Today, it’s not enough to launch an ecommerce website and call it your digital commerce strategy. Ecommerce is on its way to overtaking offline shopping as the predominant way consumers like to shop. In 2021, retail ecommerce sales amounted to approximately 5.2 trillion U.S. dollars worldwide. But there’s more to running a successful digital business than simply selling products online.
The basics of ecommerce simply won’t cut it when it comes to meeting the expectations of modern consumers - including empathetic, personalized and digital-first engagement. This is where digital commerce comes in and ecommerce takes a bit of a back seat.
What is digital commerce?
Digital commerce or d-commerce is the process of purchasing and selling goods and services through digital channels. It’s more than an online store where products reside and checkouts occur —digital commerce spans across different touchpoints. It comprises marketing, selling, servicing, R&D, development and procuring products for all types of platforms (e.g., desktops, mobiles, social networks, etc.).
Digital commerce has evolved from a series of interactions to a single continuous activity that includes building engagement and awareness, tracking conversions, encouraging repeat purchases and recording transaction history. It encompasses all processes and technologies that contribute to a customer’s movement down the marketing funnel — from acquisition to retention. Focusing on this type of commerce is key to increasing revenue, acquiring new customers and retaining existing ones for businesses looking to remain competitive in the future.
Key components of digital commerce
To succeed in digital commerce today, businesses must aim for an integrated approach to the customer journey and a unified buying experience. All aspects of purchasing decisions should be considered. The components of digital commerce include but are not limited to:
- Customer support
- Content promotion (e.g., product descriptions, social media posts and blogs)
- Descriptions of products, images and other media
- Marketing as a function, promotional activities and social media presence
- Mapping the user experience
- Fulfillment of orders and supply chain management
What is ecommerce?
Ecommerce is just one element of the customer buying journey, and therefore one part of the entire world of digital commerce. At its core, ecommerce or electronic commerce refers to the process of buying and selling goods and services using the internet. It includes the transfer of money, funds and data to execute transactions. Plus, it employs technologies such as electronic funds transfer, mobile commerce, internet marketing, online transaction processing, supply chain management and automated data collecting systems.
Although ecommerce usually refers to the sale of physical products, it can also be describing any type of online commercial transactions. There are four ways by which these transactions can occur: Business to Customer (B2C), Business to Business (B2B), Customer to Business (C2B) and Customer to Customer (C2C). Some of the most popular ecommerce stores today include Amazon, Ebay, Alibaba, Rakuten and AliExpress. Since ecommerce refers specifically to the transactions of goods and services, it differs from e-business, which relates to all the aspects of operating an online business.
Key components of ecommerce
Each ecommerce business is different and will have its own set of strategic goals, which will change over time. But integrating certain key elements is vital in cutting down on possible unwanted expenses and losses. An ecommerce strategy should include the following:
- Dynamic pricing
- Client Relationship Management (CRM)
- Ecommerce catalogue and product display
- Supply chain management
- Shipping and returns
- Product quality
- Mobile compatibility
- Reports and data analysis
So, what is really the difference between digital commerce and ecommerce?
Digital commerce is the newer term, but it only emerged because the scope of ecommerce broadened over time. For some, “digital commerce” is a digital transaction. Still, others understand digital commerce as a fully automated successor to ecommerce. A key difference between ecommerce and digital commerce is that the latter also considers the experience you offer your customers. Customer lifetime value (CLV) is its main success statistic. The goal of ecommerce is to sell while digital commerce focuses on engagement in the purchasing process – content and mobile devices being its primary drivers.
Ecommerce refers to the functional aspects of online sales such as getting a storefront set up on a website, managing supply chains, processing transactions and collecting payments. Digital commerce is not only about customers being able to purchase a product online but about providing the ideal, end-to-end customer experience. It’s expanding the customer journey and buying experience beyond the click to purchase and into the world of artificial intelligence (AI), augmented reality (AR), virtual shopping assistants, and more.
What has led the shift to digital commerce?
Today’s commerce landscape is evolving rapidly and with these changes comes a change in consumer behavior. Largely stimulated by the growing prevalence of technology and connectivity in our lives, digital commerce has been embraced as a foundation of the online retail world. In fact, according to Gartner, 86% of marketing leaders reported that digital commerce will be the most important route to market over the next two years. Excelling at it means that you need to evolve with the rise of new trends and customer demands.
Trends in digital commerce move at lightning speed, but here are few to note:
Personalization: 87% of customers are looking for a personalized and consistent experience across different shopping channels. Data is the key to knowing buyers enough to meet their needs and predict what they might want at a particular touchpoint going forward.
Integrated marketing: 42% of consumers say a seamless experience across all devices and channels is a “top expectation.” By aligning your marketing channels to promote your products or services in tandem, you achieve a cohesive experience.
Digital self-service: About 75% of buyers say they prefer digital self-service and remote human contact to in-person communication, which is why touchpoints like online chat, smart speakers, mobile apps and intuitive websites are so essential.
Inventory control: Across industries, more advanced methods for efficiently maintaining inventory levels are emerging. For instance, retailers like Walmart and Target employ a centralized inventory data system to identify product inventories in their brick-and-mortar stores, allowing them to utilize store supplies to fulfill online customer orders.
Interactive products: Interactive content is twice as likely to engage a visitor as static content. So, digital retailers are now integrating virtual and augmented reality as additional touchpoints throughout the customer journey. For instance, online clothing retailers might use AR to create digital fitting rooms, where customers can try on clothing virtually.
The future of shopping
In recent years, a range of all-in-one ecommerce platforms have been created to help businesses easily start selling their products online. But, in the age of customer-centric retail, these platforms barely touch the surface of what’s needed to engage with your audience. As customer expectations rise and technology advances, ecommerce is no longer cutting it.
Digital commerce amplifies the ecommerce business model by increasing its opportunities for value and revenue generation. By leveraging technologies ranging from virtual shopping assistants and personalization to augmented reality, brands can create a seamless buying experience that includes speed, simplicity and convenience. The future shopping experience will focus on all three while combining the best of both the digital and physical world.