E-commerce

Definition

E-commerce refers to the buying and selling of goods and services over the internet. This digital marketplace has transformed traditional retail by allowing consumers to shop online from anywhere, leading to increased convenience and access to a global marketplace. E-commerce encompasses various business models, including B2C, B2B, C2C, and more, leveraging technological advancements to enhance customer experience and operational efficiency.

5 Must Know Facts For Your Next Test

1. E-commerce sales have significantly increased in recent years, especially during the pandemic, leading to a shift in consumer shopping habits.
2. Mobile commerce (m-commerce) is a subset of e-commerce that involves purchasing through mobile devices, which is growing rapidly due to smartphone usage.
3. E-commerce relies on a variety of technologies, including secure payment gateways and data analytics, to enhance the shopping experience and ensure customer safety.
4. Globalization has played a crucial role in e-commerce growth, enabling businesses to reach international customers with relative ease.
5. Online retailers often use strategies like personalization and targeted marketing to engage customers and increase sales.

Review Questions

• How has e-commerce changed the traditional retail landscape?
  • E-commerce has revolutionized traditional retail by providing consumers with the ability to shop from anywhere at any time, significantly increasing convenience. This shift has led many brick-and-mortar stores to develop online platforms to remain competitive. Additionally, e-commerce allows for a broader selection of products, often at lower prices due to reduced overhead costs compared to physical stores.
• Discuss the role of technology in enhancing e-commerce experiences for consumers.
  • Technology plays a critical role in e-commerce by providing tools that improve user experience and streamline transactions. Secure payment systems ensure consumer safety during purchases, while data analytics help businesses understand consumer behavior and preferences. Furthermore, advancements in mobile technology have facilitated m-commerce, making it easier for consumers to shop on-the-go and access personalized recommendations.
• Evaluate the impact of e-commerce on global trade and local economies.
  • E-commerce has significantly impacted global trade by enabling small businesses to reach international markets without substantial investment in physical infrastructure. This democratization of retail fosters competition and innovation while providing consumers with more choices. However, local economies can face challenges as traditional retailers struggle to compete with larger online retailers, potentially leading to job losses and store closures in some areas.

Related terms

B2C (Business-to-Consumer): A model where businesses sell products or services directly to consumers through online platforms.

Digital Payment Systems: Technologies that facilitate online transactions, such as credit card payments, PayPal, and mobile payment apps.

Online Marketplaces: Platforms that connect buyers and sellers, allowing them to conduct transactions; examples include Amazon and eBay.