Welcome to our comprehensive guide to e-commerce success!

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What is E-commerce?

E-commerce (Electronic Commerce) refers to the use of platforms that facilitate the buying and selling of products online. This involves exchanging digital funds and data to conduct business transactions.

Although the most well-known example of e-commerce is online shopping, like Amazon and Alibaba, e-commerce can also refer to other types of online activities, like online auctions, online ticketing, and payment gateways. 

There are six main models of ecommerce:

  1. B2C (Business-to-Consumer)
  2. B2B (Business-to-Business)
  3. C2C (Consumer-to-Consumer)
  4. C2B (Consumer-to-Business)
  5. B2A (Business-to-Administration)
  6. C2A (Consumer-to-Administration)

One of the top reasons why businesses gravitate towards e-commerce is because it provides a wider reach than a physical location. Thanks to this digital innovation, people can shop online from just about anywhere while businesses get to reduce operational costs and generate more revenue.  

A Brief History of E-commerce

The e-commerce industry as we know it today didn’t happen overnight. It slowly developed over time:

1960: The inception of e-commerce dates back to the development of the Electronic Data Interchange (EDI) in the 1960s. It was developed to replace mail and fax through digital transfer, eliminating the need for human intervention. 

1972: Stanford students reportedly sold cannabis to MIT students through an Arpanet (Advanced Research Projects Agency Network) account. Arpanet is a packet switching network that is said to be one of the technical foundations of the internet. 

1979: Michael Aldrich, an English inventor, introduced electronic shopping by connecting a modified TV to a transaction-processing computer through a telephone line. 

1990: Tim Berners Lee and Robert Cailiau built a hypertext project named WorldWideWeb. Soon after, it became a publicly available service on the internet. 

1994: The first true e-commerce transaction can be traced back to when Dan Kohn, a 21-year old entrepreneur, ran a website called NetMarket and sold a Sting CD on August 11, 1994, through the website. The transaction, which involved the use of the credit card, was (for the first time ever) protected by encryption technology.  

1995: Amazon originally launched as an e-commerce platform for books. Not long after,  AuctionWeb (now known as eBay) launched, with online auctions as its primary focus.

1998: PayPal  as a money transfer tool, making global e-commerce possible.   

1999: Zappos and Victoria’s Secret entered the online shopping scene. Alibaba launched. 

2001: Amazon launched their first mobile site. 

2004: Additional security for online transactions was put in place with the formation of the Payment Card Industry Security Standards Council

Fast forward to today, we can clearly see the growth in online marketplaces with Amazon and Alibaba being two of the biggest players in the e-commerce industry. Additionally, the massive global adoption of mobile devices has driven m-commerce to the forefront of importance for retailers. 

Read more: The Past, Present, and Future of E-commerce

The Importance of E-commerce for Businesses and Consumers

Eliminates geographical restrictions


Physical stores are limited by their location and area they can service, while an e-commerce website allows anyone around the world to shop with you as long as they have an internet connection. Of course, this still depends on how far you’re willing to deliver your products and services, but with an e-commerce site, the world is your oyster.

Remain open 24/7


Unlike a physical store, e-commerce websites can operate through night and day, seven days a week, 365 days a year. You’re always open, making your business’ products/services more accessible to customers.

Reduced costs


One of the major advantages of e-commerce is the decreased operational costs compared to a brick and mortar store. You won’t have to worry about the overhead costs of real estate and the corresponding costs of having a physical location. Furthermore, you can invest in a web-based operations management system to automate your supply chain and reduce inventory costs. 

Better customer experience


Customers no longer have to search aisle per aisle or store per store when they’re looking for a particular product online. With an e-commerce site, they can simply type what they’re looking for into a search box and find their desired product instantly. Just one of the many conveniences when it comes to shopping online.

Customized and targeted marketing and communication


E-commerce websites can remember a customer’s online behavior and other relevant data using cookies (subjected to the customer’s agreement). Merchants can then use this information to show more relevant listings or improve ad targeting across multiple platforms.

E-commerce Market Overview

Research shows that in 2019, retail e-commerce sales around the world reached $3.53 trillion, while e-retail revenues are projected to increase to $6.54 trillion in 2022. Online shopping is dominating the world as it becomes the most popular online activity. Let’s take a look at some more interesting figures that showcase the e-commerce market today. 

  • Global e-commerce revenue is estimated to reach $2,258,801m in 2020. 
  • The industry’s largest segment is Fashion, with a projected market volume of $578,392m in 2020. 
  • In the United States, the largest segment is Consumer Electronics, with a projected market volume of $57,396m in 2020. 
  • In the Philippines, the largest segment is Electronics & Media, with a projected market volume of $941m in 2020. 
  • Worldwide, research shows that the number of users is expected to reach 4,658.1m by 2024. 
  • Some of the prominent players in the global e-commerce market are:
    • Amazon.com
    • JD.com
    • Apple.com
    • Alibaba.com
    • Walmart, Inc.
    • eBay, Inc.
  • Compound annual growth rate (CAGR) is expected to be around 14.7% from 2020 to 2027. 

