Tag Archives: ecommerce

What e-commerce technologies are redesigning the digital landscape?

Ecommerce technologies and online shopping only became a reality when the internet began in 1991. However, those ecommerce pioneers of the 1990’s did not survive the technological changes or did not adapt to the new dynamics of ecommerce.

Amazon.com can be considered one of the first ecommerce sites that has favorably adapted to the always evolving internet landscape until now. The following ecommerce technological developments and trends will influence the future of ecommerce, the way businesses adopt them will determine their success or failure:

Artificial intelligence and Machine Learning.

These two factors are creating a tremendous impact on ecommerce. Machine learning and its applications are improving user experience based on customers’ buyer behavior and previous data. It is helping ecommerce companies to understand customers’ preferences and choices. Similarly, Artificial Intelligence and Machine learning are helping businesses to predict what kind of products and services their customers prefer.

Ecommerce Mobile Apps

Trends and studies about ecommerce consumer behavior show that customers are buying more from mobile phone than from personal computers. As reported by SearchEngineLand, approximately 60% of Google’s total searches come from cellphones.

In the same way, Google is recommending ecommerce businesses to design their websites for mobiles and to design mobile apps as in 2018 consumers browse 286% more products on apps than mobile web.

Animation applied to ecommerce technologies.

Different technology developments are being adopted from the video games design industry and introduced to ecommerce sites. Motions are a key factor to design video games that help to attract players and give them helpful feedback. For instance, the design of video games take into account aspect like when players are doing well, what do they pay attention to and how they could improve.

Such aspects, help ecommerce websites and apps to discover how motion can be a signal of pleasure, personality, or urgency when buyers are interacting in a virtual store. Motion makes buying experiences feel more alive.

Finally, the abovementioned ecommerce technologies, will radically redesign the digital business landscape and make online shopping different and more enjoyable. However, choosing the right ecommerce technology for each specific business need, will improve the user experience and determine its success.

ecommerce technology trends

What are the benefits and disadvantages of the dropshipping business model.

Since the inception of e-commerce as a new way for entrepreneurs and customers to participate in online marketplaces, drop shipping became one of the most popular methods used by consumers to make their purchases.

Drop shipping is defined as a retail fulfillment method in which a merchant sells products without having a physical store or keeping a large inventory but still getting a wholesale price from a supplier. Moreover, when the merchant sells a product, it purchases the item from a third party and ship it directly to the customer.

Although this online business model has been expanding exponentially in the last few years, there are some benefits and disadvantages entrepreneurs need to consider before starting a drop shipping business.

Benefits:

Low financial risks: Usually the drop shipping business model offers an inexpensive manner to procure inventory which is not possible otherwise. This makes it less risky than investing large amounts of money on acquiring inventory.
Fast Profitability: If the drop shipping business model is executed following an insightful online marketing strategy, it will convert well, yielding at the same time immediate profits.
Location flexibility: A drop shipping business can be operated from any location that has internet connection. Moreover, it can be run from anywhere as long as merchants can communicate with suppliers and customers.
Wider Product Selection: In the drop shipping model, merchants do not need to pre-purchase items for sell. As a result, they can offer a wide variety of products, increasing the availability of items when suppliers stock a new item at no additional cost.
Time and money saving: As merchants do not need to manage a warehouse, plan the shipping of products or manage stock levels, they can increase their profit margins and save management time.

Disadvantages:

Low Entry Barriers: As merchants don’t need large amounts of capital to start the business, more people want to enter to the drop shipping business which increases competition.
Low Margins: In the drop shipping business, most market niches are highly competitive. As a result, merchants try to drop prices in order to draw customers decreasing at the same time their revenue.
Inventory Issues: As merchants source their products from different warehouses, inventories might change daily, making it hard to synchronize merchants store inventory with the supplier inventory.
Supplier mistakes: Due to the large quantity of business suppliers handle, very often they make mistakes when sourcing to merchants such as missing items, wrong shipments and low-quality packing.

The drop shipping business model comes with several built-in complexities. However, a well-thought digital marketing strategy and a comprehensive business plan, can help merchants to develop a thriving, profitable drop shipping business.

drop shipping business model

How is consumer behavior in ecommerce websites determined?

The business to consumer (B2C) e-commerce model is described as the most used business approach by companies and entrepreneurs when undertaking different digital marketing strategies. Therefore, some economists have tried to demonstrate the positive effects this business model have on consumers’ purchase decisions, arguing that consumers can process in a rational manner, large volumes of commercial information in order to choose the most logical option.

On the other hand, some consumer behavior experts dispute such theory explaining that in e-commerce platforms developed under web 2.0 interfaces, buying experience is determined by tactics of behavioral stimuli which trigger emotional reactions.

For instance, several e-commerce websites employ psychological motivators that exploit users’ feelings of fear or perceived risk with the idea of creating multiple interpretations of the situational reality at the moment of buying something online. Thus, these psychological motivators give a single subjective connotation to every purchase experience and therefore influence websites’ conversion rates.

Rationality or psychological stimuli when buying online?

A particular case, in which the paradigm of “rational purchase decision” might be challenged, happens in airlines websites. In these e-commerce platforms, the time factor (urgency) determines tickets’ price fluctuation, which most likely will be increased if the user performs a second search in the same website using the same device.

The aforementioned marketing strategy is based on a psychological stimulator called: “time-limited scarcity” and is supported by the installation of cookies in the users’ device by the airline website.

The implementation of different business to consumer (B2C) e-commerce models by some companies, have allowed users to access large volumes of relevant commercial information before buying a product in a website. However, users’ behavior follows a dynamic of psychological stimuli rather than the rational choice, “analysis – comparison” on the available information.

Psychology and conversion in e-commerce