What is eCommerce?

eCommerce, short for electronic commerce, refers to the buying and selling of goods and services online. It involves transactions conducted digitally between businesses, groups, and individuals. Retail eCommerce platforms enable shoppers to browse through products and safely purchase online.

Key components of eCommerce include:

  • Customer engagement. A good first impression is important for retailers. A well designed eCommerce site which is easy to navigate provides shoppers with a satisfying experience.
  • Product quality. The merit of products you offer can secure customers’ loyalty and trust, while reducing the likelihood of customers requesting returns.
  • Loyalty and marketing programs. The vast majority of shoppers will look for the best deal and then make their purchase from whoever is offering it. However, you can fight the bahaviour by implementing loyalty programs such as purchases with rewards, social shopping & social media rewards.
  • Shipping and returns. Once a consumer has made a purchase, products need to be packaged and delivered to their final destination. Good warehouse management and excellent shipping services are required as well as efficient handling of customer returns.Customer support. Dependable customer support needs to be available in case of any problems or questions. There are several different types of customer support, such as 800 numbers, email support, and online chat.


What are the types of eCommerce?

There are several key eCommerce models that enable transactions between different parties:

  •  Business to Consumer (B2C)

This is the most common type of eCommerce. B2C involves businesses selling products, services or information directly to consumers online. For example, a fashion retailer that sells apparel from its website to individual customers. Nobody’s Child and Debenhams are examples of B2C eCommerce retailers.

  • Business to Business (B2B)

In B2B eCommerce, one business sells products, services or information to another business entity. For example, office supply retailer Staples, a Taggstar customer, sells to other businesses via their website.

  • Consumer to Consumer (C2C)

This model enables consumers/individuals to sell products or services to other consumers, without a business entity acting as intermediary. Examples include classified ads sites and auction marketplaces like eBay, Etsy and Gumtree where individuals can trade items peer-to-peer.

  • Consumer to Business (C2B)

In the C2B model, consumers make products, information or services available for purchase by companies or organisations. An example is influencers getting paid by brands to promote products on social media. The consumer produces value that businesses want.

  • Business to Administration (B2A)

B2A eCommerce refers to transactions between companies and public administration/government bodies. Businesses can provide services like legal documents, business registration, and tax filing digitally to various agencies.

  • Consumer to Administration (C2A)

This involves transactions between individual consumers and public administration agencies. For example, individuals accessing and using e-government services online like licence renewals.


How does eCommerce work?

At a high level, here is how a typical consumer eCommerce transaction works:

  1. A customer visits an eCommerce website, visiting a retailers’ product details page or product listing page and finds a product they want to buy.
  2. They add the product to their shopping cart/basket on the eCommerce platform.
  3. At checkout, they enter shipping and payment information. This is processed by the eCommerce platform securely.
  4. The order information goes to the merchant who confirms inventory availability.
  5. The product is picked from the merchant’s warehouse and shipped to the customer.
  6. The customer receives tracking info and can monitor the delivery status.
  7. They receive the product. The merchant records the sale and the transaction is complete.

Of course, many other technologies and services facilitate eCommerce behind the scenes:

  • Marketing and Analytics

Tools like Google Analytics and Facebook Business Manager allow eCommerce businesses to track traffic, conduct targeted marketing and gain customer insights from data. Content, email marketing and social media also help drive sales.

  • Payment Systems

To enable online payments, eCommerce platforms integrate payment gateways like credit/debit cards, Google Pay, Apple Pay and PayPal. These send transaction information to payment processors who authorise credit, debit cards, bank transfers or digital wallets on the merchant’s behalf.

  • Order Management and Fulfilment

Inventory management, warehousing, packing and shipping of online orders to customers is handled by the merchant or third-party logistics providers. Efficient fulfilment operations ensure customers get items on time.

  • Customer Service

Live chat, phone, email, and social media support enables eCommerce companies to handle pre-sales questions, post-purchase issues and returns/exchanges smoothly. Quickly resolving customer issues improves satisfaction.

  • Social Proof

Leading retailers and brands use social proof messaging on their eCommerce platforms to help shoppers discover products and make more informed and confident buying decisions, highlighting popular, bestsellers and trending products.

So eCommerce brings together web technologies, digital marketing and operational processes to create a seamless customer experience from product discovery to delivery and beyond.


Advantages and disadvantages of eCommerce 

Benefits of eCommerce

  • Ease of access – Browse and make purchases effortlessly from any location with an internet connection, 24/7. 
  • Greater choice – eCommerce sites can offer more products than physical stores who may have limited shelf  and inventory space. 
  • Potentially lower pricing – In most cases, but not all, the cost to operate digitally is  less expensive than physical stores, factoring in property rent, maintenance etc – which leads to competitive pricing. 
  • Product recommendations & reviews – Product recommendations provide shoppers with product discoveries set by the merchandiser, and product reviews provide customers the ability to read and provide peer feedback.

 Data-driven personalisation – Customer data enables customised promotions and shopping experiences based on preferences and history.

Challenges of eCommerce

  •  Product quality concerns – Inability to physically examine items raises doubt about true quality and condition. Reliance on photos and descriptions.
  • Shipping times – Despite increasing ‘next-day’ delivery options, most physical products take days to arrive unlike in-store instant ownership.
  • Lack of personal service – Reduced opportunity to interact directly with knowledgeable salespeople for purchasing advice.
  •  Product return hassles – Returning or exchanging online purchases can be more effort than visiting a store, and more expensive for the retailer. 
  • Security threats – eCommerce businesses face cyber threats like phishing attacks and hacking that puts customer data at risk.

By being aware of these potential pitfalls, eCommerce businesses can take action to maximise the upsides and overcome the challenges through careful planning and execution.


Why choose Taggstar to transform your eCommerce business?

Social proof messaging, Taggstar helps retailers and brands deliver more dynamic and engaging shopping experiences, build customer trust and increase online conversions and sales.

Powered by machine learning, the Taggstar platform offers scalable real-time social proof solutions, including social proof messaging, social proof recommendations, and eXtended Messaging.

Join the growing list of leading global brands & retailers that trust Taggstar to elevate their shopping experiences and drive significant sales lift.

Calculate the impact social proof
will have on your conversion rate and revenue
with our ROI calculator

Conversion Calculator