E-commerce

Definition

E-commerce, or electronic commerce, refers to the buying and selling of goods and services over the internet. This digital marketplace allows businesses and consumers to engage in transactions online, which has significantly altered traditional business models and expanded global market access.

5 Must Know Facts For Your Next Test

1. E-commerce has grown rapidly in recent years, with significant increases in online shopping due to advancements in technology and changing consumer behaviors.
2. This model includes various types of transactions, such as B2B (business-to-business), B2C (business-to-consumer), C2C (consumer-to-consumer), and C2B (consumer-to-business).
3. Mobile commerce, or m-commerce, is a subset of e-commerce that involves transactions conducted via mobile devices, which has further expanded market reach.
4. E-commerce platforms often utilize data analytics to personalize shopping experiences and target marketing efforts more effectively.
5. Logistics and delivery systems are crucial in e-commerce, impacting customer satisfaction and the overall efficiency of the supply chain.

Review Questions

• How does e-commerce influence traditional retail businesses?
  • E-commerce significantly impacts traditional retail by shifting consumer preferences towards online shopping due to convenience and variety. Retailers have had to adapt by developing their own e-commerce platforms or partnering with established online marketplaces. This transition often requires changes in inventory management and customer service strategies to maintain competitiveness in a digital-first environment.
• Discuss the role of technology in enhancing the efficiency of e-commerce operations.
  • Technology plays a crucial role in optimizing e-commerce operations through automation, data analysis, and improved communication. Automated systems streamline inventory management and order fulfillment processes, while data analytics provide insights into consumer behavior, enabling targeted marketing strategies. Additionally, advancements in payment processing and logistics technology enhance transaction security and delivery efficiency, making e-commerce more reliable for consumers.
• Evaluate the impact of globalization on e-commerce and how it shapes consumer behavior.
  • Globalization has transformed e-commerce by enabling businesses to reach international markets with relative ease, broadening their customer base beyond local boundaries. This access fosters competition among retailers worldwide, often leading to lower prices and increased product diversity for consumers. As consumers become more accustomed to online shopping from various countries, their expectations for product availability, delivery speed, and customer service evolve. Consequently, businesses must adapt their strategies to meet these heightened expectations in a globalized e-commerce landscape.

Related terms

Digital Marketing: The use of digital channels, such as social media, email, and websites, to promote products or services and engage with consumers.

Supply Chain Management: The management of the flow of goods and services from the point of origin to the consumer, including production, shipping, and distribution processes.

Online Payment Systems: Services that facilitate electronic transactions, allowing consumers to make purchases securely online through credit cards, digital wallets, or bank transfers.