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What Is Ecommerce?

Ecommerce is the business of buying and selling goods and services over the internet. Ecommerce customers can make purchases from their computers as well as other touchpoints including smartphones, smartwatches, and digital assistants such as Amazon’s Echo devices.

Ecommerce is booming in both business-to-consumer (B2C) and business-to-business (B2B) sectors. In B2C ecommerce, a retailer or other business sells directly to end customers. In B2B ecommerce, one business sells to another. In both sectors, the goal for most businesses is to enable customers to purchase anything they want, at any time, from anywhere, using any digital device.

Put simply, big data is larger, more complex data sets, especially from new data sources. These data sets are so voluminous that traditional data processing software just can’t manage them. But these massive volumes of data can be used to address business problems you wouldn’t have been able to tackle before.

The Business Value of Ecommerce

The growth rate for ecommerce sales is projected to be an astonishing 265%. In 2017, retail ecommerce sales worldwide amounted to $2.3 trillion, and by 2021—just four years later—revenues are projected to reach $4.88 trillion.1

The explosive growth in ecommerce makes it an increasingly valuable, and even essential, tool that enables businesses to

  • Differentiate from their competitors
  • Reach more customers in more regions of the world
  • Reduce costs by selling directly to customers and maintaining fewer brick-and-mortar stores
  • Enable customers to purchase anytime and anywhere, using their preferred devices—a capability that is essential for millennials and other digital natives
  • Gain valuable customer data through online metrics
  • Test-market new products, services, brands, and businesses with minimal upfront investment
  • Provide self-service options to customers, allowing a smaller sales staff to sell to more customers
  • Scale quickly and at low cost

1 Statista. (2018, March). Retail e-commerce sales worldwide from 2014 to 2021. Retrieved from https://www.statista.com/statistics/379046/worldwide-retail-e-commerce-sales/

How Ecommerce Is Changing the Shopping Experience

To keep pace with customers’ increasing demands for more choice, easier access, and faster delivery, businesses are integrating their in-store and ecommerce offerings to create seamless multichannel shopping experiences where customers can

  • Research and explore products and services online before making a purchase either online or in-store
  • Experience items in-store through interactive kiosks, personal concierges, and other offerings before making a purchase either online or in-store
  • Use any device—a computer, smartphone, smartwatch, digital assistant, and more—to shop when and where they want
  • Receive personalized recommendations, coupons, and other online offers based on information collected online or in-store
  • Have items shipped wherever they want (to their homes or to their local store), often within just a day or two
  • Order items online from within a brick-and-mortar store, when that physical store lacks the preferred inventory (style, size, color, and so on)

Examples of Ecommerce Businesses

Ecommerce became a mainstream phenomenon beginning in the 1990s. Amazon.com—which is now the world’s largest ecommerce platform—debuted in 1995, and other large ecommerce businesses such as Alibaba, PayPal, and eBay soon followed. By the early 2000s, businesses of all sizes were offering ecommerce experiences.

Some B2B and B2C businesses, such as Amazon, originate as ecommerce businesses with no brick-and-mortar retail outlets. These pure-play businesses typically identify a gap in the traditional retail market that can be filled through an ecommerce-only solution.

Warby Parker is an example of a company that recognized that consumers wanted to try on glasses in the comfort of their own homes. The company was founded in 2010 as an online-only retailer of prescription glasses, and by 2015 it was valued at more than $1 billion. Today, Warby Parker operates a limited number of brick-and-mortar shops to complement its ecommerce sales. (Pure-play companies that later add physical locations are called brick-and-click companies.)

Casper mattresses also began as an ecommerce-only retailer. Founded in 2014, Casper was valued at more than $1.1 billion by 2019, and year-over-year sales continue to grow. Casper sells mattresses and related items online as well as through a limited number of physical showrooms and partnerships with companies like Target.

The Blonde Salad is another ecommerce success story, begun by Chiara Ferragni in 2009. Using social media influencers and targeting millennial shoppers, The Blonde Salad quickly grew from a fashion blog to an online magazine and rapidly expanding ecommerce business that sells clothing and accessories.

