E-commerce, electronic commerce, online or online commerce:
all these terms refer to the purchase and sale of goods or services using
electronic information technologies. Internet is the basic technology. But
other forms of digital data transmission and processing, such as mobile
telephony, electronic customer databases, or accounting software, are also used
in this field. So what is e-commerce, what are its pros and cons, and what are
the current trends?
Do you want to create an online store? Are you looking for web
development in Pakistan?
What is e-commerce?
In addition to the purchasing processes themselves, e-commerce
includes all of the processes that initiate and process a purchase. An online
store functions as a central sales platform on which potential buyers can browse
the product range and order and pay through a dedicated digital system. An
electronic merchandise management system records the product sold and updates
the stock. An RFID chip tracks the shipping route. Finally, CRM systems allow
you to manage your customer relationship well.
In a narrower definition, electronic commerce is, therefore,
part of E-Business. This includes all automated business processes in which
electronic information and communication technologies are used. The goal of
using these largely automated business processes is to make work more efficient
and increase revenue.
Digital technologies are the basis of electronic commerce.
Suppliers and customers exchange digital data within this framework. Different
technologies can then be involved: the spectrum ranges from simple radio
technology (e.g., Bluetooth) to very complex systems based on artificial
intelligence (AI). In addition to communication technologies via the Internet
and telephony, electronic databases, word processing software, social media or
television as an advertising channel, payment transactions via online banking
services and online banking services are also used. Chatbots for customer
service. This creates a widespread digital infrastructure of wireless or wired
networks. The common denominator is that spatial distances no longer matter.
Sometimes its technologies completely replace physical contact. With
e-commerce, consumers no longer need to visit a physical store or seek
in-person advice.
Characteristics of e-commerce
For businesses, e-commerce aims to optimize sales processes
so that they can generate more revenue. The aim is thus to make all
sales-related operations more efficient and to reduce the associated costs.
Companies have gained new sales channels through the Internet through online
stores, marketplaces (e.g., Amazon), or auction platforms (e.g., eBay). Through
social media, Internet advertisements, newsletters, and automated CRM systems,
merchants can gain new customers and improve their relationships with them with
relatively little effort.
In the field of e-commerce, all channels must be perfectly
coordinated. The electronic technologies used must be integrated as well as
possible into the value chain, that is to say, from logistics to marketing as
well as to customer service. For example, a product advertised on the website must
indeed be in the warehouse to meet the advertised deadlines.
Electronic commerce aims to increase its efficiency. For
example, it speeds up the sales process. Customers can easily browse the range
from their smartphone or personal computer and order at any time.
Computer-aided systems automate processes and thus save time. At the same time,
personnel costs are also reduced. If you don't have your stores, e-commerce
even saves one or more rents. Moreover, distributing offers over the Internet
is much cheaper than sending them by post or hiring someone to give out flyers.
Companies can also open up new markets much more easily and inexpensively, and
in particular, go international.
Benefits of e-commerce
There are several ways businesses can benefit from
e-commerce. Here are some of its great benefits:
Distances overcome: the Internet makes it possible to
prevent traders from being dependent on a fixed point of sale. They can launch
into new sales markets across the United States regions; Although the
distribution of material goods continues to require expansion of logistics
capacities, there is no need to open new sites. The communication facilities
that the Internet offers often reduce some business travel needs. From a
consumer perspective, the advantage of online shopping is that they can choose
from a wide range of products and directly compare quality and price.
Faster purchasing processes: e-commerce allows
purchases to be made without delay. Buyers no longer need to visit a store to
purchase their products. Instead, they can place orders 24 hours a day from
home or any computer or mobile. Dedicated systems immediately send an automated
order confirmation. On the seller side, it is very easy to offer and manage
your services online.
