What Is Ecommerce?
Learn about ecommerce, its importance, and how it can grow your business.
Learn about ecommerce, its importance, and how it can grow your business.
Ecommerce (which stands for ‘electronic commerce’) is the process of trading online. It encompasses all the online activity involved in buying and selling products and services. This exchange could take place between two businesses (B2B) or between businesses and consumers (B2C).
When you go to your favourite online retailer to buy a new pair of shoes, you’re engaging in ecommerce. If you pay online for a ticket to attend a music concert or travel by plane, that’s ecommerce, too.
Ecommerce doesn’t only occur on desktops, though. Most ecommerce traffic happens on mobile devices. Spurred by the influence of smartphones and the convenience of online shopping, mobile commerce sales make up almost 57% of ecommerce market share. That means nearly three out of every four dollars spent on online purchases today is done through a mobile device.
What you’ll learn:
Here’s how to get your products in front of billions of shoppers
Consumers used to rely on brick-and-mortar shops, product catalogues, and their trusty landlines to purchase goods and services. But the internet changed all that.
Early ecommerce platforms like eBay and Amazon transformed how businesses and consumers engage. The convenience of comparing prices and ordering products from the comfort of the home meant ecommerce has steadily grown in popularity since the turn of the century.
Mobile shopping changed the game by allowing billions of people to shop online. This changed consumer perspectives and ushered in a demand for convenience and personalisation, which brands were too happy to provide. What resulted was an enormous popularity surge in the 2010s — and the growth of digital shopping hasn’t slowed since. The gap between retail and ecommerce sales is narrowing each year.
How important has online shopping become for businesses and consumers today? Check out these ecommerce statistics on online shopping trends:
To win your market share, it’s important to stay on top of the latest ecommerce trends and know what motivates customers to make purchases.
The rise of digital trading has impacted almost every industry and business, from small mom-and-pop cupcake stores to enormous legacy media conglomerates. But just how beneficial has this rise been?
Let’s look at some of the advantages and disadvantages of ecommerce, both for consumers and businesses.
Benefits for consumers first. Here are four advantages of ecommerce for the end customer.
Next, let’s talk about the disadvantages of ecommerce:
Next, let’s talk about the businesses. Here are four benefits of the ecommerce industry to mull over:
Lastly, let’s highlight four of the challenges of ecommerce for businesses.
You’ve heard it before, but it bears repeating: Generative and predictive AI are changing the ecommerce game. They’re making teams more productive and giving them new and valuable ways to engage with customers.
Thanks to AI trained on large language models (LLMs) and historical business data, tasks that used to take your teams days or weeks now take just hours. For example, generative AI can automatically write accurate, detailed product descriptions. With low-code generative development tools, business users at all skill levels can create landing pages and localised sites with less time and effort. Ultimately, new technology means that ecommerce teams can work smarter and faster.
AI is also improving the customer experience. Remember when chatbots could answer only a few select questions? Now, their conversations are more human, more personalised, and more helpful.
Chatbots trained on LLMs can guide shoppers to specific products based on their purchase history, preferences, and past searches. The bots can also answer more complex questions, such as: How does this blouse fit? Does it run true to size? Businesses can significantly boost their bottom line and customer satisfaction by providing these tailored experiences in real time and at scale.
Customers want to shop, however, wherever and whenever they like. This means online, offline, and, increasingly, in spaces like messaging apps, voice platforms like Amazon’s Alexa, or social media. In the future of commerce, new channels will crop up. Businesses that find ecommerce successful will move quickly and engage customers in new spaces as they emerge.
Customers use multiple channels to browse products and shop online, and businesses must ensure a cohesive omnichannel experience. That’s the purpose of unified commerce: It means all your back-end systems are connected with your customer-facing channels. This creates a seamless customer experience, whether a shopper visits your website, mobile app, social media, or anywhere else.
We know that customers already want personalised experiences. In fact, 53% of them expect companies to anticipate their needs. As AI improves the shopping experience with predictive intelligence and natural language processing, customers will notice which brands are doing it right. A staggering 81% of customers expect faster service as technology advances and 73% expect better personalisation.
An ecommerce channel is any digital space where a customer shops. Think of all the ways you can browse or buy online: You can search for items on a brand’s website, download the brand’s app on your mobile device, or shop on social media. These are a few of the most popular ecommerce channels:
Mobile commerce: Simply put, mobile commerce is shopping through a handheld device (like a smartphone or a tablet). As more customers prefer shopping this way, businesses must meet demands for stellar mobile experiences. No matter what device a customer uses, shoppers want it to be simple and intuitive to browse products, add to a cart, and purchase.
