E-commerce, opportunities for consumers that might actually be

E-commerce, or
the act of selling goods or services online as opposed to selling at brick and
mortar establishments, has reshaped the modern marketplace in recent years, but
this new form of trade comes with its own sets of strengths, weaknesses,
opportunities and threats over traditional methods. It is important for
businesses to look beyond the hype and develop their own perspectives on the
true value of e-commerce—to business and to consumers—because interestingly,
there are many strengths and opportunities for consumers that might actually be
a weakness and threat for e-commerce businesses (Khurana. A, 2017).

 

 

Strengths

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            Among
the top strength for e-commerce is the price and product comparison. E-commerce
provides customers with multiple information that is valuable such as the
products descriptions, the ratings of the products and the real customer
reviews that will certainly help and affects a possible future customer
decision whether to buy the product or not. 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 the
company and does not cost anything to create or maintain.

Some customers
want to be sure that the product that is needed or wanted are the right product
with the best deal. To purchase the right product from the many that a company
offer, the customer need to be able to compare the product with different
options and the company need to continue the efforts of improving the
decision-making process. The best strength for an e-commerce is to be able to
provide the customers with different types of brand for the same product. This
give the right and opportunity for the customers to choose and compare a
certain product based on its popularities, prices and discounts.

            E-commerce
helps companies to overcome the limitation by geography. A traditional brick
and mortar are usually limited for the customers that lives or works within the
area of the store or those that pass through while travelling (Yamarie.G,
2017). However, with e-commerce anyone in the world can be a customer without
the limitation of geography. Utilizing the online platform help the company by
not only being global but also strengthening the relationships with the
customers. A company can used the e-commerce localization concept to not only
widening the customers bases but also the customers more likely to build trust
in the company’s products. Only if the products descriptions are in the
customer’s language and the price is in the country’s currency.

 Furthermore, e-commerce also helps with a
faster buying procedure. With e-commerce everything become easy and faster buy
just a click away from the seller. No physical movement is required and no
hunting of right product at the right price is to be done by the consumer which
make the buying process faster make the company’s business cycle going faster.

 

 

Weaknesses

            While it may appear that e-commerce is the perfect
choice to solve the business problems, there are still several weaknesses to
switching from selling at a physical location to using online retail. Many
consumers nowadays still prefer visiting brick and mortar shops because of the
physical touch with the products, such as the clothes and foods, and the
relationship customers get to develop with a retail location. Additionally,
many customers want to experience the product before purchase, especially when
it comes to clothing, but e-commerce eliminates that luxury.

Increases of the operating cost is also one of the
weaknesses of e-commerce. Even though developing an e-commerce platform itself
is not too costly, however because it is an extra cost on top of the already
build physical store, it will increase the operating cost of a company. To
build, design, maintain and operating the website is a huge cost even more if
the company does not have an experience with online services. Moreover, a
company that want to involve themselves into e-commerce industry must also pay
a huge price for the marketing activities as the company must pay the cost to
advertise the new website and services.

Shopping is all about instant gratification. However,
with e-commerce the customers are left empty-handed for some time after making
a purchase on an e-commerce website as the customers must either pay more for a
fast delivery or wait for several days while the postal service does its job.
Sometimes the delivery time may extend to days or weeks which one cannot wait
for. This is because the task of delivery services is usually outsourced to
other logistics company, who do not care about the timing of the seller. Additionally, if the customer
is unsatisfied with the order, many e-commerce retailers have to issue a
refund, which requires the company to expand its reverse logistics functions,
meaning the shipping back of goods and refunding of costs.

 

Opportunities

E-commerce biggest
opportunities is the less boundary access, in other word no brick structure is
mandatory to do business, or no specific boundary is required. It enables all
the companies to expand the business to global market level without any
interruptions. The widening of geographic retail markets may facilitate the
development of global retailers. Furthermore, the customers do not need to
travel a long distance to reach the preferred store for purchasing a product.
E-commerce allows the customers to reach the preferred store virtually just
with a few mouse clicks.

By being open 24 hours and 7
days a week, e-commerce helps attract customers that may have odd work
schedules or who do not have time to shop in person. For example, a potential
customer in bed at 4 am, thinking of something to buy, search for it on the
website and make the purchase instantly. Business is open and in operation with
each and every click of the mouse. Those who are busy in day time and cannot
spare time for them self, have all the opportunity to shop as per their
convenient time even during late night hours. Furthermore, the company also do
not have to pay for the resources, such as the employers and the utilities, to
physically keep a store open 24 hours a day.

            E-commerce makes marketing easier for a company to
advertise a product. By using the information that a customer provides in the
previous purchase or history, in the registration form and by placing cookies
on the customer’s computer, an e-commerce retailer can access a lot of
information about its customers. Which in turn help the company to easily
retarget or remarket a customer and can be used to communicate a relevant
message. For example, if a customer is searching for a certain product on
Amazon.com, the customer will automatically be shown listings of other similar
products. Also, Amazon.com may also email the customer about the same related
products.

 

Threats

Security and credit card fraud are also huge risks when dealing with online
shopping. There are some customers that concern about the safety of the private
information such as name, address and bank card number because the misuse of
those information can lead to a spam e-mail and identity fraud. As a result, a
lot of customers prefer to go the physical store rather than an online store
and the company also needs to invest more money to make sure that the website
is extraordinarily protected and verified for most customers to trust using it.

The brick-and-mortar companies can sell the products only when the store is
open for the customers. Similar is the case with e-commerce. There is a
possibility of business happening only when their websites are accessible to
the users. An e-commerce business which is open to worldwide customers can go
to zero accessibility in a matter of seconds. This is like shutting down a
brick-and-mortar retailer store without notice causing inconvenience to the
shoppers. Even a few minutes of downtime could make significant negative impact
on the sales of an online store. The effect of downtime could be more severe
especially in holiday season when maximum sales are expected to happen during a
limited time. During peak days the website could get overloaded with huge
traffic spike and may break down abruptly. There are two possibilities of
downtime either the site is completely down with no accessibility or the site
is impaired with performance issues. Either way, the damages are substantial
because it is the cumulative loss in terms of money, customers, sales and
business reputation.

Along with local competition, global competition also exists. Competition
is increasing day by day either from a retailer that trying its luck on
e-commerce or from the original e-commerce company itself. For example,
Walmart, an original brick and mortar company, can be seen to slowly involving
itself into the e-commerce and be a competitor to Amazon.com which is an
original e-commerce company.

Another important threat to e-commerce is the laws and regulations of a
country. As mentioned before, e-commerce will certainly provide a global market
for a company to sell its product. However, not every country applies the same
laws and regulations for an online business such as the taxes, shipping
restrictions, licenses, permits and payment getaways. There are multiple
differences of regulations and taxation that comes with opening an e-commerce business
and sometimes companies are still not clear about the tax implications of
e-commerce transactions, which is especially true when the seller and buyer are
in different territories.