The B2C eCommerce industry is exploding in growth, with market valuation projected to reach $7.6 trillion by 2028. This is attributed to the mass adoption of smartphones globally, the digitalization of the global economy, and the increasing desire to shop online.
If you are looking to tap into this industry as an online vendor or just want to learn about B2C eCommerce, this piece is for you.
In this guide, you’ll learn what B2C eCommerce is, why it’s a viable business model, its challenges, success stories to imitate, and many more. Let’s dive in.
Key Highlights
- B2C eCommerce bridges the gap between online retailers and consumers
- It offers a great way to reach customers globally at minimal costs
- There are six B2C eCommerce business models you can adopt to get started
- Selling niche-specific products and personalized targeting are ways to stand out in the B2C online marketplace
- Artificial intelligence and machine learning can be leveraged to access actionable customer data for improving overall customer satisfaction
What is B2C eCommerce?
Also called retail eCommerce, B2C eCommerce is the exchange of goods, services, or information between businesses and consumers via the Internet for use in return for monetary payment.
The B2C customer journey
A typical customer journey in B2C eCommerce starts with discovery. Here, a customer may find your product via any digital channel, for example, search engines, social media, or adverts.
Once intrigued, they go further to the consideration stage, where they learn more about your business offerings. After the purchase, customers start tracking their order until it’s delivered safely.
What can B2C eCommerce businesses sell?
In today’s digital world, almost anything can be sold online. If you’re looking to start a B2C eCommerce business, here is a list of things you can sell:
Physical products
This includes tangible products such as clothes, computers, electronics, household items, and groceries directly shipped to the end users through a digital store or a brick-and-mortar store with an online presence.
A perfect example is Walmart, a multinational retail store with an aggregate of hypermarkets and grocery stores. They have a solid online presence, where consumers can order goods shipped globally. They also have walk-in stores in the US and other continents.
Digital goods
Digital goods are intangible items, such as software, eBooks, movies, music, and more, which can be accessed online or downloaded. They can be delivered directly to the end users, eliminating the need for shipment.
For example, iTunes, Apple’s music and entertainment platform, offers a variety of digital content, including music, podcasts, movies, and TV shows to subscribers.
Services
B2B eCommerce businesses can also sell services such as hiring a service provider, booking travel tickets, coaching, writing assistance, and many more. This can be on a one-time basis or through a subscription-based model.
For instance, Airbnb is an online marketplace that allows property owners to rent their properties to travelers at a certain fee. Property owners list their properties on Airbnb, and in turn, they receive a commission.
Types of B2C eCommerce Models
Listed below are the popular B2C eCommerce business models:
| S/N | B2C eCommerce business model | Definition | Examples |
| 1. | Direct sellers | This is the most common B2C eCommerce business model. It involves selling products directly to consumers via an eCommerce website or a third-party marketplace. The business controls every transaction stage, from product creation to order delivery. | Nike is a US-based Footwear company involved in the design, manufacturing, and marketing of bespoke footwear and sportswear accessories. They have a website where customers can view the product catalog and make an order. |
| 2. | Online intermediaries | In this model, B2C eCommerce businesses act as an ‘intermediary,’ fostering the transaction between manufacturers and end users. They also facilitate product transactions by providing payment processing, delivery, advertisement, etc. In turn, they earn a commission after each sale. | Expedia is one of the internet’s biggest travel shopping sites. You can book hotels, airfare, rental cars, and other vacation packages. |
| 3. | B2C dropshipping | This involves creating an online store to sell products, and when there’s an order, the supplier ships it directly to the buyer. You don’t need to worry about packaging, shipping, or storage fees, as the supplier covers them. | Shopify is widely known to be one of the biggest dropshipping sites. You can create stores, customize them, and list the products you intend to sell. |
| 4. | Community-based | This model involves businesses building or targeting online communities where their customers are. Advertisers can market their products and services directly to community members. | Amazon Mechanical Turk is a crowdsourcing website connecting businesses to workers who can perform tasks virtually. |
| 5. | Subscription based | In this model, businesses charge customers a fee to access their products, service, or content. It’s often used to advertise freemium deals. | Netflix is an over-the-top video that enables users to watch movies, TV shows, documentaries, or other digital content for a monthly fee. |
| 6. | Advertisement based | Lastly, this model involves brands that can drive customers or compel them to buy a product by advertising them on a website with many visitors. Usually, the website has a similar target audience or can be based on search keywords. | YouTube is a global video search engine that allows brands to advertise their products and services directly to their customers through a related video marketed on their site. |
Benefits of B2C eCommerce
The B2C eCommerce models have a myriad of perks from which small and large businesses can benefit from. Here are the five major ones worth knowing:
1. Lower costs
B2C eCommerce models help businesses cut managerial, marketing, and operational costs. If you don’t have a physical store, you eliminate many expenses such as utilities, staff costs, rent, maintenance fees, etc.
