As shown above, Google defines eCommerce as:
"Commercial transactions conducted electronically on the Internet."
Given the ambiguity of that definition, it should come as no surprise that "What is ecommerce" is searched on Google an estimated 10,000 times per month.
In this eCommerce & eCommerce websites guide, we hope to clear this matter up once and for good! Let's start with the origins of the term "ecommerce."
eCommerce is a blend word for "Electronic Commerce," which in and of itself seems oddly vague.
It seems the word eCommerce was always meant to be a broad term used to refer to virtually any commercial transactions that take place on the Internet.
Most eCommerce takes place on an eCommerce website, which acts as a virtual storefront wherein transactions and commerce can take place. eCommerce can manifest in many different forms:
eCommerce websites are the digital portals (i.e. virtual storefronts) that facilitate eCommerce. Remember, eCommerce is a blanket term that includes virtually any transaction that takes place on the internet.
Any website equipped with eCommerce functionality and allows customers to purchase a good or service is an eCommerce website.
Historically, the earliest eCommerce transactions took place via email and phone calls.
Even at the earliest stages of development, effective eCommerce websites must be designed to:
eCommerce websites range from template driven plug-and-play shopping carts to complex eCommerce websites that cost millions of dollars to develop and maintain.
eCommerce websites work through a series of steps, utilizing website code, the database, and 3rd party applications such as a payment processor or payment gateway.
eCommerce websites use SSL certificates (read more about those here) to secure and encrypt all transferred data. Sensitive data, including credit card information, should never be stored within the website's database unless the website adheres to all mandated regulations, including PCI Compliance.
Overall, eCommerce websites offer advantages and disadvantages when compared to traditional brick-and-mortar storefronts.
The disadvantages of eCommerce websites are few and far between, and if you work with a reputable eCommerce website development company, are easily mitigated. Disadvantages of eCommerce sites include:
The majority of eCommerce websites on the internet are B2C retailers. However, there are many types of eCommerce websites:
Mobile commerce (mCommerce) refers to eCommerce that takes place on a mobile device. With the ubiquitous nature of smartphones and tablets, a perpetually-increasing share of ecommerce transactions will take place on a mobile device. Read more about mobile commerce statistics!
Most eCommerce websites, including some custom eCommerce websites, utilize a pre-existing shopping cart software platform and integrated content management system (CMS). There are dozens, if not hundreds of eCommerce website platforms available. The most commonly used platforms include:
If you already have an eCommerce website or plan to soon, you should have a plan to drive traffic to the website.
Your website's conversion rate is the total number of conversions on your website divided by the total number of visitors. For example, if an eCommerce site receives 2000 visitors in a month and has 500 conversions, the conversion rate would be 25%.
Most of the time, when discussing conversion rate on an eCommerce website, we are talking about the percentage of website visitors that convert into a paying customer. But don't overlook other equally important website goals!
It is up to the business to define what a conversion is. Website goals and conversions are easily identified and tracked in Google Analytics. Any desired action that visitors are encouraged to take is worth monitoring.
The idea of converting as many of your shoppers into paying customers is not a new concept, nor is altering elements of the store's layout and design to facilitate conversions. Brick and mortar stores have worked to increase their conversion rates since the dawn of capitalism.
Tracking conversion and conversion rates on your website allows you to predict future sales, compare performance, test changes, and more.
Ideally, you would never make changes to your website that hurt your conversion rate, but you never know what changes will make an impact one way or another until you try!
Running AB Tests (aka Split Testing) is a common way to test changes on an eCommerce website to determine which changes improve your conversion rate. Google now even offers its own AB testing tool which seamlessly integrates with Google Analytics.
There are many ways to track the success of your eCommerce website.
Check out these 20 Google Analytics Alternatives for even more options.
The following metrics are just a few of the most important for measuring eCommerce success, but ultimately what KPI matter most is unique to each business.
Check out our 7 Key eCommerce Site Metrics and Stats to Measure Success for more information!
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