utalk marketing - history of ecommerce
How Marketing Practices Are Shaping eCommerce
Sep 13, 2010
By Dr. Vaughan Watson, Head Of Media Strategy At 20:20 Technology
eCommerce is continuing to make an impact on the marketing industry, with increasing numbers of brands realising that online transactions can add a considerable layer to their bottom lines. As this trend grows and evolves, it's worth looking back at the history of eCommerce and how the practice has now been adapted to the modern day marketing environment.
As far back as the 1960s, businesses were using primitive computer networks to conduct electronic transactions. Using something called Electronic Data Interchange (EDI), a company's computer system could share business documents such as invoices, order forms, and shipping confirmation with another company's computer.
In the beginning, each company had its own standards for formatting these documents. But in 1979, the American National Standards Institute (ANSI) came up with something called ASC X 12, a universal standard for sharing business documents over electronic networks.
After Tim Berners-LEE introduced the Worldwide Web in 1990 and the National Science Foundation lifted a ban on commercial businesses over the internet in 1991, the scene was set for web-based eCommerce, opening companies up to a whole new way of interacting with consumers.
Over the course of a few decades, networking and computing technology have improved at exponential rates. Powerful personal computers linked to global information networks have powered a whole new world of intellectual, social and financial interactions, setting the framework for today's eCommerce and Multi-Channel environments.
The situation we now find ourselves in is one of diversification and expansion; taking the principles from historic eCommerce practices and adapting them to the needs of today's tech and channel-savvy consumers.
There are now five key types of eCommerce business models:
Business to Consumer (B2C)
This is the most common eCommerce segment. In this model, online businesses sell to individual consumers. When B2C started, it had a small share in the market but after 1995 its growth was exponential. The basic concept behind this type is that the online retailers and marketers can sell their products to the online consumer by using data which is made available via various online marketing tool.
Business to Business (B2B)
This is the largest form of eCommerce, worth trillions of pounds. In this form, the buyers and sellers are both business entities and the process doesn't involve an individual consumer. E.g. Dell sells computers and other related accessories online but it is does not manufacture all those products. So, in order to sell those products, it first purchases them from different businesses i.e. manufacturers or distributors.
Consumer to Consumer (C2C)
This practice facilitates the online transaction of goods or services between two people. Though there is no visible intermediary involved but the parties cannot carry out the transactions without the platform which is provided by the online market maker such as eBay.
Peer to Peer (P2P)
Although it is an eCommerce model but it is more than that. It is a technology in itself which helps people to directly share computer files and computer resources without having to go through a central web server. To use this, both sides need to install the required software so that they can communicate on a common platform.
This type of eCommerce has quite low revenue generation as from the beginning it has been inclined to free usage. As a result, P2P eCommerce often runs into trouble regarding cross-border cyber law infringements.
m-Commerce
This refers to eCommerce transactions conducted using mobile devices. Owners of devices can contact each other using SMS and other messages techniques and conduct business using only mobile technology. This approach also involves web redesign and optimisation to ensure that websites can be viewed correctly on mobile devices.
There are other models which exist, including Business to Employee (B2E), Government to Business (G2B) and Government to Citizen (G2C) but in essence they are similar to the five main types and are simply extensions suited to specific sections of business and society
It's not necessary for businesses or brands to use all of the above types in tandem; depending on the needs, size and objectives of the business, different techniques may be needed or it might only be necessary to adopt one of the above approaches. However, it is possible to use more than one type, and in some cases, to link them together to provide a seamless experience to consumers and business contacts requiring different services.
What is certain is that eCommerce, if managed correctly, can make a real difference to the success and growth of a business, tapping into the opportunities that online and mobile technology have thrown in the path of marketers in recent years.
eCommerce conversion has always been about convincing retailers to add a new prospective online form of business, using this additional online channel for generating revenue. If this is implemented with skill, precision, and is regularly measured and improved, then the benefits for both brands and their customers, whether consumers or businesses, can be considerable.
Original article can be found here.