THE FUTURE OF E-COMMERCE?
E-commerce, or electronic commerce, is the use of an electronic medium to carry out commercial transactions. It usually refers to the sale of products or services via the Internet, but the term also covers purchasing mechanisms via the Internet. Constantly changing and evolving based on business and consumer advantages, it is an integral part of the way we live and do business today.
The history of e-commerce is a story of technology, innovation and drive and its future, undoubtedly, very promising.
A brief history. Where did e-commerce start?
Back in the 1970s, the term e-commerce referred to the process of execution of commercial transactions electronically, by means of Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). Then, in 1979, Online Shopping was invented by Michael Aldrich.
Fast forward to 1994, Jeff Bezos founded and launched Amazon.com and in the same year, the Internet became accessible to the general public.
By 2000, a large number of US and UK companies had begun to represent their products and services on the World Wide Web.
After the dot-com collapse in 2000, however, Amazon took a serious blow as a successful business venture, but in 2003 the company made its first annual profit. This was the first step to the further development of e-commerce. The rest, as they say, is history.
To view a detailed timeline of the history of e-commerce, click here.
The present. Where is e-commerce today?
It is almost impossible to discuss e-commerce, both past and present, without mentioning Amazon, one of the first companies to introduce electronic transactions. Amazon, along with an exclusive group of companies such as eBay and Dell, can be credited for the booming e-commerce sector we have today. According to statistics, the most popular categories of products sold on the Web today are music, books, computers, office supplies and other consumer electronics.
Amazon.com is located in Seattle, Washington (USA). The company that was first considered an online bookstore, gradually extended its goods on offer by adding electronics, software, DVDs, video games, music CDs and MP3s, apparel, footwear, health products and a host of other products. The company supports and operates retail websites for many famous businesses and is one of the first e-commerce businesses to establish an affiliate marketing program. Currently, Amazon gets a whopping 40% of its sales from affiliates and third party sellers who list and sell goods on the website.
According to research done in 2008, the domain Amazon.com attracted about 615 million customers annually. The site is known for its user-friendly interface and an advanced search facility, while the favourite feature remains the product rating system, a way for users to rate and comment on products by way of a one to five star rating structure.
Today, Amazon.com is frequented by over 300 million users and hosts more than 10 000 sellers, who generate more than an estimated $1 million in annual sales each.
For mind-blowing statistics on Amazon, click here.
The benefits of e-commerce. Why is it good for business?
E-commerce is available around the clock, has a wide availability of goods and services on offer to the consumer, is speedily and effortlessly available to users and enjoys international reach.
Advantages to consumers include easily searching through a massive database of products and services available. They can see actual prices, build an order over several days and email it to friends or family members as a “wish list”. Customers can compare prices and buy the favoured product at the best prices available, all without leaving the house.
Online vendors also enjoy many advantages. Search engines allow customers to easily find products on vendor websites without costly advertising campaigns. Web technology furthermore tracks customer preferences, thus delivering tailor-made marketing for each user.
The only real disadvantages of e-commerce include – in some cases – limited customer services, prospective customers not being able to touch or see products before purchase and a slightly longer wait for goods while it is being shipped.
The way forward. Where is e-commerce heading?
Technology continues to move forward at the speed of light and e-commerce is evolving rapidly along with it. Over the years this method of transactions has grown from the basic specs to a detailed database with no limit but the imagination. As with all sectors of technology, the next frontier of e-commerce proves to be exciting and innovative. Let’s take a look at a few leaps in technology that will surely shape e-commerce over the next few years.
According to Wikipedia, “Machine learning is a field of computer science that gives computers the ability to learn without being explicitly programmed.” Machine learning is thus a discipline that allows computers to discover patterns and trends in any set of data without being explicitly programmed to recognize said pattern or trend. As of 2016, machine learning is a buzzword and, according to the Gartner hype cycle of 2016, at its peak of inflated expectations.
But what does Machine Learning mean for e-commerce?
While the discipline is by no means perfect, but it still has the potential to enhance e-commerce systems irrevocably. With Machine Learning, a system will now, for example, be able to identify types of shoppers by teaching itself which elements to look out for in a shopper’s behaviour, without any input from humans.
It will also be able to run chatbots. A self-enhancing chatbot will be capable of managing basic customer service questions, able to progressively teach itself how to help customers as determined by its online store. These chatbots will be equipped to respond with relevant comments and feedback aligned with predetermined company views, taking care of on-site chat sessions as well as social media tweets and posts.
Machine learning will equip sites to learn shoppers’ buying behaviours and recommend relevant products based on a shopper’s individual preferences. Furthermore, Machine Learning will assist companies with market-right pricing by teaching algorithms to pick up on price trends, customer behaviour and product demands. This means a far superior price-management system than that which is available at present, as Machine Learning will help retailers find the optimum price for every single item that it carries, no matter how big the site or database of products on offer.
Another exciting feature of Machine Learning set to be introduced in the near future is an ability to monitor systems for fraud patterns and to then notify the company of any suspicious activity. It will also have a feature to prevent fraud. The biggest advantage of which would be that each learning system will be unique to the company it serves. It will be able to take into account all the trends that predict fraud for its particular online retailer, ensuring a higher accuracy rate.
For more information on Machine Learning and the ways in which it will shape the future of e-commerce, click here.
A beacon is a small wireless sensor which transmits data to a smartphone or tablet and vice versa, using Bluetooth. Beacons work on any device with a Bluetooth LE chip in it and they are by no means exclusive to Apple devices. In other words, iBeacon is a small device that transmits signals with a three-part identifier. This signal is absorbed by a device a secondary device and processed by a previously downloaded application on the device. This app then carries out a predetermined action.
What do iBeacons mean for e-commerce?
The technology can provide relevant real-time information between retailer and consumer. Through beacon technology, retailers can send customers personalised messages about products while they are looking at it. Beacons can also assist with navigation in large buildings, such as airports or malls, able to detect the exact location of each user and its proximity to any desired location within the building.
Beacons will enhance customer service, whereby store staff will be able to identify customers, what they are looking at and their preferences before even greeting them. Beacon technology will benefit both the customer and the businesses that employ it. It makes the customer shopping experience easy, fast and pleasant. Most importantly, the customer will be in control over whether or not the technology will detect them.
For more information on iBeacons and the way in which they will shape the future of e-commerce, click here.
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If you are in the e-commerce field and feel that your business needs assistance, let’s get in touch. We would love to discuss the infinite possibilities available to you and, more importantly, how Realm Digital can make them happen for you.