How Technology Is Changing Ecommerce

Guides & Advice
July 16, 2020
Guides & Advice
How Technology Is Changing Ecommerce

The technology of the last decade has transformed how we shop today. Only a couple of decades ago, it was hard to imagine that one could start a retail business without having to rent a physical space and buy inventory. 

In 1991, the Internet was opened to the public, making online shopping possible for anyone. From then on, millions of businesses have put down roots at websites. Amazon and eBay are the two companies that revolutionized ecommerce. 

Amazon was one of the first ecommerce websites to start selling online. Since its launch in 1994 by Jeff Bezos, Amazon has come a long way from its modest start as an online bookseller to a global ecommerce giant. eBay was the first website that enabled customers to bid on each other’s used products. It was an innovative approach at that time, as not just entrepreneurs, but anyone could sell items online. 

In 1998, PayPal emerged as a global online payment company that provided payment processing for online vendors. With the PayPal payment gateway, customers could make secure online financial transactions in multiple currencies. 

While the internet and online payment services made it cheaper and easier to start and run a retail business, building an online store still required significant investments. The introduction of ecommerce platforms in the 2000s reduced these investments by miles making online commerce even  more accessible. Today you can launсh a store for as much as $30.

In recent years, mobile computing has begun to rise, as more and more people are using their mobile devices to access ecommerce stores. In 2001, Amazon introduced its first mobile website, starting a mobile commerce boom. According to a Statcounter report, in 2016 mobile web usage outperformed desktop usage. 

As you can see, advancements in technology keep pushing merchants to provide cutting-edge shopping experiences and find ways to spend less and sell more. Where is the market going now? 

The latest top ecommerce technology trends that help to cut spending and provide superior user experience are cloud computing, headless commerce, and PWA (progressive web app). Let’s talk about each technology in detail.

Cloud computing

Cloud computing is here to accelerate the ecommerce revolution. Within the next few years, everything from software to data will be accessible via the cloud. By the end of 2020, a striking 83% of all computing will be stored on cloud-enabled virtual environments. 

The merchants have started adopting cloud computing solutions, as it enables them to pay-as-they-use, significantly reducing costs. Cloud ecommerce platforms have become the ideal solution for online commerce companies that are planning to extend their infrastructure. A cloud-based platform is able to deal with scalability challenges, and automate the manual process of ordering, inventory, and fulfillment. 

What is cloud computing? 

Cloud computing can be determined as a process of outsourcing data centers including storage, servers, databases, applications, software to a remote service provider typically over the Internet (“the cloud”) on a pay-as-you-go basis. Cloud-based service is hosted on the vendor’s servers and accessed through a web browser.

With cloud-based ecommerce platforms, online businesses can reduce upfront costs, as they simply pay for cloud services they use and can add or delete these services when required. In their turn, providers of cloud services can benefit from providing the same services to a large number of customers.

The cloud computing software can be categorized into three different models generally known as.

  • Public Cloud: This is the most traditional Cloud model. In this case, the data centers are shared between numerous customers. They are typically regarded as pay-per-use services. These services encompass applications for transaction management. Eg: Amazon, Google. 
  • Private Cloud: Private cloud services are managed by a single user, an infrastructure of inner users or a separate organization. The services and security aspects are also updated regularly. Eg: Intranet, VMware.
  • Hybrid Cloud: Hybrid refers to a combination of both Public and Private Cloud. It includes the advantages of both public and private environments. 

The term ‘cloud computing’ includes three main services: IaaS (infrastructure as a service), SaaS (software as a service), PaaS (platform as a service). Here’s an excellent visual analysis from Gartner. They analyzed the main characteristics of cloud services highlighting with yellow those that you manage and highlighting with orange those that the vendor manages.

IaaS vs PaaS vs Saas comparison
IaaS vs PaaS vs Saas comparison

With SaaS, everything is handled by the service provider. With PaaS, you control the application level and data, while IaaS customers control everything from the OS level upwards.

How the ecommerce industry is leveraging cloud technology

The ecommerce industry has started embracing cloud technology to save upfront costs, expand their business, and benefit from innovations. Leveraging a robust, flexible, and scalable enterprise cloud technology for your ecommerce business is a winning solution. Cloud computing offers a number of benefits:

  • Cost

A lot of retail companies have decided to move to the cloud-based ecommerce service due to significant cost savings. First of all, a cloud-based solution usually has a considerably lower entry fee. Secondly, with cloud computing, you only pay for what you use. The possibility to pay per use allows you to scale down the unnecessary resources and not pay for them if this is what your business needs. 

