Online Shopping With Electronic Commerce

Published Date: 02 Nov 2017

Introduction

Electronic commerce define as the conducting of business activities such as distribution, selling, buying, marketing and servicing of products and services electronically all over the computer networks. it covers a range of different types of business, from retail sites, through auction or music sites, to business exchanges trading goods and services between companies. In fact, 66% of us have used e-commerce have used it to purchase products of some description online.

One of the factors that e-commerce became so popular is it only requires lower start-up cost as compared to setting up a retail store. As a result, risks has been lowered and easier for beginners who want to start a business as they don't have to look for a decent location for their store, don't have to worry about paying for the renovation and rental expenses, and don't have to worry about hiring employees.

Moreover, if you are selling niche products which are targeted in a smaller segment of the market, it is easier to market them using an online store than placing them in a retail store. This is because it can reach more customers and there is higher chance you will meet a customer who really need it.

In an online store, there is no shelf size or store size restrictions that mean you can put whatever you want to sell. It provides more choices for your customer and you don't have to worry about arranging the shelves time to time.

From your customers' perspectives, it is more convenient for them because they don't have to physically be on the store. It can save your customer gas and time spent on their journey to the retail store. They can browse through many products within minutes by only scrolling the webpage, sometimes when a retail store is too large, customer may find it difficult to find what they want so they have to walk around the entire store to look for it.

History

It all began from the development of the Electronic Data Interchange (EDI) in the 1960s. EDI enable its users to exchange electronic data long distance. In the early days it is only used by large companies, banks and military department for command control communication purposes.

In the late 1970s, ASC X12 and ARPAnet were developed at the same time; both provide the same purpose to exchange business documents and information electronically, except the fact that Arpanet was the first to exchange information through telephone networks.

In 1979, Michael Aldrich invented online shopping when he connected a television to a transaction processing computer with a telephone line, created an idea to shopping at a distance, called teleshopping.

All the systems mentioned above sends information streaming down one route, in 1982 Transmission Control Protocol and Internet Protocol was developed. TCP & IP was the first to send information in small packets along different routes using packet switching technology like the internet today.

Business-to customer e-commerce would not be successful until the introduction of World Wide Web and the large widespread use of PC. In 1982, France launched the precursor to the internet called Minitel which can be used for online ordering. In 1990 Tim Berners Lee build Hypertext project called WorldWideWeb using NeXT computer. This gives people every day like us the opportunity to use this wonderful technology.

Until 1994, WWW the first user friendly browser was developed with built in security protocol to protect user's confidential information online. This enables secure transactions like payment transactions to be conducted on the internet.

In 1995, the online payment methods are introduced. After the way to e-commerce has been paved, 2 big companies such as Amazon and EBay that we all know of today took their first steps into the world of e-commerce. Until today, Amazon and Ebay are the most successful companies in the world of e-commerce.

Real world applications

Business-to-business (B2B) E-commerce

B2B E-commerce occurs when transactions are made between company to company over the internet. B2B market enables business partners to supply each other in a virtual supply chain to reduce resupply times and costs. B2B markets control your cost by enabling you to identify and compare the prices offered by various competitive suppliers, order in a large amount to enjoy discounts and promotions .

Real world companies that used B2B e-commerce includes Alibaba.com, E-marketplace and etc. Alibaba.com is a website which offers the customers to choose items which they would like to purchase from a wide of products through a online vendor itself.

Business-to-consumer (B2C) E-commerce

In a B2C e-commerce, customers deal directly with an organization and avoid any intermediaries such as wholesalers or retailers. When a product sells directly to consumers, this means more profit for the manufacturer and lesser price charged to consumers as no profits will be shared to the intermediaries.

Moreover it is easier for the online customers to compare prices with other competitors, features, other customer's opinions. Many merchants have recently added a section called social commerce where shoppers can view the products which is only frequently viewed by other visitors.

Real world companies that are using business-to-consumers e-commerce are Amazon.com, cold storage and etc.

Consumer-to-consumer (C2C) E-commerce

C2C is a subset of e-commerce involves consumers selling directly to other consumers using a third party website. Value of sales and length of sales process would often be smaller and shorter than B2B and B2C. Products offered are usually single product or one of a kind so the delivery costs would be slightly more costly. The buying process is relatively easier, and there would be lesser discussion over payment and delivery options. With the growth of C2C, people have actually reduce in advertising and selling their personal stuffs in classified pages of newspaper.

C2C e-commerce provides the opportunity for people to make money through selling their own personal items or clearing their junk items. Most people use C2C websites to get rid of their second hand items such as smart phones, magazines, books, equipments to get back portion of the money. There is a higher chance that you will meet the right buyer who values your "junk" and who is willing to pay for it more than you charged. A man's junk can be another man's treasure.

Dell is one of the most successful business organization using both B2B and B2C e-commerce. When internet technology has arrived, Dell quickly set up the e-commerce processes so that they can online sell directly to their customers. Since 1996 when Dell opened its website, the company had a large growth in sales, by 1997 the company recorded $1 million in online sales, by 2000 the company achieved $50 million a day.

Dell is known for supplying their customer via virtual supply chains, assemble the components of computers according to customer's preferences, and deliver directly to their customer within five days.

Dell's product is relatively affordable than its competitors because they don't sell their products in actual stores. Selling their products in an online store saves rental and salary expenses. Their customer doesn't need to travel to the actual store to gain knowledge about the computers. Customers would only have to go to www.dell.com and follow the easy automatic instructions that show up on the screen and they would be able to customize the computer with features they desired.

More than customizing the product, Dell added a feature which allows their customer to check product support, shipment and delivery dates after ordering. There is also 24 hours customer service that helps Dell establish strong customer relation, whenever a customer found a problem they can directly reach to Dell and ask for advices and maintenances.

Future Trends

Online Shopping with augmented reality

Sometimes while we are shopping for apparels in online stores, the shirt may look good with the model in the picture, but when you buy it, you realized it does not look good on you. There are companies that have already developed an augmented reality dressing rooms which allows customers to try on the apparels in an online store as if the customer is in a fitting room, but the developers are still working on it, we are looking forward to it in the future few years later.

Dynamic personalization

Online store websites collects analytics data from thousands of visitors every day, if you put the data collected into good use, your website will gain competitive edge over the others. Imagine when your customer visits your site, without even logging in, a shopper’s persona is defined with a few interactions. When the site have better understanding with your customers by collecting data, it can present the products your customer is more interested to see rather than wasting time on looking at something that holds no interest. The website will eventually know before they start browsing.

Adding human elements that sell

Shopping online may lack the human element that would convince your customer to buy your product. Because there is no bargaining, no sweetening of the deal, ecommerce unable to provide the same experience that shoppers shop in retail outlets. Imagining while visiting your favorite online store, you found something you have been dreamt for, so you examine every photo and experiment with every possible configuration, after several minutes of thinking you decided not to buy it. However if you are in an actual store, in most cases the sales assistant would be able to convince you by lowering the price, you are more likely to buy it cause you feel like you are getting a deal.

This time imagine that after a few days you find your way back to the online store, you are greeted with a pop out message showing the image of your dream product marked down 40 percent for today only, in that way it is more convincing right? Retailer knows that a lesser profit is better than getting nothing. The ability of the website to negotiate the price with your customer without the need of human supervision is something which is lacking in the e-commerce today.

Voice Shopping with your personal computer assistant

In the future, there would be personal computer assistant who is smart enough to recommend which product you might need, helps you compare prices and helps you detect any sales promotions.