What is the difference between e-commerce and e-business?

What is the difference between e-commerce and e-business?

Electronic commerce (e-commerce) refers to both financial and informational electronically mediated transactions between an organisation and any third party it deals with.

So e-commerce involves management not only of online sales transactions, but also of non-financial transactions such as inbound customer service enquiries and outbound email broadcasts, so you can argue that e-commerce is open to all online organisations.

E-commerce is often further subdivided into a sell-side e-commerce perspective, which refers to transactions involved with selling products to an organisation’s customers, and a buy-side e-commerce perspective, which refers to business-to-business transactions to procure resources needed by an organisation from its suppliers.

This is Social commerce is an increasingly important part of e-commerce for site owners, since incorporating reviews and ratings into a site and linking to social networking sites can help understand customers’ needs and increase conversion to sale.
It can also involve group buying using a coupon service like Groupon. There is much discussion on the extent to which social media interactions between consumers directly influence sales.Digital marketing outlines research hinting at the complexity of understanding this relationship. We introduce social media marketing later in this blogger. 

E-business or digital business is similar to e-commerce but broader in scope and refers 

To using digital technology to manage a range of business processes incorporating the sell side and buy-side e-commerce.

Different forms of online presenceThe form of digital strategy developed by a company will depend on the nature of a business identifies different types of online presence which each have different objectives and are appropriate for different markets. Note that these are not clear-cut categories of websites since any company may combine these types as part of their business model, but with a change in emphasis according to the market they serve.

Increasingly companies are using their company pages on social networks such as Facebook, Google+ and LinkedIn to similar purposes

 As you review websites and company social presences, note how organisations have different parts of the site focussing on these functions of sales transactions, services, relationship-building, brand-building and providing news and entertainment. The five main types of site or site or mobile app functions are as follows.

1 Transactional e-commerce site

Enables purchase of products online. The main business contribution of the site is through sale of these products. The sites also support the business by providing information for consumers who prefer to purchase products offline.

● Visit these examples: an end product manufacturer such as Vauxhall (www.vauxhall.co.uk) or an online retailer such as Amazon (www.amazon.com).

2 Services-orientated relationship-building website

Provides information to stimulate purchase and build relationships. Products are not typically available for purchase online. Information is provided through the website and e-newsletters to inform purchase decisions.The main business contribution is through encouraging offline sales and generating enquiries or leads from potential customers. Such sites also add value to existing customers by providing them with detailed information to help support them in their lives at work or at home.

● Visit these examples: B2B management consultants such as PricewaterhouseCoopers (www.pwcglobal.com) and Accenture (www.accenture.com).

3 Brand-building site

Provides an experience to support the brand. Products are not typically available for online purchase.

Their main focus is to support the brand by developing an online experience of the brand are typical for low-value, high-volume fast-moving consumer goods (FMCG) brands for consumers.

● Visit these examples: Tango (www.tango.com) and Guinness (www.guinness.com).

4 Portal or media site

Provides information or news about a range of topics. ‘Portal’ refers to a gateway to information; it is not in common usage today.

This is information both on the site and through links to other sites. Portals have a diversity of options for generating revenue including advertising, commission-based sales, sale of customer data (lists).

● Visit these examples: Yahoo! (www.yahoo.com) (B2C) and Smart Insights (www.smartinsights.com) (B2B).

These different types of sites tend to increase in sophistication as organisations develop their Internet marketing. 

In this blogger we look at stage models of the development of digital marketing services and capabilities, from static brochureware sites to dynamic transactional e-commerce sites that support interactions with customers.

5 Social network or community site 

These sites or parts of sites focus on enabling community interactions between different consumers (C2C model). Typical interactions include posting comments and replies to comments, sending messages, rating content and tagging content in particular categories.

Well-known examples include Facebook, LinkedIn and Twitter. In addition to distinct social network sites such as these, social networks can also be integrated into other site types.

Challenges in developing and managing digital marketing strategy

Some of the challenges in managing Internet marketing strategy which are commonly seen in many organisations (and should be managed) include:

● Unclear responsibilities for the many different Internet marketing activities. 

● No specific objectives are set for Internet marketing.

● Insufficient budget is allocated for Internet marketing because customer demand for online services is underestimated and competitors potentially gain market share through superior online activities.

● Budget is wasted as different parts of an organisation experiment with using different tools or suppliers without achieving economies of scale.

● New online value propositions for customers are not developed since the Internet is treated as ‘just another channel to market’ without review of opportunities to offer improved, differentiated online services.

● Results from digital marketing are not measured or reviewed adequately, so actions cannot be taken to improve effectiveness.

● An experimental rather than planned approach is taken to using e-communications with poor integration between online and offline marketing communications.

Research by Smart investigated the challenges of managing digital marketing. It was found that many businesses do face challenges in these areas:

● Planning. Half (50 per cent) of businesses surveyed do not have a defined digital plan or strategy although they are active in digital marketing, while nearly half (44 per cent) also don’t have a defined marketing plan in the business against which to align strategy.

● Organisational capabilities. Nearly half (43 per cent) of businesses have a well-defined performance improvement process, with 46 per cent having adapted their structure. Many businesses either already have or are planning to introduce a digital transformation programme, although a substantial number (37 per cent) of businesses don’t think it’s relevant for them.

● Integration of digital channels into marketing. Only a quarter of companies (26 per cent) were happy with their level of integration of digital marketing and traditional communications. The main barriers to integration are: 

1. Lack of integrated strategy and plans (28 per cent); 

2. Teams structured in silos (21 per cent); 

3. Lack of skills in integrated communications (17 per cent).

Lastly is ROI evaluation. A significant proportion (39 per cent) see opportunities from digital marketing, but find ROI measurement challenging a key area for managers to address.

Given the future importance of digital marketing, larger organisations have introduced Digital transformation programmes to help manage these challenges. The approach has been discussed by many management consulting groups, for example MIT Center for Digital Business and Capgemini Consulting Altimeter produced a visual proposing enablers and barriers to digital transformation. 

It shows how disruptive digital technologies such as social media, mobile platforms and real-time marketing should be harnessed to create an effective digital customer experience.