By 2021, the number of online shoppers will reach 2.14 billion, a significant increase from 1.66 billion in 2016. (Statista)

More and more people are shopping online, which continues to open up more opportunities for businesses. Ignoring the online shopping trend will mean shutting your doors to a potentially large portion of your target audience. 

About 25% of shoppers won’t buy a product if there’s no option to return the item to a physical store. (Narvar)

Offering a flexible return policy can help you build customer loyalty and attract more customers. It’s also a good to idea partner up with a merchant for scheduled pick-up of return items.

Americans are spending $270.4 billion annually on mobile commerce, predicted to represent the majority of e-commerce spending by 2021. (eMarketer)

Smartphone users are browsing and shopping online using their mobile devices, so naturally, businesses need to integrate mobile-friendly strategies into their browsing, ordering, and checkout processes for a smoother and more convenient buying experience.

Sustainable e-commerce is on the rise. (Shopify)

Today, consumers are leaning towards brands that align with their own personal values, such as sustainability in manufacturing practices and eco-friendly packaging. Furthermore, research shows that they’re willing to pay a premium for products produced in socially compliant ways. 

Chatbots will help improve the online shopping experience (Big Commerce)

Chatbots are getting more intelligent, less annoying, and more intuitive, which makes them easier to adopt. As a matter of fact, a study shows that 60% of customers now prefer interacting with websites, apps, or chatbots for their simpler inquiries. Now that bots can tend to thousands of customers while giving each one of them a personalized experience, e-commerce automation is taking a leap forward!

Read more: Insightful E-commerce Trends and Statistics

E-commerce Design

Website Functionality


The features and functionalities of e-commerce websites are uniquely different to other websites. For starters, they need to have a system for managing their catalog of products, allowing users to efficiently browse their inventories. Additionally, they need a payment gateway to facilitate online transactions via their platform. All this means that e-commerce platforms have unique requirements for design, features, analytics, and much more.

Simplicity and Minimalist


It’s important to eliminate unnecessary clutter when it comes to designing e-commerce sites. There should essentially be one goal when they visit your online store, and that’s to buy your products. This makes it incredibly important for e-commerce websites to offer a frictionless shopping experience to maximize your chances of success. 

Product Pages


Product pages should contain all the specifications, features, price, and other information made available by the manufacturer. These relevant details act as a replacement for a salesperson, since customers don’t get to interact with them face-to-face. If possible, include high-quality photos to give visitors a real-world experience. 



The nature of making financial transactions means that e-commerce stores handle sensitive data like credit/debit card details and other personal information, making privacy and security a lot more important. These days, online stores are expected to implement security provisions like SSL for authentication, encryption and decryption of transmitted data, and trusted payment methods to provide customers with the protection they need to shop without worries. 

Read more: UX in E-commerce Design

E-commerce Optimization

E-commerce optimization is different from regular website optimization in that conversions and transactions happen in one place—similar to a retail store. Visitors behave differently on e-commerce websites, which means that your priorities for optimization will also be different.

Below are a few key e-commerce optimization best practices:

Enhance product pages


Since customers visit your site to search and view products, your first step should be improving your product pages. The first thing you should consider is using hierarchy-based breadcrumbs to allow easy navigation.

Furniture > Office > Tables and Chairs > Work Desk

Aside from that, there are plenty of other product page optimization strategies like using SEO-friendly titles, including product videos, and featuring customer reviews, but what works best will be different for everyone, so it’s important to keep measuring, testing, and improving.

Feature product recommendations


Research shows that product recommendations were responsible for up to 31% of e-commerce revenue. Using behavioral data, online stores can make customized recommendations with improved relevance. This type of personalization plays a huge role in e-commerce success because it increases conversion rates and encourages repeat purchases. 

Streamline the checkout process


Cart abandonment is an unavoidable issue that e-commerce businesses have had to deal with. However, there are a few key ways to address this an improve the checkout experience:

  • Don’t force customers to sign up for an account in order to checkout (offer an option to checkout as a guest).
  • If users register, retain the data and pre-fill forms automatically to make shopping quicker the next time they visit.
  • Provide response examples in form fields that guide users, especially for fields where they usually make mistakes. 
  • Including different payment methods is a great way to broaden your appeal to potential customers. 

