E-commerce, online trading, or internet trading—all these terms refer to the buying and selling of goods or services using electronic information technology. Online shopping is, by no means, limited to the younger generation. Age differences are becoming less and less important; many people over 65 are already comfortable using the Internet. However, the purchasing behavior of these groups varies greatly. When it comes to clothing and shoes, older people still prefer physical stores. On the other hand, young people aged 14 to 29 go online much more often, regardless of the product.
E-commerce continues to grow at a breakneck pace, driven by the constant evolution of technologies and consumer habits. It has become an essential factor in global commerce, and it continues to grow at a sustained pace.
What is e-commerce?
E-commerce, or electronic commerce, refers to all commercial transactions carried out online, from the purchase of products and services to home delivery.
It allows online buyers to access an online store from a website, a mobile application, or even social networks.
Indeed, since the global health crisis (COVID-19), e-commerce has experienced unavoidable growth, with spectacular growth rates and turnover that exceeds billions of dollars.
Features of e-commerce.
For companies, the goal of e-commerce is to streamline sales processes to generate more revenue. The goal is to make all sales operations more efficient and reduce associated costs. Companies have gained new sales channels over the Internet through online stores, product reviews, marketplaces (e.g., Amazon), or the creation of an auction site (e.g., eBay). Through social media, web advertising, newsletters, and automated CRM systems, sellers can attract new customers and improve their relationships with them with relatively little effort.
E-commerce strives to improve its efficiency. For example, it speeds up the sales process. Customers can easily browse the range on their smartphone or personal computer and place an order at any time. Computer systems automate processes and thereby save time. At the same time, personnel costs are reduced.
Advantages of e-commerce.
- Reduced overhead costs:
Managing an e-commerce site is much more profitable than managing a physical store. You don’t need to rent commercial real estate; you just need reasonable web hosting to pay for it. You neither need to invest in the security of your commercial property nor worry about managing logistics or employees. For an e-commerce site, typical costs will be the domain name, web hosting, the price of developing your website, and your inventory. That said, most e-commerce websites also spend money on marketing. - No need for a physical storefront:
Managing a physical store is very complicated. E-commerce will save you a lot of daily worries. Renting commercial space can be expensive, especially if you are in a big city. You must also pay for electricity, water, and Internet access for your commercial space. Security is also to be taken into account. If you want your physical storefront to be secure, you will need to invest in cameras and other surveillance equipment. With an e-commerce store, you can simply create a website and start selling your products online without having to spend a lot of money in a physical store. - Reaching a broader audience:
One of the advantages of e-commerce lies in its ability to reach a vast audience. A traditional store can only accommodate foot traffic per day, especially if it is located in a town or rural area. With an e-commerce store, you have the potential to reach customers worldwide and showcase your products to them. Even if you don’t actively sell internationally, you could still attract buyers from regions within France. Significantly boost your sales figures. This broad reach has even enabled some e-commerce ventures to establish themselves as iconic brands over time. - Scalability and adaptability:
Among the pros and cons of e-commerce for a business, scalability is one of the most tangible benefits for long-term growth. With a physical store, your growth will inevitably mean that you will have to find a larger commercial space after a while. You will also have to move your inventory and equipment, which only complicates things. With e-commerce, your website and store can grow as your business grows, so you won’t have to spend a fortune to move to a new, larger business space. - Logistics tracking:
Keeping track of logistics is an essential part of e-commerce and retail marketing, and it’s much easier with a website than with a physical store. You can outsource your fulfillment logistics to give your customers benefits like 2-day shipping and efficient return processing. Everything is recorded electronically, making it simple to track sales and identify trends that will help you grow your business over the long term.
Disadvantages of e-commerce.
- Potential security threats:
When selling online, there is always a risk of security threats. A poorly secured website can allow unauthorized users to access your website and view your sensitive data. In rare cases, problems with payment processors can lead to data breaches that put customers’ banking information at risk. A large part of setting up an e-commerce site involves securing the website, so business managers often prefer to hire a professional. - Competition:
There is a lot of competition in the world of e-commerce because creating an online store is as easy as pie. This is one of the biggest disadvantages of e-commerce because it means you have to work extra hard to promote your store and increase traffic to your website. Some niches are also very crowded, so you may struggle to sell your product based on your industry and products. Ultimately, the success of your site will depend on your efforts to strengthen your online presence.
Conclusion:
E-commerce, or electronic commerce, is constantly evolving around the world, with meteoric growth in recent decades. For example, the rise of digital technologies has made it faster and easier for consumers to shop online, radically changing the way businesses do business. To remain competitive and meet market expectations, it is essential to anticipate the major trends that will shape the e-commerce of tomorrow.
