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?
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 where potential buyers can not only browse the range of products, but also 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. Very different technologies can then be involved: The spectrum ranges from simple radio technology (eg 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. chat-bots for customer service.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 get advice in person.
Characteristics of e-commerce
For businesses, the goal of e-commerce is 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 via the Internet through online stores, marketplaces (eg Amazon) or auction platforms (eg 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.
Online merchants often decide which technologies and sales channels they want to use based on their industry and business goals . It is in no way necessary to digitize all processes. The trend is more towards multi-channel and cross-channel marketing, which simultaneously encompass several channels in their strategy. For example, a furniture store can gain customers by having an online presence. At the same time, it should always offer a physical store or at least a showroom. In this way, customers can take a look at their pre-selected item before validating or collecting the ordered merchandise themselves. They thus save on shipping costs which are sometimes a deterrent for large parcels.
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 as available must indeed be in the warehouse in order to meet the advertised deadlines.
Electronic commerce aims to increase its efficiency . For example, it speeds up the sales process. If you don’t have your own stores, e-commerce even saves one or more rents. In addition, distributing offers over the Internet is much cheaper than mailing them or hiring someone to hand out flyers. Companies can also open up new markets much more easily and inexpensively, and in particular go international.
E-commerce allows all types of commercial transactions. The latter can in fact be dealt with both in B2C (commerce between companies and consumers) but also in B2B (commercial relations between companies).
Benefits of e-commerce
There are several ways that 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 regions of France, Europe or more. 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 the perspective of consumers, 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 enables 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 from any computer or mobile. An automated order confirmation is immediately sent by dedicated systems. On the seller side, it is very easy to offer and manage your services online. For example, a travel agency can easily advise people interested in a destination and process reservations.
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. In order to increase their competitiveness, small and medium-sized enterprises can additionally cooperate with online service providers: for example, instead of using their own 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 pays to initiate an online and offline presence using all the channels available to you. If you use an online store, social media, and a business of your own, then consumers have more points of contact to turn to to access your offering.
Wide Reach Ads : Social media, blogs, and corporate websites provide inexpensive ways to draw attention to offers. Companies active on Facebook benefit in particular from the wide reach of this network. SEO marketing and online ads can be crafted effectively with an ad budget that is often much less than traditional ads, such as those printed in magazines or broadcast on television. 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.