If you decide to own a website rather than use a third-party marketplace, better! Opt for a web host that is compatible with eCommerce tools, for example, Shopify, BigCommerce, etc.
2. Data Gathering
As a B2C eCommerce business owner, you have access to valuable customer insights. This includes demographic data, purchasing behavior, psychographics, or feedback. This data can help you make an informed decision on improving your marketing strategies: product development, and overall customer experience.
Most eCommerce platforms use advanced AI data tracking and analytics tools to streamline data-gathering. The information can be handy in identifying best-selling products, sending personalized emails or product recommendations for a better purchasing experience.
3. Eliminates the need for physical presence
As a B2C eCommerce business owner, you don’t need a physical store to scale your business. You can manage your business from your home or anywhere around the world. This is a perfect solution for brands that offer services or sell products in demand globally.
By eliminating the costs of owning a brick-and-mortar retail store, brands can focus on improving their customer experience and expanding their product offerings, thereby generating more income streams.
4. Trackable personalized marketing
Personalized marketing is a strategy where brands create a personal experience for their customers based on data gathered from them. This can be based on your customer’s previous purchases, geographical location, interest, or other psychographic behavior.
Personalized marketing makes it easier to segment customer needs and proffer hyper-targeting marketing strategies to increase return on investment (ROI). Customers are even more likely to buy when the offer is tailored to their needs or interests.
5. Global Reach
Thanks to the borderlessness of the internet, B2C eCommerce businesses can reach more customers anywhere in the world. People can discover your store and purchase your product or service without interacting with you.
By sharing your business website on social media or advertising through any digital channel, your business can attract the right audience with a higher potential of becoming customers.
Despite the alluring perks of this business model, there are a few bottlenecks that limit mass adoption in every country. This brings us to the next section:
Challenges of B2C eCommerce
Have you ever encountered payment restrictions while trying to make a payment online? This is just one of the many pitfalls B2C eCommerce businesses encounter. Here are six others:
1. Competition
B2C eCommerce is a highly competitive market, with many businesses vying for the attention and dollars of online consumers. This intense competition can make it difficult for companies to differentiate themselves and stand out. It’ll take a lot of work for a new company to compete with bigger players like Amazon, eBay, etc.
How to resolve this:
To thrive in this ever-competitive industry, brands must continue discovering and implementing unique products and services that match the customers’ needs. This can only be possible by adopting a customer-centric approach in all their marketing strategies and business values.
2. Customer acquisition
One viral post can drive visitors to your site and compel them to purchase. But the real hassle lies in retaining these visitors and turning them into loyal customers. Plus, with so many B2C eCommerce brands available, building a loyal customer base may take a lot of work.
How to resolve this:
B2C eCommerce businesses need to shift focus from being competitor focused to customer-obsessed. Jeff Bezos, Founder of Amazon, shared this as a key factor in Amazon’s success in an interview with Micheal Beckerman, president and CEO of the Internet Association:
“…everything we’ve done and every success we have is at its root primarily due to the fact that we have put customers first”
3. Supply chain management and logistics
Supply chain management coordinates goods and services from production to delivery to end users. Ineffective supply chain management results from stock shortages, poor quality control, damaged goods during transit, subpar product quality, etc.
For instance, in December 2018, Amazon received bulk orders due to the holiday season. With this increased demand and the high volume of orders, Amazon had challenges meeting shipping schedules. Many customers received their orders late, some not at all, leading to disappointment and frustration.
How to resolve this:
Brandon Ginsberg, CEO of ApparelMagic shared five actionable strategies that work:
- Collaborate with third-party logistics to improve shipping times and reduce costs
- Create an effective warehouse management system that can improve productivity and delivery of orders
- Communicate effectively with your vendors, team, and customers
- Find a quality sourcing partner
- Use an effective inventory management software to accelerate product delivery time
Read more about how to improve supply chain management in B2C eCommerce.
4. Payment processing
Ensuring secure and efficient payment processing is a crucial challenge for B2C eCommerce businesses. This is due to technical and cybersecurity issues.
How to resolve this:
With the rise of online fraud and security concerns, companies must employ robust security measures to protect customer payment information and ensure that transactions are processed quickly and efficiently.
5. Website performance
Website performance is critical to the success of any B2C eCommerce business. Poor website performance can negatively impact the customer experience and drive customers away. Plus, a high bounce rate negatively impacts the SEO of your website. If no one is seeing your products, how do you make sales?
How to resolve this:
B2C eCommerce businesses must ensure that their website is fast, easy to navigate, and optimized for search engines. This includes having a responsive design, a streamlined checkout process, and a user-friendly interface that gives customers easy access to the information they need.
