What is e-commerce? Exploring the growing backbone of modern business
As a business that deals primarily with online payments, we are experts in electronic commerce. We sit at the center of the transaction, with a singular focus to drive conversions for our partners. Yet, one of the things that keeps coming up in casual discussions is a simple question: what exactly is e-commerce? Is all online commerce e-commerce?
Here’s a quick take on the word, its true meaning, and how to further leverage what has become the defining feature of business today.
What is e-commerce?
As Google’s handy definition reminds us, e-commerce refers to selling goods and services online. Any transaction that occurs digitally is considered e-commerce – whether on mobile or via the Web, all transactions are folded into the e-commerce umbrella.
While this simplistic definition does a good job of explaining the mechanics of commerce online, it doesn’t do it justice.
The reality of today’s e-commerce is more complex.
We live in an omni-channel world. This is a world where an offline touch point, such as an event, might lead to an online conversion. Or a brand blog might lead to customer walking through the doors of the physical shop to buy something.
We’ve reached the point where e-commerce has blended with commerce. It’s really about serving the customer across all the touch points in their offline and online journeys. For us, we approach e-commerce as the entire customer relationship, where each touch point is a type of transaction that blends online and offline seamlessly. It’s about a modern approach to selling goods and services, regardless of channel, with a focus on what the customer needs. And then serving them the best offer possible at the moment that they are ready to buy.
As more purchases are completed online, it’s only going to be become more pressing to understand your brand’s paths to purchase and deliver a stress-free, easy e-commerce experience that converts prospects to customers regardless of channel.
Within that frame, let’s explore how your business can leverage digital channels to make more sales.
How can my business harness the growth in e-commerce?
By 2022, the Enterprise Guide to E-commerce says that there will be $4.5 trillion in worldwide e-commerce sales. As a percentage of total retail sales, this figure is still quite low.
Even so, it won’t be long before a significant chunk of retail sales will be completed online. As consumers acclimate to buying more online, the scope of purchases made online will likely expand to include larger ticket items.
This expansion will put the onus on brands to craft a positive user experience – including personalized product selections and payment options – to keep customers from jumping over to a competitor.
For businesses that want to take better advantage of this explosive growth in online sales, there are three important considerations to remember.
- Social selling matters. Mary Meekers’ latest Internet trends report found that 55 percent of respondents to a Curalte survey bought a product online after first finding it on social. Further, 11 percent purchased the product right after finding it, while 44 percent returned to buy the product online later. If you want to sell more goods and services online, then be sure that your brand is participating in the communities where the target audience hangs out. Don’t neglect social platforms, as well as the content marketing that can provide effective organic fodder for your social feeds.
- B2B has eclipsed B2C. Most people erroneously think that B2C e-commerce dwarfs B2B. As Statista’s 2017 B2B Ecommerce Report found, there is an enormous difference in the market sizes of these two segments: B2B wins out, with e-commerce sales that are 234.78% larger than B2C. So if you’ve been ignoring e-commerce because you mostly sell to other businesses, think again. Gartner recently found that B2B “customers are 57 percent of the way through a typical purchase process prior to proactively reaching out to a supplier’s sales rep.” So keep your content fresh, pull your prospects through to the funnel, and know that e-commerce can be a lucrative channel for B2B sales.
- Differentiate on the user experience. Consumers have more choice than ever. If they find an unpleasant checkout experience, a poor product selection, or payment options that don’t suit their needs, they will go to a competitor. That’s because most goods and services today are commoditized. If a consumer cannot distinguish between your company’s goods and another company’s, then there are only two ways to compete: the price or the experience. Focus on the user experience, and preserve your pricing power. Given the immense global scale of e-commerce, there always be competitors eager to underprice. It’s hard to replicate the experience, however!
E-commerce: just another channel or a way of life?
One final thing to consider when tweaking your e-commerce approach to meet evolving consumer expectations: does your company see e-commerce as a channel or as a way of life? There’s no wrong answer. But your answer should inform your strategy.
If you see e-commerce as a channel, then you manage it as part of a wider channel mix. You weigh and devote resources to it according to your preferred channel mix and marketing plan. There is nothing wrong with this, but it is a traditional way of seeing e-commerce.
On the other hand, if you are committed to this new way of selling – and want to truly provide the e-commerce experience that consumers are beginning to expect – then e-commerce must be a way of life.
Everything you do revolves around the digital selling experience. You’re always optimizing for that experience, across all touch points, to bring customers into your funnel and convert them online. That puts e-commerce at your core – making it not just an ingredient in the mix but the recipe itself.