We Need to Talk About The “E” in E-Commerce

You may have heard some of your colleagues use commerce and e-commerce interchangeably. But there is a difference. Let’s start with some basic definitions.

• Traditional commerce or commerce is the exchange of goods or services and includes all of the activities that encourage the exchange (e.g. two people face-to-face in a storefront)
• E-commerce (also known as electronic commerce or internet commerce), is a modern business methodology and a variant of traditional commerce, that refers to the buying and selling of goods or services, funds or information, between businesses and consumers using an electronic network, and the transfer of money and data to execute these transactions.
  • E-commerce can also be further categorized as follows: B2B commerce (business transactions between two businesses via an electronic means), B2C commerce (exchange of goods or services over the internet between a business and a consumer), C2C commerce (buying and selling of products and services using an electronic channel)

Now that we’ve defined commerce and e-commerce for you, let’s take a look at some of the differences and what’s notable about that awkward “e”:

1. Availability: With an e-commerce store, you’re open 24/7/365 this includes Christmas, Hanukkah, Ramadan and every holiday.
2. Care: With e-commerce, consumers typically lose part of the traditional commerce where they can approach a sales person, ask questions or hold a product. This can be combated in other ways (an FAQ, chatbot or other Q&A forum).
3. Reach: You’ll reach more consumers because you’re not limited to a certain geographic area.  Your demographic pool expands beyond local regions; it can be national and sometimes international.
4. Profits: E-commerce can help you increase sales by cutting costs and streamlining operating costs. Some of these costs include middlemen and overhead. While the upfront investment can be significant, the long term ROI can show not only a reduction in overhead but the ability to shift your valuable human resources to focus on broader goals of your business.
5. Launches: In traditional commerce, it takes a lot of time and energy to introduce a new product. With e-commerce, resources can be allocated to production, analysis and surveys for more immediate feedback. And, with that feedback you can pivot with more flexibility and speed. Money can be put into producing, analyzing and piloting surveys to consumers. In e-commerce, you can easily introduce a product to a website and seek more immediate feedback. Based on the feedback, your company can redefine and modify as needed.
6. Space: Long coveted shelf space in brick and mortar stores are a thing of the past. With e-commerce, you aren't limited in your offerings.
7. Process: With e-commerce, manual processing goes to the wayside in favor of automated processing. In traditional commerce, you see a lot of manual intervention giving way to clerical error.
8. Payment: You can pay with credit cards, fund transfers and many more options with e-commerce. Whereas with traditional commerce, you might see cash, checks, credit cards etc. A shift to e-commerce may increase your security scope for card payments but it can also prove a reduction in cash management fraud as well as card payment security at the point-of-sale.
9. Forecasting: Lots of planning goes into an e-commerce experience.  If you or your company is considering an e-commerce site, here are some questions to review:
10. Take inventory. Channels are how a consumer reaches a product or service.  Channels can be direct from advertisements, email campaigns, social media etc. These can also be industry specific, so ask yourself, what are all the different ways a potential user can reach my site?

There you have it—more information on that awkward “e” in e-commerce.  In the modern age of online shopping, more and more businesses (small and large) are using an e-commerce platform—it’s becoming a necessity, not a luxury.