Defining E-Commerce
E-commerce is a form of conducting business over an electronic network, most preferably the internet. It is a process involving the online interaction between the buyer and the seller or between two entrepreneurs characterized by online exchange of money.
Factors leading to the rise in the number of consumer shopping online
A huge number of people today have access to the internet compared to the number a decade or two ago. A large number of online users leads to more people preferring shopping for consumer goods online because entrepreneurs offer their products at lower prices that the normal higher-retail shops. Second, the efficiency and effectiveness of online shopping contributed to the rise in the number of online shoppers. Shopping through the internet is cheap and does not take a lot of the consumer's time because a person can shop from anywhere and at any time as long as there is the internet access. Finally, consumers opt for online shopping because it allows easier comparison of prices and offers from business people. Online shopping gives the consumer a chance to review many products at a go and compare their prices. Moreover, the consumer can use the information and reviews shared by other online shoppers about a particular product that aids in determining the best product to purchase.
Two ways in which high street retailer can compete with online retailers
Online retailers have overtaken the market today as more and more consumers prefer shopping online to walking physically into a high street store to shop. However, high street retailers can still compete with online retailers through the following two methods. First, high street retailers should focus more on attracting customers by selling products at lower prices and offering special discounts to customers buying from the store. High street retailing remain significant because they give the customer total experience and physical contact with the product. A big number of consumers prefer buying what they can see because buying happens to be a tactical process, giving high street retailers an opportunity to shine in the modern market despite the boom of e-retailing.
Second, high street retailers could come up with an online customer database that allows the consumer to navigate through available products and then travel to the store for physical purchase. A lot of online shoppers complain about receiving different products from what they orders and time to time delays during delivery. The use of an online customer database allows high street retailers to compete effectively with online retailers by giving their customers both the online and tactical shopping experience.
Advantages and disadvantages to retailers of selling products online
Advantages
Modern entrepreneurs are adopting e-commerce processes because of many benefits they offer. One of the advantages of selling products online is the ability to have a large number of people viewing the product. The number of online viewers keeps increasing each year as more and more people become connected to the internet in their home and through mobile phones. The high online presence increases chances of the retailer selling their online products compared to selling in high street stores where only a few number of people shop daily. Second, selling products online reduces the cost of running the business compared to high street retailing, leading to more profits. Retailers forego costs associated with renting premises, paying rates to local and government officials and the overall cost of running a physical store. Finally, selling products online allow the retailer to widen the market beyond local customers. The retailer can easily expand the business internationally and attract potential customers in those target markets that transforms to more sales.
Disadvantages
Selling products online introduces some negativity. First, the retailer requires high initial capital to set up the website page, pay hosting firms, maintenance of the website, and marketing to online customers. E-commerce is highly competitive because of the high numbers of websites offering online businesses, therefore; the retailer needs to make the website visible through extensive marketing that is much costly. Second, online retailing brings about customer trust issues. The retailer encounters challenges building customer loyalty without a physical retail shop affecting consumer buying behaviors.
