30. May 2022 By Heike Heger
Digital commerce or e-commerce – what’s the difference?
Let’s start with the definitions. On Wikipedia (translation of the German page), e-commerce is described as follows:
‘Electronic commerce, also called Internet commerce, online commerce or e-commerce, refers to buying and selling transactions via the Internet (or other forms of remote data transmission). Early manifestations of e-commerce were found in the online portals of the 1980s, especially in the form of Compuserve’s Electronic Mall.
Buyers and sellers conclude sales contracts online; the transactions are commonly largely automated. In a broader sense, e-commerce includes any type of business transaction in which Internet providers – including those that are not retail/trading companies – and Internet consumers draw on electronic communication technologies as transaction partners in the context of service initiation, agreement or provision. (...) In the narrower sense, e-commerce comprises business relationships conducted via the Internet between Internet retailers (that is, retail companies that use the Internet exclusively or (as multi-channel retailers) in addition to their brick-and-mortar or traditional mail-order business) and Internet consumers. Goods from the presented range can be selected and added to a ‘shopping basket’ in the same way a customer would if they were shopping at a physical store. The ordering process is completed by submitting and confirming the order online
Source: Wikipedia [German], 03 May 2022/9:15 am
Der elektronische Handel oder E-Commerce bezieht sich also auf den Prozess des Kaufs und Verkaufs von Waren und Dienstleistungen mit Hilfe einer geschäftlichen Transaktion über das Internet. Dabei werden Gelder und Daten zur Durchführung dieser Transaktion ausgetauscht.
Damit dies alles geschehen kann, werden bestimmte Technologien eingesetzt, zum Beispiel zur Datenerfassung und zum Datenmanagement, zum elektronischen Geldtransfer, zum mobilen Handel, zum Online-Marketing, zum Lieferkettenmanagement, zur Online-Transaktionsverarbeitung, zu EDI und, und, und.
Electronic commerce or e-commerce therefore refers to the process of buying and selling goods and services by means of a business transaction over the Internet. Funds and data are exchanged to carry out these transactions.
For all this to happen, certain technologies are used, for example, data capture and management, electronic funds transfer, mobile commerce, online marketing, supply chain management, online transaction processing, EDI and so on.
There are various ways in which e-commerce takes place. This includes business to customer (B2C), business to business (B2B), business to business to consumer (B2B2C), customer to business (C2B) and customer to customer (C2C). The most prominent and commonly known e-commerce providers are Amazon, Zalando, eBay and so on. These platforms are used to trade physical and digital products as well as, of course, services.
‘So far, so good’, you might say, but where does digital commerce fit in? So let’s take a closer look at this definition as well.
The Gartner Glossary describes digital commerce as follows:
‘Digital commerce enables customers to purchase goods and services through an interactive and self-service experience. It includes the people, processes and technologies to execute the offering of development content, analytics, promotion, pricing, customer acquisition and retention, and customer experience at all touchpoints throughout the customer buying journey.’
At first glance, you might not find any major differences between e-commerce and d-commerce. While some view digital commerce as a subset of e-commerce by definition, Professor Stummeyer, Professor of ‘Business Informatics and Digital Commerce’ at the Ingolstadt University of Applied Sciences (THI), has a different take. In his opinion, d-commerce is a synonym of e-commerce:
‘The term digital commerce is synonymous with the term electronic commerce (e-commerce). And this means that digital commerce is an “electronic business transaction”. E-commerce or digital commerce is part of the greater concept of electronic business (e-business), which “involves the buying and selling of goods and services via electronic connections”. The characteristic feature of digital commerce is that business transactions (such as the sale or purchase of goods and services) as well as other business processes (for example, advertising, after-sales services, online banking) are handled electronically. As such, the parties communicate with each other electronically (via the Internet or mobile phone networks, for example) rather than engaging in direct physical exchange.’
The central message of all this, which you may already be familiar with, is that customers do not think in terms of channels.
While we often perceive e-commerce as synonymous with online retailing, for us d-commerce goes even further, because the boundaries between online and offline become completely blurred here.
Digital Commerce – a practical example
To give you a hands-on example, let me share a story from my own private life:
My two children got their driving licences some time ago, so the purchase of another family car was on the agenda. I initially researched via the Internet, working my way from profitable used cars to leasing offers for more sustainable new vehicles. Accident statistics, consumption data, technical features, coolness factor of the vehicle (yes, this is also a very important criterion), value for money, types of leasing models and, of course, a trustworthy local dealer – I was able to gather all pertinent information in advance online. The next step was to go to the car dealer and arrange a test drive. Enamoured with the beautiful new vehicle, we went back online to check influencers, advertising sites and so on, which gave us further positive feedback regarding our decision. It was then thanks to the personal sales performance of the employee on site that all further steps took place offline. However, it could have well been the case that we would have ordered the vehicle using online car sales.
As you can see, our customer journey leading to the new vehicle was a hybrid one – and it reflects what is a perfectly normal experience for consumers today.
D-commerce and e-commerce – what does it matter to retail?
To the extent that consumers are shaping their customer journey in any way they choose, both online and offline, retailers must also provide the right offers and services. Seamless shopping processes, multiple payment offers, fast and smooth processing and excellent delivery service and customer support... Today, none of this is exceptional any longer; instead, it has become the standard that customers have internalised and expect. And, as the word ‘digital’ – the ‘d’ in d-commerce – implies, it’s all about digitalisation, about IT systems and the corresponding maturity level of a company.
As our little excursion down terminology lane has illustrated, it can be quite enlightening to understand a few of the commerce definitions and to work out what they mean for you. In the end, however, it is about the development of customers on the one hand and traders and suppliers on the other. In this context, I like to use the term ‘maturity’. It best describes how we – every single one of us – has evolved over the past years: From going to the local shop and then online retailing at the click of a button all the way to smooth online and offline shopping. Digital commerce gives this process a label, while also conveying the message that in the future, absolutely everything will depend on digitalisation – both online and offline.
Where does your company stand regarding this topic? Do you know the digital maturity of your organisation? And would you go along with this trend?
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