Originally introduced as Confinity, PayPal debuts as a money transfer tool. Startups proliferate, with entrepreneurs being seduced by the get-rich-quick promise of the internet. Many online and technology entities declare bankruptcy, including Webvan , an early grocery delivery service.
Despite the bust, Google AdWords is introduced as a way for eCommerce companies to advertise through short-text ad copy and display URLs. Pay-per-click PPC advertising efforts of online retailers takes off. In addition, Amazon launches Amazon Prime, giving members free 2-day shipping within the United States and making expedited shipping a consumer expectation. Today, there are approximately million Prime members in the United States. Many other eCommerce platforms , such as Magento and BigCommerce, quickly enter the space and make a name for themselves.
Though the aforementioned Webvan and other grocery delivery services failed or struggled in the past, food shopping finally finds its groove in , with the founding of Instacart. Instacart sends shoppers to local stores to pick out groceries that consumers order online. Today, with advances in cold warehousing and delivery, online food shopping is big business. Also in , fulfillment solutions provider The Fulfillment Lab is founded by Rick Nelson, giving eCommerce business owners further insight into their inventory, new methods of customizing packaging, and more ways to increase sales.
The coronavirus pandemic forces many physical stores to close their doors, and lockdowns keep many citizens quarantined at home. To purchase essentials and combat boredom, people embrace online shopping. Retail Index , the pandemic accelerated the shift away from physical stores to digital shopping by roughly five years.
The business pays the individual for the blog post, video, or podcast, and benefits from the marketing opportunity. Because all of that happens online, it qualifies as C2B e-commerce. Another good example of C2B e-commerce reflects a popular trend for individuals to earn or supplement their living.
Platforms have emerged that allow freelancers to market their skills to clients. On those websites, freelance photographers, writers, developers, and more will secure assignments from businesses. An easy way to illustrate C2C e-commerce is through the freelance platforms in the previous type of e-commerce. Instead of freelancers selling their products and services to businesses, freelancers in C2C e-commerce engage in work with other consumers.
Think of a consumer who wants a professionally designed graduation party announcement done or a family website built. Neither party is an established business. Other examples are even more straightforward. Imagine a married couple who wants pictures taken from someone they find online who has a passion for photography. Another common scenario is when people sell items online, at websites like eBay and Craigslist, to other people.
Transactions take place online and no party is an established business. One example is found in consumer-to-government C2G e-commerce, when individuals pay the government online for taxes or university tuition. Another type of government e-commerce is when businesses perform services for governmental organizations. The strategic information technology company Synergetics has a client list that includes the National Institutes of Health, the Department of Veterans Affairs, the Department of Defense, and the Department of Agriculture.
That model of business is referred to as business-to-government B2G e-commerce. Other opportunities may be possible in the future, too. Compare to traditional retail, e-commerce has benefits that can take a business to the next level. The ability for people to purchase products and services online instead of in person is, to put it plainly, huge.
Customers shopping online instead of in person leads to other benefits for businesses. Instead of marketing to an audience locally through more traditional advertising methods, online marketing is the focus in e-commerce. Concepts like search engine optimization SEO , pay-per-click advertisements, and social media help level the playing field a bit.
Costs are typically lower in online marketing than the traditional marketing methods required to succeed in traditional retail. Having no real estate costs in e-commerce is another bonus. What are some notable concepts that are impacting the world of e-commerce. You could find dozens upon dozens of examples, but here are just a few trends that demonstrate what businesses can do with online storefronts.
Influencer marketing is a social media marketing strategy that uses influential people to draw attention to the product or brand. Think of it as a new spin on having a spokesperson. However, influencer marketing is often more short-term in nature. The influencer is paid for marketing a product or service. One example might be a fashion influencer being paid by an up-an-coming designer to showcase a new line of accessories.
Those types of relationships can exist in nearly any type of business. One-click purchasing is exactly what it sounds like. E-commerce stores can simplify the shopping process by enabling users to complete their entire purchase without having to go through several steps to checkout. Both sides benefit from one-click purchasing. Customers save time by avoiding the need to select saved or default options, like shipping speed and payment method.
Businesses can enhance their profits because one-click purchasing increases impulse buys. If the system is as easy as possible to complete, consumers are more likely to make purchases at the site. Social shopping is another e-commerce trend that builds off the idea that making things easier for consumers to shop will result in increased profits.
In social shopping, people viewing products on social media networks receive a direct link where they can make a purchase. This feature has been integrated on Instagram and Pinterest. When people are searching for something like art project ideas for children or a way to decorate their home, they may come across a great activity or a set of matching pillows and blanket. Providing a direct link enables businesses to make it as easy as possible to purchase the product.
Similar to one-click purchasing, doing adding a direct link is a powerful way to increase sales. Subscription services appeal to customers by providing a product that people need on a regular basis. Customers simply sign up for a subscription box, and every month they receive a new order. What can shoppers get with subscription services? The three main models are:.
In a dropshipping model, the e-commerce business takes no physical possession of the items on sale. The store owner does not keep products in stock and there is no inventory held.
Instead, orders are sent directly to the manufacturer, who is responsible for storing the items and shipping them to the customer. In this sense, the merchant never sees or touches the products, which has some unique advantages over adopting a more traditional order fulfilment model.
Buying wholesale is arguably closest to the traditional offline retail model. In effect, the business owner retailer acquires stock directly from a wholesaler at a discounted rate, applies a margin onto each product and decides to deliver to consumers directly. Whilst there are numerous advantages to the drop-shipping model, there are also some drawbacks that require careful consideration:. The retailer may wish to market products from a supplier that does not provide a dropshipping service.
In this model, companies such as Shipwire are commissioned to handle the product side of the business, on behalf of the retailer. Generally, speaking, they are responsible for collecting products from the supplier, holding the product at their distribution centers, all packaging as well as onward order fulfilment to the customer. This service comes at a cost — minimum fees, return fees and setup fees are commonplace and should be fully weighed up beforehand.
Dropshipping is a great option to have, particularly when starting out with an e-commerce business. Cash flow management is easier and there is a reduced burden on the workforce associated with fulfilment. That said, wholesale offers the longer-term benefits of higher margins and allows greater scope for building a truly differentiated brand. If a product is high-margin, an outsourced fulfilment route is possible, but should be fully evaluated.
Having understood the main e-commerce models, it is important to spend some time considering the technology platform on which it operates. When analysing online businesses, t he choice of platform is important; it will determine the basic customer experience, checkout process and the day-to-day management of orders etc.
To begin with, a decision needs to be made between a hosted or custom installation. A custom installation will mean a cquiring your own hardware. Both have practical implications for the owner, we have detailed some considerations below. It is important to remember that if a self-hosted solution is preferable, shopping carts can be switched. Businesses sitting on out-dated self-hosted installations can be moved over to hosted carts at a relatively low-cost depending on level of complexity, number of integrations.
Further, it is important to plan ahead and research when deciding on which route to take — hosted may make sense now, but as the business grows self-hosted could make more sense. Having decided on the relative merits of growing the business via a hosted vs. We recently assessed a number of different e-commerce platforms and looked into which platforms were most popular, below serves as a good starting point:.
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