Guardian article (1) “Why retailers stop selling online: the hidden cost of e-commerce” claims the costs of e-tailing, namely free delivery and returns, are making B2C less attractive for retailers.
The article says that some 30% of shoppers will purchase extra items just to get a free-delivery option, and then return the unwanted products. With margins already crushed, and returns being artificially inflated by this consumer trend, it is easy to see why B2C ecommerce can be so painful around Christmas, and even unsustainable long term.
B2C Ecommerce has its benefits
Despite the hefty cost of online ecommerce, the benefits for retailers have been huge: Entering new markets, expanding their catchment areas, market research, promoting their High-Street offering, and ultimately driving expansion. Many bricks and mortar businesses have attributed impressive growth to their online sales.
Has time been called on the free-delivery, free-return mantra of online retail?
Although all the benefits of B2C ecommerce are hard to turn away from, the costs of competing in a ‘free-delivery, free-returns’ world are spiralling and at some point, online retailing seems likely to shift from being convenient and free, into a luxury option that comes at a premium
The Guardian article (based on Barclaycard research) claims that some small businesses have been actively turning away from ecommerce. They say that “ more than a fifth (22%) of bricks and mortar retailers choose not to sell online due to concern about the costs of managing delivery and returns.”
Paul Dorey, MD of Aspidistra, B2B ecommerce technology specialists, comments: “The retail business case must be addressed, and some costs cannot continue. It is a real pity that such a high proportion of retailers have been turned off from online selling, particularly as they are missing out on the benefits of marketing, branding and awareness.
One option could be through thinking creatively, where the shift to charging for ecommerce, may not be at the level of currency – there might be a data-premium to the customer, or a sharing option, or even shared resources (see article on Gig Economy, Feb 2017). And I believe an insight into how the B2B ecommerce marketplace, could offer a whole range of technology solutions”.
B2C v B2B – the technologies compared.
Taking a snapshot of a few areas of ecommerce shows the technology difference between an integrated B2B ecommerce solution and a standard B2C solution.
The B2B ecommerce technology is undoubtedly more complex than its fore-runner, the online shop. However, it may be that B2C now needs to look to its big brother in B2B and implement specialist technologies to boost its success.
(1) Guardian article: https://www.theguardian.com/small-business-network/2016/dec/15/hidden-cost-e-commerce-online-shopping-entrepreneurs