What Is Ecommerce and What Trends Are Shaping It?

May 3, 2024

Ecommerce covers buying and selling goods and services online, and anyone can start an online store. However, to succeed, retailers need to be flexible and offer high-quality, seamless shopping experiences to attract and keep customers.

Today, it’s hard to find someone who hasn’t shopped online, whether it’s for a regular delivery of laundry detergent, a vintage auction item, or an e-book. If you’ve done any of these, you’ve participated in ecommerce.

This article will explain what e-commerce is, highlight key trends affecting the industry now and in the future, and discuss the growing role of mobile commerce (m-commerce), where customers make purchases via mobile apps instead of just through websites.

What is Ecommerce?

Ecommerce is the buying and selling of goods and services over the internet. This includes various types of transactions (like B2B, B2C, C2C) that occur online. Ecommerce allows businesses of all sizes to connect with buyers anytime, anywhere.

Although ecommerce began in the 1970s, it became mainstream with the launch of Amazon and eBay in the mid-1990s. Today, global retail ecommerce sales hit $5.2 trillion in 2021 and are expected to grow by 56% in the next five years. Amazon alone is projected to make over $1 trillion in online sales by 2027.

The convenience of ecommerce is a major factor driving its growth. With online shopping available 24/7 and perks like free shipping and membership benefits, ecommerce is set to make up 31% of all US sales by 2026.

Platform vs. Marketplace

Businesses entering ecommerce can choose to sell on online marketplaces (like Etsy, Amazon, and Walmart) or through ecommerce platforms (like Shopify and Squarespace).

Marketplaces are where multiple sellers connect with buyers. They are less risky with no startup costs but have more competition.

Platforms are software applications that let sellers create their own online stores. They require more investment but offer better control and customer insights.

Trends Impacting Ecommerce

The COVID-19 pandemic boosted ecommerce sales significantly, with US sales reaching $870 billion in 2021—a 50.5% increase from 2019. The pandemic also pushed businesses to improve their online presence.

As the world adapts to the ongoing effects of COVID, such as supply chain issues, businesses must be ready to adjust. Omnichannel sales, which offer a seamless shopping experience across in-store, online, mobile, and phone channels, are becoming essential. AI and machine learning are also playing a major role in personalizing shopping experiences and improving efficiency.

The Rise of Mobile and Social Commerce

Mobile commerce, or m-commerce, is booming. By 2025, retail m-commerce sales are expected to reach $710 billion. For success, mobile sites must be user-friendly and make it easy for customers to complete purchases. Mobile payment options like Apple Pay and Amazon’s “Buy Now” button can reduce cart abandonment.

Social media is also impacting ecommerce, with platforms like Instagram enabling direct shopping. Brands must create engaging content and interact with customers to stand out.

The Future of Ecommerce

Tech-savvy consumers are pushing ecommerce forward. Trends like video shopping, virtual reality, and buy-now-pay-later options are shaping the future. Flexibility in payment and return policies, as well as easy fulfillment options, will be crucial. Retailers must also cater to new generations of shoppers who are highly tech-savvy.