Business Modes

Non-electronic business, or what is called “brick and mortar” business, has been conducted in the same way for quite some time. In fact, the parties of what constitutes a business transaction have remained essentially the same and include the following:

• Business-to-business (B2B)—In this mode of business, one business sells products or services to another business. A B2B transaction could be a manufacturer to a wholesaler and the wholesaler to a retailer. B2B services can include janitorial services, office equipment leasing, insurance, and legal services. B2B transactions were once strictly conducted from catalogues, order blanks, and product sheets, but e-commerce store fronts are becoming the norm.

• Business-to-consumer (B2C)—We know this business mode as retail. A business, store, shop, or vendor sells a product or service to a consumer. However, due to its relatively short transaction time and the lower costs and margins of the types of goods in the transactions, B2C has been and is attracted to the web and e-commerce. There are several variations of B2C, each mainly related to the business type, location, and the nature of the product or service. In any case, the business is selling to a consumer. We will be looking at this business mode later in this chapter.

• Consumer-to-business (C2B)—In this business mode, the roles of the two parties are somewhat reversed. The consumer, which could very well be the buyer, is providing a product or service to a business. For example, homeowners who want to have a house painted may send out invitations to bid to several house painters that their research has shown to be trustworthy. Another view of this business mode is that the consumer (meaning someone who is not a business) sets the price and accepts bids from businesses. Except for the role reversals, the C2B mode fits on e-commerce well. Some examples are an individual answering a poll or survey on a website or an individual who refers visitors to his or her website to a job board for which he or she receives a stipend. Figure 3-1 shows a screen capture of the Upwork (www.upwork.com) website on which companies can find freelancers to do their projects.

• Consumer-to-consumer (C2C)—This webpage mode is also called an online marketplace. Consumers use this type of e-commerce page to find goods and services for sale or barter. These sites can also be auctions and a sort of departmentalized garage sale. The site typically charges the seller or the buyer or both a fee for completed transactions. Early examples of C2C sites are eBay, craigslist, and Indeed.

In most cases, all these business modes for e-commerce webpages are available to just about anyone on the net. Some may ask for some form of identity proof, such as a tax number or business license ID, or other qualification documentation, but that is not always the case.

Early E-Commerce

Most of the earliest e-commerce sites, those put up in the early 1990s, were primarily online catalogs or product lists, some with pictures. These sites essentially created a visual that duplicated a company’s on-ground store. For a site’s owner, the focus was getting information about the products and services offered to consumers and bringing them into the physical store. E-commerce sites became the display windows of the physical operation. Although these sites did help to draw consumers into stores, most visitors to these early e-commerce sites did so not for buying, but for comparison shopping. Consumers could now compare one brand to another and one store to another without leaving their home or office. The e-commerce websites were primarily informational and because of both business and consumer distrust, no financial transactions were supported, and no consumer data were stored, which meant that security was not a huge risk. Software continued to advance and began providing better customer experiences with online ordering and transaction and payment processing. E-commerce operators realized better software handling of accounting functions, supply-chain management, customer-relationship management (CRM), shopping carts, and shipping and receiving.

The advances in both front-end (client-servicing) and back-end (order-processing and accounting) software led to the web e-commerce services becoming more than just a catalogue or advertising for physical stores. E-commerce was fast becoming a virtual storefront. Anything the consumers could do at the store they could now do online from wherever they happened to be. However, with the growing success of the web as a retail outlet, the personal information of consumers held by e-commerce operators began to generate concern over privacy issues and security on the whole.

Customer-Focused Services

E-commerce applications began to evolve from their focus on transactions toward more customer-oriented services. As the web and its supporting technology shifted away from menus, catalogs, and general selling toward a more individualized consumer-oriented approach, marketing online became critical to the success of an e-commerce site. Those e-merchants that did it the best saw growth and made money. The nature of e-commerce, especially in the B2C market, had moved from a passive marketing strategy into a more aggressive marketing strategy. In a passive environment, an e-commerce website is not a destination, and buyers may have only happened upon the site or clicked on an entry in a search engine’s results. Aggressive marketing works to create awareness, improve a site’s position in search engine results, and seeks out potential customers with individually oriented advertisers.

The web is a marketing and advertising juggernaut with organizations scrambling to be a part of it. Advertising controls much of the web today; it seems as if virtually any website you visit displays at least one ad. On today’s internet and web, software is collecting your information, such as the sites you access, what products or topics you access, and, in many cases, how much time you spend doing so. Why? Your personal data can be used to create an information profile that can be shared with e-merchants, advertising sites, and any other entity that will pay for it. Your profile is used to identify you as a potential customer, along with then products, services, topics, and sites in which your history shows you have an interest. As your web habits change, so does your profile. For instance, your Facebook account, assuming you have one, gathers demographic data about you (mostly supplied by you). This information is then used, along with information from search engines on the searches you have done and e-commerce sites you have visited, to determine which ads will appear on your Facebook home page the next time you open it. As a consumer, it helps to know how marketing on the internet and web works and the objectives and methods of the marketing professionals. As a potential e-merchant, it is doubly important that you understand the design, positioning, and methods employed by the successful e-commerce sites, for not only operational success but the security of proprietary and customer personally identifiable information (PII).

The Evolution of the Web

At the time of its public release in 1993, the World Wide Web had around 50 servers online and a small population of users. Its growth over the next 20+ years has been phenomenal. In early 2021, according to the Siteefy.com (https://www.siteefy.com) website, the statistics of the web had grown to the following:

• 1,188,038,392 websites in the world

• 252,000 websites are created each day

• 133,361,676 websites are in the United States

• 199,463,687 websites in the world are active

• 62.3% of the websites in the world are in English

  • Russian is second with 7.5%

  • Turkish and Spanish are third at 3.8%

  • Farsi, French, German, Japanese, Vietnamese, and Chinese round out the top 10, in that order

There are those who believe the web may not actually be growing. They cite that the number of sites added and the number of sites that go inactive in any period are about the same. The experts who know these things say that the explosive growth of the internet and web may be over, but a much slower, steady rate of growth will continue.

Regardless, any business in today’s commercial space cannot expect to grow with only brick-and-mortar operations. Shoppers and commercial buyers expect a web presence for virtually all businesses. So, any business launching onto the web likely sees the previous statistics as an opportunity and the potential for future customers.