Digital Commerce vs. E-Commerce - What Are the Differences?
Digital commerce and e-commerce are still often used interchangeably. However, there are practical and strategic differences between the two. Digital commerce, in particular, is much broader because, as with e-commerce, the holistic purchasing experience plays a key role in addition to the pure sale of goods.
What Is Digital Commerce?
The term "digital commerce" encompasses all common retail activities, such as the purchase and sale of goods, paired with associated services, which in turn take place within digital channels - just like retail itself. However, this reasoning alone does not clearly distinguish between e-commerce and digital commerce. This only arises when another aspect of digital commerce is taken into account: Reaching customers across a variety of channels and touchpoints.
If the term digital commerce does not only refer to pure retail activities, but also the entire framework in which they take place. How attention is generated for your own product range within and outside the target group, how conversion rates can be measured and improved on individual channels as well as individual product segments, and how existing customers are reactivated and subsequently transformed into valuable regular customers - these are all additional areas of the entire digital commerce spectrum.
From a retailer and company perspective, the aim is to place your own (future) customers at the center of your own digital activities in order to remain competitive in the future, even if your direct competitors are only a few mouse clicks away from your customers.
Key points of digital commerce
- Optimization of the user experience
- Integration of high-quality content, for example, in text and image form
- Rich content advertising activities, including between different channels
- Order processing, supply chain management, and transaction recording
- Ongoing analyses using digital tools
- Customer support and digital channels provided for this purpose
What Is E-Commerce?
"Electronic commerce" is defined as e-commerce, which inevitably falls into the world of digital commerce as a generic term. In a direct comparison of e-commerce vs. digital commerce, however, it becomes clear that e-commerce primarily encompasses a retailer's "classic" activities, which in this case take place in an electronic (and, therefore, digital) framework.
In addition to the pure purchase and sale of physical or digital goods, payment processing and pricing also fall under this sub-area. A closer look at the key points illustrates this.
Key points of e-commerce
- Pricing (also dynamic)
- Supply chains
- Logistics, especially shipping and returns
- Compatibility of the store with mobile devices
- Management of the customer base and customer relationship management
- Product displays
- Data-based analyses, for example on (seasonal) demand, and reporting
Digital commerce is also characterized by using various new technologies to positively influence the customer's shopping experience and offer them more than just a shopping cart and order process. Examples of this would be virtual shopping assistants, customer service chatbots, or even product presentations in augmented or virtual reality.
As you can see, digital commerce can be considered a subcategory or even a further development of traditional e-commerce. Some academics see it differently and equate d-commerce with e-commerce as a synonym. Nevertheless, the key message is that customers do not think in terms of channels.
Why Is Digital Commerce So Important for Retailers?
In today's rapidly changing retail landscape, digital commerce is critical to meet increasing customer demands and remain competitive. Customers expect a seamless and personalized shopping experience that goes beyond traditional shopping options. To meet these expectations, retailers need to integrate innovative technologies and services.
Expanding the business model
Digital commerce enables companies to expand their business model and create new, interactive shopping experiences. Examples of this include virtual shopping assistants and augmented reality, which enable customers to experience virtual fitting rooms or showroom visits. These technologies not only offer a fascinating shopping experience, but also help to increase customer satisfaction.
Personalized shopping experiences
A seamless, interactive and personalized shopping experience is another key benefit of digital commerce. With the help of artificial intelligence (AI), retailers can offer customized recommendations and efficient customer service. AI-based systems analyze customer preferences and thus create a customized shopping experience that strengthens customer loyalty.
Availability around the clock
Another advantage of digital commerce is constant availability. Online stores have no opening hours and can be reached around the clock, giving customers a flexible shopping experience. This continuous availability is a key advantage over traditional retail stores.
Larger product range
Without physical space restrictions, online stores can offer a much wider range of products. This expands customer choice and increases the likelihood that they will find exactly what they are looking for.
Cost savings
By eliminating physical store space, companies can make significant cost savings. These savings can be reinvested in other areas such as marketing or product development to further strengthen the business.
Quick adaptations
In digital commerce, changes can be implemented quickly and efficiently. Whether it's price changes, new promotions or additional products - the flexibility of online commerce makes it possible to react immediately to market trends and customer needs.
Increased customer reach
By using chatbots, email marketing and social media, retailers can reach a broader customer base. These communication options not only improve customer service, but also enable targeted marketing campaigns that promote customer loyalty and satisfaction.
Sustainability and accessibility
Digital commerce can also contribute to sustainability by reducing the need for physical stores and thus reducing the ecological footprint. It also offers barrier-free shopping options for people with limited mobility, making it easier for everyone to access products and services.
Overall, digital commerce offers numerous advantages that enable retailers to meet modern requirements and increase their competitiveness. It is an indispensable tool for succeeding in today's dynamic market.
The Transition from E-Commerce to Digital Commerce (Gartner)
The market research and analysis institute Gartner clarifies why the further development and expansion of the scope from the original e-commerce to holistic d-commerce is necessary: with new technological possibilities, consumer demands are also changing for obvious reasons, as is consumer behavior. Companies and retailers must react to this. The following aspects deserve particular attention due to current developments:
Personalization
According to Gartner, almost 90% of customers expect a personalized, highly personalized, and tailored shopping experience—extensive data analysis is required for retailers to achieve this.
Integrated marketing
Almost half of consumers want a consistent and seamless shopping experience across all devices. This requires symbiosis and coordination between marketing activities and channels.
Digital self-service
Three-quarters of shoppers prefer digital self-service to face-to-face communication. Online chats are an excellent example of this.
Inventory monitoring
Inventory data must be continuously recorded and analyzed, and correct actions must be taken to optimize one's own logistics and supply chain sustainably.
Interactive products
Interactivity, such as virtual or augmented reality, can positively impact the shopping experience - for example, in the form of virtual or augmented reality.
Source: Gartner for Marketers - The State of Digital Commerce - Ant Duffin, Senior Director Analyst - Published 29 October 2021 - ID G00755786
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Practical Example
The example of cosmetics is a good illustration of continuous development. "Simply" offering these in your own store is no longer necessarily enough for customers today. Creating multiple touchpoints with customers and making the shopping experience as personal as possible is better. For example, retailers can use AI or digital analysis tools to offer consumers a skin analysis to help them find the perfect cream for their skin. They can also provide real-time support with chatbots or, in the case of make-up, use augmented reality to give a preview of the result - while influencers on social networks promote the brand and serve as application examples and testimonials.
Conclusion - The Future of Shopping
More and more purchases are being made digitally - this is not surprising so far. Digital commerce can be seen as a logical progression from pure e-commerce, closing the gap to brick-and-mortar retail. Personal customer contact, advice options, and the shopping experience itself were typically the strengths of bricks-and-mortar retail compared to the more distanced online e-commerce purchase. With digital commerce, an expansion of touchpoints, optimization of the user experience, and a holistic digital strategy, this gap is now being closed - while consumers benefit from seamless, individual, fast, convenient, and simple purchases in digital spheres. Naturally supported by innovative technologies such as virtual and augmented reality and AI.
To benefit from these strengths and master the challenges of digital commerce, companies need powerful and flexible software solutions to stay one step ahead of the competition.
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