What is the difference between E-commerce vs. Digital Commerce?
E-commerce and Digital Commerce are two important concepts in the online business industry, but they are not the same. E-commerce primarily refers to the online purchase and sale of products and services, focusing on a simple exchange between sellers and buyers. Meanwhile, Digital Commerce is broader, including E-commerce, and expanding to include elements such as digital marketing, online payments, and optimizing customer experience through digital platforms.
According to a recent report, the global e-commerce market reached $4.12 trillion in 2024 and is expected to continue growing strongly, reaching $6.49 trillion by 2029, with fluctuations in 14 segments. However, the overall trend is positive, with most segments recording growth, reflecting the growing importance of technology in the industry.
(Source: Statista)
1. What is Digital Commerce?
According to Gartner, digital commerce is the process of buying and selling goods and services through a digital platform, including all the pieces of activities from online marketing, and payment, to customer experience. It uses technology to automate and optimize the sales process, helping businesses interact effectively with customers throughout the shopping journey.
A basic digital commerce process can be understood by starting to attract customers through digital marketing (SEO, online advertising, email marketing). Next, conversion optimization helps optimize customer conversion rates by improving the user interface (UI/UX). Then, customers make payments through secure payment gateway methods. Finally, the CRM (Customer Relationship Management) system is used to maintain long-term relationships with customers, track behavior, and optimize the experience for future purchases.
2. Essential Elements of Digital Commerce
To succeed in modern digital commerce, an integrated strategy is needed across the entire customer journey to ensure a seamless shopping experience.
Every aspect of the shopping process needs to be carefully considered. Key elements of digital commerce include:
2.1. Analytics
Collecting and analyzing user behavior data helps businesses better understand customer habits and preferences. Using analytics tools like Google Analytics, e-commerce platforms can track metrics like page views, conversion rates, time spent on site, and purchases.
Analytics also helps predict shopping trends and make personalized recommendations, thereby improving customer retention and revenue growth.
2.2. Customer Support
Providing fast and efficient customer support is critical to improving user experience and customer retention. Support channels such as live chat, email, and phone should be optimized to make it easy for customers to reach out when they have problems or questions.
For example, a 24/7 live chat system with AI that automatically answers common questions can reduce wait times and increase customer satisfaction. It is also important to provide detailed instructions via email or phone to resolve more complex issues.
2.3. Content Promotion
In modern marketing, there are many promotion methods such as product descriptions, social media posts, videos, and blogs. However, businesses need to choose the right type of content for their industry and target audience.
For example, in the food industry, social media posts with eye-catching images and cooking instruction videos are effective. Meanwhile, the software industry should use in-depth blogs, instructional videos, and case studies to explain product features, instead of entertaining videos or simple images. Choosing the right content helps to effectively target customers and build credibility.
2.4. Product Descriptions, Images, and Other Media
It should convey the core value of the product, including both functional and emotional values. Functional values focus on the specific features and benefits that the product provides, such as the power of a blender. Emotional values, meanwhile, emphasize the feeling that the product provides, such as the pride of owning a luxury handbag.
Product descriptions should be tailored to each target customer group, helping them easily identify the strengths that the product brings, thereby creating a deeper connection.
2.5. Boosting Sales Through Social Media
Social media advertising, especially Facebook and TikTok, plays an important role in today’s marketing strategy. Platforms like TikTok not only help increase brand awareness but also promote shopping behavior through short videos and online shopping sessions, a prominent feature of today’s consumer behavior. With the popularity of audiences like Gen Z and Millennials, businesses need to make the most of social media to connect directly with customers, improve advertising effectiveness, and increase revenue.
2.6. User Experience Mapping
This is the process of identifying and optimizing each step in the customer journey, from the moment they engage with the brand to the completion of the transaction and even after-sales. This process helps businesses identify important touchpoints and optimize them to create a smooth and easy experience. Each step in the journey needs to be closely linked to elements such as user interface, customer support, content, and payment methods to ensure consistency.
