What is e-commerce? Nowaday, these words are heard frequently, but do you know why? Just listen to everyone, experts, medias and businesses… they are talking about it as if the e-com had always existed. However, when you do a review, you realize that e-commerce has come a long way in the last 30 years. The question certainly arises; What is the origin of e-commerce? What are the key elements that led to its success? How can I quickly learn about the subject without spending my entire life in articles way too complicated? This is what we will try to answer in this blog…. Have an good read!
Let’s start by defining the term used. E-commerce comes from the words commerce and electronic. It has several other names: e-com, online shopping, web transactions, online sales, etc. The purpose of e-commerce is simple. Conclude a transaction between 2 parties, but on the internet. There are several types of transactions:
1) From one business to another business (B2B);
2) From a trade directly to the consumer (B2C);
3) From one consumer to another consumer (C2C);
4) From a consumer to a business (C2B);
5) From trade to government (B2A);
6) From consumer to government (C2A);
We could spend a lot of time explaining each of these transactions, maybe it will be in a future blog? Let’s say that for today, the important thing will be to retain that most of the time, online sales are qualified by the concepts of B2B, B2C and C2C.
The ancestor of online sales
Before getting to the heart of the matter, we can’t talk about selling online without talking about one of their ancestors; Sears. Indeed, when we do the analysis of this company, which has had a hell of a success with their sales model by telephone via catalogs, the parallel with online sales is obvious. The same goes for the company, Distribution aux consommateurs, which used a similar model when the customer went to the shop / warehouse and selected his products from catalogs before seeing a clerk prepare his order and deliver it. These companies had a distribution network ahead of their time, while the technologies were way less attractive. Companies were successful with this model before collapsing following the web arrival. We are very curious to imagine what would have happened if a company like Sears had made the decision to go all-in with the e-commerce sooner. Indeed, following the surge in online commerce, some companies did not adapt and paid the high price while others like La Baie, which was on the verge of perishing, were able to save their business.
The beginnings of e-Commerce
Now that we have defined e-commerce, why not take a quick step back to remember one of the first step in e-commerce. We are in the 60s and already, indigenous people were going to revolutionize the e-com future, EDI! We already hear many people asking the following question: “EDI ?, but what is EDI”? To keep it simple, EDI mean Electronic data interchange. EDI allows users of a system to transmit data by computer. It was already obvious, this system would one day replace the paper and the way of doing business.
Despite the fact the computer could exchange data, the second stage did not happen until several years later. It was at the end of the 1970s that a new innovation emerged. It’s in the UK that Michael Aldrich developed a revolutionary system that would allow transaction on the web. It was the beginning of online business! It was at that moment that e-commerce experienced its first growth, mainly in the B2B world. Companies would then start migrating to this new system. At that time, the end consumer was not yet a major player in the online commerce industry. In fact, there were very few people who owned a computer at home back then.
The explosion of e-Commerce
Why not take a few years’ jump to talk about the rise of e-commerce in the early 90s. At that time, we are reaching a turning point in e-commerce. More and more people have computers at home and the Internet is slowly coming into every home. This is the start of many opportunities for companies looking for new sales channels. However, many are afraid of selling online. We can once again hear our readers: “Why would a company not want to sell online and increase its turnover? ”. You have to remember that the internet is still something new and the system is not necessarily reliable at that time. Many fear that their personal information will fall into the wrong hands if they decide to buy online. This fear is present until the SSL protocol makes its long awaited arrival on the web! Let’s keep it simple again, SSL (Secure Socket Layer) allows you to secure and authenticate data on the internet. The information sent and received is encrypted and this has not only made the system more reliable, but it reassured customers to buy online.
Unsurprisingly, several companies are launching on the web. We can name a few: Amazon (1995), Ebay (1995), Netflix (1997), Paypal (1998), Alibaba (1999). All forerunners in the field, these companies have chosen to go on the web and they are now leaders in the world of online commerce 20 years later. Each business has successfully found its niche and made it easier for consumers to buy a product or service online. These companies would pave the way for the future of e-commerce.
Accessibility to online commerce.
Once every home have access to online shopping on their computer, what could happen to e-commerce? The cellphone! The increase in popularity of mobile devices from 2000 to 2010 is incredible.However, most websites are almost non-functional on the mobile … The consumer tries to buy online with their cellular device and tablet, but the task is not easy and almost impossible. Companies therefore give themselves the mandate to have responsive sites in order to meet customer demand again. In other words, the responsive website adapts to the used device in order to offer a pleasant experience to those who consult it. You guessed it, the accessibility to e-commerce becomes even more appealing. The consumer can decide to buy anything and everywhere. He can buy a television during his break at the office and pay for his movie ticket in the taxi. Obviously, online shopping explodes again from 2010 to 2020. On the other hand, this brings up another challenge. The customer buys quickly, but he also wants to receive quickly. Of course, businesses have to reinvent themselves again to deliver the goods quickly. The future will tell us who will win this stage of e-commerce.
The future of e-Commerce
It is really difficult not to write this section. Unfortunately, we will have to be patient and wait for our 4th blog on online business. We can’t wait to talk about it!
To conclude, e-commerce is such a vast subject, that we could talk about it for hours and get lost easily. We hope this blog has taught you a little bit about the history of this fascinating subject. This blog sets the scene very well for our next week topic, which is titled “An Analysis of Amazon’s Business Model”. Our team is very excited to help you understand how Amazon plays the role of model, ally, competitor and sales platform for an order fulfillment and distribution center like ours.
If you have any questions, comments or suggestions about an article, or would like to suggest article topics to us, please do not hesitate to contact us and we will be happy to discuss them together.
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