6. Product returns
Lastly, ensuring the return process is smooth and cost-effective for your customers can be difficult and impact the customer experience if not managed effectively.
How to resolve this:
That said, B2C eCommerce businesses should have clear and transparent return policies and offer multiple return options, such as in-store returns or prepaid shipping labels.
Successful B2C eCommerce examples
In this section, I outlined four successful eCommerce B2C businesses and how they made a huge impact in the eCommerce industry:
Spotify
Founded in 2006, Spotify has grown to be one of the largest music streaming service providers, with over 489 million active users. But how did Spotify become so successful in less than two decades?
Spotify focuses on providing an ideal customer experience for all its users. Take creating playlists, for instance. They use AI, machine, and deep learning to identify user listening patterns and create a personalized playlist unique to each user.
Spotify focuses on user experience
Spotify provides users with several impeccable personalized features such as discover weekly, release radar, time capsule, and Spotify wrapped. When Discover Weekly was launched in 2015, it attracted 40 million users with 1.7 billion streams.
Spotify was able to garner a huge customer base across continents because of its:
- Personalization options
- Affordability
- Accessibility
- Wide range of listening options (music, podcasts, and shows)
- Outstanding user experience
Etsy
Another platform to consider is Etsy, a B2B eCommerce platform that sells vintage, art/craft, and handmade products. Etsy uses a marketplace model, making it easy for consumers to purchase unique products from artisans and creators worldwide.
Despite not having a large audience like Amazon or Alibaba, Etsy carved out a unique niche making it a go-to for artist-made goods.
“It’s our mission to keep human connection at the heart of commerce. That’s why we built a place where creativity lies and thrives because people power it.” – Etsy About Us
Etsy makes an acquisition
Etsy uses state-of-the-art technology to accurately define and suggest products to users based on their previous purchases and interests. In 2016, they acquired a deep learning and artificial intelligence company, Blackbird technologies, to deliver more streamlined services to customers and sellers.
Etsy also has a user-friendly interface that compels users to interact with buyers and make a purchase. Sellers can create a personalized store based on their audience preferences.
ASOS (AsSeenOnScreen)
ASOS is a leading B2C eCommerce fashion retailer in the UK. Founded in 2000, this company has captured GenZs hearts and turned them into loyal buyers. They offer a wide selection of clothing, accessories, beauty products, shoes, and many more.
ASOS employs a customer-focused approach by eliminating the major obstacle in the fashion industry: discrimination of looks or body shape. By promoting inclusivity, they create a sense of uniqueness that encourages youngsters to embrace their appearance.
“So we make sure everyone has an equal chance to discover all the amazing things they’re capable of – no matter who they are, where they’re from, or what looks they like to boss. We exist to give you the confidence to be whoever you want to be.”– ASOS about us.
ASOS makes an exception
Who wouldn’t jump at a free shipping offer? ASOS uses free shipping to incentivize new customers. In addition, they offer return policies and a quality customer support team.
Lastly, the company’s investment in innovative technologies, such as augmented reality and virtual try-on, has further enhanced the customer experience and driven repeat purchases.
ASOS’s success can be attributed to its commitment to delivering a personalized and inspiring shopping experience for its customers.
Zappos
Zappos is a leading B2C eCommerce retailer and a subsidiary of Amazon that specializes in shoes and clothes. What sets this company apart is its focus on providing stellar customer service and memorable shopping experiences.
In an interview with Forbes, Zappos’ former CEO and co-founder, Tony Hsieh, shared how focusing solely on customer service and culture contributed to Zappos’ success online:
“Zappos stands for one thing, the absolute best customer service. We started selling just shoes online, but today we sell handbags and apparel and even housewares and pots and pans, and hopefully, ten years from now, people won’t even realize we started selling shoes.”
Zappos puts customers first:
Besides providing quality customer experience, Zappos employs a unique methodology for hiring talents. Instead of focusing on qualifications, Zappos takes a different turn by prioritizing company culture.
“We’ve actually passed on a lot of really smart, talented people that we know can make an immediate impact on our top or bottom line, but if they’re not good for the company culture, we won’t hire them for that reason alone.”
Zappos’s success can be attributed to its customer-obsessiveness and addiction to retaining a solid company culture.
Conclusion
B2C eCommerce is a viable business model that can yield sustainable income if done correctly. With the ever-increasing popularity of online shopping, this is the best time to start your B2C eCommerce business.
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Next Steps: What now?
- Choose your product(s) and sales channel
- Find the perfect eCommerce web host for your website
- Choose a domain and create a brand name
- Design your website using a website builder
- Set up your storefront and install eCommerce marketing and analytics tools
- Advertise your website on your social media channels
