What is the e-commerce industry characterized by?

Service Business

The simplest definition of e-commerce is electronic commerce. Its main form is online stores. There would be no e-commerce phenomenon without the development of a new economy, i.e. one based on knowledge and information. New information technologies and digitization have transformed the economic system - from one based on industry - to one based on the development of technology. The most important of these technologies was the Internet, but the digitization of various processes, also off-line, and the development of cellular networks, WAP, GPS, etc. were also important. First, this process took place in the USA, where online purchases could be made already in 1979. From 1992 through the 1990s, the new economy developed in the United States. Later, the same processes took place in other countries, along with the spread of the network in them. According to economists, the Internet has a significant impact on economic growth, and its share in GDP growth around the world is also growing.

In Poland, the Internet became available in 1991, but the first Polish online store was established only in 1997. Currently, in our country, the new economy related to e-commerce is developing rapidly. In 2015, e-commerce amounted to over 5% of the value of retail trade in Poland, which means that transactions worth over PLN 30 billion (according to PMR's analyzes) were made in its scope. Experts from PMR estimate that by 2020 e-commerce will account for approximately 10% of the Polish retail market. Already today, according to experts from the research company PwC (report: Customer in the digital world), 55% of Poles shop online (although they do not completely give up shopping in traditional stores). E-commerce is therefore not only a child of the new economy, but also its future.

E-commerce sales models

It will probably come as no surprise that e-commerce has developed so quickly. The Internet has turned out to be an excellent space for concluding commercial transactions both between companies (B2B - business to business) and in retail (B2C - business to consumer). The B2C sales model is the most widespread and is implemented by most online stores. Along with the development of e-commerce, in addition to these two basic sales models, there are also online trade between C2C (consumer to consumer) consumers, e.g. on auction or advertising platforms (e.g. Allegro, OLX) and the reverse B2C model, i.e. C2B (consumer to business) . The C2B model uses the interactivity and two-way communication on the Internet, as opposed to traditional media (press, radio, TV, outdoor) which used to be one-way. In the C2B model, the client can offer to sell something to a company, e.g. an internet domain through a specialized website or directly.

We can also distinguish 3 other types of e-commerce:

  • direct - a commercial transaction takes place entirely on the Internet (including payment and delivery of a product or service),

  • indirect - searching, ordering, purchasing and paying takes place via the Internet, while the delivery of a service or goods takes place in the real world,

  • hybyrdowy - uses transitional forms, different at different times.

Which e-commerce trading strategy to choose?

  1. Become an industry leader. This strategy is easiest when we launch a new product, service, customer service or other innovative solution. The old marketing principle speaks of the dominance of the first in the market. For example, on the Polish market, Allegro was the first to launch an auction site on a large scale. And it is Allegro, and not eBay, which dominates the global market, that is still the leader in Poland. However, this rule does not always work. It is enough to cite the example of the Nasza Klasa and Facebook websites. In the fight for the leading position on the e-commerce market, all the features that distinguish our company from the competition: taking care of the high quality of the offer and promoting it among customers as the best on the market.

  2. Choose a specialization or market niche. Competition on the internet market is huge. So instead of setting up a shop with an offer that already has thousands, it is worth rethinking your idea for e-commerce and choosing a narrow specialization or a completely niche offer. The range and scope of sales will be smaller, but most likely there will be little or no competition on the Internet. So let's think about what isn't there yet. What needs of e-commerce customers are not yet sufficiently satisfied? How can my e-shop stand out?

  1. Build a network of relationships. Symbiosis and synergy are two effects of such a network. Cooperation with many entities that will help us achieve greater conversion, increase sales, develop the reach of marketing activities and brand awareness are elements of this strategy. Sometimes it is a purely commercial relationship, sometimes a symbiosis with, for example, various portals that already have an established position on the market. The more contacts, the greater the chance that thanks to them our e-store will develop faster.

  2. Take care of every customer. One of the biggest costs for e-commerce companies is customer acquisition. Many marketing activities are mainly aimed at creating the so-called a shopping funnel, i.e. making the acquired customers make a purchase. So if it costs so much to get customers, you should take care of them and keep them for longer. Customer care, answers to their questions, sales and shipping services, complaints and good after-sales service will help in this. A satisfied customer returns, dissatisfied not only will not come back, but will spread a bad opinion about us. It is also good to take care of motivating customer loyalty systems, e.g. discounts for subsequent purchases, special promotions, etc.

  3. Invest in developing affiliate programs. This method is becoming more and more popular not only in e-commerce. Various types of affiliate programs and referrals allow both sides of the relationship to benefit. Thanks to this, the online store increases sales and acquires new customers, while the recommending or partner receives commissions for their actions. Commands can be technically implemented as leads (obtained data of potential customers by filling out forms) or as entries to the landing page through advertisements posted on the partner's website (counted based on tracking codes). There are also affiliate programs that only take into account the execution of specific actions by the client, for example, making a purchase, opening a bank account or taking a loan.

These are just a few suggestions for an e-commerce business strategy. You can read more about the possibilities of e-commerce in the next part of the article.