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UNIT- 1Introduction to E-commerce Tools Q1) What is Ecommerce?A1) Ecommerce, also known as electronic commerce or internet commerce, refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions. Ecommerce is often used to refer to the sale of physical products online, but it can also describe any kind of commercial transaction that is facilitated through the internet.Whereas e-business refers to all aspects of operating an online business, ecommerce refers specifically to the transaction of goods and services.The history of ecommerce begins with the first ever online sale: on the August 11, 1994 a man sold a CD by the band Sting to his friend through his website NetMarket, an American retail platform. This is the first example of a consumer purchasing a product from a business through the World Wide Web—or “ecommerce” as we commonly know it today.Since then, ecommerce has evolved to make products easier to discover and purchase through online retailers and marketplaces. Independent freelancers, small businesses, and large corporations have all benefited from ecommerce, which enables them to sell their goods and services at a scale that was not possible with traditional offline retail. Q2) What are the types of E-commerce model?A2) Types of Ecommerce ModelsThere are four main types of ecommerce models that can describe almost every transaction that takes place between consumers and businesses.Business to Consumer (B2C):
When a business sells a good or service to an individual consumer (e.g. You buy a pair of shoes from an online retailer). Business to Business (B2B):
When a business sells a good or service to another business (e.g. A business sells software-as-a-service for other businesses to use) Consumer to Consumer (C2C):
When a consumer sells a good or service to another consumer (e.g. You sell your old furniture on eBay to another consumer). Consumer to Business (C2B):
When a consumer sells their own products or services to a business or organization (e.g. An influencer offers exposure to their online audience in exchange for a fee, or a photographer licenses their photo for a business to use). Q3) Give some example of E-commerceA3)Examples
Ecommerce can take on a variety of forms involving different transactional relationships between businesses and consumers, as well as different objects being exchanged as part of these transactions.1.Retail:
The sale of a product by a business directly to a customer without any intermediary.
2.Wholesale:
The sale of products in bulk, often to a retailer that then sells them directly to consumers.
3.Dropshipping:
The sale of a product, which is manufactured and shipped to the consumer by a third party.
4.Crowdfunding:
The collection of money from consumers in advance of a product being available in order to raise the startup capital necessary to bring it to market.
5.Subscription:
The automatic recurring purchase of a product or service on a regular basis until the subscriber chooses to cancel.
6.PhysicalProducts:
Any tangible good that requires inventory to be replenished and orders to be physically shipped to customers as sales are made.
7.DigitalProducts:
Downloadable digital goods, templates, and courses, or media that must be purchased for consumption or licensed for use.
8.Services:
A skill or set of skills provided in exchange for compensation. The service provider’s time can be purchased for a fee. Q4) Explain the Technologies Used in E-Commerce SystemsA4) There is rarely a facet within an industry that hasn’t been touched by technology. Most notably, big data and machine learning are paving the way for robotics automation, the instant transfer of data, and a variety of interesting devices.The retail industry is no exception when it comes to taking advantage of technology. In fact, successful businesses are setting the bar by implementing technologies such as artificial intelligence (AI), chatbots, and voice assistants into their operations. The reasons vary, but can include that these technologies help provide excellent customer experiences through instant communication, providing support without the help of live employees, data management and security, and much more.Many online stores already have integrated e-commerce software, but to stay in the competition, any e-commerce business must give serious thought into the following technologies to stay prosperous and maintain customer satisfaction.Artificial intelligence (AI)AI is revealing valuable insights into customer preferences — which can guide marketing campaigns. It also can provide for the automation and transfer of data management operations to increase performance. In the retail and e-commerce world, AI is being relied upon for several unique aspects of business.Personalized user experience74% of businesses believe that user experience is important for improving sales and conversions. AI provides a personalized user experience that 59% of customers say influences their shopping decisions. Artificial intelligence can facilitate a shopping experience that is supported by customers’ personal preferences.AI, big data, and machine learning can offer analytics and foresight into customer behavior patterns which can drive advertising campaigns, provide support and services, and automate communication — all of which increase engagement rates for businesses.Recommendations to customersSince AI can predict customer behavior patterns, it is able to recommend relevant and useful information to customers on products and services and more. AI and machine learning algorithms can efficiently forecast this information by taking in a customer’s search history and other third-party data. This can lead to effectively proposing applicable information and solutions to satisfy customer needs.Automated campaign managementCustomer