Brief guide to ecommerce

Electronic Commerce (commonly known as Ecommerce) – In simpler form, ecommerce is a concept where buying and selling of product or service is conducted over electronic systems such as the Internet by the businesses and consumers. In other words, if a transaction is done over the internet then it is ecommerce. Now a days, we use ecommerce in one way or the other. It might be in form of buying ticket through irctc, buying/selling a product on a site, downloading a proprietary software or video after paying to vendor etc. are some of the examples of ecommerce form.

Ecommerce was started around 1979 by Michael Aldrich (as per Wikipedia). Earlier we had only Brick and Mortar stores. Brick and mortar businesses are companies that have a physical presence and offer face-to-face customer experiences. E.g. Walmart, Best Buy etc. These companies have online as well as offline presence.

Traditional Commerce versus Ecommerce

Traditional commerce

Ecommerce

Information is passed through one person to another person
Information is passed through electronic media
Communication is synchronous i.e. manual intervention is required
Communication is asynchronous i.e. automatic
More cost is involved as it is dependent on personnel
Less cost as comparative to traditional commerce
Difficult to implement 24X7 availability
Easy to implement 24X7 availability

Applications using Ecommerce

 Below are some of the areas where ecommerce is used -
  • Entertainment: Movies on demand, event etickets, multi-user games etc.
  • Financial services: Home banking, financial services like trading etc.
  • Essential services: Online shopping through websites
  • Educational: Interactive education

Ecommerce journey from Single Channel to Omni Channel


Single Channel Selling the products through only one channel e.g. Brick and Mortar store.

Multi ChannelSelling products through multiple channels like Store, web, mobile etc. None of these channels are integrated with each other. It mainly targets on providing information through multiple channels at the same time.

Cross ChannelSelling products through multiple channels like Store, web, mobile etc. which are integrated with each other. E.g. item (product) can be ordered from web and picked up from the store. Sites like Best Buy provide these facilities. Consumer is important on cross channel. All the campaigns etc are targeted to the consumer.

Omni Channel – Providing same brand experience irrespective of the channel you are on. Companies like Apple, Macys have started providing omni channel experience to the users.

Type/Category of Ecommerce

B2B (Business to Business) - Business-to-business (B2B) describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. example is Salesforce.com. It sells online CRM software; the leader in its field,

B2C (Business to Consumer) - B2C means selling items from business to consumers. Business shows list of products on the website. Customer can choose one of the product and add to the cart. Once customer does the payment, item is shipped to the consumer. Amazon and other sites like flipkart are example of B2C sites

C2C (Consumer to Consumer ) - C2C means consumers are selling their assets like car, furniture, electronic devices to other customers through websites. E.g. OLX or EBay is an example of C2C

Advantages and Disadvantages of Ecommerce

Advantages of using Ecommerce

  • Cost is low as comparatively to Brick and Mortar store because space is not required for showroom
  • Product can be sourced from multiple vendors
  • Personalization and recommendation for users based on their history or product selected
  • Time can be saved by ordering the item from home or mobile
  • Access to global market
  • No checkout queues
  • Easily accessible 24 hours a day
  • Wide selection to cater all type of customers

Limitations of Ecommerce


  • Not everyone is connected to internet
  • Possibility of credit card theft
  • There can be lack of system security or reliability e.g. system might go down just after payment is made and order is not complete etc.
  • User might not trust ecommerce site since they don’t know who is behind the site

Ecommerce Terminologies


Category – Type or Segment to which a product belongs e.g. Electronics or Mobile can be a category to which mobile like Samsung Galaxy S3 or iPhone 5 belongs.

Product- Anything that can be offered to a market or group of users. In retailing, products are called as merchandising. Products can be of different variant like Normal product or Custom products
  •  Normal product – It doesn’t need any customization
  • Custom product – Requires customization e.g. custom jersey having your name and logo printed

Product has attributes like color,size, title,short description,long description etc.