Social commerce: Social commerce brings the entire shopping experience — from browsing to checkout — to social media. Customers can discover products as they scroll their social feeds, browse your brand’s social posts for products that match their needs, and buy directly on a social platform through shoppable content. Social commerce is a convenient way for customers to find and purchase products. It’s a great way for businesses to expand your reach and customer base quickly.
Ecommerce websites: An ecommerce website is a powerful sales tool where customers can visit, browse, and purchase your products via mobile or desktop. These sites should include a home page representing your brand well, product pages enticing shoppers to buy, and a pain-free checkout experience.
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Ecommerce brings businesses and customers together on different channels. To make ecommerce work, a business needs to create a user experience on a given channel where customers can easily search for and buy products. This requires certain elements and features, including:
Content: This is where you create and update your user experience. It includes all the content — images, video, product descriptions, and other written ecommerce content — across your entire site. Anything you see on an ecommerce site’s home page, product listing pages, and detail pages is all part of content management. Merchandisers, marketers, designers, and developers are responsible for creating the user experience and bringing it to life on the web.
Site navigation: Think of the last time you bought something online. Were products easy to find? Did you intrinsically know how to browse, add to cart, and pay for your items? That’s the result of a carefully thought-out site navigation strategy. Ecommerce works best when businesses consider the customer journey and how each shopper will use the site.
Payment: If it’s hard to make a purchase or if a payment process feels clunky, customers will find a competitor who does it better. Getting the payment experience right and making it as easy as possible is critical.
Order management: This involves the logistics of ecommerce and everything that happens after a shopper clicks the Buy button. Order management is what gets an item from a warehouse to a customer’s doorstep.
There’s an art and a science to successful ecommerce. Your digital storefront is the “face” of your brand, and it’s often a shopper’s first impression of your business. By combining the above elements with successful strategies for user experience (UX), design, and merchandising, you can create stellar, memorable shopping experiences that keep customers coming back.
It’s hard to understate the importance of a digital storefront. So, what makes an ecommerce website shine? Here are a bunch of successful ecommerce case studies.
Known for bringing clean beauty to the masses with affordable cosmetics, E.l.f. Beauty is a shining example of ecommerce. Neatly categorised products, uniform imagery, and easily scannable product details make it easy — and enjoyable — to browse the site.
YETI
YETI makes tough, long-lasting outdoor gear built for all kinds of adventures, and its ecommerce site reflects that: Shoppers can easily browse by activity: hunting, fishing, travel, and more. Promotions are highly visible. Adding an item to your cart? Simple. Checkout is streamlined and the entire shopping experience is seamless.
Sonos
Wireless audio devices can be complex. Are the items compatible with a customer’s other technology? What are the product specifications? Wireless-speaker system leader Sonos offers filters by product type and feature to help customers find what they’re looking for. Product detail pages neatly display all the information a shopper needs to make a decision.
Filipino brand First Circle is an innovative online finance business that provides smart banking solutions for small businesses. The brand is powering the future of eCommerce in finance by offering faster loan processes to small business owners looking to scale.
First Circle understood the limits of traditional banking institutions and worked to refine this model to better serve the needs of local businesses. The entire process, from application to receiving the funds, takes only 1-3 days.
Part of the brand’s appeal is that it has expertly honed in on its target audience. The brand scrolls images of different small business owners that First Circles has funded, adding a human element to what can be quite an impersonal sector.
First Circle shows you don’t have to reinvent the wheel to provide a great ecommerce service. By improving on an existing offer with ecommerce accessibility and prioritising a single target audience, you can capture your slice of the market.
Ecommerce provides the best convenience and accessibility. It’s a highly efficient way to sell goods and services, whether you’re an all-digital business or use ecommerce to supplement your physical stores. But the benefits of ecommerce go far beyond the convenience of running your business online.
Here’s what you can look forward to once you launch your online store:
Brick-and-mortar stores come with overhead, such as money spent on leases, staffing needs, and utilities. Physical locations also require business hours, which means you’re making sales only during a percentage of customers’ waking hours. Ecommerce lets you bypass these costs and sell at all hours of the day.
A physical store limits business operations to a specific geographical area. With an ecommerce website, your business can reach more customers globally, maximising your selling potential.
With a physical store, you likely operate during regular business hours. With ecommerce, customers worldwide can buy your products at any time.
Ecommerce lets you collect more customer data than at a brick-and-mortar store. With the right ecommerce platform, you can access detailed information and real-time data about how customers shop: their click paths, search history, order history, and product pairings. Business leaders use this data to make informed decisions for their ecommerce, marketing, and sales strategies. The result? A hefty boost to your bottom line.
