What is E-commerce?
E-commerce means buying or selling goods online. From the first glance, it looks like an obvious step in the retail industry. First, everyone made a website for their business. Then contact forms appeared, and these evolved into online orders. But if you dig deeper, the last step is not as simple as it seems. To provide secure, fast, and safe online payments, people had to do a lot of work in the backend. It is one of the marvels of human technology and cooperation, on par with the invention of the CPU.
Even before the pandemic, the e-commerce industry was growing. Just in 2018, the total sales reached 3.3 trillion dollars. The number of buyers grew as well. Everything looked well for the industry, but things went crazy as the world locked down for the first time.
In the year 2020, the pandemic hit, and many stores closed doors for their customers. E-commerce, in particular business-to-customer deals, were the only means to buy “non-essential” goods. The first months of the pandemic showed the immense value that online trades could provide to the economy. The total sales rose as high as 4.2 trillion dollars that year.
Then most retailers opened online stores and provided delivery options. The job market changed as well, seeking people who could create and maintain the new systems. These include programmers, designers, and e-commerce consultants.
The Power of E-Commerce
Two traits make the e-commerce industry unique and increase its value. The first one is the absence of any limits imposed on the buyer. As long as the website is online, the deal will happen. The logistic expenses are non-existent for digital goods and lessen for physical ones, as a physical store is unnecessary. As long as the customer clicks “buy” the deal will proceed.
The second one is the marketing potential. There is little friction to buying a product, and most sellers aim for three clicks to go from the product page to checkout. It provides a lot of room for targeted marketing and optimization.
Superiority of E-commerce
A comparison between an average shop and an online store reveals the true power of e-commerce. A shop has a limited number of customers in the area. They come in once in a while and buy physical goods, spending their time and resources on transportation. There is a cost increase associated with rent. A separate facility or room is necessary to store stock. Most importantly, store owners know nothing about their customers, unless there is a loyalty program to gather data.
Compare this with an online store. The delivery is possible within a large area, which increases the potential customer pool. The rent is lower as the warehouse can be anywhere, and the delivery prices within one city don’t usually change. For a customer, there is no friction associated with buying something, as the order is delivered to their doorstep.
Moreover, the amount of data the seller gets about their customers is unmatched. Which pages of the site do people visit, where do they stay longer, what are their devices. All this information is priceless, and a good marketer can do a lot for a business with it.
It is obvious now that the world will never return to a “pre-covid” state. A lot of things have changed, and more will change. In this new world, e-commerce has become one of the dominant industries. Many people work in it, providing the seamless experience of buying in three clicks.