Brief History

E-commerce has become, without a doubt, one of the most important pillars of the Internet Age, driving entrepreneurship, creativity and profits to never before seen levels. E-commerce boils down to carrying out business over the Internet with the assistance of computers, which are linked to each other forming a network, therefore dealing away with the need for “human” middleman, and by extension, minimizing potential human error (Ecommerceeducation.com, 2015)

Global E-commerce sales have increased over 15% year-on-year for the past 5 years and show no signs of slowing down. Traditionally, the North American market was largest by total number of sales, but was surpassed by the Asia-pacific region for the first time in 2014. The graph below, drawn from Statista.com, details the impressive growth seen in E-commerce.

(Sources: Statista.com & Emarketer.com)

Advantages of E-Commerce

1. Overcome Geographical Differences

With the advancements made in global shipping and transportation of goods, it is becoming increasingly easy to ship a company’s products virtually anywhere in the world (Khurana, 2015)

2. No need for Physical Stores 

If you decide to to sell exclusively online, there is no need to showcase your products in a physical store, which drastically reduces your overhead costs.

3. New Customers Through Search Engine Optimization (SEO)

By efficiently optimizing your website to appear as high as possible on search engines’ results, using a combination of relevant key words to maximize your visibility, it is possible to increase your site traffic and therefore your potential sales. 58% of people begin their online shopping from a search engine homepage and 81% use search engines to research purchases over $300 (Boone, 2013). Therefore never underestimate the power of SEO!

4. Open 24/7, 365 Days A Year

Although your initial shipping of the product bought online may be restricted to standard working hours, your online store is not! Use this to your advantage as your potential future customer could be living somewhere far away with different time zones.

5. Price Comparison

With the ever more precise search engines at your disposal coupled with the facility to find relevant information online (price, size, etc), comparing prices for identical or similar products online has never been easier. There are multiple websites specifically dedicated to comparing prices of products from virtually any industry such as Google Shopping, Nextag, Ebookers etc.

6. Ease of Experience

With the advent of E-commerce, never has shopping been so easy. There are no queues,not being placed on hold, availability of a product is known instantaneously, and most importantly the practically endless CHOICE at your fingertips (Khuruna, 2015)

Disadvantages of E-Commerce

1. Price

Due to discount and promotional nature of selling products online, prices tend to be cheaper online, which is good for the consumer, but less so to the seller. It could therefore be argued that there is increased market competition online vs the traditional retail.

2. E-commerce slower final delivery

Due to the consumer not going to a physical location to purchase his goods but instead purchasing online, the consumer will always have to wait a certain amount of time. As previously mentioned, with the technological advancements made in containerization, shipping goods cheaply has become a reality. (How containerization shaped the modern world – Sir Harold Evans, 2012)

One exception to e-commerce’s slower delivery times are digital products such as ebooks, music and film that are all instantly downloadable once purchased.

3. Can NEVER Try Before You Buy

Since the wide-spread adoption of e-commerce in the 90’s (Winterman and Kelly, 2013), the single most logged complaint was that the product received did not correspond to what the consumer was expecting. 

One cannot touch the fabric of clothing, or try on a pair of shoes, or test the video quality of a TV buying through online. There have been forays into creating virtual mannequins that were supposed to showcase what the items would look like in real life. The most famous of these companies to attempt it were Boo.com, considered by many to be one of the biggest failures of the dot.com bubble (Boo – Business Nightmares, 2011)

4. Security

When the consumer has finally chosen to buy a good or service online, they must then provide at least their credit card information and mailing address. Many e-commerce websites require far more information and are then able to harvest other information about your online behavior  and habits. This could then lead to either credit card fraud or even identity theft (Khuruna, 2015).

The website below contains just a few of the most recent credit card breaches that seem to be happening with ever increasing frequency.

http://krebsonsecurity.com/category/data-breaches/

Conclusion

If you are planning on starting your own business, or already have one, be it B2B or B2C, that plans on selling any type of good or service online, it is definitely worth giving your potential customers the option to buy online!

 

 

References

Boo – Business Nightmares. (2011). https://www.youtube.com/watch?v=n9kgZqbCJiM: BBC.

Boone, L. (2013). Contemporary marketing, 2015 update. [S.l.]: Cengage Learning.

Ecommerceeducation.com, (2015). Benefits of Ecommerce | Advantages Of Ecommerce | Online Business | Ebusiness Benefits. [online] Available at: http://www.ecommerceeducation.com/benefits-of-ecommerce.asp [Accessed 14 Apr. 2015].

Emarketer.com, (2015). Retail Sales Worldwide Will Top $22 Trillion This Year – eMarketer. [online] Available at: http://www.emarketer.com/Article/Retail-Sales-Worldwide-Will-Top-22-Trillion-This-Year/1011765 [Accessed 14 Apr. 2015].

How containerization shaped the modern world – Sir Harold Evans. (2012).  http://ed.ted.com/lessons/how-containerization-shaped-the-modern-world: Ted Talks.

Khurana, A. (2015). Is Ecommerce Right for Your Business? 36 Pros and Cons. [online] About.com Money. Available at: http://ecommerce.about.com/od/eCommerce-Basics/tp/Advantages-And-Disadvantages-Of-Ecommerce.htm [Accessed 14 Apr. 2015].

Rampton, J. (2015). 25 Tips From SEO Professionals. [online] Forbes. Available at: http://www.forbes.com/sites/johnrampton/2015/04/13/25-tips-from-seo-professionals/ [Accessed 14 Apr. 2015].

Statista, (2015). Global B2C e-commerce sales 2009-2018 | Statistic. [online] Available at: http://www.statista.com/statistics/222128/global-e-commerce-sales-volume-forecast/ [Accessed 14 Apr. 2015].

Winterman, D. and Kelly, J. (2013). Online shopping: The pensioner who pioneered a home shopping revolution. [online] BBC News. Available at: http://www.bbc.co.uk/news/magazine-24091393 [Accessed 14 Apr. 2015].