E-tailing definition: Types, examples & benefits

What is e-tailing?

E-tailing, also known as electronic retailing or e-retailing, is the process of selling online through digital channels like websites and apps. Both physical stores and digital-only businesses participate in e-tail because of the benefits it can deliver, including global reach and 24/7 availability.

Where the e-tailing business model differs from ecommerce is its specific focus on the selling of goods and services to customers. In other words, e-tailing has more of a business-to-consumer (B2C) focus.

On the other hand, ecommerce encompasses all kinds of digital transactions, including business to business (B2B), consumer to consumer (C2C) and consumer to business (C2B) transactions..

In this way, e-tailing is a subcategory of ecommerce but distinct from it. Below, we’ll explain the how e-tailing works, while discussing its key benefits and real-world examples 👇

The 7 main types of e-tailing (with examples)

There are a wide range of e-tailing businesses and yours is likely to fall into one of the following seven categories:

  1. Online retailers - independent ecommerce apps and websites like ASOS, Target and Walmart
  2. Marketplaces - online platforms that bring multiple sellers and buyers together in one place, including Amazon, eBay and Alibaba
  3. Coupon providers - e-tailers offering limited-time sales events with discounted prices on specific products like Groupon and Woot
  4. Subscription-based model - e-tailers providing products that customers pay recurring fees for, like Dollar Shave Club or HelloFresh
  5. Social commerce - e-tailers using social media channels like Instagram, Facebook and Pinterest to sell their products
  6. Auction sites - e-tailers using eBay to sell their products in a specific time frame via a bidding process
  7. Online classifieds - e-tailers enabling individuals and businesses to list products or services for sale and connect with them directly, like Craigslist and Gumtree

How does e-tailing work?

Most e-tailing businesses are powered by online selling platforms that facilitate the selling and distribution of their products to consumers. Here’s how the process typically works:

1 - Create an online store

If you want to become an e-tailer, you’ll need to create your own online store. This could be a website, a mobile app or you could create both to ensure both desktop and mobile users are catered for.

2 - Upload (and manage) your inventory

Once you’ve created your online store, it’s time to fill its shelves. Uploading product images and descriptions while attaching associated pricing information is the first port of call. This will all be displayed in a user-friendly product catalogue that makes it easy for customers to browse, see other customer reviews and make purchases.

In-built inventory management tools will then help you monitor your stock levels and update product availability, ensuring you don’t undersell or oversell items.

3 - Enable secure payments

By providing a range of secure payment options, including debit and credit card as well as mobile payments like Google Pay and Apple Pay, potential customers are less likely to abandon their carts.

4 - Fulfil customer orders

You have a number of options when it comes to fulfilling customer orders. Instead of physically holding inventory in storage, many retailers opt for a dropshipping business model. This means you only have to display and sell the items, while a third party fulfils the orders, taking care of packaging and shipping.

Of course, this comes at a price, but it is widely regarded as a more cost-effective option than investing in your own storage facility, particularly in the early stages of your business venture.

5 - Provide customer support

Whether through email, live chat or phone support, you need to provide customer assistance for order-related issues, while handling customer feedback.

You should think about automating your returns to free up your own time or that of your customer service team, as these will account for lots of the enquiries you deal with.

6 - Create a digital marketing strategy

To attract people to your online store, you can choose from a wide range of strategies. Chief among these are:

  • Search engine optimization (SEO) - a free marketing strategy that helps your products appear towards the top of the search engine results page, encouraging conversions
  • Email marketing - a free marketing strategy that allows you to send offers and promotions directly to your customer base
  • Display advertising - a paid marketing strategy that gets your products in front of your target audience on social media, encouraging conversions
  • Influencer marketing - a paid marketing strategy that leverages the profiles of trusted individuals in your niche to sell your products

While you should test several of these options, it's likely that your target audience will respond to some channels better than others. Once you work out what these are, you can dedicate more budget to them and less to ineffective channels.

7 - Analytics and optimization

Once your business starts generating revenue, it’s important to use analytics to improve your performance.

E-tailing platforms provide you with this, including customer behaviour insights as well as historical and real-time internet sales data.

This allows you to understand what your best and worst-performing items are, forecast future demand and create a more targeted online marketing strategy.

6 key benefits of e-tailing

Although we covered some of the key benefits of e-tailing in the section above, here are six key takeaways:

  1. Global reach - because e-tailing uses the internet, it overcomes the geographical barriers involved in traditional retailing
  2. 24/7 availability - online stores have no set business hours, meaning customers can shop at their convenience
  3. Cost efficiency - with e-tailing, you don’t need a brick-and-mortar store and you can leverage dropshipping to keep order fulfilment costs down
  4. Data analytics - make it easier to understand user behaviour, anticipate seasonal demand, optimise customer experience and, ultimately, increase online sales
  5. Expanded product variety - because you don’t need to stock physical products as an e-tailer, you can offer a wide range of products
  6. Targeted marketing - using customer data analytics, you can understand your target demographics and create marketing campaigns personalised to them

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