What is eCommerce? Definition, importance and success factors
What is eCommerce? Definition, importance and success factors
::: The definition of eCommerce
eCommerce is the abbreviation for electronic commerce – Nowadays electronic trade, internet trade, or online trade.
Very few of us can imagine a life without Amazon, eBay, and Co. From 2014 to 2019, sales in online retail increased by more than 50 percent to almost 70.8 million Dollars. And according to the E-Commerce and Mail Order Association, there is no end to the growth in sight, especially since the pandemic has contributed to the boom.
In all likelihood, the importance of eCommerce will continue to increase in the coming years. The subject area is therefore becoming larger and more confusing rather than more manageable. That’s why we’ve put together the most important things you need to know today – and found out which trends could be cutting-edge tomorrow.
The areas of e-commerce:
E-commerce is all about buying and selling goods. None! This also includes the provision or procurement of services. This can include offering online banking or customer service.
In addition, three divisions are divided according to customers and source of income:
- B2C area: Business to Consumer:
Probably the classic among the eCommerce models – here you sell goods or services online to private customers.
This can be a purely online business or a model that combines stationary sales outlets with an online shop. In both cases, the aim is to reach the largest possible number of potential customers.
- B2B area: Business to Business
In B2B transactions, two dealers or a supplier and a company are involved. In this case, you earn income by selling goods or services to another company.
- C2C area: consumer to consumer
On C2C platforms, customers have the opportunity to trade goods or services with each other. Probably the best-known example of this is eBay classifieds. As a provider of the marketplace, you generate income by taking a percentage of the purchases and/or by generating advertising revenue.
Success factors in e-commerce:
General statements for e-commerce should often be treated with caution. After all, there is a world of difference between running a consumer-to-consumer portal for handyman services and selling goods to other companies. And yet there are a few central similarities – after all, with every variant you are dealing with customers in the electronic area.
Because the market is highly competitive, it is heavily customer-centric. A strong competitive orientation is therefore essential: What do you do better than the competition? Especially in e-commerce, a good user experience is a be-all and end-all. This includes not only the design but also the technical availability, such as the loading times.
Last but not least, innovation is the driver behind every e-commerce model: only those who recognize structural changes early can take advantage of the challenges and opportunities behind them.
Of course, no eCommerce can do without good marketing. In the beginning, it is crucial for winning new customers, but later it is also essential to retain your customers and continue to grow your buyer base.
In addition to classic advertising, social media presence, or a blog, e-mail marketing can also be an extremely lucrative and comparatively uncomplicated way to draw attention to your product or service. Regular newsletters are comparatively inexpensive and can help you build up your regular customers.
Note, however, that the more content there is out there on the web, the faster users sort out. So please do not send spam, but – with the consent of the customer – only quality content that actually creates added value for (potential) customers.
If you have your own shop, it is advisable to integrate a blog into the site. There you can place the content that has already been produced and attract additional traffic to your site with the necessary SEO knowledge.
However, before you take on everything at once and don’t really get anything done, you should focus and decide which of the marketing options suits you best for your e-commerce: What do you have the capacity for, what suits you and your best Product?
Legal Bases: E-Commerce Directive:
The legal component is entirely Not important in eCommerce. The content of the following sentences seems familiar to all of us: “As an online retailer, you must immediately confirm receipt of the order electronically. The order (and acknowledgment of receipt) is deemed to have been received as soon as it is available to you as the seller (or buyer).”
However, very few people know that this goes back to the so-called E-Commerce Directive, which came into force in 2000 under the somewhat cumbersome name 2000/31/EG. After online trading had increased in the 90s, the need arose to regulate this throughout Europe. And even though the E-Commerce Directive has since been supplemented by a few regulations, it still serves as a guide and the basis for all online business within Europe today.
In addition to the eCommerce Directive, there are of course a number of other laws to be observed in online trading. In addition to the general legal bases – such as the BGB and the HGB – which of course always apply, there are also numerous other specifications that must be observed specifically for e-commerce. If you would like to read more about this, you will find an overview of the legal basis on the IHK website.
You can also find the E-Commerce Directive in full and as an official summary on the European Union website if you want it to be a little more compact.
And what will happen with e-commerce in the future?
The most constant thing in eCommerce is still changing – so some new technologies are already in the starting blocks, which are sometimes already being used:
- Virtual Reality, eg: virtual showrooms
- Augmented Reality, e.g., “try on” glasses via webcam/mobile phone camera
- Biometric documentation, e.g: fingerprint or face recognition
- Artificial intelligence, e.g.: customer service through bots, optimization of returns
A major trend that only has something to do with technical innovations at second glance, but is no less important for that: experiences management. Personalization is the word of the hour: the customer should feel comfortable on your platform. For a long time, eCommerce was said to lack emotionalization. Personal video support via chat or the presentation of the products by employees in high-quality videos can – and may – be made up for here.
Conclusion E-Commerce: Now it’s your turn
Regardless eCommerce of whether you want to open a completely new business or already have a company with which you now want to get (more) involved in e-commerce: Since the field is constantly changing, you should always have your finger on the pulse of marketing and sales time – or even ahead of it. While new trends establish themselves and others go again, a strong brand core forms the basis for every company’s success.
If you are always looking for the smartest solutions for your business, you probably expect the same from your tools. Then the online banking offer could be particularly worthwhile for you. Here you will find more than “just” a digital banking tool by benefiting from numerous additional functions such as an interface and additional sub-accounts.