Digital Commerce Vs E-commerce: What is the Difference?

E-commerce and digital commerce are two terms frequently utilized interchangeably, but they are completely different. Both terms involve buying and selling things online, but they have key differences that are worth knowing.

In today's blog, we will clear this confusion by discussing the differences between digital commerce and e-commerce.

What is Digital Commerce?

Digital commerce, or D-commerce, refers to buying and selling products/services online. More than just an online retailer where the products are stored and where checkouts take place, digital commerce extends to multiple touchpoints. It includes selling, marketing, servicing R&D, and acquiring items for different platforms (e.g., desktops, mobiles, and social media).

Digital commerce has grown from a set of transactions into a continuous process, which includes generating the customer's awareness and engagement by tracking conversions, promoting purchase repeats, and logging transactions' history. 

It consists of all techniques and processes contributing to the customer journey through a sales funnel from purchase to retention. Concentrating on this marketing is essential in increasing revenues, getting new clients, and maintaining current ones so companies can stay relevant.

Now, let’s discuss the key components of digital commerce:

To be successful in online commerce, businesses must strive for a holistic method of customer interaction and an unifying purchasing experience. Every aspect of buying decisions must be taken into consideration. Digital commerce's components comprise but aren't restricted to:

• Analytics
• Customer support
• Promotion of content (e.g., description of products, Social media posts, blogs)
• Images, descriptions of products as well as other forms of media
• promotions and presence on social media
• Capturing the experience of the user
• Order fulfillment and supply chain management

What is E-commerce?

E-commerce is only one part of the buyer's journey, which is an aspect of the whole universe of online commerce. The essence of e-commerce or electronic commerce refers to purchasing or selling products and services via the Internet. 

It involves transferring funds, data, and information to complete transactions. In addition, it involves techniques like electronic money transfer, mobile commerce, web marketing, and online transaction processing. It also includes supply chain management and automated systems for collecting data.

While e-commerce is typically used to sell physical items, it may also refer to any internet-based commercial transaction. There are four different ways in which these transactions may take place:

• Business to customer (B2C) 
• Business to business (B2B)
• Customers to businesses (C2B)
• Customer to customer (C2C)

Because e-commerce refers explicitly to the exchange of goods and services, it's different from e-business, which is related to every aspect of running an online business.

Now, let’s discuss the key components of E-commerce:

Every e-commerce company has unique strategies, which may alter over time. Integrating certain essential elements is essential to cut the risk of unnecessary expenses and loss. A successful strategy for e-commerce should contain the following elements:

• Dynamic pricing
• Client Relationship Management (CRM)
• Catalogue for E-commerce and display of products
• Management of the supply chain
• Returns and shipping
• Product Quality
• Mobile compatibility
• Data analysis and reports

Understanding the Difference Between Digital Commerce And E-commerce

While digital commerce solutions and e-commerce are similar, they have some significant distinctions. Below are a few essential differences

• E-commerce is focused on making it easier for consumers to locate and buy online products. Digital commerce is dedicated to providing an effortless user experience at all interaction points.
• Digital commerce items are not tangible and are only in digital format that can be consumed using electronic devices. In contrast, products from e-commerce are digital, tangible, or even services.
• It is possible to repeatedly sell similar digital products by providing an online link or storage. However, with e-commerce, tangible items require only one transaction.
• Digital commerce items include books, courses for learning photographs, multimedia such as digital assets, templates, software, digital arts, web development, and mobile application development. The products offered by e-commerce can be any product that one would find inside a brick-and-mortar retail store.
• Digital commerce software and services are offered online. The items are developed and then uploaded to an online platform for hosting or on marketplaces such as mobile applications. Thus, they do not require warehouses, inventory management, or shipping. eCommerce will require these features, which means higher overhead costs.
• D-commerce is also advantageous because it's unaffected by product-related problems like damages, perishing, and wear and tear concerns, while some e-commerce items are perishable.
• The online marketplace has to deal with issues regarding refunds, returns, and exchanges that D-commerce does not have to deal with.
• It's easier to automatize the selling process of D-commerce websites and extend to affiliate websites.
• The downside of e-commerce is that it requires much adaptation to meet the needs of your selling products. Also, the intended audience uses it due to the specific requirements that consumers need from the design, user interface, and features.