Other businesses have a long history as traditional brick-and-mortar retailers and have integrated ecommerce with their traditional sales offerings. For example, London-based department store John Lewis & Partners opened its first John Lewis store in 1864 and now maintains more than 50 brick-and-mortar stores across Great Britain. At the same time, the business has integrated sophisticated ecommerce offerings, enabling customers to shop online from a variety of devices and purchase items for home delivery or in-store pickup.

Louis Vuitton (founded in 1854), Things Remembered (founded as Can Do in 1967), and the TJX Companies (founded as Zayre Corp. in 1956) are additional examples of traditional retailers that have successfully integrated ecommerce. All maintain brick-and-mortar stores where customers can still try on items, interact with salespeople, and physically touch and test products. At the same time, their ecommerce channels enable customers worldwide to research products and order them using their preferred device when they want, for delivery when and where they want.

Key Elements of Ecommerce Platforms

Whether providing B2B or B2C ecommerce—or both—businesses need a powerful, flexible, and scalable ecommerce platform that will meet customers’ needs today and into the future. The best ecommerce platforms are

Flexible The platform should support both B2B and B2C selling in one platform that can be deployed using a hybrid cloud environment or other models.
Affordable Software-as-a-service (SaaS) subscription models are typically more affordable than on-premises platforms, which usually require high and continuing infrastructure investments.
User-friendly Ecommerce needs to be easy for customers to navigate on the front end and easy for businesses to manage on the back end. User interfaces need to be clear and simple so that nontechnical workers can add pages and features without difficulty.
Easy to integrate It should be easy for businesses to integrate their legacy technologies into the platform to keep costs down and take advantage of existing investments.
Customizable Businesses should be able to customize the front-end customer experience as necessary to support their brand.
Fast Businesses need ecommerce platforms that are easy to implement, with self-service architecture and standards-based frameworks that simplify deployment and make it easy to add applications and features as needed.
Simple Ecommerce platforms should be easy to maintain and monitor, with automatic updates, instant access to the latest features, and real-time visibility into businesswide performance metrics.
Secure Ecommerce platforms must provide the latest comprehensive security measures while also ensuring compliance with the Payment Card Industry Data Security Standard (PCI DSS), the General Data Protection Regulation (GDPR), and other regulations.
Scalable Whether it’s Black Friday or launch day for a new brand, the platform should be able to scale rapidly to deliver an exceptional experience to customers worldwide every day of the year.

The Future of Ecommerce

Ecommerce is growing quickly, as customer demands keep growing and technological innovations in AI, machine learning, the Internet of Things (IoT), and more enable businesses to meet those demands in new ways.

Among the ecommerce trends to watch are

Expansion to more markets Ecommerce is growing around the world and businesses will be competing to win millions of new customers in emerging as well as existing markets.
Greater personalization Customers want personalized ecommerce experiences, such as discounts and upsell suggestions based on their purchase history. Ecommerce platforms that leverage AI for more accurate predictions and recommendations will gain and retain more customers.
Faster deliveries Same-day and even same-hour deliveries via drones and other means will become increasingly common, forcing all businesses to streamline their supply chains and speed deliveries to stay competitive.
Subscription-based purchasing Subscription sales of lifestyle products and other goods are likely to increase, providing curated products to discerning customers.
More touchpoints Customers will be shopping more with their phones, digital assistants, and other digital devices, forcing ecommerce retailers to provide seamless service across more touchpoints.
Better chatbots Digital assistants and other chatbots will become progressively more sophisticated, enabling customers to interact by voice, and using AI to provide more conversational assistance.
Experiential stores Brick-and-mortar retailers will shift toward more experiential and immersive offerings, engaging customers with digital kiosks, touchscreen-enhanced mirrors, in-store classes, virtual reality features, in-store cafés, and other interactive displays and experiences.
Enhanced visualization Ecommerce retailers will leverage virtual reality, 3D imaging, augmented reality, and other technologies to mimic hands-on experiences that were once available only in physical stores.

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