Reduced transaction costs through electronic commerce:
e-commerce can eventually make it possible to avoid the need to rent new shops
and new warehouses. Inventory, cash register, and other systems designed
specifically for managing online stores automatically track inventory and cash
flow. The coordination of the different departments is then facilitated, and
new business models can be developed. To increase their competitiveness, small
and medium-sized enterprises can additionally cooperate with online service
providers: for example, instead of using their online store, they can use the
Amazon Marketplace or the auction platform eBay to partly outsource their sales
and at the same time take advantage of the wide reach of these platforms.
Simple omnichannel and multichannel marketing: If the
situation allows it, it is worthwhile to initiate an online and offline
presence using all the available channels. If you use an online store, social
media, and a full-fledged business, then consumers have more points of contact
to turn to access your offering.
Wide Reach Ads: Social media, blogs, and corporate
websites provide inexpensive ways to draw attention to offers. Companies that are
active on Facebook benefit in particular from the wide reach of this network.
SEO marketing and online ads can be done effectively with an ad budget that is
often much less than traditional ads, such as those printed in magazines or
broadcast on TV. Additionally, online advertising is easier to personalize than
traditional advertising.
Opportunities to be closer to the customer: Social
media allows you to make more personal contact with potential customers and
improve your business image. Monitoring and analysis tools make it easy to
collect personal data and create accurate customer profiles. This makes it
easier to plan advertising campaigns and adapt the range of products to demand.
CRM systems make it easier for you to stay in touch with your customers.
More Satisfied Customers: Customer service by email,
online contact forms, or instant messaging can overcome the shyness of some to
ask for advice. With these technologies, customers can ask questions around the
clock and receive a quick response. Simplifying the processes for placing and
paying for an order significantly reduces the effort of customers and
businesses.
The disadvantages of e-commerce
E-commerce can also present certain drawbacks for businesses
and customers. Much depends on the industry in which you operate and the
capabilities available to you.
Complex implementation: Building a digital
infrastructure takes time and money. Not all small retailers have the know-how
or the human and financial capacities to set up an online store or manage their
social media regularly. There is no point in maintaining a website
intermittently. Also, shipping terms and complaints can be a big drag in online
commerce.
Expertise and work on advertising: To assess how much
you will be able to save costs, it is necessary to consider the industry in
which you work. In highly competitive markets, businesses struggle tooth and
nail to gain attention on the World Wide Web. A simple Google AdWords
advertising campaign is not enough. Additionally, with smartphones and social
media, users' attention spans have become shorter. Search engine marketing
(SEO) requires know-how or sometimes the more expensive support of a
specialized agency. Here, small businesses generally fail to compete with large
businesses.
Increased competition and price pressure: Global
online commerce has increased the number of competitors exponentially. If
supply exceeds demand, there is enormous pressure on companies in their pricing
strategies. Price comparison portals also allow consumers to choose the
cheapest offer with just a few clicks. From the point of view of local businesses,
it is very difficult, depending on the industry, to oppose such price wars and
generate profits.
Lack of personalized advice: Not all online retailers
can offer 24-hour customer service or have the resources to integrate chatbots
into their websites. Unlike the traditional physical store, the customer will
not have a direct contact for advice. Buying advice promulgated by trained
staff is even more effective than those sent by chat. E-commerce cannot
completely replace on-site advice, especially for products and services that
require a lot of explanation and possibly a demonstration, such as trekking
equipment or medical devices.
Undermining own businesses: booming Internet commerce
is at the expense of in-store retailers. New strategies must be developed by
physical stores that are seeing the number of their visitors decrease. We think
in particular of bookstores, which are suffering drastically from the success
of the giant Amazon.
Payment security and data protection: some Internet
users continue to avoid online purchases for security reasons or do not wish to
communicate their data.
Using as many channels as possible, you will inevitably
reach more potential buyers and most certainly increase customer satisfaction.
For an increasingly easy transition between online and offline, you can count
on IoT innovations. Thanks for the example, to beacons based on Bluetooth
technologies, smartphones can receive signals from the shelves of products or a
specific product in a store. An application records these signals and then
provides the customer with detailed information about the products in question.
She may also try to draw his attention to promotions or refer him to products
that meet his preferences (for example, organic food).
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