As the world continues to embrace digital transformation, electronic retailing, commonly known as e-tailing, is a prominent force shaping the retail landscape. Australia has practically embraced this norm, with the E-commerce Guide covering data pinning down the country as the tenth-largest in the world in terms of revenue.
In this blog, we’ll provide a general description of e-tailing and delve into the operations of both Business-to-Business (B2B) and Business-to-Consumer (B2C) e-tailing in Australia. We’ll also discuss the advantages and disadvantages of e-tailing and provide real-world examples of successful e-tailers in the Aussie market.
What is Electronic Retailing (E-tailing)?
E-tailing, or electronic retailing, refers to the online sale of goods and services, encompassing both business-to-business (B2B) and business-to-consumer (B2C) transactions.
Engaging in e-tailing demands that companies adapt their business strategies to accommodate online sales, such as expanding distribution networks to include warehouses, web platforms, and shipping facilities.
Effective distribution channels hold immense importance in e-tailing as they serve as the pathways facilitating product delivery to the customer.
How Electronic Retailing Works
Electronic retailing covers a diverse array of companies and industries, yet commonalities prevail among most e-tailers, including a compelling website, an online marketing strategy, efficient product or service distribution, and using customer data analytics.
Achieving success in e-tailing hinges on robust branding, with websites that are visually pleasing, user-friendly, and consistently updated to meet evolving consumer preferences. Distinguishing products and services from competitors while adding value to consumers’ lives is essential. Pricing competitiveness is equally crucial to avoid losing customers solely on price considerations.
Efficient and timely distribution networks are imperative for e-tailers. Consumers expect swift product or service delivery and value transparency in business practices, fostering trust and fostering customer loyalty.
Generating revenue online involves various strategies. Primary income stems from product sales to consumers or businesses. Both B2C and B2B entities can generate revenue through subscription-based models, such as Netflix, charging a monthly fee for access to media content.
Additionally, online advertising presents another revenue stream. For instance, Meta (formerly Facebook Inc.) predominantly earns from ads placed on its platform, taking advantage of the vast user base regularly engaging with the site.
Types of Electronic Retailing
Business-to-consumer (b2c) e-tailing
Business-to-consumer (b2c) e-tailing involves businesses selling products or services to other businesses through online platforms. These transactions are often bulk or wholesale orders. B2B e-tailers typically provide businesses with a digital platform where they can place orders, access product catalogues, and manage their accounts. This can include dedicated websites, customer portals, or online marketplaces. Aussie B2B e-tailers may include suppliers of office equipment, industrial machinery, or wholesale distributors catering to retailers.
Business-to-business (b2b) e-tailing
Business-to-business (b2b) e-tailing focuses on businesses selling directly to individual consumers and their transactions are usually smaller in scale: B2C e-tailers offer user-friendly online stores, shopping apps, or e-commerce websites where consumers can browse and purchase products, and have them delivered to their doorstep. B2C e-tailers in Australia encompass a wide range of industries, from fashion and electronics to food delivery services, and more.
Advantages and Disadvantages of Electronic Retailing
As much as e-tailing is touted as a next step in commerce, here are points to weigh on.
Advantages
E-tailing extends beyond exclusive e-commerce entities, attracting increasing interest from traditional brick-and-mortar retailers. Compared to operating physical stores, electronic retailing boasts lower infrastructure costs.
Online platforms enable companies to swiftly move products and access a broader customer base, facilitating the closure of unprofitable stores while maintaining profitable ones.
Automated sales processes and online checkouts reduce the necessity for extensive staffing and cut down on operational expenses, as websites demand less in terms of opening, staffing, and upkeep costs compared to physical stores. Additionally, e-tailing diminishes advertising and marketing expenses, leveraging search engines and social media to direct customers to online stores. Data analytics plays a pivotal role for e-tailers.
Tracking consumer shopping behaviour yields insights into spending patterns, page engagement, and product interest, potentially reducing lost sales and enhancing client engagement, ultimately leading to increased revenue.
Disadvantages
While creating and sustaining an e-tailing website is less costly than maintaining a traditional retail space, it can still incur significant expenses. Establishing warehouses and distribution centres for product storage and shipping may escalate infrastructure costs. Managing online returns and customer disputes also necessitates substantial resources.
Moreover, e-tailing lacks the immersive sensory experiences offered by physical stores. It doesn’t afford consumers the opportunity to engage their senses by smelling, feeling, or trying products before purchase—a facet often influential in buying decisions. In-person browsing tends to be more enjoyable and conducive to higher spending. Personalised customer service and direct interaction further highlight the advantages of brick-and-mortar establishments.
Examples of Electronic Retailing
With the above information taken into account, let’s look at some Aussie examples of B2C and B2B e-tailers.
Business-to-Consumer (B2C)
For the Business-to-Consumer (B2C) front, let’s take UberEats as an example.
A subsection of ride-share company Uber, Uber Eats focuses on processing orders and deliveries from a wide range of restaurants. It’s a prime example of the food delivery sector in e-tailing. A recent Statista report revealed that UberEats had a 67 per cent market share in Australia, based on a survey of 778 respondents between 18 to 64 years old. TechReport noted in particular, that at least 50 per cent of the Australian UberEats audience are in the 25-34 age demographic.
However, it is currently undergoing a host of challenges, from dealing with potential effects of the federal government’s workplace legislation to the attrition rates of its riders, with some fatalities reported.
Business-to-Business (B2B)
On the Business-to-Business (B2B) front, let’s have a look at Woolworths’ online business hub called “Woolworths at Work.”
Going live in September 2020 after months of development by the WooliesX digital division, Woolworths at Work allows businesses to order groceries, cleaning supplies, and other products in large quantities for their operations. The products also include over 5,000 items from the Woolworths Own Brands catalogue. It has tailored packages for SMEs and large organisations, offering free next-day delivery for orders over $99 and no extra packaging charges.
Conclusion
B2B e-tailing offers efficiency and convenience for bulk orders, while B2C e-tailing brings a world of products to the fingertips of consumers. While e-tailing offers numerous advantages, such as convenience and broader reach, it also comes with challenges like intense competition and security risks. By understanding the operations and weighing the pros and cons, entrepreneurs and businesses can make informed decisions when venturing into the e-tailing business in Australia.
DISCLAIMER: This article is for informational purposes only and the opinion of the author. BARTERCARD has no business relationships with any company or organisation mentioned.
