The Impact of Ecommerce on Retail & Marketing

Ecommerce businesses are quickly gaining ground and changing the way of doing business. The main aspect of ecommerce involves doing business on the web and includes business-to-business (B2B) and business-to-consumer (B2C) ecommerce models. Below we will discuss the impact of ecommerce on retail and marketing Ecommerce has affected businesses positively and negatively. On one side, ecommerce makes it easier for businesses to reach a much wider audience at less expense than would be required if the traditional retail method was to be applied.

With ecommerce, there is no requirement to acquire expensive shops in affluent areas and shopping centers. You can produce or store your goods at a remote upcountry location and still advertise and sell them worldwide.

Additionally, once you have your website operational, you will reach a wide client base. The next thing is to ensure that you have access to appropriate means of transporting goods to customers who make orders. On the other hand, established enterprises, most of which are vertically integrated are finding it harder than before to retain their market share.

More flexible competitors are entering the market traditionally dominated by these established companies, making competition fiercer than ever. To remain relevant, old school companies are having to adjust to the new technologies and incur capital expenditure in developing new capabilities. Blockbuster, a leading video rental and franchise in the world had enjoyed many years of success. However, Netflix, an ebusiness firm entered the market and took away a considerable market share from Blockbuster which was forced to close its doors.

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It’s no secret that ecommerce is changing the retail business landscape. The obvious example being the Amazon Effect, which refers to the disruption of the retail industry as a whole. Manifestations of this effect include ease on online shopping for consumers, speedy delivery, closure of legacy retailers and a disappearance of malls in America. So, if legacy companies are shrinking, what does this mean for ecommerce startups? Well, to be honest there is still plenty of room for the little guys to break into the online retail space so long as they find a niche capable of sustaining their company. While Amazon strives to sell everything to anyone, smaller e-stores can corner a market or demographic for themselves.

Perhaps ironically, legacy companies are attempting the same strategy. Rather than casting a big net, corporate giants are being forced to focus only on what they can do best and outsource the rest. An example of this are Apple stores selling their own merchandise, rather than relying on Best Buy; and Best Buy taking steps to prepare for weaker smartphone demands. Unfortunately, securing a niche is much more difficult for legacy companies which are not as nimble as startups. Will the refocusing of legacy companies allow them to survive? Only time will tell.

One positive effect of the emergence of ecommerce is that it may save energy. Consumers who shop online rather than drive to stores use less fuel and their cars emit less pollution. Also, because ecommerce reduces the need for warehouse space to house goods near retail stores, these warehouses use less energy. Ecommerce can also reduce costs for consumers when companies cut down on middlemen involved in distributing goods, warehouse space to store the goods and personnel expenses.

Ecommerce also enables companies to manage their inventory better. So, entrepreneurs looking to start a furniture business online via Shopify have a better chance of turning a profit compared to brick-and-mortar furniture stores which require extensive retail space and storage. To be competitive, ecommerce businesses are likely to pass down at least some of these savings to consumers.

The impact of ecommerce on businesses is enormous. And many of the effects won’t be truly understood for years to come. Nevertheless, the fallout is expected to increase as the internet continues to cater to the change demands of consumers.