What is Digital Commerce?

What is digital commerce

Updated April 07, 2023

There are multiple ways to answer the question – what is digital commerce?. The easiest explanation would be – digital commerce is the selling and buying of products and/or services online. The transaction may take place online or offline. It is important to note that most businesses operating in different industries have an online presence and provide information on their product and/or services on the website, social media, and other mediums. Hence, it becomes important to modify the traditional definition of digital commerce to match the current scenario.

Table of Contents

  • Classification of Digital Commerce
  • Challenges in Digital Commerce
  • Benefits of Adopting Digital Commerce for Businesses
  • What is Driving the Need for Digital Commerce?
  • Overview of a Digital Commerce Software
  • Upcoming Trends in Digital Commerce.

Classification of Digital Commerce

Most of the businesses today have some form of digital in the way they operate. Consider the case of a business that only has a website to share information. While this business may accept small payments online but for large sums of money, they prefer to stay away from online transactions. At this point, it becomes essential to classify digital commerce further.

Examples to Understand Digital Commerce Classification

  • Example 1 – Businesses that sell their products or services online and are able to accept payments online.
  • Example 2 – Businesses that show information about their products or services online and accept few payments offline.
Examples to Understand Digital Commerce Classification
  • Active Digital Commerce – Businesses that are actively selling products and/or services as well as accepting payments online.
  • Passive Digital Commerce – Businesses that are marketing their products and/or services online but are accepting some payments offline.

Challenges in Digital Commerce

The rapidly evolving world of technology and customer behavior may be a challenge when incorporating those digital business practices into your everyday business. It can be challenging for your clients to spend enough time tracking several points of contact during the customer journey. Prepare yourself to expect the following digital commerce challenges.

Deliver Consistent Experience to Customers

The expectations of customers change constantly. The use of advanced algorithms as well as customer analytics tools enables one to optimise the digital business strategy. They also ensure consistency in all aspects of the shopping experience. It includes delivery choice, search choices, and more. Furthermore, businesses must take a strategic approach for the surveillance of customer data to identify well functioning areas. The more consumer behavior is learned, the more you can customize every experience.

Meet Expectations

Meeting customer demands can be a difficult job in the digital era with so many of the digital marketing trends. Devices are continually upgraded, so you will need to regularly update your campaign’s goals. Recall that consumers prefer to use several digital channels when looking for the right brand before a product is purchased. You can offer seamless buying experiences by staying abreast of digital business trends. Those trends include visual lookups, video marketing, personalization, conversational marketing, and artificial intelligence.

Generate Relevant Traffic

In order to transmit targeted traffic to their e-commerce website, successful digital businesses hop into e-commerce search engine optimisation (SEO), social media, email marketing, display ads, retargeting, affiliates and more. Build Instagram galleries, secure partnerships with influencers, host awards for social media gifts, optimise Google product photos. These are just some ways for your e-commerce company to generate traffic through digital channels. Investing in a technological solution that incorporates every aspect of digital commerce is the best way to address this challenge.

Business Expansion

Firm foundations for the technical capabilities of businesses that wish to continue and expand consistently with digital trade should be created. There are many things to consider, among them analytics, cart solutions, email applications, CRM systems, and inventory administration apps. Keep your company from failing by investing in the right technical avenues. For instance, incorporate a website chat feature in your digital business and ask your customers for feedback.

Benefits of Adopting Digital Commerce for Businesses

Easy Expansion

While brick and mortar businesses are bound by location, the case is not the same for businesses that have diversified into digital commerce / ecommerce as well.

The various facets of expansion when it comes to brick and mortar business like choosing a location or hiring in-office personnel could require a lot of time, money and energy. On the other hand, when it comes to digital commerce, expanding a business can be relatively easier.

Business expansion for service based businesses can also be made possible using digital commerce. For example, if you are into the grooming industry, you could create an online store and make available the customized products that your salon uses.

