E-tailing isn’t just a sales channel—it’s the future of retail, and it’s happening now. With online sales projected to hit $6.3 billion and account for 20% of all retail sales by the end of 2024, adapting to this shift is important for businesses looking to stay competitive.
This guide will give you an inside look at e-tailing. You’ll learn how it works and what types exist, understand the benefits of e-retailing, explore real-world examples, and find out how e-tailing is shaping global commerce.
What is electronic retailing (e-tailing)?
E-tailing, or electronic retailing, involves selling goods and services online through websites, mobile apps, and social media. It allows businesses to set up virtual storefronts where customers can browse products, find detailed product information, and make purchases 24/7 from anywhere in the world.
How e-tailing works
Here’s a breakdown of how e-tailing works:
- Creating an online store: E-tailers build websites or apps to showcase their products. Platforms like Shopify offer easy-to-use templates and editors, helping businesses set up customized online storefronts—even without coding experience.
- Product listings: Sellers create product listings by uploading photos, descriptions, pricing, and inventory details. Clear, high-quality images and informative descriptions help with sales. Shoppers check out the e-tailer’s website, read about their products, and read buyer reviews before deciding what to buy.
- Inventory management: E-tailers track inventory to avoid running out of products. Shopify can help with tracking stock and managing inventory across multiple warehouses.
- Shopping cart: Customers put items they might buy in a virtual shopping cart.
- Checkout process: Buyers enter shipping details and payment information to complete their purchase, often using integrated payment gateways like Shopify Payments.
- Secure payments: Security is critical – nearly 3% of ecommerce revenue was lost to payment fraud globally in 2023. Shopify and similar platforms offer integrated payment solutions that guard against fraud and support multiple payment methods, while keeping transactions safe.
- Order fulfillment: After a customer places an order, the e-tailer checks that the payment went through, gets the items ready, and starts preparing the order for shipping. Fulfillment services like Shopify Fulfillment Network or Amazon FBA streamline this process.
- Digital marketing: E-tailers use search engine optimization (SEO), social media ads, and email campaigns to drive traffic.
- Customer service: Online retailers offer email, chat, or phone support. For instance, Shopify helps its merchants with tools like live chat and FAQ management to provide quick, helpful responses to customer inquiries.
- Data analytics: E-retailers track customer behavior and sales trends using customer data analytics tools.
Types of e-tailing business models
Online retailers
Online retailers connect directly with customers through websites or mobile apps. Online stores offer 24/7 availability, global reach, and bear lower operating costs than brick and mortar stores. Customers favor online shopping due to the ease of comparing products and prices across various stores without having to physically visit.
Competition in online retailing is fierce. To succeed, you need a reliable logistics network to ensure fast, efficient delivery and a website with a smooth user experience.
Ecommerce platforms like Shopify provide the tools to get started. From website building and product listings to payment processing, these platforms make it easy for anyone to start selling and making money online without requiring technical skills.
Consider the success stories of Floof Cotton Candy, a Shopify store started by a single mother, or Fly by Jing, a Chinese condiment brand created to challenge the perceptions around Chinese food in the US. Both entrepreneurs used e-tailing to reach new customers and grow their brands beyond local markets.
Marketplaces
Marketplaces like Amazon, Etsy, and eBay are e-tail platforms where sellers can reach millions of potential customers without managing their own inventory. These selling sites function as search engines where many buyers start their product searches, and thus they can give seller listings valuable exposure.
Selling on marketplaces gives you instant access to a large, pre-existing customer base. On platforms like Amazon or Etsy, your products can reach customers without any investment in ads or digital marketing strategies.
That said, making your brand stand out among thousands of competitors requires a lot of effort. You also have limited control over the design and experience of your store, and you don’t own your customer data, making it harder to build long-term relationships with your buyers.
That’s why many e-tailing businesses combine selling on marketplaces with their own Shopify store. Sales channels allow you to sync inventory and sales between the platforms and benefit from marketplace traffic while maintaining control over your branding and customer relationships.
Subscriptions
A subscription service lets customers pay a set price at regular intervals in exchange for products or services. In ecommerce, subscriptions extend to industries such as food and beauty products.
Subscriptions are a powerful tool for building customer loyalty and generating recurring income. They ensure consistent repeat purchases, allowing e-tailers to better forecast sales and plan inventory. A subscription business model can also open opportunities for upselling and cross-selling, helping boost average order value, all while keeping the customer experience personalized.
If you’re looking to grow your business, Shopify’s platform makes it easy to offer subscriptions. For example, Shopify brand Cocofloss, a subscription-based oral care company, sets itself apart by making dental hygiene more enjoyable. Each subscription box includes new flavors, colors, and designs, making it fun for customers.
Social commerce
Social commerce uses platforms like Instagram and TikTok to sell products directly within each app, allowing buyers and sellers to interact in real time. They offer native shopping features, such as in-app checkout and shoppable posts, letting customers buy products without leaving the platform.
Statista expects this type of digital commerce to generate $700 billion in global sales in 2024, covering 20% of all ecommerce. Shopify Starter plan provides an affordable way for e-tailers to sell directly to social media audiences.
