challenges or a hard time. In e-commerce, visitors can check product category pages and use the site search bar to find the desired product quickly.
- International reach – Brick and mortar businesses sell to customers who physically go to their shops. With e-commerce, businesses one can sell to any type of consumer who can use the web. E-commerce has the potential to grow a business’ customer base.
- Personalization and product recommendations – E-commerce sites can monitor visitors’ searching, browsing, and purchasing history. They can use this history in personalizing the products for each customer or personalized product recommendations and obtain valuable insights about target markets.
The perceived disadvantages of e-commerce sometimes include limited customer services, consumers unable to physically analyze the product before purchase & wait time for product shipping.
- Limited customer service – In e-commerce the services offered to customers are limited.
- Not being able to touch or see – In online shopping, we can only see the attractive images of products but we can not physically touch or check that product which is the biggest disadvantage of online shopping.
- Security – Skilled hackers can develop authentic-looking web pages that claim to sell well-known products. Through these websites, hackers can get payments without providing any products to the customer.
E-commerce is managed & organized using different applications, like online catalogs, Email, and shopping carts, Electronic Data Interchange (EDI), computing, files, web services, transfer protocol, mobile devices, or any other devices. This includes B2B activities & outreach, like using email for advertisements, generally viewed as spam, to customers and other business prospects, sending e-newsletters to subscribers & SMS texts to mobile devices. Most of the companies now try to entice customers directly online, using different tools like social media marketing, targeted advertisements, digital coupons, and many others.
The uplift of e-commerce has forced IT personnel to think beyond infrastructure design and maintenance to think about multiple customer-facing aspects, like consumer security and data privacy. While building IT systems and applications to accommodate e-commerce activities, personally identifiable information privacy rules, data governance-related regulatory compliance mandates, and information protection these protocols must be followed by the developers.
E-Commerce Platforms and Vendors
An E-commerce platform is a tool which is used to manage a business in e-commerce. E-commerce platform options are there for clients ranging in size from small to large business enterprises. These e-commerce platforms involve online marketplaces like eBay, Flipkart, and Amazon, which need signing up for user accounts, and little to no IT implementation. One more model of e-commerce platform is SaaS, where the owners of the store can ‘rent’ space in a cloud hosted service that doesn’t need any on-premises infra or in-house development. All other e-commerce platforms can come in the shape of open-source platforms that need a full manual implementation, hosting environment cloud or on premises, & maintenance too.
Few examples of e-commerce marketplace platforms includes:
- Walmart Marketplace
Providers giving e-commerce platform services for clients hosting their online store involves:
- Salesforce Commerce Cloud (B2B and B2C options)
- Oracle SuiteCommerce
The Future of E-Commerce
The future of eCommerce is bright! In the United States of America, eCommerce sales are expected to overtake in-store sales by the year 2024. However, as heritage wholesalers come online and global retail bosses like Walmart explore their eCommerce initiatives, digital competition will grow. In addition, competitors in categories of products that are not in-demand online, such as health, household essentials, and personal care items, will be available online soon.
To grow & survive, online retailers will require to know their niche or find some other way to compete in the market.
Along with offering shipping & secure storage, The Fulfillment Lab offers an awesome experience for customers. Think about it once:- physical stores, Without godowns e-commerce retailers do not have a touchpoint with customers until they get their package delivered. So, the shippers are required to be memorable.
This is possible, due to our fulfillment marketing, permitting e-commerce retailers to tailor the entire experience to their customers. This helps customers in:
- Elevate the customer experience
- Differentiate from competitors
- Increase brand awareness and recognition
- Impress current customers and attract new ones
- Create positive word-of-mouth and social proof
- Drive additional revenue.
We’ve looked at all the important aspects of e-commerce, including different types of e-commerce, the history of e-commerce, how e-commerce has grown over the years, and its effect on customers, and how business is organized and managed.
With Good comes Evil & same in e-commerce but the future has various opportunities for even better growth in this domain.