Helps Provide a Better Customer Experience

Gone are the days when people only used to research online and then go buy from a brick and mortar store. People are preferring to buy online these days. It is no surprise then that while e-commerce share of total global retail sales was just 7.4% in 2015, the rate is expected to grow to 22% by the end of 2023. The reasons why digital commerce helps provide a better customer experience are:

  • Customers can sit in the comfort of their homes and buy
  • They do not have to deal with salespeople trying to upsell
  • They do not have to take on the stress of shopping with too many people around
  • They can avoid the long traffic jams and the trouble of finding a good parking spot
  • There are no long queues that the customer has to wait in
  • Returns and exchanges are made easy
  • There is ease of browsing, ordering, and searching products
  • Round the clock live chats are available to solve customer issues

Easy to get Customer Data Insights

When it comes to digital commerce, storing and collecting customer data becomes quite easy. You do not need to ask for their preferences, age or email address. You automatically get to know them when they buy or browse your store.

You can keep a track of customer interactions and their buying frequency.

Every single item the customer views but doesn’t buy can help you gain actionable insights about each customer that can help you innovate your entire customer experience.

More Personalization and Better Targeting

The more customer insights you gain, the better you can become at personalisation and targeting. Digital commerce helps you track the buying habits of each customer and thus helps you gain insights on how to devise your promotional campaigns. 

The recommended items list on Amazon is one way how ecommerce helps you in this manner. It follows a system in which the items are shown based on the things you have browsed earlier and the things you might like based on that. Targeting based on location, gender, cart abandonment rates also becomes easy when it comes to ecommerce.

Online cross-selling and upselling doesn’t turn out to be upsetting or uncomfortable for the customer as you just simply provide suggestions for add-ons while they are buying a particular product.

Affordable Advertising and Marketing

The avenues of advertising and marketing can be manifold when it comes to digital commerce.  E-commerce marketplaces’ biggest way of marketing is the power of their visual channels. Various advertising tools can be used to add colour to their products by adding videos, good quality and aesthetically pleasing images, infographics depicting all the information a customer needs.

Creating customised deals, coupons and sponsored ads can be an effective option as well. Another form of marketing and advertising channel that can be used is email and content marketing. For example, a food company can provide tips to use their different food products together and provide recipe suggestions on their blog through content marketing. This blog can then be sent to customers using email marketing or social media management. This type of marketing can be an inexpensive and effective way to tell stories about your brand and differentiate yourself from other sellers.

Save on Staff and Rent

As many business processes can be automated when it comes to digital commerce, the cost incurred on human resources can be lowered. Many ecommerce businesses also employ people who work part-time or work from home and thus can be a huge avenue for cost reduction.

When you employ less people that work on-site, you don’t need a huge space for your office which significantly helps save your rent costs. You can also save on money spent on store upkeep such as store design, inventory design, etc., as your main focus is on having an attractive online store and getting the products shipped properly.

Faster Buying Process

In this fast-paced world, everyone wants to do things quick. The same applies to buying as well. Customers go online, search for an item, get a fast response, read the reviews and the description, add the item to the cart and buy it just as quickly. These steps take no time at all and in the end, the customer is happy to have ordered something without the trouble of going too far and waiting in long queues or sitting in the physical offices/stores for too long.

Reach New Customers

A seller with just a physical store may only be able to reach a certain number of buyers. They may start delivering to their customers’ homes but their reach remains quite low. Whereas digital commerce lets you get new customers from all across the country or from all across the world and that too at a relatively lower cost. You can also reach new demographics and explore different target markets and segments.

The Ability to Meet Customers Where they Shop

What is the first thing you do when you want to buy a certain product? You go online and search about it, maybe to check the reviews or to check the product’s description. What if you see that product available online at the same price? You would definitely want to buy it, right?The fact is shoppers don’t just research online, they buy online too. Adopting digital commerce allows you to meet those customers where they are and make buying convenient for them.

What is Driving the Need for Digital Commerce?

Creating Best Customer Experience

Research by Qualtrics reveals that over 65 % of consumers believe the overall experience is influenced by a company’s app or website. The digital experience was described as “very critical” in recommending a brand by these people. People use digital as well, for example by way of customer service, to gain support from the companies with which they operate. Another thing about which to think is the all-round achievement-something that most consumers demand from today’s brand.

This has been a theme for traders and retailers who wish to raise their order with minimal effort in recent years. This is a key solution. Different distribution channels with inventory and locations of fulfillment are centralized through this process.