Run marketing campaigns


Just like any other website, e-commerce stores need marketing to grow. Don’t neglect the importance of generating traffic because without visitors, you won’t have anyone to convert. Things like writing useful blog posts, building engaged communities on social media, and running targeted PPC campaigns all work to build brand awareness and drive a consistent flow of shoppers to your store.

Read more: E-commerce Website Optimization Guide

Building an Effective E-commerce Website

1. Establish a plan 

1. Establish a plan

After covering the basics—like coming up with a name for your brand as well as identifying your products and suppliers—the first thing you’ll want to do is identify your store’s Unique Selling Propositions (USPs).

  • What makes you different?
  • Why should shoppers choose you?

Document all your requirements in a formalized business plan and make an executive summary template of the same. Make sure that the template covers all bases to help your store launch and work, as smoothly as possible. 

2. Build a website 

2. Build a website

You’ll want to make sure that your visitors have good user experience across all devices while being secure and responsive. Be sure to choose the right Content Management System (CMS) that’s compatible with e-commerce features you want to use. Additionally, find one that offers a UI and functionality that you’re comfortable with.

3. Add e-commerce features 

3. Add e-commerce features

At this point, you’ll want to decide on what e-commerce features you want your store to have, like product listings, shopping carts, and customer service portals. Find a reliable payment gateway partner, and when it comes to payment options, select the methods that would best serve your business and its customers.

4. Optimize for conversions 

4. Optimize for conversion

Conversion rate optimization (CRO) is essential for boosting your online conversions, sales, and business growth. Two key ways to get insights for optimization are A/B testing and multivariate testing. You can test different elements on your site, such as your web copy, layout, design, headline, images, and more, uncovering the best mix of page elements that drives users to convert. 

5. Market your e-commerce business

5. Market your e-commerce business

Much like any other website, you need to market your e-commerce store to gain exposure. You can dive into content marketing, social media, pay-per-click (PPC), or even collaborate with relevant influencers to boost your online visibility. Whatever marketing channels you decide to go with, be sure to continuously measure, evaluate, and improve your strategies to maximize your chances of success.

6. Track, Analyze, and Improve

6. Track, Analyze, and Improve

As with brick and mortar businesses, it’s important that you strategically monitor, review, and adjust processes to better understand and serve your customers. Check your web analytics to see how users behave on your website, who they are, what motivates them to purchase, and so on. These numbers should tell you where to focus your attention for improvement (e.g., shopping cart remarketing, improving site speed, etc.).

Read more: Building an Effective E-commerce Store

E-commerce Marketing Strategies


E-commerce marketing is all about building awareness and guiding online shoppers in your direction when they’re ready to make a purchase. These marketing strategies focuses on helping users find you, converting them into customers, and improving website usability and after-sales campaigns to encourage repeat customers. 

Typically, e-commerce businesses tend to focus on PPC and email marketing to drive sales. Of course, the most successful stores employ a combination of strategies that include things like blogging and social media, but paid advertising is normally prioritized for its audience targeting capabilities and ability to drive immediate results.

When it comes to email marketing, online stores can roll out post-purchase follow-up material to help keep the conversation going and ignite future interest in their products. Meanwhile, abandoned cart email campaigns give businesses an additional opportunity to convert. 

Read more: Marketing Tips to Boost E-commerce Sales

E-commerce Mistakes to Avoid

Building an e-commerce website that generates sales can be a challenge, but a fulfilling one when you manage to get it right. Learn from the mistakes of others and steer clear of these common e-commerce blunders: 

Read more: E-commerce Mistakes to Avoid

Useful E-Commerce Tools

  • Website tools – These are tools that you can use to help set up and manage your e-commerce website’s look, feel, and function. Popular platforms include Shopify and BigCommerce, while those on a budget might opt for a free option like PrestaShop.
  • Marketing tools – These tools that help boost online visibility and turn leads into customers. Google Ads can help you run targeted online advertising campaigns, while tools like Hootsuite and NapoleonCat can help automate your social media marketing campaigns.
  • Competitor analysis tools – It’s important to know what your competitors are up to, and e-commerce is no exception. Tools like SEMRush and Wiser help you find out about their strategies as well as performance, so you can identify opportunities to gain an advantage. 
  • Business tools – Tools that will help you manage the daily operations, logistics, and finances of your online store. It can be difficult managing new projects, inventories, shipping and logistics, and finances and accounting all at once, but the right productivity tools and accounting software can make the job a lot less stressful.
  • Analytics tools – They’ll tell you what’s working, what’s not working, and which areas you need to improve to boost your sales. This is an essential part of optimization and these tools will help you make the most of every dollar you spend.

The e-commerce world can be tricky, but with the right approach, you can give your online store the best chances at success. If you’d like help managing or growing your online store, be sure to contact the e-commerce experts at Spiralytics!

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