behavior patterns are a driving force behind any marketing campaign. Using AI, businesses are able to target both potential and existing customers by looking at data such as past certain history. These analytics can be used to provide a better aimed content marketing strategy for businesses.Content and advertisements may then be created with a tone that engages various audiences and placed on the correct media platform to capture their attention. Using AI and marketing automation can show a business the data necessary for a strategic and tactical campaign.The CloudYou will be hard-pressed to find a successful business that does not have at least one aspect of their business operations posted on the cloud. Managing and processing data in the cloud is essential for the instant access of data by anyone who needs it, on any device. Especially for e-commerce businesses, a cloud ERP can improve delivery speeds, make your store more adaptable, and bring about business stability and growth.ChatbotsRecognized for their customer satisfaction rates and wide-scale availability, chatbots have pivoted from limited use in call centers to wide-spread e-commerce website applications. Rather than asking questions and providing information to those over the phone, e-commerce websites that utilize chatbots can provide a variety of services and solutions.24/7 assistanceMany businesses cannot provide answers exactly when a potential customer is searching for them. Additionally, customers may be frustrated when put on hold because a business does not have the staff to answer and tend to a high volume of customers.Chatbots are available 24/7, day and night, to provide any answers and solutions a potential customer may inquire about. Having this automated communication can be valuable for businesses as it frees up employees to focus on other business operations, efficiently communicates with customers, and may even propose products and services.Respond to queriesBuilt into a chatbot’s algorithm is what is called a decision tree. Decision trees use machine and deep learning to automate complex business processes, essentially developing, maintaining, and always expanding upon a comprehensive network of if/then statements.By addressing commonly asked questions and concerns from customers, chatbots are able to expand upon their decision tree. Here, a chatbot can gain information on whether they’ve helped a customer or not. If they have helped the customer, this information may be passed on to another consumer with a similar question. If they have not adequately satisfied the customer, the chatbot may continue asking questions until they provide the customer with the information they are looking for. When they have answered the customer, the chatbot now has more choices in their decision tree to help customers in the future.Send shipping and tracking informationImagine if Amazon never remembered your address or payment information and never told you when your order is scheduled to arrive. It is a pain for customers to have to enter shipping information every time they want to order something from your e-commerce website. Additionally, it is a best practice for user experience to give a customer a timeframe for when the order will be at their doorstep.Chatbots remember this information and can provide real-time shipping tracking details for customers. This can also help warehouse operations, as they could focus on the supply chain and fulfilling orders through their order management system rather than telling customers where their packages are.Voice assistantsNot everyone searches for products and information via mouse and keyboard in the digital age. To accommodate these potential customers, businesses will need to adopt voice commerce — using voice recognition technology and allowing customers to use voice commands to find and purchase products online. Voice assistants such as Siri, the Amazon Echo, and Google Home are becoming increasingly popular for their convenience in searching for and purchasing products. In order to stay successful, e-commerce businesses will need to provide this technology and its benefits to capture a new wave of consumers.Audio brand signaturesAny company jingle, music composition, or auditory tone is considered an audio brand signature. It is a way for businesses to better establish a brand identity, and help customers remember their name.Businesses can command their audio brand signature to play through voice assistants to let their customers know where they are ordering their products from. By associating your brand with an auditory signature, consumers will know and remember they are ordering from your store – even when laying on their couch, speaking to a voice assistant.Shopping listsCustomers would rather automate their continual shopping needs than frequent a website (or store) every month for their essentials. Through voice assistants, people are able to compile shopping lists — ordering what they need from who they want. This technology learns the preferences of the owners, and many businesses are able to capitalize on brand loyalty. If a voice assistant knows that a person wants a product from your store monthly, it can add it to their shopping list. This can be beneficial to companies in forecasting sales and balancing order management.Assistive technologyIn the marketing world, assistive technology and voice commerce are helping to reach a wide variety of new audiences — not just the younger generation who are using new devices, but the visually impaired as well. By using speech-to-text technology, the visually impaired can forgo the struggles of traditional search experience, and order what they need through new and developing assistive technology.All interconnected, AI, chatbots, and voice assistants are becoming necessary for any e-commerce business