User experience mapping not only helps businesses reflect on their current strategy but also allows them to look at it from the customer’s perspective, thereby adjusting, modifying, and improving the process to best meet the needs and expectations of users.
2.7. Order Fulfillment and Supply Chain Management
This ensures fast, accurate delivery while optimizing production costs. An efficient supply chain tightly connects suppliers, transportation, and warehouses, ensuring goods are always available and of high quality. Models such as Just-in-Time (JIT) and Lean Supply Chain help reduce inventory, optimize processes, and reduce costs.
Good supply chain management not only reduces production costs but also improves customer satisfaction through fast and accurate delivery, while also positively impacting customer relationship management (CRM), supporting sustainable growth in the future.
3. What is E-commerce?
According to McKinsey & Company, E-commerce is the buying and selling of goods online. By optimizing e-commerce as part of a broader digital commerce transformation, sellers stand to attract more customers and earn more profits.
4. Key components of E-commerce
E-commerce focuses on online buying and selling activities, conducted on digital platforms such as websites or mobile applications. Key elements are designed around improving customer experience and optimizing transaction processes, including:
4.1. Sales Website or Mobile Application
A sales website or mobile app is the heart of e-commerce, where UI/UX design plays a pivotal role in creating a seamless experience, increasing conversion rates, and retaining customers. Steps like User Research, Wireframing, User Testing, and Continuous Improvement ensure that the interface is intuitive, easy to use, and relevant to real-world needs.
Modern technologies like AI product personalization, heatmap behavioral analysis, voice search optimization, and responsive design ensure a seamless experience across all devices, especially with the growing mobile user base.
4.2. Product Catalog and Display
Product categories and displays are optimized according to the AIDA (Attention, Interest, Desire, Action) model, which not only makes it easy for customers to find but also increases conversion rates and average order value.
Attention is attracted through sharp images, 360° videos, and bold headlines. Interest is stimulated through attractive product descriptions, focusing on benefits such as “health protection” or “sustainability.” Desire is built through reviews, ratings from previous customers, and related product suggestions. Finally, Action is promoted through clear purchase buttons and promotional suggestions. Applying this model not only increases product click-through rates (CTR) but also improves conversion rates (CR) and enhances customer satisfaction.
4.3. Order Management and Payments
Order Management System (OMS) helps track order status from placement to delivery. Integrating payment gateways such as PayPal, Stripe, or local e-wallets increases convenience. For example, Shopify supports OMS integration and diverse payments, helping businesses effectively manage orders globally.
4.4. Order and Payment Management
The Order Management System (OMS) helps track and manage order status from placement to delivery, ensuring accuracy and speed transparently. Integrating payment gateways such as PayPal, Stripe, or local e-wallets helps optimize the payment experience, bringing convenience to customers.
In today’s increasingly developed technology era, businesses that apply smart payment systems to the customer experience process are a huge plus, helping to automate processes, minimize errors and risks, and ensure transparency in transactions.
4.5. Supply Chain Management
Effective supply chain management ensures stable supply and optimal production costs. Optimizing supply processes helps businesses maintain flexibility, and avoid out-of-stock or excess inventory, thereby saving operating costs and increasing efficiency.
4.6. Shipping and Returns
Fast shipping and easy return policies play an important role in attracting and retaining customers. A clear and accessible return policy not only increases satisfaction but also helps increase revenue. Flexible return policies build trust, encourage customers to return to buy, and help minimize risks when customers are not satisfied with the product.
4.7. Online Marketing
To reach the right target customers, businesses should apply the STP (Segmentation, Targeting, Positioning) strategy, targeting specific customer segments through channels such as Google Ads, Facebook Ads, SEO, and email marketing. Tailoring messages to each audience will maximize the effectiveness of your marketing strategy.
4.8. Customer Support
Customer support channels, such as AI chatbots, emails, and hotlines, help resolve customer issues quickly, thereby improving satisfaction and loyalty. Integrating effective customer support tools helps businesses improve responsiveness and grow customer relationships.
