Digital channels

Digital channels are the ways a business sells using the internet or other electronic technology. The main ones are e-commerce, a business's own website, social media marketplace sites, online auction sites and downloads. They are growing fast because they often cost less to run, are quick and cheap to start, and reach customers worldwide.

How e-commerce changes place

E-commerce is any business transaction carried out online, including sales to other businesses. It has changed how consumers shop and how businesses plan place: many no longer need to be near their target market or pay for an expensive store.

An e-tailer is a retail business that sells its products to customers over the internet. You can target anyone with internet access, wherever they live, and cheaper premises keep costs down, so many e-tailers start and stay home-based. Two friends selling handmade phone cases from a spare bedroom, for example, reach customers in several countries with no shop rent.

Advantages of digital channels

• Reduced overheads such as rent, heating and shop staff, which can allow lower prices.
• Convenience: customers can shop at any time.
• A worldwide market, not just people who can travel to a shop.
• Full product information, such as sizes and customer reviews.
• Data about customer behaviour, such as the most-viewed pages.
• Fewer staff needed, since the website does much of the selling.

Disadvantages of digital channels

Buyers of physical goods must wait for delivery, cannot inspect products physically and may find it harder to ask questions. They need a reliable internet connection, and some people lack access or do not want to buy online, whatever their age. The business faces the cost and time of setting up and maintaining online content, more global competition, packaging and posting costs, returns administration, fees, less face-to-face contact and technology failures.

Services can be delivered remotely too, giving customers wider choice, flexibility and no travel. A theatre company can charge schools to stream a recorded show, so a class hundreds of miles away sees it without a coach trip. But the actors get no reaction, and the provider may not notice mistakes as easily as in person.