to be successful. In order to stay with the times, businesses must adapt to these new technologies which appeal better to potential and existing customers.Discover more B2B e-commerce trends and statsGet to know your customers: download our B2B Buying Process 2019 Report for stats and insights into the behavior, preferences and challenges of buyers, based on a survey of 500+ B2B customers. Discover the e-commerce trend toward B2B2C and D2C sales, including what other businesses are doing, and how you can respond. See how e-commerce trends have evolved and how to get ready for the future of e-commerce with our B2B e-commerce trends timeline. Understand the business benefits of ERP-integrated e-commerce based on a survey of global B2B and B2C customers. Q5) What are the Various Activities of E-Commerce? A5)Online shopping for retail sales direct to consumers via Web sites and mobile apps, and conversational commerce via live chat, chatbots, and voice assistants Providing or participating in online marketplaces, which process third-party business-to-consumer or consumer-to-consumer sales Business-to-business buying and selling; Gathering and using demographic data through web contacts and social media Business-to-business (B2B) electronic data interchange Marketing to prospective and established customers by e-mail or fax (for example, with newsletters) Engaging in pretail for launching new products and services Online financial exchanges for currency exchanges or trading purposes. Q6) What is Business to consumer in E-commerce?A6) B2C – Business to consumer.B2C businesses sell to their end-user. The B2C model is the most common business model, so there are many unique approaches under this umbrella.Anything you buy in an online store as a consumer — think wardrobe, household supplies, entertainment — is done as part of a B2C transaction. The decision-making process for a B2C purchase is much shorter than a business-to- business (B2B) purchase, especially for items that have a lower value. Think about it: it’s much easier for you to decide on a new pair of tennis shoes than for your company to vet and purchase a new email service provider or food caterer.Because of this shorter sales cycle, B2C businesses typically spend less marketing dollars to make a sale, but also have a lower average order value and less recurring orders than their B2B counterparts. And B2C doesn’t only include products, but services as well. B2C innovators have leveraged technology like mobile apps, native advertising and remarketing to market directly to their customers and make their lives easier in the process.For example, using an app like Lawn Guru allows consumers to easily connect with local lawn mowing services, garden and patio specialists, or snow removal experts.Additionally, home service businesses can use Housecall Pro’s plumbing software app to track employee routes, text customers, and process credit card payments on the go, benefitting both the consumer and business alike. Q7) What is Business to Business in E-commerce?A7) B2B – Business to business.In a B2B business model, a business sells its product or service to another business. Sometimes the buyer is the end user, but often the buyer resells to the consumer.B2B transactions generally have a longer sales cycle, but higher order value and more recurring purchases.Recent B2B innovators have made a place for themselves by replacing catalogs and order sheets with ecommerce storefronts and improved targeting in niche markets. In 2020, close to half of B2B buyers are millennials — nearly double the amount from 2012. As younger generations enter the age of making business transactions, B2B selling in the online space is becoming more important. Q8) What are the Five Value Delivery Methods for Ecommerce Innovation?A8) If your business model is the car, then your value delivery method is the engine.This is the fun part — where you find your edge. How will you compete and create an ecommerce business worth sharing?Here are a few of the popular approaches taken by industry-leaders and market disruptors.1. D2C – Direct to consumer.By cutting out the middleman, a new generation of consumer brands have built loyal followings with rapid growth. Online retailers like Warby Parker and Casper set the standard for vertical disruption, but brands like Glossier are showing us how D2C can continue to be an area for innovation and growth.2. White label and private label.To “white label” is to apply your name and brand to a generic product purchased from a distributor.In private labeling, a retailer hires a manufacturer to create a unique product for them to sell exclusively. With private labeling and white labeling, you can stay lean on your investments in design and production and look for an edge in technology and marketing. 3. Wholesaling.In a wholesaling approach, a retailer offers its product in bulk at a discount.Wholesaling is traditionally a B2B practice, but many retailers have offered it to budget-conscious consumers in a B2C context. 