What is E-commerce? What are E-commerce Examples? What are E-commerce Trends?
E-commerce is the practice of buying and selling goods over the Internet. The e-commerce sector has been one of the most transformative industries on the planet because it offers qualities that traditional brick and mortar shopping methods usually fall flat on; namely, comfortability, convenience and personalization. E-commerce has become the bedrock of how most stores operate and will continue to dictate the way we buy and sell in the future.
The E-commerce Industry
Did you know rock legend Sting played a role in transforming the history of tech and business as we know it? On August 11, 1994, Phil Brandenberger of Philadelphia made the first ever credit card purchase using encryption over the Internet, thus marking the beginning of the e-commerce era. What was the world’s first e-commerce purchase? Sting’s 1993 CD “Ten Summoner’s Tales,” of course. The seemingly mundane $12.48 purchase set off what would eventually become one of the most transformative industries in the world.
When we think about shopping today, we immediately think of the Internet. How did e-commerce get to be the future of buying and selling? How did we go from buying basic electronics to purchasing nearly every product imaginable via the Internet? Well, e-commerce offers a variety of solutions for both buyers and sellers that physical stores just simply can’t. First and foremost, e-commerce offers a buying experience that is unrivaled by traditional brick and mortar shopping. With traditional shopping, we get dressed, go to the store, peruse the aisles and make a purchase (regardless of whether it's the lowest price). The Internet gives us a much more powerful alternative to brick and mortar.
We’ve come to associate online shopping with convenience. With e-commerce, we have millions of choices from hundreds of different online stores. We have access to thousands of crowd-sourced reviews in order to verify a product actually works. We are able to find the best available price (instead of just hoping the brick and mortar is being honest with us). And, maybe most importantly, we can shop from wherever. The sheer ease and convenience of online shopping is no better exemplified than in “Cyber Monday,” a day dedicated to lower-than-normal deals on the best products the internet has to offer. During 2019’s Cyber Monday, US shoppers spent a whopping $9.4 billion on everything from TVs to new mattresses. Shockingly, $3 billion of these purchases were made via mobile device, solidifying e-commerce’s spot as the most convenient and easy way to shop.
Second, the Internet has also become a virtual small business incubator, where millions of entrepreneurs can set up their online shops and reach customers all over the globe. Prior to the advent of e-commerce, small businesses all over the world could only operate in their immediate geographical areas with smaller customer bases. Today, there are approximately 24 million e-commerce sites that allow the little guys to compete with the big box stores on a global scale.
Third, e-commerce personalizes the entire shopping experience for both buyers and sellers. E-commerce has been a boon for sellers, who can programmatically display specific advertisements and products that directly appeal to an individual customer. Using data on what sellers have viewed or put into their online carts, sellers can then gently remind buyers to purchase their recently-viewed items. This type of information has streamlined the selling process and has enabled online retailers to grow their profits.
The personalization aspect of e-commerce enables buyers to see exactly what they want and when they want it. Have you ever come across an ad for a pair of shoes you were just looking at 5 minutes prior? What about hotel deals to a city you were just doing some research on? Personalization refines our choices, introduces us to products we most likely want and helps us to make the most well-informed purchases. The data gathered by e-commerce stores brings the right product to us, saving us the time (and sometimes money) that we normally would spend walking aimlessly around department stores.
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Future E-commerce Trends
We’ve seen e-commerce upend almost every single industry, so what does its future hold? To put it briefly, it holds a lot. We’re seeing e-commerce transform industries and create new ones altogether. Below are just a few of the trends to expect for e-commerce over the next few years.
As stated above, personalization is the key to the future of e-commerce. The online shopping experience isn’t a one-size-fits-all approach. Knowing a customer’s habits is beneficial to both the seller and buyer. Online retailers boost profits and customer loyalty, while customers get the benefit of being connected with products they love and sometimes didn’t even know they wanted. Online retailers boost customer engagement by showing them media, content and personalized recommendations based on their purchase history and demographics. Based on data, the same website could be running ads for baby supplies for a new mother and laptop deals for a college student. Optimizing shopping experiences helps connect customers to the products they want quicker, grows trust in consumers and ultimately makes for a streamlined sales process.