Importance Of Digital Commerce in E-commerce

Utilizing the latest technology, businesses can improve their operations and communicate better with their customers. Digital commerce can benefit both sides and focuses on its impact on customer experience and business efficiency. Let’s see how digital tools streamline processes, increase satisfaction, and ultimately lead to business success for companies and customers.

1. Importance for Consumers

Digital commerce can greatly improve the customer experience by providing personalized features and various convenient services. With the latest digital tools, consumers can get personalized products, personalized deals, a smooth purchasing procedure, and 24x7 support. 

These tools not only help make shopping more convenient and enjoyable but also improve the customer's happiness and retention. Consumers aren't just searching for top-quality products; they appreciate a satisfying and enjoyable shopping experience that changes with time.

2. Importance for Businesses

For companies, digital commerce can simplify implementing strategies and offer multiple ways to increase customer satisfaction and streamline processes. 

This method increases the visibility across all channels, resulting in increased sales and quicker attainment of ROI objectives. With the help of digital commerce, businesses can increase their online sales, deliver better results, and effectively meet their goals.

What Factors Have Led to the Transition Towards Digital Commerce?

Businesses are transitioning towards B2B digital commerce for many reasons that include a combination of technological, economic, and societal factors. With the growth in technology and consumer preferences, this shift will grow bigger, opening new opportunities and challenges for businesses.

1. Personalization

87% of consumers want a customized and consistent experience across various buying channels. The data is essential in identifying buyers to understand their preferences and anticipate what they may like at any particular point.

2. Integrated Marketing 

42% of users expect seamless experiences across all channels and devices. By aligning your marketing channels to highlight your product or service with a common goal, you create an integrated experience.

3. Control Of Inventory

Better techniques for efficiently managing inventory levels are being developed across industries. For example, stores such as Walmart use a central database of inventory information to track products in their brick-and-mortar shops, which allows them to use store inventory to fulfill online orders.

4. Interactive Products

Interactive content has twice the potential to grab the attention of a viewer as opposed to static content. This is why internet-based retailers have been utilizing AR or virtual reality technology to provide immersive experiences during the buying experience. 

For example, online clothing stores could use AR to create digital fitting rooms that allow customers to test clothes and see what they look like

5. Digital Self-Service

Customer service is an integral part of an e-commerce company's success, and digital commerce helps to provide 24/7 support more easily and faster than ever. Thus, introducing AI chatbots could be the ideal solution to improve the digital self-service process and increase satisfaction. AI chatbots can provide immediate and 24/7 support that allows customers to receive answers to their questions or resolve issues and complete transactions without the intervention of a human. 

This ease of use enhances the customer experience overall and decreases companies' waiting durations and operating costs. With personal interactions and efficient service, AI chatbots ensure that customers feel appreciated and happy, leading to higher satisfaction and a positive brand perception.

6. Use Of Omnichannel

Digital commerce helps make omnichannel a reality, transforming an e-commerce business's performance. It allows retailers to offer different channels to conduct online transactions, which can improve user satisfaction, accessibility, and sales. Implementing this method helps increase sales, which results in increased revenue.

Trends in Digital Commerce in 2024

New trends and technologies continue to affect the digital landscape and nothing is different with digital commerce. These trends compel businesses to constantly adapt and evolve at a faster pace, for two reasons-to sustain in the market and to increase profitability. Let’s look at those trends in digital commerce. 

1. Artificial Intelligence

70% of decision-makers in e-commerce are convinced that AI can help them improve their customers' experience. AI utilizes sophisticated data analysis using logic-based methods and machine learning to enhance alternatives, determine specific actions and triggers, analyze patterns, create suggestions for products and predictions, and automate the overall marketing plan.

Data-driven technology analyzes users' gender, age, and preferences to create personalized content consumers want to read and interact with. It is akin to human cognition and capabilities to resolve issues and gain new data. Integrating AI into your digital commerce strategy could help increase customer satisfaction, and sales, and reduce friction in the buying process.

2. Recommendation Engines And Personalization

Customers value personalized experiences and are willing to spend more on a unique and special experience. A negative experience may hinder them from making subsequent purchases. Customers are more likely to interact with your company if marketing messages are tailored to specific needs and preferences. A customized user experience will make customers feel appreciated and create and encourage loyalty.

