What is e-commerce?
E-commerce is much more than simply making money out of online stores – although it is that too. As Wikipedia clearly indicates:
[…] the term may refer to more than just buying and selling products online. It also includes the entire online process of developing, marketing, selling, delivering, servicing and paying for products and services.
E-commerce is, therefore, practically everything traditional business has done since time immemorial – but even more so in almost every respect.
On the one hand, we have:
- more customer-focus;
- more tailor-made solutions;
- and more satisfied niches;
And yet on the other hand, we have:
- more globalisation;
- more automation;
- and more opportunities;
How is it possible to get so big and still act so small?
This is the miracle of e-commerce – and Amazon.com is a perfect example of how this goal can be achieved. On the web since 1995, in 2011 its revenues reached $48 billion. Although it has since diversified into many other fields, it is still best known and loved for its online stores.
For many years, the site was known for just selling books – and for anyone who loves books, this was a mighty achievement. A bookshop owner acquires a very good knowledge of their clients. Over a long and fruitful business relationship, he or she will intuitively learn what their customers are going to like. And customers value that intuition – very much. In a competitive marketplace, it can often be the difference between making that sale or not.
Anyone who knew the publishing trade – at least in 1995 – could hardly have predicted a website might one day substitute the flesh-and-blood appeal of real professionals such as the above.
And yet from personalised recommendations and instant digital downloads to private and public wish-lists of those items we would most like our family and friends to buy, there is nothing a traditional bookshop-owner can do any longer which Amazon, with its virtual intelligence, cannot.
What is even more incredible, however, is that this concentration of ingenuity and wealth has led not to a fall in book-lovers’ choices but, instead, to a more effective connection with that diversity of interests which characterises modern society.
E-commerce doesn’t just mean higher levels of customer satisfaction in matters such as prices, delivery times, almost instantaneous customer-service emails and mobile apps and purchases – it also leads, if properly implemented by businesspeople looking to get that extra edge, to a greater variety of products, services and opportunities.
We may be looking to sell books or language courses; we may want to provide deals on online credit card transfers or travel insurance; but, whatever the product or service in question, bytes and websites are not only better for the Internet-connected customer than bricks and mortar – they’re cheaper to set up, expand and grow.
How to get it right
We started off this article by highlighting the broad range of activities which can come under the umbrella of e-commerce. It is such a broad range that perhaps we might be tempted to murmur: “How to get it wrong!”
Starting off in e-commerce can seem a little daunting. But if truth be told, a lot of what it needs is already part and parcel of good business practice. All you need to remember is the following maxim from Jerry Gregoire, an ex-CIO at Dell, the computer manufacturer:
“Don’t automate broken business processes.”
If your processes fail to work efficiently in a bricks-and-mortar store, where you only have to sell to those people who live close by – people who, in any case, probably value you as a friend above all – just imagine what’s likely to happen to such processes when they’re exposed to the competitive gaze of millions of potential customers.
No friends there – unless you work out how to crack the Amazon secret!
The secret is there is no secret…
The only secret is knowing who to ask.
Solutions exist – all you need to do is understand the options first. Once you’ve understood the options and made your bricks-and-mortar processes as resilient as possible, it’s time to contact reputable organisations which show that they are able to understand your processes – as well as engineer effective e-commerce implementations.
It won’t always be simple – but no one said it would be. The rewards, however, are simply too great for any 21st century businessperson to ignore.
So what are the rewards?
A German report recently recommended the following seven factors for e-commerce success:
7 factors that lead to e-commerce success
As part of its comprehensive analysis, the study examined seven overall factors in online retail success. These range from site design and the user-friendliness to the product range, the pricing level and the payment methods offered to shipping options and delivery of goods to the customer.
Meanwhile, a report on e-commerce in India concluded:
[…] One of the main challenges that online shops have been confronted with for a long time is the desire of Indian consumers to see and touch products before buying them. As a result, many retailers offer cash-on-delivery payment and convenient return and refund options. Nonetheless, B2C E-Commerce experienced a more than 30 % growth from 2010 to 2011 in India.
And the potential rewards? Apart from exponential expansion as hundreds of millions of new Internet users join the population of e-commerce aficionados, the same German article quoted above underlines how high the stakes really are:
The results of the largest survey of customer satisfaction in German e-commerce, conducted by ECC Handel and Hermes, were published on the occasion of the Online Trading Congress in Bonn. More than 10,000 consumers and customers of 108 German online shops came to the conclusion: Musikhaus Thomann is better than Amazon.
Just think of it – in a few years, you could end up being better than Amazon too!
Now isn’t that a potential reward really worth pursuing?