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What is eCommerce?

A shopper purchases a pair of boots from an online department store.  A small business re-stocks its inventory electronically.  A homeowner pays her water bill on the city council’s webpage.  These are all examples of electronic commerce, or eCommerce.  So, what is eCommerce?  Put simply, it’s a term used to describe every transaction that happens online.

It’s a Growing Trend


Most products and services can be bought or sold via eCommerce, assuming they’re supported by the appropriate infrastructure (such as a reliable mail delivery system or sufficient bandwidth).  A business owner may have a tangible store as well as an internet retail presence.  One of the differences between the two operating models is that eCommerce can often operate with lower overheads, by selling goods that don’t need to be physically marketed or stored in a potentially expensive retail space.

Embracing eCommerce seems like a smart move, given the numbers.  Consumers are increasingly choosing online shopping over visiting a physical store.  According to United States Census Bureau figures, retail eCommerce sales increased nearly 4% in the second quarter of 2018 to $127.3 billion, accounting for almost 10% of total transactions.

eCommerce Business Models

Customers, suppliers, vendors, corporations, and government agencies can all conduct business using eCommerce.  It can improve efficiency, for one.  The internet is a 24-hour marketplace, allowing transactions at any time.  Brick-and-mortar shopfronts are generally limited in the number of hours they can remain open each day, and some even close for extended periods.  Additionally, geographic distance is rarely a problem for eCommerce, as long as goods can be readily moved in and out of an area.  Also, in terms of an operating budget, maintaining a website is likely to cost far less than a real store.

The eCommerce models are broken down into several categories.  The first is B2C, or business-to-consumer. Amazon is arguably the most well-known in this group.  fCommerce refers to business via Facebook and other social media platforms, and mCommerce refers to transactions on mobile devices (e.g., using an app in lieu of a paper ticket).  These both fall under the B2C umbrella.

Another model is B2B, or business-to-business.  A large market as well, this refers to companies that transact with each other online, generally to source parts or stock for the objects they’re producing.  In fact, some companies utilize programs that allow them to automatically re-stock their inventories, reducing expenditure on staffing, limiting human error, and ensuring orders are data-driven.

C2C, or consumer-to-consumer, includes auctions and trading forums (such as eBay) and can be considered a contemporary take on what used to be bartering over items in the village square.  There is also the B2A model, which includes business-to-administration/government bodies, e.g., a local government sourcing e-services to manage documents.  C2A, or consumer-to-administration, may include an individual paying taxes or municipal fees to a public agency over the web.

Pros and Cons of eCommerce

eCommerce may appear to be one of the best modern solutions to evolving consumer needs.  Undoubtedly, it has positive qualities.  An online shopping experience is more attractive to customers who want to avoid lines and long commutes, a fact that could considerably expand your customer base.  Having an eCommerce presence enhances your search engine visibility, cuts staffing and property costs, allows for targeted communication, and makes your merchandise accessible all day, every day.

Of course, there are disadvantages as well.  Internet-based commerce takes away the opportunity to establish a human connection.  There are customers and operators who thrive on building a personal rapport, which can generate repeat business and encourage loyalty.  Also, there’s no instant gratification.  Spending money online and not having anything in your hands to show for it is a considerable turn-off for some shoppers.

Consumers who want to try something before they buy it don’t often get that chance with electronic purchases.  There is also the risk of identity fraud or a security breach when transacting on the web.  Recent cases of identity theft have been so significant that the United States has introduced a new law to provide consumers more protection.

Shipping costs may be another disadvantage.  While home delivery itself is a bonus, the associated fees can prevent customers from completing online purchases.  The rate for returning or exchanging items can be prohibitive as well.

The Importance of Strategy

Research and become familiar enough with eCommerce principles so you can develop a comprehensive and tailored business strategy.  As an online retailer, your operation will require a marketing strategy that specifically targets your customers, directs traffic to your site, and encourages repeat clients.  Nail down a plan for growing your business online, focusing on how to attract more buyers and retain loyal customers.  It’s crucial to identify your goals and objectives at the outset, making sure to target the right clientele with the most valuable marketing tools.

An eCommerce strategy will look very different from one that is formulated for a brick-and-mortar establishment.  Tips include posting email forms on every page to gather contact details, encouraging subscriptions, constructing informative blog posts and videos, opening a Facebook store, and inviting reviews.

Choose the Best Platform for your Business

Launching an innovative eCommerce business may seem overwhelming, at first.  But there are many resources available to aid in the process, including a variety of solutions to enrich your website.  Magento is a flexible platform that offers creative solutions and access to an active community of experts.  Demandware provides a fully hosted solution to reduce your worries over site maintenance.  BigCommerce is a comprehensive platform enabling vendors to sell across other sites.  Volusion is another popular choice, boasting its own site builder and shopping cart software.

Whether you’re prepared to welcome it or not, eCommerce could become the favored mode of all transactions in the future.  There’s a wealth of information and support out there.  Just be prudent in selecting the best solutions for your business.


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