The use of ICT and the emergence of the Internet have brought about the rise of various socio-economic developments in various sectors, e-commerce being one of them. E-commerce is a form of trade that allows customers to browse and purchase goods and services online. In this lecture, you are provided with a general introduction to the e-commerce systems.
What is E-Commerce?
E-commerce is a form of trade that allows customers to
browse and purchase goods and services online. It refers to any form of
business transaction conducted online. The most popular example of e-commerce
is online shopping. E-commerce is typically classified into three different
types based on the type of participants involved in the transaction: business
to business (B2B), business to consumer (B2C), and consumer to consumer (C2C).
ICT is comprised of information technology, telephony, electronic media, and all types of process and transfer of audio and video signals, and all control and managing functions based on network technologies. Use of ICT and the emergence of the Internet has brought about the rise and expansion of various socio-economic developments in various sectors such as banking and finance, education and academia, healthcare, defense, and military services, science and research, sports and entertainment, etc
What is M-Commerce ?
Another form of commerce is mobile commerce (m-commerce).
M-commerce is a rapidly growing new avenue of e-commerce that’s mostly driven
by the expanding market and influence of smartphones. M-commerce is a type of
e-commerce on the rise that features online sales transactions made via mobile
devices, such as smartphones and tablets. M-commerce includes mobile shopping,
mobile banking, and mobile payments.
Benefits of E-Commerce?
The benefits of e-commerce include global market, around-the-clock availability, reduced cost, inventory management, targeted marketing, serving niche markets, and working from anywhere.
1. Unlike a physical store, an online store allows e-commerce to possess a global market that is not limited by a geographical area it can serve.
-The whole world becomes its market. E-commerce extends its market from a local customer base to a global market at no additional cost. Another great benefit of running an online business is that it is always open, i.e. around-the-clock availability. This benefit allows a dramatic increase in sales opportunities for a merchant and a convenience for a customer because the shop is open 24/7/365 with no time restrictions.
2. e-commerce allows a significantly reduced cost due to lower running costs.
-As there’s no need to hire sales staff or maintain a physical storefront, the major e-commerce costs go to warehousing and product storage. Another great advantage of e-commerce is inventory management. e-commerce businesses can automate their inventory management by using electronic tools to accelerate ordering, delivery, and payment procedures.
3. E-commerce gives access to targeted marketing.
-With access to such a wealth of customer data and an opportunity to keep an eye on customer buying habits as well as the emerging industry trends, e-commerce businesses can stay agile and shape their marketing efforts to provide a better-tailored experience and find more new customers.
4. E-commerce also allows serving niche markets.
-Running a niche brick-and-mortar business is extremely difficult. There’s almost no chance of scaling it unless a niche product becomes mainstream. By tapping into a global market, on the other hand, e-commerce retailers can build a highly profitable niche business without any further investment. Using online search capabilities, customers from any corner of the world can find and purchase your products.
5. Lastly, e-commerce allows working from anywhere.
-Often, running an e-commerce business means that you don’t need to sit in an office from 9 to 5 or suffer through a commute day-in and day-out. A laptop and a good internet connection are all it takes to manage your business from anywhere in the world.
So generally, short pointers advantages of e-commerce include low financial
cost, 24/7 potential income, sell internationally, easy to showcase
bestsellers, personalized online experience, affordable employees, easier to
encourage an impulse buy, easy to retarget or remarket to the customer, customers get
a less invasive experience, gain access to customer data easily, able to
process a high number of orders, can scale the business quickly, can grow business
organically with content.
Challenge of E-Commerce?
The growth of e-commerce has experienced several challenges and disadvantages. The most common issues associated with e-commerce include:
A Site Crash: No one can buy during a site crash. To
overcome this, it is important to ensure a website is hosted on the right
platform.
Customers Can’t Try Product Before They Buy: While this is
currently a problem for many retailers, this won’t be a long-term problem. With
Augmented Reality (AR), more stores are starting to add AR elements to their
store to allow customers to try products on.
E-commerce Is Highly Competitive: Finding the right niche is
another one of the worst e-commerce disadvantages.
Customers Can Be Impatient: Delay in responding to customer
inquiries.
You Need To Ship Your Products: Customers consider shipping
times to be one of the worst e-commerce disadvantages. However, this can be
resolved by creating tens of millions of Prime members like Amazon.
Physical Retail is Still More Popular Despite Decline:
Physical retail still owns most of the market share.
Security: Security needs to be enhanced regularly.
How to Start E-Commerce
There is a logical order in how you would go about building
an e-commerce business. Although setting up an actual online store would
probably take less than a day, researching, building, launching, and growing a
profitable e-commerce business is a multi-layered process involving many
steps and decisions. For a well-established e-commerce system, you need to
consider choosing and sourcing a product, conducting research and planning
ahead, getting your brand right, and deciding how you will sell. The actual
setting up of your online shop can be achieved in two ways, i.e. by building an
e-commerce store from scratch or by using an off-the-shelf e-commerce solution
like Shopify, which makes building an online store a quick and easy process.
E-commerce is conducted using a variety of applications, such as email, online catalogs, and shopping carts, EDI, the File Transfer Protocol, web services, and mobile devices. This includes business-to-business activities and outreach, such as using email for unsolicited ads -- usually viewed as spam -- to consumers and other business prospects, as well as sending out e-newsletters to subscribers and SMS -- short message service -- texts to mobile devices. More companies now try to entice consumers directly online, using tools such as digital coupons, social media marketing, and targeted advertisements.
The rise of e-commerce has forced IT personnel to move beyond infrastructure design and maintenance to consider numerous customer-facing aspects, such as consumer data privacy and security. When developing IT systems and applications to accommodate e-commerce activities, data governance-related regulatory compliance mandates, personally identifiable information privacy rules, and information protection protocols must be considered. Examples include https://www.amazon.com/,,https://www.ebay.com/e.t.c
Government Regulations For E-Commerce
In the United States, the Federal Trade Commission (FTC) and the Payment Card Industry (PCI) Security Standards Council are among the primary agencies that regulate e-commerce activities. The FTC monitors activities such as online advertising, content marketing, and customer privacy, while the PCI Council develops standards and rules, including PCI Data Security Standard compliance, which outlines procedures for the proper handling and storage of consumers' financial data.
To ensure the security, privacy, and effectiveness of
e-commerce, businesses should authenticate business transactions, control
access to resources such as webpages for registered or selected users, encrypt
communications, and implement security technologies, such as the Secure Sockets
Layer (SSL) and two-factor authentication (2FA).