4. Dropshipping.One of the fastest growing methods of ecommerce is dropshipping.Typically, dropshippers market and sell items fulfilled by a third party supplier, like AliExpress or Printful. Dropshippers act as a middle man by connecting buyers to manufacturers. Easy-to-use tools allow BigCommerce users to integrate inventory from suppliers around the world for their storefronts.5. Subscription service.As early as the 1600s, publishing companies in England used a subscription model to deliver books monthly to their loyal customers. With ecommerce, businesses are going beyond periodicals and fruit of the month clubs. Today, virtually every industry has seen the arrival of subscription services to bring convenience and savings to customers. Q9) Write some Examples of Innovative Ecommerce Business Plans?A9) Many companies have flourished with the freedom ecommerce gives them. These brands have combined classic business models with something new, making them innovative leaders in the field.1. Larq – D2C.In 2018, LARQ launched the first self-cleaning water bottle. This reusable, rechargeable bottle uses UV-C technology to eliminate viruses and bacteria in water, whether it’s from a tap or a natural source. LARQ’s launch was the largest crowdfunded effort for a clean water initiative with $1.7 million raised. Today, LARQ donates 1% of its proceeds to efforts for clean drinking water around the world.Buyers were attracted to this reusable bottle because of its eco-friendly factors, while they can also save money skipping on single-use water bottles, but still enjoy a clean water vessel (without scrubbing it) every time. These unique factors have led to LARQ’s increased revenue by 400% year-over-year. 2. Beer Cartel – Subscription service.Some ideas sell themselves.Beer Cartel offers Australia’s longest running beer subscription service, with expert-selected craft beers from around the globe delivered to subscribers’ doorsteps each month. They’ve attracted the curious and the connoisseurs by giving their customers a unique selection at a price better than what they could get in stores. Beer Cartel has also done a great job of offering several different subscription options to serve customers of all appetites and budgets.3. Berlin Packaging – B2B.Fortune 500 companies an family-owned startups alike trust Berlin Packaging for sourcing, designing, and distributing their containers and closures. As a hybrid supplier, Berlin Packaging brings their expertise to every level of the supply chain to increase efficiency and lower cost for their customers.Berlin Packaging is over 80 years old but has kept their advantage by innovating every step of the way. By adopting an ecommerce business model, they stayed competitive by making it easy for their customers to shop from their large selection of containers sourced from more than 200 different partner vendors. Berlin Packaging also prioritized a strong connection between their site and ERP, making it easier for customers to see their credit limits, balances, and past due balances.4. Atlanta Light Bulbs – B2B.Atlanta Light Bulbs is no stranger to innovative ecommerce. ALB launched their first ecommerce site in 1999, which gave them a huge head start on creating a unique site experience for their customers.As their market has shifted to the millennial generation, Atlanta Light Bulbs has focused on adding more to their online platform that will set them apart from their competition, such as using apps for their BigCommerce storefront. Their mobile shopping app has primarily helped grow Atlanta Light Bulbs’ B2C sales, but even their commercial clients have come to enjoy the convenience of ordering from their mobile devices. Another creative tactic from ALB is their make an offer feature, which allows buyers to name a quantity and price and submit an offer. On the backend, pricing rules are used to auto-calculate the lowest price Atlanta Light Bulbs can give. Customers receive a message letting them know their proposal has been accepted and they can checkout, or, if the price is too low, a different deal is offered. 5. Mountain Crest Gardens – Wholesaling.Mountain Crest Gardens began as a family-owned and operated business in Northern California in the mid-90s. But when they relaunched their website in 2012, they saw 10x the revenue and a 400% increase in orders. Mountain Crest Gardens capitalized on what made them unique: their aesthetically beautiful succulents. User-generated content organically amplifies the plants and drives orders. Plus, Mountain Crest Gardens caters to different consumers as they offer individual succulents, wholesale options and even a subscription box. Q10) How so you Select Your Ecommerce Business Model?A10) We’ve talked about your broader options for choosing an ecommerce business model, now let’s look at the specifics.Here are a few questions that will help you create a plan that will set your company apart. The key here is honesty and research. Spend time learning about the market you’re targeting and be honest about what unique value you can bring to the space. 1. Who is your customer?Who are you looking to serve?Consider what their expectations are when purchasing the type of product you plan to sell. You’re most likely to succeed if you can understand their behaviors and habits and find ways to improve them or save money. To do this, you’ll need to look for pain points in the way things are currently done. This is where you as an innovator can carve a space for yourself. 2. What are you capable of?What do you know better than anyone else?Build around your existing strengths and the pieces that are energizing to you. Be realistic about what elements you can do yourself and what you will need to find help for. It can be challenging to know your limitations but it will help you make better long-term decisions. 3. What is best for your product?Depending on your product, different models will serve you better than others.For example, if you are manufacturing your own products, you may want to consider wholesaling or subscriptions to help cover production costs and break even more quickly. If you are a distributor of other people’s products, you’ll want to invest more heavily into direct marketing and strategies that will grow your customer base. 4. What is your positioning?You understand what makes your product better, but will consumers?Evaluate your competition and make sure it’s clear why your product is the best choice. Are you competing on price? Selection? Convenience?From your back end processes, to your warehousing, to your marketing, to your website’s shopping experience, your unique value should be clear.
