E-commerce and its future in 2023
Everyone who has entered the world of e-commerce has a lot to learn about this sector. E-commerce is no longer a new trend. However, there are many who do not realize the potential of e-commerce. In this introductory article on e-commerce, we will cover all the essential e-commerce topics and questions every entrepreneur and retailer should know. But before we do that, let’s answer the following key question:
What is e-commerce?
E-commerce, also known as electronic commerce or internet commerce, means the buying and selling of goods or services using the internet and the transfer of funds and data to conduct these transactions. E-commerce is generally used to sell physical goods over the Internet, but it can also be used for any business transaction that takes place over the Internet.
How did e-commerce appear?
The history of e-commerce begins with the first online sale on August 11, 1994: a man sold musician Sting Ten Summoner’s Tales album to a friend via US retail platform NetMarket. This special transaction entered history as the first electronic commerce transaction and showed the world that the Internet was a viable platform for commerce. In the years that followed this development, Amazon and eBay; Then, with the advent of Alibaba, e-commerce gained great momentum and took its present form.
Advantages of e-commerce
There is a reason why e-commerce is growing so fast day by day. The internet has become a basic requirement for daily life and people are now learning to take advantage of the many advantages of e-commerce.
Availability: Apart from outages or pre-planned website maintenance, e-commerce websites are available 24/7, allowing visitors to browse and shop whenever they want. Flexibility this time is the most important reason for the popularity of e-commerce.
Access speed: While shoppers in a physical store may move slowly due to internal density, e-commerce sites prepared with account and bandwidth consideration on both consumer devices and e-commerce sites operate quickly. Product pages and cart pages load in a few seconds or less. An e-commerce transaction can involve several clicks and take as little as five minutes.
Wide Availability: Amazon’s first slogan was “The World’s Largest Bookstore”. They didn’t hesitate to make such a claim because they were an e-commerce site, not a physical store that had to stock every book on its shelves. E-commerce allows brands to offer a wide range of products, which are then shipped from warehouses after a purchase has been made.
Global reach: Traditional businesses sell to customers who physically visit their stores. With e-commerce, businesses can sell to any customer who can access their website. E-commerce has the potential to expand a business’s customer base globally.
Lower cost: E-commerce businesses avoid costs associated with physical stores such as rent, inventory, and cashiers, although they may incur shipping and warehouse costs.
Personalization and Product Recommendations: E-commerce sites can monitor visitors’ browsing, search, and purchase history. They can leverage this data to provide helpful and customized product recommendations. For example; As on many e-commerce sites, they can offer sections like “best sellers” or “customers viewing these products also viewed.”
Ease of access: Customers who shop in a physical store may find it difficult to determine which aisle a particular product is in. However, in e-commerce, visitors can browse product category pages and use the search engine feature within the site to find the product.
Disadvantages of e-commerce
Limited interaction with customers: Without a face-to-face encounter, it can be difficult to understand the wants, needs, and concerns of e-commerce customers. But you can use survey data, customer support communications, and user analytics to understand customer needs. It is up to you to turn a disadvantage into an advantage by using it.
Technological glitches: If your e-commerce site is slow, down, or unavailable to customers, it means you can’t sell. Site downtime and technical errors can damage customer relationships and negatively affect your bottom line.
No opportunity to test or try: Not having the opportunity to try or test a product (especially in the field of physical products such as clothing, shoes, and beauty products) will lead to distrust in customers. This is probably the weakest point of e-commerce, but there isn’t much that can be done about it at the moment.
Types of e-commerce
Classification of e-commerce by related parties
Business to consumer (B2C)
As the name suggests, the B2C e-commerce model represents a transaction between businesses and individuals. B2C e-commerce is the most popular business model among physical and online retailers. Nike, IKEA, and Netflix are examples of companies involved in B2C e-commerce.
Business to Business (B2B)
In the B2B e-commerce model, both parties are companies. In this type of transaction, one company offers a product or service to another. For example; Slack, a communications platform, and Xero, a corporate accounting software, are two examples of B2B companies.
Consumer to Business (C2B)
A C2B business model, unlike a business-to-consumer business model, is a transaction where people create value for the business. Consumers provide products or services to companies, collaborate on projects, and ultimately help companies increase their profits. Freelancer, an independent platform that connects remote workers and businesses, is an example of a company that engages two parties in C2B transactions.
consumer to consumer (C2C)
C2C e-commerce occurs when the two parties involved are consumers who trade with each other. For example: eBay is an example of an online marketplace where people buy and sell items to each other.
Business to Government (B2G)
The B2G model refers to companies and companies that provide goods and services to governments. For example; OpenGov is a company that provides governments with cloud-based platforms for communication, reporting and budgeting.
Government to Business (G2B)
The G2B e-commerce model occurs when the government offers goods and services to businesses. Government tenders and data centers are examples of G2B e-commerce.
Government to Consumer (G2C)
The C2G e-commerce model comes into play when consumers pay taxes, health insurance, electronic bills, or request public sector information.
We’ve included all of these e-commerce models to give a general idea of the e-commerce categorization, but the majority of e-commerce traffic is related to B2C and B2B models.
Classify e-commerce companies according to what they sell
Stores that sell physical goods
These are the typical online retailers. Clothing, furniture, appliances, and accessories are all examples of physical products. Shoppers can purchase physical items from online stores by visiting store websites, adding items to their shopping carts, and making purchases. When a shopper makes a purchase, the store delivers the items directly to their doorstep. There are also online stores where customers can make purchases online but go to the store to pick up the products.
Service based online sellers
Apart from products, services can also be purchased online. You can contact educators, freelancers and advisors via online platforms. The purchase of services is up to the seller. Some may allow you to purchase their services immediately from their website or platform. Some providers require you to contact them first (i.e. book a consultation) to determine your needs.
E-commerce transactions are carried out over the Internet, so products in the field of e-commerce are often referred to as “electronic products”. The term digital goods refers to all items in a digital format, including e-books, online courses, software, graphics, and virtual goods.
The future of e-commerce
We have come to the most important topic of our article. How will e-commerce take place in the future? Research shows that the future of e-commerce is very bright because e-commerce has already gained great momentum and continues to be so. New studies predict that e-retail sales worldwide will reach a new level by 2021. E-commerce business shows a growth rate of 265% from $1.3 trillion in 2014 to $4.9 trillion in 2021, and global e-commerce sales are expected to exceed $6.5 trillion. dollars by 2023. In 2020, e-commerce revenues will reach $4.13 trillion. (Source: Statista) This statistic really reveals how amazing the acceleration we are talking about. So much so that by 2040, it is expected that 95% of all purchases will be made through e-commerce. (Source: 99 companies)