What Is Digital Commerce
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Online retail has progressively grown to represent a significant share of the global marketplace since the dot-com boom era. Ecommerce will account for about a quarter of all retail sales worldwide by 2023. But digital commerce goes well beyond a simple button click or looking up a product online before buying it in a real store.

What is digital commerce?

The whole process of selling products and services through digital means is known as “digital commerce.” The term encompasses not just online transactions but also everything that occurs before and after. This covers activities like market and customer research, data analytics, and even logistics.

Digital commerce vs. ecommerce

Ecommerce is the online sale of products and services, often via a website created and designed specifically for such transactions. When a customer buys a product from a website, the website sends the product to them. Ecommerce is just a small part of the customer purchasing process, and as such, it is only a small part of the overall world of digital commerce.

Digital commerce refers to all activities and tools that help a customer move through the marketing funnel, from acquisition through retention. Consider payment technologies, SEO optimization to help an ecommerce site rank on Google, retargeted advertising to market products to users after they’ve visited (and left) your 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 future world of ecommerce, which encompasses augmented reality (AR) shopping, virtual assistants for online shopping, and other forms of shopping beyond the traditional “click to purchase” customer.

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 customer who is shopping, say, on Amazon. Their website uses a sophisticated algorithm to provide users with customized search results for every specific product. Depending on records of prior purchases, geographic location, and a variety of other factors, the order in which things appear may fluctuate significantly from one customer to the next.

Analytics are used to better inform how products are sold and displayed on a website, and even how assistance and customer queries are handled. Every purchase instantly informs marketing for the next one. In this sense, digital commerce is more about gathering information and leveraging it to continuously improve the online shopping experience than the method of delivering purchases from point A to point B.

Innovations in digital commerce

Similar to the internet, digital commerce is always changing. The following are some industrial trends:

  • Personalization. The online shopping experience has been changed by cookies, little pieces of code that allow websites to “remember” their users and so personalize material for them. Customers now want a personalized experience, and 88% of them say they are more inclined to buy from companies that provide it.
  • Interactive products. As more touchpoints are added to the customer experience, digital retailers are starting to use augmented and virtual reality. For instance, digital fitting rooms where customers can virtually try on clothing could be created by online clothing retailers using augmented reality (AR).
  • Inventory control. Digital retailers still spend a lot of money on inventory, an issue that technology has made huge strides to address. Large retailers today, like Target and Walmart, employ sophisticated technology to locate product inventories in physical shops throughout the country, enabling them to leverage in-store inventory to satisfy online customer orders. Having separate in-store and warehouse inventories is no longer necessary, which may save money on overhead. Large digital commerce retailers like Alibaba Express, which cut out the middleman by connecting customers and suppliers directly, instead eliminate the need for significant storage.
  • Integrated marketing. The customer experience has been fragmented as a result of digital commerce and its many channels. One potential solution to this problem is integrated marketing. By integrating marketing content across all customer touchpoints, brands may produce a seamless experience that improves brand awareness and affinity in a dispersed digital world.

Final thoughts

The ecommerce business model is simply amplified by digital commerce by increasing the opportunities for value creation and revenue generation. Brands can provide customers with a seamless shopping experience by using technologies like first-party cookies, personalization, and augmented reality.

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