As your customer base grows, you can expand your ecommerce businesses to accommodate more sales. While expanding your physical store typically means relocating or renovating (which can be expensive), with an ecommerce platform, you simply need to increase its bandwidth to handle more traffic and orders. You can also predict future sales based on past sales data and scale your platform up or down accordingly.
With ecommerce, you can take advantage of AI to create personalised shopping for your customers. AI-enabled upselling and cross-selling lets you present customers with products they’re most likely interested in, increasing your business’ sales.
As technology improves, you’ll find more ways to streamline your business processes. With a physical store, there can be limitations to what technology can do. With ecommerce, you’ll find various apps and integrations that help you market your products, improve team collaboration, and provide faster customer service.
Rather than rely on traditional marketing methods like print ads to drive traffic to a physical store, you’ll have a range of affordable marketing channels to drive customers to your ecommerce business. Search engine marketing, organic and paid social media ads, and email marketing let you reach a segmented market for a lower cost.
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Whether you sell products directly to customers or sell services to other businesses, there’s an ecommerce model for you. Here are some of the different types of ecommerce businesses to consider before launching your online store.
Business to consumer (B2C) ecommerce refers to selling goods or services to individual customers. B2C is what most people think of when they hear the term “ecommerce business.”
Traditional B2C sales occur between a business and a single consumer. In this model, a shopper finds a business online and places an order, and the business sends the product to the customer. A B2C ecommerce strategy, then, involves using customer data to get a full view of customers across their online shopping journeys.
B2B ecommerce refers to selling products or services to businesses. B2B companies typically have a higher order value and more recurring purchases.
B2B ecommerce products and services may include manufacturing equipment, distribution, website hosting services, financial services, or software solutions for businesses, just to name a few. These businesses provide other businesses with the products or services they need to grow.
Like B2C, the D2C ecommerce customer is an individual consumer. The difference is that D2C allows manufacturers to sell directly to consumers instead of (or in addition to) using third-party retailers or wholesalers.
While B2B, B2C and D2C are the three you’ll be most familiar with, there are several other more niche business models you should know about:
Before you can start launching an online business, you need to know what products you want to sell. We suggest you identify a problem before you develop the solution. Ask yourself:
You don’t have to land on a completely new invention here. Oftentimes there are plenty of opportunities to improve on products that already exist. If you’ve identified a flaw with a brand’s idea, how can you make it better?
With a product idea in mind, you’ll want to validate it. You need to go through a process to make sure you aren’t wasting your time. Here’s what you need to do:
These three steps will help you determine whether a product idea is worth your time or a waste of money.
Haven’t landed on a winner? Sometimes the market just isn’t ready for what you’re offering. And that’s okay; head back to the drawing board and identify new opportunities.
Got a product that you’re confident will work? Now you need to know how to obtain it. There are a few different approaches here:
Now, it’s time to create your ecommerce platform. The best place to start is with a business plan. Here are some of the things you’ll need to include.
Basics first. Specify all of the essential details about your business:
Who are you aiming your products at? Understanding your target market will inform everything from your product positioning to your marketing strategies.
Your market research can help with this. Create an ideal customer profile (ICP) that explains your perfect buyer. You should be able to answer important questions like:
There is no right or wrong way to create your customer profile. But the more detailed you can be, the better.
Who do you need on board to bring your vision to life? List all of the stakeholders you need to achieve your goals:
Defining these stakeholders in your business plan will give you a roadmap for building your business. It will also help you set realistic expectations about the relationships you need to build to realise your vision.
Lastly, you need to talk about finances. The aim here is to show the profitability of your business. Here are the components you should aim to include:
Your business plan will guide you strategically as you begin building your brand and marketing. It’s also absolutely essential for getting key stakeholders on board with your project.
Every successful digital commerce business has a potent brand image. You will need:
The goal here is to give personality to your business. From the outset, you need to tell your consumers how they should feel when they interact with your website. This step will help you design everything from your ecommerce website right down to your shipping labels.
A strong website is the cornerstone of a successful ecommerce business. Start by choosing a content management system (CMS). WordPress is the most popular, but you can also opt for a website builder.
As you build your site, here are a few things to keep in mind:
Ready to sell? If your customers don’t know you exist, they won’t land at your shopping cart, no matter how great your product is.
Your ecommerce marketing strategy will help your target audience find your ecommerce store. The first step is to take stock of your ideal buyer persona. How do your audience find things online? What are they looking for?
From there, you can take a few different digital marketing approaches depending on your audience’s needs:
There’s no shortage of ways to market your local or global ecommerce brand, but these are a few ideas to help you get started and grow your business.
Ecommerce is a proven business model that helps drive revenue growth for some of the world’s largest brands. By getting started with online commerce, you’ll reach more customers online and significantly increase your business revenue.
Ready to embark on your ecommerce journey? Start here:
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