A downside of social commerce is that you don’t own the audience. If your social media account is suspended or deleted, all your customers are lost. That’s why it’s often best to combine social commerce with your own website to ensure you maintain control over your customer relationships.
DBL Jewelry, founded by Liz Portio, is a great example of a social commerce success story. With just $40 in startup capital, Liz used TikTok to build a following of more than 2 million people, growing her business to $1.2 million in just three years.
Auction sites
Auction sites like eBay are digital marketplaces where buyers engage in competitive bidding for different kinds of products, from rare collectibles to everyday items.
The excitement of auction sites comes from their unpredictability. Buyers might win items at prices far below retail, while sellers stand to benefit from bidding wars that drive prices higher than expected.
Both buyers and sellers need to be vigilant about potential fraud or misrepresented items. Winning bids are binding, which can sometimes lead to buyer’s remorse or overpayment in the heat of bidding.
Despite these challenges, auction sites thrive as a unique alternative to standard ecommerce platforms. You can launch a live auction on your Shopify ecommerce store with the help of Auction Pro.
Examples of e-tailing
Kirrin Finch
Brooklyn-based Kirrin Finch creates gender-defying clothing inspired by menswear, designed to fit women and non-binary bodies. It makes its garments from eco-friendly fabrics and produced through ethical and sustainable practices.
Kirrin Finch’s growth has been fueled by its partnership with Shopify, which provides tools to manage its online store, process orders, and scale operations. With Shopify handling ecommerce logistics, the founders can focus on the core business functions.
As a result of its partnership with Shopify, Kirrin Finch has grown into a leader in the gender-defying fashion category.
We Make Goods
We Make Good is an Irish social enterprise brand that partners with emerging Irish designers to create its products in an environmentally friendly way.
The brand collaborates with social organizations, providing employment opportunities and skills training to those who might otherwise struggle to find work. Shopify’s platform powers the brand’s online store, helping it showcase and sell its products to a global audience.
Benefits of e-tailing
Market size
eMarketer expects the global ecommerce market to cross $6 trillion in sales worldwide in 2024. By 2027, it’s projected to grow by 33%, to $8 trillion. This growth opens doors for online businesses of all sizes to expand their customer base.
Imagine turning a $3,000 t-shirt business into a $4 million one, or making money selling your finger painting art? The growing world of ecommerce has made all this possible.
Global reach
By the end of 2024, an estimated 2.71 billion consumers will shop online, and Oberlo expects this number to grow to 2.77 billion by 2025. E-tailers can tap into this expanding global market and reach their target audience internationally without needing physical stores.
For example, Turkey-based e-tailer Bebemoss sells sustainable toys internationally, which would be nearly impossible in a traditional retail setting.
Leveraging customer data
By 2029, nearly all Americans and half of the world will shop through online platforms, providing e-tailers access to vast amounts of data on their customers. This data can be used to refine product selections, personalize marketing, and predict customer preferences.
Personalization helps with repeat purchases and customer retention. For example, Canadian skin care brand Omy Laboratories saw a 60% jump in web traffic and a 35% increase in repeat customers after offering a more personalized shopping experience through Shopify’s platform.
Cost advantages
E-tailing offers clear cost advantages over brick-and-mortar stores. Forty-seven percent of retail leaders said they’re expecting a focus on ecommerce profitability to drive operating margin increases in 2024.
By using automation tools for order processing, inventory management, and customer service, e-tailers can reduce labor costs and run their operations more efficiently.
Growth of mobile shopping
E-tailers can increase sales by taking advantage of the growing trend of mobile shopping: 79% of smartphone users have bought items such as clothing, electronics, and daily essentials directly from their mobile devices.
This shift toward mobile commerce is fueling huge growth. eMarketer expects mobile sales to reach $543 billion in the US by 2024, making up 45% of online retail sales.
To succeed in retail nowadays, you must have a mobile-friendly website with detailed product information and high-resolution images.
Start your e-tailing journey with Shopify
E-tailing is reshaping retail, allowing anyone to start a business without the need for a physical storefront. Whether you’re a local artisan expanding beyond your neighborhood or a sustainable brand looking to sell eco-friendly products globally, the digital marketplace opens new doors for growth.
Shopify provides everything you need to launch and scale your business. With features like customizable website templates, secure payment options, and built-in marketing tools, you’ll have the resources to grow your brand and succeed online.
E-tailing FAQ
What is an example of an e-tailer?
Amazon is a prime example of an e-tailer. It’s an online platform that sells retail products directly to consumers through its website and mobile app.
What is the difference between ecommerce and e-tailing?
E-tailing refers to the online selling of retail goods directly to consumers. E-tailing is a subset of ecommerce, and it’s focused on business-to-consumer (B2C) retail sales.
What are the major issues in e-tailing?
- Customer acquisition and retention
- Logistics and supply chain management
- Handling returns efficiently
- Maintaining robust technology infrastructure
- Competition from traditional retailers
- Cybersecurity and data privacy