A unique, user-friendly experience should encompass all platforms, brick-and-mortar places, and applications. Every interaction should lead to the next providing a complete comprehension of the journey that customers take, which includes site search and targeted advertisements, segments of the audience, and product ideas.

When clients shop in person, make them sign up for an electronic newsletter or list to receive offers for future purchases. Information allows you to deliver tailored content for each interaction and enables consumers to customize their own experiences. Analyze data continuously to determine your customers' behavior, give them an impression, and improve information.

3. API-Driven and Headless eCommerce

In an e-commerce headless architecture, the front-end display layer (also known as a customer-facing site and application) will be separated from the back-end commerce functions, "the body." This distinction allows you to change, modify, and create the front end on your own with any platform without affecting key commerce functions like inventory management, order fulfillment, and payment processing.

The headless model offers versatility and compatibility with a variety of front-end technology. It's easy to incorporate functions to adjust to the changing marketplace and ensure customers get an efficient, consistent, and relevant experience across all different touch points. Integrating headless commerce into your physical store operations will guarantee accurate inventory updates and delivery.

4. AI Chatbots

Chatbots offer instant, automated customer service by responding to often-asked questions, solving frequently asked questions, and troubleshooting issues. They also handle overwhelming requests, reducing the need for human interaction. By scalable methods of connecting with customers, offering personal experiences, and automating repetitive activities, you will increase the customer experience and boost effectiveness.

5. Sustainable Digital Commerce

Today, consumers are more concerned about the negative environmental impacts of their purchases. Sustainable digital commerce can address these issues by providing green products, reducing packaging waste, promoting ethical consumption, and many more. 

Sustainable digital commerce services help in ethical conducting of ecommerce practices throughout all chain stages. Customers are provided with details regarding the origins of products, certificates, and eco-labels, which allow consumers to make educated choices.

Companies that provide high-quality, long-lasting products can extend their life, decrease the need for replacements, and encourage innovation in product design, packaging, and operation procedures. In this way, sustainable products align with customers' values, reduce negative environmental impact, and encourage social accountability.

6. Augmented Reality and Virtual Reality

Due to technological advances, the physical and digital worlds are becoming increasingly blurred. Top e-commerce firms use Augmented Reality (AR) and Virtual Reality (VR) to enhance shopping experiences. Here are a few real-world examples: 

• IKEA

IKEA's AR application, IKEA Place, allows customers to imagine how a particular furniture would look in their homes before purchasing. Users can position virtual furniture within homes using the smartphone camera, which helps them make right decisions.

• Sephora

Sephora's Virtual Artist feature uses AR to allow customers to try various makeup products in virtual reality. It lets customers observe how different products appear on their skin without the need to apply them.

• Warby Parker

Warby Parker has virtual try-on features that let users test how different eyewear frames appear on their faces with AR. This allows customers to pick the right pair of glasses in the comfort of their homes.

• Nike

Nike's Nike Fit technology utilizes AR to assist customers in finding the ideal size of shoe. When scanning their feet with smartphones, users get specific size suggestions for the best fitting.

• L'Oreal

The app, powered by L'Oreal's AR technology, ModiFace, lets users experiment with different hairstyles and color options virtually, making it easier for them to experiment with new styles.

7. Voice Commerce

Voice command provides an easy and hands-free method of communicating with technology. Users can interact using digital devices, including smartphones, smart speakers, or wearable gadgets, through spoken commands or questions instead of typing or clicking. 

Customers can search products and add items to their shopping carts, place orders, and monitor deliveries while driving or doing multiple tasks. This is a great feature for customers with visibility issues. 

Virtual assistants such as Amazon's Alexa and Siri from Apple Siri use user preferences and shopping history to give personalized suggestions for purchases and special offers, thereby raising retail sales and conversion rates. As virtual assistants gain popularity, they are likely to play a more significant part in online shopping.

Conclusion

E-commerce and digital commerce describe different aspects of the online marketplace. While these terms are often used interchangeably, they differ in subtle ways. 

E-commerce is specifically focused on selling and buying items online. Digital commerce covers all aspects of the customer journey. It utilizes technology that enables an unmatched customer experience at all channels. Understanding distinctions between both is essential for companies who want to thrive in the digital market.