When a business sells a good or service to an individual consumer (e.g. You buy a pair of shoes from an online retailer).
When a business sells a good or service to another business (e.g. A business sells software-as-a-service for other businesses to use)
When a consumer sells a good or service to another consumer (e.g. You sell your old furniture on eBay to another consumer).
When a consumer sells their own products or services to a business or organization (e.g. An influencer offers exposure to their online audience in exchange for a fee, or a photographer licenses their photo for a business to use).
Ecommerce can take on a variety of forms involving different transactional relationships between businesses and consumers, as well as different objects being exchanged as part of these transactions.1.Retail:
The sale of a product by a business directly to a customer without any intermediary.
2.Wholesale:
The sale of products in bulk, often to a retailer that then sells them directly to consumers.
3.Dropshipping:
The sale of a product, which is manufactured and shipped to the consumer by a third party.
4.Crowdfunding:
The collection of money from consumers in advance of a product being available in order to raise the startup capital necessary to bring it to market.
5.Subscription:
The automatic recurring purchase of a product or service on a regular basis until the subscriber chooses to cancel.
6.PhysicalProducts:
Any tangible good that requires inventory to be replenished and orders to be physically shipped to customers as sales are made.
7.DigitalProducts:
Downloadable digital goods, templates, and courses, or media that must be purchased for consumption or licensed for use.
8.Services:
A skill or set of skills provided in exchange for compensation. The service provider’s time can be purchased for a fee. Q4) Explain the Technologies Used in E-Commerce SystemsA4) There is rarely a facet within an industry that hasn’t been touched by technology. Most notably, big data and machine learning are paving the way for robotics automation, the instant transfer of data, and a variety of interesting devices.The retail industry is no exception when it comes to taking advantage of technology. In fact, successful businesses are setting the bar by implementing technologies such as artificial intelligence (AI), chatbots, and voice assistants into their operations. The reasons vary, but can include that these technologies help provide excellent customer experiences through instant communication, providing support without the help of live employees, data management and security, and much more.Many online stores already have integrated e-commerce software, but to stay in the competition, any e-commerce business must give serious thought into the following technologies to stay prosperous and maintain customer satisfaction.Artificial intelligence (AI)AI is revealing valuable insights into customer preferences — which can guide marketing campaigns. It also can provide for the automation and transfer of data management operations to increase performance. In the retail and e-commerce world, AI is being relied upon for several unique aspects of business.Personalized user experience74% of businesses believe that user experience is important for improving sales and conversions. AI provides a personalized user experience that 59% of customers say influences their shopping decisions. Artificial intelligence can facilitate a shopping experience that is supported by customers’ personal preferences.AI, big data, and machine learning can offer analytics and foresight into customer behavior patterns which can drive advertising campaigns, provide support and services, and automate communication — all of which increase engagement rates for businesses.Recommendations to customersSince AI can predict customer behavior patterns, it is able to recommend relevant and useful information to customers on products and services and more. AI and machine learning algorithms can efficiently forecast this information by taking in a customer’s search history and other third-party data. This can lead to effectively proposing applicable information and solutions to satisfy customer needs.Automated campaign managementCustomer behavior patterns are a driving force behind any marketing campaign. Using AI, businesses are able to target both potential and existing customers by looking at data such as past certain history. These analytics can be used to provide a better aimed content marketing strategy for businesses.Content and advertisements may then be created with a tone that engages various audiences and placed on the correct media platform to capture their attention. Using AI and marketing automation can show a business the data necessary for a strategic and tactical campaign.The CloudYou will be hard-pressed to find a successful business that does not have at least one aspect of their business operations posted on the cloud. Managing and processing data in the cloud is essential for the instant access of data by anyone who needs it, on any device. Especially for e-commerce businesses, a cloud ERP can improve delivery speeds, make your store more