Coping Up With the Evolving Competition

You should seriously consider starting if you are not already planning out the customer journey. Your rivals will probably already have this in their equation for digital business. After all, you can begin to understand exactly what makes a customer wish to recommend your brand experience to a friend, family member, college, neighbor, and so on when you focus on moments of consumer interaction that support brand loyalty.

Overview of a Digital Commerce Software

The basic use of digital commerce involves four different user types:

  • User – A user is a website visitor who has not registered. He may browse the product catalogue, view prices, and more.
  • Buyer – The buyer can place orders, browse the product catalogue, and more.
  • Seller – The seller can upload products, modify product details, reply queries shared by the buyers, and more.
  • Admin – In the case of a single store, the seller and website admin is the same. The admin manages the entire website and is also responsible for marketing. To do so, he may create discount coupons, start an email campaign, and more.

For a seller to find buyers online, the first requirement is to establish an online presence. Few things are required to achieve that, such as a digital commerce platform. Followed by the implementation of marketing practices that involve omnichannel marketing techniques and the use of analytics to turn data into useful information. The final step involves omnichannel customer service.

Digital commerce software is an essential part of capability within the eCommerce ecosystem. A business owner has two options – select a digital commerce platform from a vendor or design and develop the software from scratch.

Platform Developed by a Vendor

There are many industry leaders such as IBM, Oracle, Magento, Salesforce, SAP, Digital River, and more, that provide a digital commerce platform. There are professional services and software companies such as Accenture and Apttus, respectively, that offer solutions. For startups and small medium businesses (SMBs), the ideal e-commerce platform providers can be Shopify, CS Cart, and others.

Native Features

Platforms come with built-in features. These features help you perform different functions such as execute a new email marketing campaign, provide analytical insights, and more. Native features generally includes:

  • Content management system (product descriptions, and more)
  • User management
  • Login / signup
  • Revenue sources – advertisement, subscription, affiliate, and others
  • Discount coupon management and social media
  • Customer experience

Third-party Integrations

There might be a case when the need to modify the platform arises to suit the business requirements.

Custom Software Development

Consumer expectations often change as more advanced technologies are developed. The use of technologies is essential to design and deliver the new eCommerce experiences possible within the ecosystem. Hence, the need for custom development arises.

Marketing and Customer Service

The essence of an omnichannel eCommerce marketing strategy is to deliver a consistent and targeted message across different channels. As a purchase journey often starts with a single search, it is important to know what relevant problems prospects are facing.

Omnichannel customer service creates an impactful outcome and bridges the gap between digital and physical. It increases cross-selling and up-selling opportunities by leveraging tools and techniques to understand the context at a deeper level.

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Smart Home

A smart home uses the internet of things (IoT) to connect different devices together. For example – a consumer can order groceries using a smart assistant like Alexa while looking inside the refrigerator.

Augmented Reality

Due to Covid-19, many people are practicing social distancing. This also gives rise to the use of augmented reality (AR) to browse products while the consumer is inside the store.

Customer Analytics

Customer analytics can enable eCommerce businesses to monitor different aspects of the customer lifecycle. By applying customer analytics in digital commerce, one can gain insights into repeat customer rate, purchase frequency, and more. To succeed in eCommerce, it is also suggested to use the AARRR framework. This framework was coined by an entrepreneur, Dave McClure. To learn more about the framework, feel free to view the video at this point.

Progressive Web Application

The Progressive web application is a kind of software application. It’s delivered via the web. The progressive web application is built using some of the most common technologies like JavaScript, Cascading style sheet, and Hypertext Markup Language. It’s intended for working on all the platforms which use compliant browsers. Some of the most popular progressive web applications include Microsoft 365, Google Apps, and others.

Content and Commerce

Content commerce is a process of generating revenue from digital content provided the content is in the picture, video, book, newsletter, video format. Creating fresh content is a good idea but generating money for the created content is the best.

Artificial Intelligence

Artificial Intelligence is a field of study that is demonstrated by machines and is often known as machine intelligence. The digital commerce industry is used by online retailers. AI can be leveraged to provide various personalized services to customers. Additionally, AI-enabled chatbot services can be used to analyze the comments shared by customers.


Digital commerce is an important differentiator for retailers. The transition from offline to online involves creating a strategy and selection of tools. In this blog post, introductory information on digital commerce platform and marketing was shared to enable businesses to make an informed decision.

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