4.9. Reporting and Analytics
Data analytics tools such as Google Analytics or Power BI help track customer behavior, measure strategy effectiveness, and adjust business plans. Data analytics allows businesses to capture market trends and optimize marketing, product, and inventory strategies, thereby achieving sustainable growth.
5. E-commerce Vs. Digital Commerce: What’s the Difference?
E-Commerce vs Digital Commerce has a distinct difference in scope and objectives. While E-Commerce focuses only on online transactions such as buying and selling products on a website or app, Digital Commerce is broader, encompassing the entire customer journey. E-commerce is mainly about single transactions and elements related to payment and delivery. This means that the shopping process usually ends once the customer completes the transaction and receives the product.
However, Digital Commerce is not just about selling but also focuses on optimizing the customer experience through advanced technologies such as AI, Big Data, and AR. For example, a customer can receive personalized recommendations based on previous shopping behavior, or even use AR to experience products such as trying on clothes before buying. This helps create a seamless and interactive shopping journey while fostering long-term customer relationships.
Finally, the clear difference lies in how businesses apply sales channels. E-commerce is mainly an online sales platform, while Digital Commerce integrates many different sales channels, including online and offline. Digital technologies help businesses connect customers from physical store experiences to online platforms, providing a synchronized shopping experience. With Digital Commerce, businesses can use tools like chatbots, marketing automation, and loyalty programs to maintain long-term engagement with consumers.
6. What has led to the shift to digital commerce?
The current business environment is undergoing swift transformations, and these shifts are accompanied by a notable alteration in consumer behavior. Primarily driven by the pervasive influence of technology and connectivity, digital commerce has become a cornerstone of the online retail realm. Gartner reports that a significant 86% of marketing leaders anticipate digital commerce to be the foremost avenue to market in the next two years. To thrive in this landscape, it’s imperative to adapt to emerging trends and meet evolving customer expectations.
Digital commerce trends evolve rapidly, and it’s crucial to keep an eye on the following developments:
6.1. Personalization
A staggering 87% of customers seek a tailored and consistent shopping experience across various channels. The linchpin here is data—understanding your buyers well enough to anticipate their needs and preferences at each touchpoint.
6.2. Integrated Marketing
For 42% of consumers, a seamless experience across devices and channels is a top expectation. Achieving this involves aligning your marketing channels to seamlessly promote your products or services, resulting in a cohesive customer experience.
6.3. Digital Self-Service
Approximately 75% of buyers express a preference for digital self-service and remote interaction over face-to-face communication. This underscores the importance of online chat, smart speakers, mobile apps, and user-friendly websites as essential touchpoints.
6.4. Inventory Control
Industries are adopting advanced methods to efficiently manage inventory levels. Retail giants like Walmart and Target, for example, leverage centralized inventory data systems to monitor product stock in brick-and-mortar stores, enabling them to use store supplies to fulfill online orders.
6.5. Interactive Products
Interactive content is twice as effective in engaging visitors compared to static content. Consequently, digital retailers are incorporating virtual and augmented reality into the customer journey. For instance, online clothing retailers may utilize AR to create digital fitting rooms, allowing customers to virtually try on clothing.
The Future of Shopping
Recently, a variety of all-in-one e-commerce platforms has emerged, aiming to facilitate businesses in effortlessly launching their online product sales. However, in the era of customer-centric retail, these platforms merely scratch the surface of what is necessary to truly connect with your audience. As customer expectations soar and technology progresses, traditional e-commerce falls short.
Digital commerce enhances the e-commerce business model by expanding its possibilities for value and revenue generation. Through the utilization of technologies such as virtual shopping assistants, personalization, and augmented reality, brands can craft a seamless purchasing experience characterized by speed, simplicity, and convenience. The forthcoming shopping experience will prioritize all three elements while seamlessly blending the strengths of both the digital and physical realms.
At Kyanon Digital, we specialize in empowering businesses with cutting-edge digital commerce solutions. Ready to revolutionize your customer experience? Contact Kyanon today to start building the future of your business.