E-commerce has gotten a huge boost over the past few years thanks to mobile devices. Online ordering doesn’t have to stop when you leave your desktop or home thanks to phones and tablets. In fact, 65% of all e-commerce traffic (and 53% of all sales) are made via a mobile device, and those numbers are only expected to grow. Optimizing an online platform for mobile-first users will help to keep customers happy, carts full and profits expanding. We’ve seen a huge boost in usage of mobile wallets as powerful e-commerce tools. These wallets, like Apple Pay, provide the ultimate convenience for shoppers who don’t want to fumble around with inserting their credit information on every purchase. Mobile-first design, sales funnels and wallets are a large part of the future success of any e-commerce store.
Omni-channel e-commerce ensures that customers have a seamless shopping experience whether the client is shopping via phone, tablet, computer, on the phone or even in-person. Omni-channel experiences incorporate personalization in order to give the customer the highest amount of purchase satisfaction possible.
An example of an omni-channel shopping experience would be a customer who is looking at a new pair of running shoes. They could have purchased a pair of running shorts beforehand, leading the site to suggest the shoes that most people buy with those shorts. They could have been looking at different sites to purchase shoes on their iPad and then received ads for those exact sites on their phone’s search. The customer could even call a customer service representative to ask questions about the shoes. The rep could pull up past purchase information and can use the past shoe purchases to inform the next. The seamless experiences provided by omni-channel e-commerce will help to drive customer loyalty and brand awareness.
Content Marketing/Social Media Strategy
Content marketing and social media strategy are playing, and will continue to play, a vital role in e-commerce strategies. E-commerce companies are going above-and-beyond in order to gain a wide, loyal customer base. Now, these companies are drawing customers in with clever content that educates, engages and calls them to action (to buy their products).
To picture content marketing, think of a traditional blog. The content from company blogs can share experiences and insights that would be helpful to customers who are trying to make a decision on a product. Are you buying a new car? You might come across a piece of content about the car that shares the stories of people who talk about the efficiency or safety of the car in the hopes that it will educate you, and move you, enough to make a purchasing decision. Are you a recruiter looking for new ways to build your employer brand or reach new candidates? We’ll shamelessly plug our content to help you with that.
Content marketing has crossed over from blogs to the wide world of social media. Today, curated Instagram profiles, engaging Facebook pages and “self-aware” Twitter handles help bring in masses of people and convert them to customers. Social media is one of the next great frontiers in the future of e-commerce because it offers creative ways to engage different groups of customers, who might not have been converted to buyers from basic forms of content marketing.
The e-commerce industry is made of smaller subcategories that are determined by the goods and products that each digital store sells. Some e-commerce sites sell directly to consumers. Others sell to other businesses. Some sell physical products and others just sell digital services. Below are a few of the main popular forms of e-commerce:
B2C E-commerce means “Business to Consumer,” where an online store sells physical goods or online services to individuals. This is probably the most popular form of e-commerce today because almost all of us have bought a product from an online store. Top examples of B2C e-commerce sites that sell physical products are Amazon, Walmart, Ikea, Etsy and Kroger.
D2C, or “Direct to Consumer,” companies have taken off in the last few years. D2C companies usually provide a narrowed genre of their own products that reduce the sometimes overwhelming choices people have with traditional online marketplaces. They also cut out the middleman (like selling in retail stores), which cuts costs for both them and consumers. Because a D2C company usually handles logistics, R&D, customer service and the alike in-house, they usually have a higher consumer satisfaction rate because they are able to streamline processes, reduce prices and better meet consumer’s needs. The top examples of D2C companies are Dollar Shave Club, Casper, Blue Apron, Glossier and Warby Parker.
B2B stands for “Business to Business” and encapsulates any product or service that business sells to another. In fact, B2B is so popular across the globe that the industry is expected to be worth more than $6 trillion by the end of 2020. B2B suppliers sell everything from software to web hosting services and payment processing solutions. One of the most popular examples of a B2B company is Square, which provides the backend financial processing solutions for thousands of businesses all over the world. Other B2B examples include Microsoft, Oracle and IBM, which all sell various technology solutions to other businesses, and Costco, which sells millions of products in wholesale. Shopify can also be considered a B2B product because they are selling their hosting and e-commerce website solutions to entrepreneurs all over the world.
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