March 31

What is e-retail?

In e-retail, a business or individual sells retail products and services electronically, typically through the internet.


E-retail, also known as e-tail, internet retail or online retail, stands for electronic retail. In e-retail, a business or individual sells retail products and services through online stores. An e-retail company can be a purely digital presence, meaning there is no physical store for a customer to enter.

However, an e-retail business can also be a brick-and-mortar shop with an online presence. Brick-and-mortar retail stores are no longer the primary means for purchasing goods. Instead, they can act as one aspect of the customer’s journey with a retailer’s brand. 

Here are some of the latest stats that show why e-retail matters more today: 

Recent e-retail statistics

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The most famous example of an e-retail company is Amazon. As the largest online retailer globally, Amazon made over $120 billion in 2020.

Key Takeaways:

  • An e-retail business model is where a business or individual sells retail products and services electronically, typically through the internet.
  • Two subcategories of e-retail are business-to-business and business-to-consumer.
  • To get started in e-retail, you’ll need an attractive product, an engaging website, a digital marketing strategy and data analytics. 

e-retail vs. ecommerce

E-retail is a subset of ecommerce, meaning that 100% of e-tailers can say that they are an ecommerce business, but an ecommerce business doesn’t necessarily do e-retail. 

Aside from e-retail, ecommerce sites deals with a more extensive range of activities including: 

  • Electronic financial services like online banking, investing and money management
  • Management of supply chains online
  • Web hosting services like Bluehost and GoDaddy
  • Content management systems like WordPress or Joomla
  • Digital marketing platforms
  • Data collection systems

The above list is not definitive but illustrates the greater scope that is ecommerce.

Subcategories of e-retail

Online retailers commonly fall into two categories.

1. Business-to-business (B2B)

B2B retailers sell to other companies. An example is a wholesaler who sells their products in bulk from their manufacturing facility to businesses. These companies, in turn, sell those goods to consumers.

2. Business-to-consumer (B2C)

B2C retailers sell products or services to consumers directly through their websites. The company can ship the product from its warehouse or the manufacturer. A successful B2C retailer must deliver excellent customer experiences.

Pros of e-retail

The benefits of e-retail include:

  • Customers save time and effort when selecting merchandise. For example, there’s no standing in line at the checkout counter.
  • There are no “store hours.” The customer can make purchases at any time and from any location.
  • In a physical store, a customer may need to flag down a salesperson and wait until they are available to get assistance on a product. In e-retail, product descriptions, including photos and perhaps a video, are available online to assist the customer in making the decision. Some e-retail websites may even include chatbots to answer buyer questions.
  • E-retail provides a variety of payment methods, such as credit cards and PayPal.
  • If the customer isn’t satisfied, e-retail also offers a refund policy, such as a 30-day refund. The seller typically waives the return shipping fee if the product is defective.
  • For businesses, the infrastructure cost is lower for e-retail than for brick-and-mortar.
  • Businesses can reach more customers in their own country and others.
  • When businesses sell in bulk, they can offer more competitive pricing.
  • Automation reduces the need for personnel for particular tasks, such as checkout and level one customer support.
  • Businesses save on marketing expenses by leveraging email, social media and search engine optimization (SEO).
  • E-retail businesses can study consumer behavior through analytics tools to improve the shopping experience and generate more revenue.

To better understand the benefits of e-retail for you and your customers, take a look at the following top reasons people shop online:

reasons why people shop online

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Cons of e-retail

There are a few disadvantages with internet retail:

  • The buyer has to wait until the product arrives vs. being able to walk out with it right away from a store.
  • An image on a website or buyer reviews can only go so far. Ultimately, the customer won’t know if they made a good purchase until the product arrives.
  • The element of haggling doesn’t exist.
  • Online shopping may lack an emotional connection since the buyer can’t feel or smell the product before purchase.
  • Operating expenses can increase due to business expansion.

Getting started in e-retail

A common thread with e-retail companies is having an attractive product, an engaging website, a digital marketing strategy and customer data analytics. 

1. Attractive product

Since sight is the primary way an online retailer can showcase a product, the company should invest effort into making it appealing to consumers. Play with shape and color when designing the product. Try gathering a focus group and present different options to see which speaks to the most number of people. When shipping to the customer, you can even delight them with the packaging.

2. Engaging website

Right from the homepage, provide beautiful, professionally made images. Can you add a 360-degree view or a video when displaying the product? Include chatbot technology on the site so customers can feel free to ask questions.

Don’t feel that once you create a web design, you’ve completed that aspect of your e-retail business. Styles are constantly evolving, and the website should reflect that. If necessary, perform A/B testing to see if variations of your site can draw more customers.

3. Digital marketing strategy

Search engine optimization, mobile apps, targeted emails and social media can be inexpensive omnichannel digital marketing strategies.

Another effective method to promote your brand and products is influencer marketing partnerships. Influencer marketing leans into the concept of social proof, where buyers trust the recommendations of people they admire. You can request an influencer to test your product and promote it on their social media platform if they genuinely enjoy it. There are several options for compensating the influencer, including money payment, free products or special discounts.

4. Data analytics

Data analytics is essential for creating personalized customer experiences. For example, you can use past purchases to make product recommendations on the homepage. You can use information from shopper behavior to create targeted emails. Properly analyzing data can help make business decisions, such as closing a store at a location that isn’t profitable or investing more in places that are.

Services for online retailers

Today’s consumers can interact with retailers through multiple channels simultaneously. E-retailers must deliver a seamless customer experience across all of these channels to stay ahead of the competition and gain loyal customers. Optimizely’s team of experts can help businesses enhance their website with A/B testing, provide analytics tools to understand customer expectations and more.

Contact Optimizely today to see what we can do for your e-retail business.