While some would argue that e-tail and ecommerce are just different words for the same thing, others claim that there are some important differences between the two concepts. Whether you consider those differences to be mere semantics or not, thinking about them may be a great entry point to more significant strategic discussions and decisions for your business.

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E-tail and ecommerce: More popular than ever

E-tail, ecommerce, online sales, digital sales – whatever wording you prefer, what it represents has never been hotter.

The rapid pace of growth in digital sales has been impossible to ignore. In fact, projections show that global ecommerce sales will grow by 39% over the coming years. This growth might not look the same across all regions of the world. For instance, it’s expected that Latin America will have the fastest ecommerce acceleration, while Western Europe’s numbers will grow slower.

Consumers now expect seamless transitions between online, in-store, and mobile experiences. And retailers are focusing on omnichannel strategies that integrate all customer touchpoints, creating a cohesive brand experience. This includes unified inventory systems, real-time order tracking, buy-online-pick-up-in-store (BOPIS), and click-and-collect options.

We will most likely never return to when we could only find our favorite products in physical stores. Many customers have realized that the digital habits they picked up out of necessity are very convenient. So, as we move forward, the brands that manage to adapt to and deliver on these new expectations are the ones that will thrive.

One of the most important things to consider as a retailer, ecommerce merchant, or e-tailer is how to set up your business model. In this article, we’ll look at the differences between e-tail and ecommerce to help you shed some light on what may suit your needs best.

Differences between e-tail and ecommerce

E-tail: A definition

E-tail or e-tailing is short for electronic retailing and refers to the specific activities related to selling retail products and services via the internet. The key words in this definition are “retail products and services.”

Ecommerce: A definition

Ecommerce refers to a broader set of activities that include but are not limited to selling retail products on the Internet (e-tail), electronic financial services like online transfers or transactions, management of online supply chains, mobile commerce (m-commerce), digital marketing, data collection systems, and more. The concept of digital commerce is also related to ecommerce.

E-tail focuses on the B2C segment

E-tail, being electronic retail, primarily focuses on the business-to-consumer (B2C) segment. Ecommerce, on the other hand, encompasses B2C as well as business-to-business (B2B), consumer-to-consumer (C2C), direct-to-consumer (D2C), and consumer-to-business (C2B) markets. More recently, people increasingly use the term e-retail or e-tail to talk about indirect ecommerce selling or distribution, meaning selling products through ecommerce channels you don’t own.

From a manufacturer perspective: E-tail vs ecommerce

Let’s have a look at what these differences mean for a manufacturer. If you are a manufacturer of goods and you want to sell them online, how does that play out, depending on what option you choose? Although e-tail and ecommerce are not mutually exclusive business models, they come with different pros and cons.

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E-tail: Advantages and disadvantages

With this setup, you distribute your products via a network of online retailers, also known as e-retailers or e-tailers. This business model is very similar to selling your products in retail stores, except now these stores are online or ecommerce sites instead. They could be

  • Online versions of physical stores, such as the ecommerce sites of brick-and-mortar stores like Walmart.com
  • Pure online players like Zappos
  • Digital marketplaces like Amazon

The advantages of this approach include:

  • Unlocking larger revenue opportunities by getting your products in front of many more potential customers
  • Outsourcing individual sales, returns, or customer service to the online retailer, effectively freeing up your resources and budgets
  • Selling in bulk and therefore offering more competitive pricing

The disadvantages of this approach include:

  • You have to share the margin with an additional intermediary
  • Limited ability to gather customer data since you’re not as close to the end customer as you could be
  • If you don’t properly manage your distribution network, your brand image can suffer
  • You have less control over the customer experience, how your products are positioned, and your brand communication
  • Several distributors can create intra-brand price competition

Ecommerce: Advantages and disadvantages

With ecommerce, you operate your ecommerce website and sell directly to consumers. Some handle their own logistics, while others outsource it to a third party.

The advantages of this approach include:

  • You don’t have to share your margins with anyone else
  • Direct contact with the end customer: you handle the relationship, and you own customer data (emails for marketing, on-site behavior, etc.)
  • Control over exactly how your brand and products are displayed
  • The ability to quickly launch new products
  • The ability to gather your customer data
  • Option to target new customers using online marketing and website analytics tools that help you understand your customers’ needs better

The disadvantages with this approach include:

  • Limiting yourself to only ecommerce (selling on your own website) may mean you’re giving up on a lot of potential business, even if you are a compelling brand
  • Selling direct-to-consumer requires specific skill sets and capabilities, and this might not be in your company’s DNA
  • Selling only through your own website requires a strong brand and heavy marketing spend

Key takeaways

While the difference between e-tail and ecommerce can seem mainly semantic, the different business models and their implications are important to consider. When moving into digital sales and marketing, picking the right mix of sales channels will have a fundamental impact on the growth potential of your business.

To sum things up:

  • E-tail, short for electronic retailing, typically refers to the activities related to selling retail products and services via the Internet. This also includes distributing your products via a network of online retailers known as e-retailers or e-tailers.
  • Ecommerce refers to a broader set of activities, including selling retail products on the internet (e-tail), electronic financial services, management of online supply chains, mobile commerce (m-commerce), digital marketing, and data collection systems. And with ecommerce, you operate your own ecommerce website and sell directly to consumers.

Regardless of the exact definitions of e-tailing and ecommerce, the essential thing for every brand right now is to make sure their products are available online and that the digital customer experience is on par with or superior to that of their competitors. Today, buyers increasingly prefer to make their purchases online, and businesses that fail to offer great online experiences will struggle in this new landscape.

So, if you’re coming from a background of physical sales and brick-and-mortar, there are several strategic business decisions to be made. Both e-tail and ecommerce come with advantages and disadvantages, and which one is best suited for you depends on several factors. Also, the two can be combined in many different ways.

How Vaimo can help

Navigating the different options and taking the first steps to new business models can be complicated and feel overwhelming. At Vaimo, we have extensive experience in helping clients all over the world take this step to grow their businesses to the next level.

We’re constantly exploring new strategies to help our clients build new revenue channels to complement and further their current ones. And as always, the key to getting ahead is getting started. We’d love to help you expand your online business and drive growth – get in touch with our team of experts to explore the opportunities.

At Vaimo, we help brands, retailers, and manufacturers all over the world drive success in digital commerce. Reach out to us if you want to hear more about how we can improve your customer experience strategy, go-to-market plan or explore how technology can enable success.

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