Each year e-commerce claims a larger share of the total retail market. In 2020, 21.3% of retail sales occurred online. The rise from 15.8% in 2019 was the biggest yearly increase yet. Customers continue to shift toward digital sales channels because of the convenience and larger selection of products.
Many retailers are adopting an omnichannel approach to unite digital and physical channels, giving customers a more consistent experience. While traditional and digital commerce are starting to blend, there are still some key distinctions between pure-play e-commerce organizations and brick-and-mortar retailers. This post examines these differences and how companies are using e-commerce technologies to bring the channels together.
Traditional commerce and e-commerce have some notable differences in how customers find products. With traditional retail, customers are able to see and touch items in person. Product information is usually available on the item’s packaging (box, tag, stickers).
E-commerce sellers rely on pictures and product descriptions to convey the value of an item. While customers cannot see or touch e-commerce products in person, there are some benefits to the online catalog. To start, there is no limit to the number of products you can list. With traditional commerce, you are restricted to what your physical space allows.
E-commerce gives customers better capabilities for searching for specific products. They can type a product name or keyword into the search bar or sort and filter based on specific criteria. Industry leaders are beginning to add this to their in-person shopping experience. For example, with Lululemon’s mobile app, customers can search for a product to see if it is available at their local store. Another example is Nike. Customers can use the mobile app to request a try-on for a pair of shoes. A store associate will then bring the shoes to the customer.
E-commerce allows businesses to personalize the shopping experience for each customer. Online merchants can create unique product recommendations for each person based on their interests. This is done through e-commerce software like a headless CMS or a digital experience platform (DXP). For example, with fabric XM, the system uses machine learning to rapidly analyze customer data to find the best products to automatically display for each individual.
Traditional retail stores do not have the same capacity to provide highly personalized experiences. Different customers shop in the same physical store. There is no way for the merchant to create a unique product display for each person.
The scope of a traditional brick and mortar businesses is limited to a particular area. This reduces the total number of potential customers the business can reach. However, it also reduces the amount of competition the business has to face. There can only be a certain amount of other physical stores in the area (though the business still may compete with online alternatives).
E-commerce businesses are not limited to just customers that are close to their business location. Rather, they can reach people across different countries. This creates a much larger audience of potential customers but it also increases competition considerably. E-commerce merchants must compete with every other online store in their niche. There can be a lot of competing stores as there is no limit to how many the internet can handle.
Headless architecture helps brands and retailers with both digital and physical presences create a consistent experience across channels. Headless APIs can connect your point of sale systems to the backend e-commerce system, ensuring a constant and accurate flow of product and inventory information.