What is an online store?

An online store is an ecommerce website or app where buyers can see a catalog of products or services and electronically purchase them.

A typical representation of an online store is a brick-and-mortar retail business that also displays and sells its products on a website. Customers can browse through merchandise and see options, such as color and size, at both the physical location and online. However, some online shops operate without a physical store.

In 2021, almost 20% of global retail sales happened online. 

Key takeaways:

• An online store is a website or app where buyers can see a catalog of products or services and make electronic purchases.

• An ecommerce store is slightly different from an online store in that it doesn’t need to have a digital catalog or checkout process, only an electronic payment method.

• Elements of building an online store include forming a business plan, finding an ecommerce platform and creating a marketing strategy.

Examples of online stores

1. The local store

The local store is your shop-around-the-corner that isn’t a franchise. It’s a beloved arts and crafts store or a place that serves the perfect BBQ ribs. A local store that becomes popular in a neighborhood can enhance its success by having a website. 

An example of a local store with a website is The Soggy Dollar, a restaurant, bar and boutique store on the tiny island of Jost Van Dyke in the British Virgin Islands. The Soggy Dollar grew in popularity as arguably the birthplace of the Painkiller cocktail.

The usual way to reach the three square mile island of 300 inhabitants is by private boat or ferry. The Soggy Dollar also has a website where you can purchase merchandise from its boutique store and its signature line of rums.

2. The major retailer

The major retailer is the large chain of department stores with shops in many locations, like Macy’s or a hotel chain like the Marriott. In both cases, one can go in person to purchase the product or service, or complete a transaction online. An added advantage for customers booking through a hotel’s website is that they can view different room types, along with their amenities and views.

Let’s take an instance of a major retailer that doesn’t have an online store: 

The American supermarket, Trader Joe’s, originally opened as a wine shop in the 1960s. They expanded to include organic foods and natural products. Today, there are over 530 stores in 43 states. When visiting the company’s website, you can select a store location and create a shopping list. However, there is no checkout process, thus disqualifying it as an online store.

3. The manufacturer

A manufacturer may offer their goods to a retailer (B2B) or sell directly to the consumer (B2C). The buyer may visit the physical location or shop on the manufacturer’s online store.

One such manufacturer is Namaqua Wines, a vineyard in Vredendal, South Africa, operating for over 70 years. The winery has a tasting room and a restaurant and can serve as a venue for weddings and special occasions. The online store offers a variety of wines from its vineyards.  

4. The individual

An individual can be the sole proprietor of a business, such as a food truck owner or a craft maker. This business model is consumer-to-consumer (C2C).

An example of an individual operating solely out of an online store is photographer Ann Hudec. Ann specializes in travel photography and sells her artwork through her online shop on etsy.com. She does not sell her merchandise at a physical location.

Is there a difference between an online store and ecommerce?

While many may equate an online store with ecommerce, there is a difference. An online store has a digital catalog that buyers can view. There’s typically a shopping cart or a list for an order. There’s a checkout process that includes an electronic payment method such as credit card or online merchants like PayPal. While an electronic payment method is a necessary part of ecommerce, having a digital catalog and a checkout process isn’t.

For instance, returning to Ann Hudec, she uses Etsy for her online store. On the other hand, Etsy isn’t an online store but a platform for sellers and buyers to come together. In this case, Etsy is an ecommerce company and gets a commission on Ann’s sales.

More examples of ecommerce are:

• web hosting

• tutoring (where the payment occurs online)

• social media marketing

• graphic designers and photographers that sell their work to companies consumer-to-business (C2B)

• online tax preparation 

How to build an online store

To establish an online business, you’ll need the following:

• An idea: What would you like to sell? Do you have a knack for creating particular items? The product could be tangible like shoes or clothing, or digital like ebooks and stock photos.

• A plan: What is the target audience? How wide will you sell geographically? What is your budget? Lay out the purpose of the business, its goal and its day-to-day operations.

• Materials and utilities: If creating a physical product, you’ll need to purchase supplies, find a location to work from and perhaps hire employees. Account for the price of utilities such as electricity and internet service.

• User-friendly ecommerce platform: Will you set up your store on an all-in-one online marketplace, like Amazon or Alibaba? Or will you create a custom domain for your business? Web hosting companies offer various tiers (and pricing) of web hosting services. They often bundle domain name registration with the hosting.

• An electronic payment method: With web hosting, ensure that the site is secure by obtaining and installing an SSL certificate. Then, set up an electronic payment method. Many content management systems (CMS) facilitate the process by providing plugins that you can install without coding experience.

• A marketing strategy: How will you promote your product? Some of the best marketing channels for ecommerce are:

  • social media

  • search engine optimization (SEO)

  • email marketing

• Daily management: The success of an online store relies on customer satisfaction. It’s essential to have inventory on hand to meet buyer demand and be detail-oriented. Ensure your business expediently and accurately handles shipments and customer concerns.

How to make your online store successful

Many companies partner with ecommerce solutions providers such as Optimizely to gain and retain more customers. Optimizely’s suite of products includes using artificial intelligence to create a personalized customer experience, such as product recommendations and search result rankings.