- E-commerce Basics
- Business Applications
Impacts: Impacts on Market & Retailers
- Impact on Supply Chain Management
- Impact on Employment
- Impact on Customers
- Impact on Environment
- Impact on Traditional Retail
- Impact on Distribution Channels
What Is E-Commerce?
–The act of doing business transactions over the Internet or similar technology
–Has existed for years via private networks (electronic funds transfers, etc.)
–Now most often performed via the Internet
- An Internet-only store with no physical presence
- A conventional store with a physical presence
–E-commerce carried out via smartphones and other mobile devices
–Near Field Communications (NFC) uses RFID to facilitate communications between devices
Advantages of E-Commerce
- For Businesses
- Dot-coms are less expensive than brick-and-mortar stores because there is no physical storefront to maintain
–Increased customer satisfaction
- Shopping experience is convenient (open all the time, no driving, etc.)
- Can send customers personalized information
–Broader customer base (less geographical restrictions)
–Potentially higher sales
- For Customers
–Higher degree of selection
–Easier comparison shopping
- Higher number of merchants to choose from
- Geographical location is not an issue
- Shopping bots and other comparison shopping tools are available
–Potential cost savings
Technology and You Box
–You can make purchases and send money to others via a mobile device
–Mobile payment processing allows payments (typically credit card payments) to be collected via a mobile device
- Field workers
- Craft vendors
- Sales personnel
Disadvantages of E-Commerce
- For Businesses
–Pressure to be always open, site always working
- Solid, well designed sites and hosting
–Lost business due to some customer hesitation to shop online
–Risk of fraudulent credit card transactions
–Ease of entry for competitors
- For Customers
–Potential for fraud and other potential security problems
- Buyer protection programs and using
credit card protection can help
–Not being able to see or touch the goods
- 3D online stores may help
–Possible expense of returning merchandise
- Some click-and-mortar stores allow returns to local stores
E-Commerce Business Models
- Business-to-Consumer (B2C) Business Model
–An e-commerce model in which a business provides goods or services to consumers
- Business-to-Business (B2B) Business Model
–An e-commerce model in which a business provides goods or services to other businesses
- Bring buyers and sellers together
–Consumer-to-Consumer (C2C) Business Model
- An e-commerce model in which a consumer provides goods or services to other consumers
- Craigslist and online auctions are common means of C2C transactions
–Business-to-Government (B2G) Business Model
- An e-commerce model in which a business provides goods and services to government organizations
- Businesses or individuals paying taxes online etc. can be viewed as G2B and G2C transactions, respectively
Manufacturer and E-Tailer Sites
- Manufacturers and online retailers sell directly to customers via their Web sites
- Sells access to its online content
▪Newspapers and journals
▪Premium social networking services
- Bring buyers and sellers together and earn revenue by charging commissions on sales made via the site
- Online Auctions
- Allow individuals to sell stocks, bonds, futures, etc.
- Generate revenue by charging commissions or transaction fees
Real Estate, Travel, and Other Consumer Brokerages
- Assist consumer in finding resources they desire
The global ecommerce market is expected to total $5.55 trillion in 2022
Global retail sales growth will continue to rise and take up more retail market share
- According to eMarketer, online retail sales will reach $6.17 trillion by 2023
- China is accounting for 52.1% of all retailecommerce sales worldwide
- Latin America saw $85 billion in ecommerce sales in 2021
- The Indian ecommerce marketis expected to grow to $111.4 billion by 2025
- Russia, the UK, and the Philippines saw more than 20% ecommerce sales growth in 2021.
Mobile shopping and social commerce
- Online retail continues to expand due to the increasing use of smartphones and tablets globally
- 30% of US consumers report purchasing goods through social platforms
The metaverse and interactive shopping
- Brands are betting on virtual shopping and experimenting with augmented and virtual reality retail
Impact on markets and retailers
E-commerce markets are growing at noticeable rates
- Traditional markets are reported slow growth as compared to online business
- Online and traditional markets have different strategies for conducting business
|Traditional Business||Online Business|
|Geographical Barrier||Over Come Geographical Barriers|
|Prices to cover cost of keeping inventory||Pricing based on speed of delivery|
|Few products due to shelf space||Warehouses, sometime have no inventory, but send customer order number to manufacturer|
Impact on Supply Chain management
Increase warehouse capacity and customer proximity: The closer your warehouses are to customers, the faster you can fulfill orders directly to consumers or brick-and-mortar retailers.
Lower the cost of shipping: shipping deals for orders over a certain price, as well as incentives to bundle items, such as price discounts and free shipping.
Integrate an order management system: The end-to-end order management process is automated, working hand-in-hand with each link of the supply chain to guarantee customer satisfaction.
Kit items: Kitting items is the process of automatically manufacturing and storing bundled items together.
Automated Invoice: With online invoicing, your customers can pay online and access all important payment documentation whenever they need to.
Impact on Employment
Increased Demand for Worker
- Remote sales agents
Technology provides workers with an upper hand
- The continual growth of the e-commerce sector has fueled the development of new technology.
Omnichannel sales and recruitment
- Omnichannel selling means accessing consumers at every point, both online and offline. Many established stores have taken advantage of this and launched online shopping experiences to mimic the ones found in their stores.
Impact of E-commerce on Customers
E-commerce lacks human interaction for customers
Customers are also concerned with the security of online transactions and tend to remain loyal to well-known retailers
Impact of E-Commerce on Environment
- E-commerce business models allow for organizations to conduct business without physically commuting.
- work from home
- When information is transferred digitally, it reduces the need for the use of physical paper throughout the business.
- The digital transfer of information paired with digital manufacturing could eliminate warehouses and create on-demand production.
Impact of E-commerce on Traditional Business
Elimination of middlemen: Businesses can sell directly to the customers
Marketing: The rise in e-commerce, digital marketing has replaced traditional marketing methods.
Higher Profits: 24*7 availability and convenience has resulted in huge profits.
Global marketplace: All the customers from overall the world can access your products by simply sitting at home.
Impact of E-Commerce on Distribution Channels
The end of old distribution channels mainly had the consumer purchasing a product by visiting a physical retail location. Increasingly customers now expect the product to come directly to them.