What Is Electronic Retailing (E-tailing)? How Electronic Retailing (E-tailing) Works

Types of Electronic Retailing (E-tailing)

Business-to-Consumer (B2C) E-Tailing

Business-to-consumer retailing is the most common of all e-commerce companies and the most familiar to most Internet users. This group of retailers includes companies selling finished goods or products to consumers online directly through their websites. The products could be shipped and delivered from the company's warehouse or directly from the manufacturer. One of the primary requirements of a successful B2C retailer is maintaining good customer relations.

Business-to-Business (B2B) E-tailing

Business-to-business retailing involves companies that sell to other companies. Such retailers include consultants, software developers, freelancers, and wholesalers. Wholesalers sell their products in bulk from their manufacturing plants to businesses. These businesses, in turn, sell those products to consumers. In other words, a B2B company such as a wholesaler might sell products to a B2C company.

Advantages and Disadvantages of Electronic Retailing (E-tailing)

E-tailing includes more than just e-commerce-only companies. More and more traditional brick-and-mortar stores are investing in e-tailing. Infrastructure costs are lower with electronic retailing versus operating brick-and-mortar stores.
Companies can move products faster and reach a larger customer base online than with traditional physical locations. E-tailing also allows companies to close unprofitable stores and maintain the profitable ones.
Automated sales and checkout cut down on the need for staff and sales personnel. Also, websites cost less than physical stores to open, staff, and maintain. E-tailing reduces advertising and marketing expenses as customers can find the stores through search engines or social media. Data analytics is like gold for e-tailers.
Consumer shopping behavior can be tracked to determine spending habits, page views, and length of engagement with a product, service, or website page. Effective data analytics can decrease lost sales and boost client engagement, which can lead to increased revenue.
There are disadvantages to running an e-tailing operation, though. Creating and maintaining an e-tailing website, while less expensive than a traditional retail location, can be expensive. Infrastructure costs can be substantial if warehouses and distribution centers need to be built to store and ship the products. Also, adequate resources are necessary to handle online returns and customer disputes.
Also, e-tailing does not provide the immersive, emotional experience that physical stores can offer. E-tailing does not give the consumer a chance to smell, feel, or try on products before purchasing them—sensory experiences that often result in a decision to buy; browsing is also more pleasurable in person, and lends to increased spending. Personalized customer service and interaction can also be an advantage to brick-and-mortar stores.