Benefits of e-commerce

06/04/2020 1 By indiafreenotes

When you read the following list of advantages of e-commerce for businesses and customers, you will get the sense that e-commerce is the holy grail of retail.

  1. Overcome Geographical Limitations

If you have a physical store, you are limited by the geographical area that you can service. With an e-commerce website, the whole world is your playground. Additionally, the advent of m-commerce, i.e., e-commerce on mobile devices, has dissolved every remaining limitation of geography.

  1. Gain New Customers with Search Engine Visibility

Physical retail is driven by branding and relationships. In addition to these two drivers, online retail is also driven by traffic from search engines. It is not unusual for customers to follow a link in search engine results and land on an e-commerce website that they have never heard of. This additional source of traffic can be the tipping point for some e-commerce businesses.

  1. Lower Costs

One of the most tangible positives of e-commerce is the lowered cost. A part of these lowered costs could be passed on to customers in the form of discounted prices. Here are some of the ways that costs can be reduced with e-commerce:

  • Advertising and marketing: Organic search engine traffic, pay-per-click, and social media traffic are some of the advertising channels that can be cost-effective.
  • Personnel: The automation of checkout, billing, payments, inventory management, and other operational processes lowers the number of employees required to run an e-commerce setup.
  • Real estate: This one is a no-brainer. An e-commerce merchant does not need a prominent physical location.
  1. Locate the Product Quicker

It is no longer about pushing a shopping cart to the correct aisle or scouting for the desired product. On an e-commerce website, customers can click through intuitive navigation or use a search box to narrow down their product search immediately. Some websites remember customer preferences and shopping lists to facilitate repeat purchase.

  1. Eliminate Travel Time and Cost

It is not unusual for customers to travel long distances to reach their preferred physical store. E-commerce allows them to visit the same store virtually, with just a few mouse clicks.

  1. Provide Comparison Shopping

E-commerce facilitates comparison shopping. There are several online services that allow customers to browse multiple e-commerce merchants and find the best prices.

  1. Enable Deals, Bargains, Coupons, and Group Buying

Though there are physical equivalents to deals, bargains, coupons, and group buying, online shopping makes it much more convenient. For instance, if a customer has a deep discount coupon for turkey at one physical store and toilet paper at another, she may find it infeasible to avail of both discounts. But the customer could do that online with a few mouse-clicks.

  1. Provide Abundant Information

There are limitations to the amount of information that can be displayed in a physical store. It is difficult to equip employees to respond to customers who require information across product lines. E-commerce websites can make additional information easily available to customers. Most of this information is provided by vendors and does not cost anything to create or maintain.

  1. Create Targeted Communication

Using the information that a customer provides in the registration form, and by placing cookies on the customer’s computer, an e-commerce merchant can access a lot of information about its customers. It, in turn, can be used to communicate relevant messages. An example: If you are searching for a certain product on Amazon.com, you will automatically be shown listings of other similar products. Also, Amazon.com may email you about related products.

  1. Remain Open All the Time

Store timings are now 24/7/365. E-commerce websites can run all the time. From the merchant’s point of view, this increases the number of orders they receive. From the customer’s point of view, an “always open” store is more convenient.

  1. Create Markets for Niche Products

Buyers and sellers of niche products can find it difficult to locate each other in the physical world. Online, it is only a matter of the customer searching for the product in a search engine. One example could be the purchase of obsolete parts. Instead of trashing older equipment for lack of spares, today we can locate parts online with great ease.

E-Commerce advantages can be broadly classified in three major categories:

  • Advantages to Organizations
  • Advantages to Consumers
  • Advantages to Society

Advantages to Organizations

  • Using e-commerce, organizations can expand their market to national and international markets with minimum capital investment. An organization can easily locate more customers, best suppliers, and suitable business partners across the globe.
  • E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and manage the paper based information by digitizing the information.
  • E-commerce improves the brand image of the company.
  • E-commerce helps organization to provide better customer services.
  • E-commerce helps to simplify the business processes and makes them faster and efficient.
  • E-commerce reduces the paper work.
  • E-commerce increases the productivity of organizations. It supports “pull” type supply management. In “pull” type supply management, a business process starts when a request comes from a customer and it uses just-in-time manufacturing way.

Advantages to Customers

  • It provides 24×7 support. Customers can enquire about a product or service and place orders anytime, anywhere from any location.
  • E-commerce application provides users with more options and quicker delivery of products.
  • E-commerce application provides users with more options to compare and select the cheaper and better options.
  • A customer can put review comments about a product and can see what others are buying, or see the review comments of other customers before making a final purchase.
  • E-commerce provides options of virtual auctions.
  • It provides readily available information. A customer can see the relevant detailed information within seconds, rather than waiting for days or weeks.
  • E-Commerce increases the competition among organizations and as a result, organizations provides substantial discounts to customers.

Advantages to Society

  • Customers need not travel to shop a product, thus less traffic on road and low air pollution.
  • E-commerce helps in reducing the cost of products, so less affluent people can also afford the products.
  • E-commerce has enabled rural areas to access services and products, which are otherwise not available to them.
  • E-commerce helps the government to deliver public services such as healthcare, education, social services at a reduced cost and in an improved manner.