SKU – Stock-keeping unit is a distinct item, such as a product or service, as it is offered for sale that contains all attributes associated with the item and that distinguish it from all other items e.g. Dark Wash Jeans is a product but Dark Wash Jeans of size 30X30 is SKU. Anything that can be sold separately from anything else has a stock keeping unit, such as extended warranties, delivery fees and installation fees.

Inventory – Number of goods/materials available for sale by a business. It is used interchangeably with the word Stock.

Shopping Cart - Same as shopping cart used in physical store which hold our items to be bought. Only difference is that it is virtual in case of ecommerce.

Minicart – It is a summary of the contents of your cart on each page that you decide to include it on. It is generally displayed above the top navigation and remain persistent throughout the navigation. E.g. below snapshot appearing on sites like Aeropostale.



Coupon (Implicit/Explicit) – Implicit or Explicit promotion (promo in short form) coupon

  •  Implicit Promotion – Promotion or coupon which is automatically applied when a particular condition is satisfied. E.g. Shipping can be free if order total is greater than $25 or second item can be bought at 50% off if first item bought is of amount > $100
  • Explicit Promotion – This type of promo code is generally sent to loyal customers or sent to particular group of people. It needs to be entered manually in the promo/coupon code text box generally on the cart page.

Payment (PayPal/Debit/Credit Card/Google checkout) – These are different modes through which payment can be made

Quick View/Express Shop/Quick Shop – This is same page quick view of the product generally shown with lightbox effect. It has less details as comparative to product details page.

One page checkout – It allows user to complete all checkout facilities (billing/shipping information, payment, review) etc. on the same page. Thus it reduces chances of user abandonment.

Guest Checkout – Allowing user to do the checkout without login.

Abandon cart – Tracking user who has abounded on the cart page. User who has already added items to the cart has high probability of purchasing the item.

GTGT (Guaranteed to get there) – Guaranteed delivery of the product by a particular date. Can be used for delivery around festival time.

EDD (Estimated delivery date) – Shows estimated delivery dates of the item

Parametric Navigation (Facet) – Also called as guided navigation. Allows user to filter the criteria as shown below.

Recommendation – Showing related items of user interest.
You may also like this
People who bought this also bought this
Related products

Cross sells – Cross sell is when customer comes up to buy something and we sell completely a different product (not similar)

Up sell - Up sell is when customer comes to buy something and we sell the similar product but expensive one

In Stock – Items is available for sale


Out of Stock – Items is not available for sale

Advance Sale – Selling the product even if it is not available for sale. E.g. Pre ordering an item before it is launched.

Notify me when available – This feature enables notification to the user when item become available again.

Dynamic Pricing – Also called as time based pricing. It means showing different price to different customer group. Pricing is decided based on consumer history.

A/B testing – It is mainly used with advertising domain and web development. Here two variants of the site or advertisement are tested with two different group of users. Based on the result, one of the variant is chosen for the entire site. Some of the tools like Adobe Test and Target provide A/B testing

Drop ship management -  Supply chain management technique in which the retailer does not keep goods in stock, but instead transfers customer orders and shipment details to either the manufacturer or a wholesaler, who then ships the goods directly to the customer.

Order Tracking – Tracking the order through order number

PIM – PIM (Product Information Management) refers to processes and technologies focused on centrally managing information about products, with a focus on the data required to market and sell the products through one or more distribution channels. There are many ecommerce tools which provide admin tool to manage information about product/catalog

Wish list – Adding items to the list in order to buy them later. This wishlist can be shared with friend. Most of the sites require user to login in order to add item to the wishlist.

Sitemap - List of pages of a web site accessible to crawlers or users. There are two types of Sitemap

  • XML Sitemap is a structured format that a user doesn't need to see, but it tells the search engine about the pages in your site, their relative importance to each other, and how often they are updated.
  • HTML sitemaps are designed for the user to help them find content on the page, and don't need to include each and every subpage. 

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