What Exactly Is Digital Commerce? Examples, Trends, and How It Works (2023). Online retail has progressively grown to account for a sizable percentage of the global industry since the dot-com boom era.
What Is Digital Commerce? How It Works In 2023
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E-commerce will account for roughly 22% of global retail revenues by 2024. But digital commerce goes far beyond a simple button click or looking up a product online before buying it in a physical store.
What is digital commerce?
Selling products and services entirely online is referred to as digital commerce. The phrase includes not only online transactions but also everything that occurs before and after. This encompasses activities like supply chain management, data analytics, and even market research and client acquisition.
Digital commerce vs. ecommerce
Ecommerce is the online sale of products and services, typically through a website created designed specifically for those transactions. When a customer buys a thing from a website, the website ships the item to them. Ecommerce is only a small portion of the client purchasing process, and as such, only a small portion of the overall world of digital commerce.
From customer acquisition to customer retention, the entire range of procedures and tools that make up digital commerce are included.
Consider payment technologies, SEO optimization to help an e-commerce site rank on Google, retargeted advertising to market products to users after they’ve visited (and left) your e-commerce website, and logistical engineering to get a product from the warehouse to the customer’s house more quickly and effectively.
The term “digital commerce” also refers to the subsequent iteration of online shopping, which includes augmented reality (AR) shopping, artificial intelligence, virtual assistants for online shopping, and other innovations.
How does digital commerce work?
The first time a customer comes upon a brand or product online is the beginning of digital commerce. They can come upon a product listing on a retail aggregator, an advertisement on their social media feed, or the brand’s domain name in Google search results.
Consider a consumer who shops on, say, Amazon, an e-commerce website. Their website uses a sophisticated algorithm to present users with customized search results for any given product. Depending on past consumer behavior, geographic location, and a host of other factors, the order in which things appear may fluctuate drastically from one client to the next.
Analytics are used to better inform how things are sold, presented on a website, and even how assistance and consumer inquiries are handled. Every transaction automatically informs marketing for the following one.
In this sense, digital commerce is more about how customer data is gathered and used to continuously improve the online buying experience than it is about the logistics of getting products from point A to point B.
Digital commerce examples
A vast range of online commercial activities fall under the umbrella of digital commerce. Four instances of digital commerce are shown below:
Online retail: Selling actual goods online, such as clothing, electronics, or home goods, is known as online retail. With digital commerce platforms like Shopify, opening an online store is simple.
Digital products: Digital commodities include ebooks, software, apps for mobile devices, online courses, and digital subscriptions (such as streaming services). With online marketplaces like Gumroad, Teachable, and Udemy, selling digital goods is simple. Also check Digital Advertising Platforms
Online Services: Online expertise sales are a possibility for service-based businesses. Web design, graphic design, digital marketing, and consultancy are some of the options. Service providers and clients are connected by websites like Upwork and Fiverr.
Online marketsplaces: Markets link buyers and sellers of an infinite number of goods. For tangible commodities, there are Amazon, eBay, and Etsy; for digital goods like website designs, there is Envato Market.
Digital commerce trends
The experience of commerce is always changing, much like the internet. The following are some industrial trends:
Personalization. The online shopping experience has been changed by cookies, tiny pieces of code that allow websites to “remember” their users and so customise material for them. Customers today demand a personalized experience, and 88% of them think they are more likely to buy from companies that offer it.
Interactive products. Augmented and virtual reality are now being used by online merchants as additional touchpoints for customers. For instance, digital fitting rooms where clients can virtually try on garments might be created by online apparel merchants using augmented reality (AR).
Inventory control. For digital merchants, inventory costs continue to be a significant expense—a problem that technology has made great strides to address. Large retailers today, including Target and Walmart, use sophisticated programming to locate product inventories in physical stores across the country, enabling them to use in-store inventory to fill online customer orders. Having separate in-store and warehouse inventory is no longer necessary, which can save money on overhead. The necessity for considerable warehousing is instead eliminated by large digital sellers like Alibaba Express, which bypass the middleman by linking customers and suppliers directly.
Integrated marketing: The consumer experience has been fragmented as a result of digital commerce and its numerous channels. One potential solution to this problem is integrated marketing: Brands can create a cohesion digital experience that satisfies customer expectations in a dispersed digital world by unifying marketing creative across all customer touchpoints.
Automation. Retailers are increasingly using automation as a way to improve efficiency and cut costs. Businesses may concentrate on more important factors like growth and customer experience by automating repetitive operations like marketing, support, and inventory via automation in ecommerce.
APIs-based Commerce. Modern methods of digital commerce called “headless commerce” decouple the back-end e-commerce infrastructure from the front-end user experience. Through a variety of channels and devices, this trend enables businesses to offer customers experiences that are more flexible and personalized.
Create your digital commerce strategy today
The ecommerce business model is simply amplified by digital commerce by increasing the options for value creation and revenue generating.
Brands can give customers a smooth buying experience by utilizing technology like AR capabilities, first-party cookies, and customization.