What is e-commerce?

Let’s start with the basics, according to Poliakh et al (2017), it is defined as ̈the specific part of e-business. This includes public relations for the sale of goods, services, and information through the internet, using all the tools on the net.

Stated simply: it is an online business that seeks to obtain an economic benefit.

An example of this is ¨Free Market, Amazon, Wish¨, or any other platform that seeks to sell you something.

Why using an e-commerce platform?

Customers change

Some events have become a watershed in the history of humanity. When we see these events regularly we think of wars and diseases. By introducing themselves, they change people’s lifestyles forever. The consumer’s perspective changes and a new period of learning and adaptation begins.

An example of changes in customers can be seen in Facebook memes and jokes where we compare babyboomers with millennials. The first, the result of economic growth after the catastrophes of war, and the second, a generation that was born hand in hand with technology but with not much luck in the economic stability. Both generations live together, but they reason, develop and consume differently.

Technological advancements and product adaptation

Changes also apply to technology. Looking at the issue from the product side of view we have the stationary phone. It used to be the only means to communicate with someone. As times advanced it was forced to evolve and today we all use a cell phone with almost no one having a stationary phone at their homes. What’s more, it has become so vital that many businesses are conducted through it.

Think about it. The phone passed from being a home element to a communication device, marketing tool, camera, indicator of social status and, all this has been building up creating a consumer ecosystem.

The same thing that happened to the stationary phone is happening to face-to-face businesses. People want to have purchasing power in the palm of their hands and save precious time without dealing with any extras.

E-commerce is not a novelty, it has been present in our environment for several decades and it offers benefits there are not available for traditional means for any of the parties involved.

Time has become a key element for today´s lifestyle. Going to a store is time-consuming and exhausting. What’s more, it would mean to go different places looking for the same product.

Seeing a product on the internet is preferred to seeing it firsthand. Customers get to know its specifications and reviews from anywhere. Also, because of globalization, the customer has unlimited options. It’s like being in a giant store.

From the business point of view, it opens up to new markets with a reduced investment. Imagine selling your product in the USA and UK. Even when there should be a budget to adapt the platform for the tastes and interests of these different cultures you can still manage to reach much more and with less money than how it would be with physical stores.

E-commerce growth

Thanks to the appearance of various events such as SARS (2003), H5N1 (2006), H1N1 (2009) and currently COVID-19, considerable progress has been made in the growth of digital commerce.

Events that can change the way your consumer operates will not stop happening, but you can control the way you react to avoid disappearing with trends.

In 2020, a 60% growth in e-commerce was estimated due to the Covid-19 situation. We are already in 2021! That means that this has already happened and if you are integrating you could still be on time.

According to the AMVO report (Mexican Association of Online Sales), 2 out of 10 companies have grown 300% in business volume.

According to Statista, sales through e-commerce represented 11% of total sales in the US, by 2021 it is expected to grow by 4%, reaching 15% of total sales. This figure will increase annually.

For its part, in Mexico for 2019, 7 out of 10 internet users had made an online purchase during the last year, there are currently 88 million internet users and many of them could be looking for you.

Forever 21 case study

There are companies that, even before the pandemic, had already experienced the decline of traditional businesses. Among these unfortunate businesses, we can find Forever 21.

This is a family company dedicated to the sale of clothing that until 2020 had 593 stores around the globe. Despite being highly recognized, in 2019 it experienced such serious difficulties that it declared bankruptcy.

The million-dollar question is What caused this brand to drown? The market to which this company is dedicated was changing. When the shopping centers began, they were the best, but … from 2009 on, we began to see the relentless fall of these concrete colossi.

According to CBS News, there were three crucial reasons for the change, two of them in terms of consumer habits. The first was that the new generations switched to spending through the internet (e-commerce). In addition to this, they wanted higher quality products at a low price, which was different from what the company offered as it was based on the fast-fashion model (which is being criticized for its ecological impact). Finally, excessive growth was observed in the support of too many stores coming from an aggressive expansion.

By growing too fast and not seeing the external factors that affected the company, it lost responsiveness. One consideration that we must always have in the market is that we are never alone and there are always competitors who will take advantage of our failures.

Moral

Here are basic questions that we must constantly ask ourselves as we seek to grow, and the answers must always be aligned with our vision and mission as a company:

• What do I want to sell?
• Who else sells it?
• What distinguishes me from others?
• Who do I want to sell it to?

In short: what, how, and why. If you want more information about it, you can review our article How to choose my e-commerce products.

These questions are crucial because as we saw previously with the phone example, times change, new technologies arise and they can become your best asset or your doom.

Also, take into account that your customer will change. The teenagers that you were selling to five years ago might have had 15 and now are in their 20´s. They might be looking for a professional job position, getting married, or whatever. The thing is, they are not the generation you are selling to anymore.

As a corollary, I´d like you to remember the serenity prayer. It is more than a prayer, It is getting to tell you out loud that you are present and you are going to seek the possible means in situations that you cannot modify.

If you do not believe in God or have any other belief you can modify it at your discretion, this is only the literal quote of the text. The important thing is that you never forget that you have the power to analyze, understand and adapt.

Read aloud:

“God, give me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”

Reinhold Niebuhr

Take the best of things and continue to excel. I wish you much success on your way.

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