adaptable, and bring about business stability and growth.ChatbotsRecognized for their customer satisfaction rates and wide-scale availability, chatbots have pivoted from limited use in call centers to wide-spread e-commerce website applications. Rather than asking questions and providing information to those over the phone, e-commerce websites that utilize chatbots can provide a variety of services and solutions.24/7 assistanceMany businesses cannot provide answers exactly when a potential customer is searching for them. Additionally, customers may be frustrated when put on hold because a business does not have the staff to answer and tend to a high volume of customers.Chatbots are available 24/7, day and night, to provide any answers and solutions a potential customer may inquire about. Having this automated communication can be valuable for businesses as it frees up employees to focus on other business operations, efficiently communicates with customers, and may even propose products and services.Respond to queriesBuilt into a chatbot’s algorithm is what is called a decision tree. Decision trees use machine and deep learning to automate complex business processes, essentially developing, maintaining, and always expanding upon a comprehensive network of if/then statements.By addressing commonly asked questions and concerns from customers, chatbots are able to expand upon their decision tree. Here, a chatbot can gain information on whether they’ve helped a customer or not. If they have helped the customer, this information may be passed on to another consumer with a similar question. If they have not adequately satisfied the customer, the chatbot may continue asking questions until they provide the customer with the information they are looking for. When they have answered the customer, the chatbot now has more choices in their decision tree to help customers in the future.Send shipping and tracking informationImagine if Amazon never remembered your address or payment information and never told you when your order is scheduled to arrive. It is a pain for customers to have to enter shipping information every time they want to order something from your e-commerce website. Additionally, it is a best practice for user experience to give a customer a timeframe for when the order will be at their doorstep.Chatbots remember this information and can provide real-time shipping tracking details for customers. This can also help warehouse operations, as they could focus on the supply chain and fulfilling orders through their order management system rather than telling customers where their packages are.Voice assistantsNot everyone searches for products and information via mouse and keyboard in the digital age. To accommodate these potential customers, businesses will need to adopt voice commerce — using voice recognition technology and allowing customers to use voice commands to find and purchase products online. Voice assistants such as Siri, the Amazon Echo, and Google Home are becoming increasingly popular for their convenience in searching for and purchasing products. In order to stay successful, e-commerce businesses will need to provide this technology and its benefits to capture a new wave of consumers.Audio brand signaturesAny company jingle, music composition, or auditory tone is considered an audio brand signature. It is a way for businesses to better establish a brand identity, and help customers remember their name.Businesses can command their audio brand signature to play through voice assistants to let their customers know where they are ordering their products from. By associating your brand with an auditory signature, consumers will know and remember they are ordering from your store – even when laying on their couch, speaking to a voice assistant.Shopping listsCustomers would rather automate their continual shopping needs than frequent a website (or store) every month for their essentials. Through voice assistants, people are able to compile shopping lists — ordering what they need from who they want. This technology learns the preferences of the owners, and many businesses are able to capitalize on brand loyalty. If a voice assistant knows that a person wants a product from your store monthly, it can add it to their shopping list. This can be beneficial to companies in forecasting sales and balancing order management.Assistive technologyIn the marketing world, assistive technology and voice commerce are helping to reach a wide variety of new audiences — not just the younger generation who are using new devices, but the visually impaired as well. By using speech-to-text technology, the visually impaired can forgo the struggles of traditional search experience, and order what they need through new and developing assistive technology.All interconnected, AI, chatbots, and voice assistants are becoming necessary for any e-commerce business to be successful. In order to stay with the times, businesses must adapt to these new technologies which appeal better to potential and existing customers.Discover more B2B e-commerce trends and stats
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