  • Scalability

Scalability is a great benefit of cloud-based ecommerce solutions. If you expect that your business will increase in the near future, it’s essential to scale your online store as it grows. Cloud offers the possibility to upscale or downscale depending on your range of products, requirements, and traffic. When business needs are growing, you can simply add cloud resources to enlarge your storage volume. When the increased needs are reduced then you can scale back down to your initial configuration.

  • Deployment

Easy deployment is one of the cloud service’s greatest benefits. Customers can generally begin using cloud-based hosting in just minutes. This can be very useful for retail companies in the ever-changing ecommerce market. 

  • Accessibility 

Another advantage of cloud service is accessibility. You just need to have an internet connection to access your data from virtually anywhere in the world. Having the possibility to access data at your fingertips helps to improve functionality and promote innovation. 

Employees have easy and fast access to information regardless of where they are, either walking around the shop or driving on the road. Furthermore, organizations can immediately recover the database in case of emergencies, such as natural disasters or electricity cuts.

  • Performance

Cloud companies set up their data centers with a high-performance computing infrastructure that ensures low network waiting time for your website.

If you make a decision to apply a cloud-based ecommerce solution, one of the best options is Magento Commerce Cloud. Learn more here:
Choose Magento
Magento Commerce Cloud: Features And Benefits

Headless commerce

Over the past few years,  headless commerce has begun to draw attention across all the key ecommerce platforms, as it can provide exceptional flexibility and advanced customization. Shopify, BigCommerce, and Magento platforms have already integrated headless commerce, which is a piece of evidence that the headless approach is on the verge of widespread implementation. 

What is headless commerce and how does it work?

The term headless commerce basically describes a software architecture that separates the front-end (or the “head”) from the back-end of an ecommerce application. This software architecture enables each part of the software to function autonomously so that modifications on one end do not require modifications on the other end. 

In a headless system, API  (application programming interface) serves as a bridge of communication between the front-end layer and the back-end layer to which you can add as many heads as you need ( heads being customer touch-points). The front-end system sends an API query to the back-end system to process the order. At the same time, the back-end system is sending another API query to the front-end system to display the status of the order to the customer. 

With headless commerce, you have an opportunity to design the front-end of a store with any CMS ( content management system ) such as WordPress, Drupal, and join it to an ecommerce back-end. It fully separates the presentation layer of your ecommerce website from the business operations such as inventory management, resource planning, payment processing, product management, order fulfillment, and more.

A headless approach allows you to smoothly deal with the content section of your online store while at the same time introducing architectural flexibility. Therefore, customer-centric alterations, which only influence the presentation level can occur faster because they don’t demand alterations to the application level.  

Headless commerce vs traditional ecommerce

In comparison, the traditional commerce model has a predefined front-end that is joint with the back-end, thus you have to implement an update to the entire system. In a traditional approach, changes can require updates to both the front-end and back-end layers, which can turn even small projects into painful experiences. Here’s a complete comparison between headless and traditional approaches:

Front-end development1. Design limit2. To edit the database, code, and the platform is time-consuming.1. No design limit. Just need to make an easy API request2. Development of frontend presentation from scratch
Flexibility and adaptabilityPre-defined experiences for both customers and adminsProvide your own experience for both customers and admins
Customization and personalizationFront-end level is joined with back-end level, resulting in little room for customization Limitless customizationChanges can be easily made in presentation level

The ways headless technology is transforming commerce 

The headless commerce technology has a significant impact on ecommerce businesses and customers.

Headless commerce offers endless customization and advanced personalization

A monolithic software determines how a front-end should be structured. By adopting a headless solution, you can design the user interface from scratch and include your own company’s look-and-feel without the necessity to comply with a templated layout. A headless approach enables endless customization to create a unique brand identity. While the presentation and application level are two independent systems, customization can be done simultaneously. 

With a headless approach, ecommerce businesses can personalize the content based on demography, gender, location, age, and engage customers while they are surfing on the store through product demonstration, blogs, images, and more. For instance, marketing teams could run ongoing back-end promotion campaigns for obtaining the highest standards of customer personalization without impeding shoppers who are using the front-end search function. 

With headless commerce, you get reduced time to market and development efficiency 

With a decoupled architecture, store owners are able to make quick adjustments and innovate in a fast way, instead of maintaining a full-stack software. As customer technology changes, you can catch up with demand and release new transactional touch-points without having to redeploy your entire ecommerce platform. 

The development process also becomes much more effective as front-end and back-end development teams can work in parallel. You can implement new functionalities and integrations with far less time as you don’t have to reboot your entire system. With headless technology, the content loading will be much quicker and the system will be able to support more traffic in comparison to a monolithic software.

Headless commerce allows you to seamlessly integrate your store with third-party systems

The headless technology is API driven, so you can seamlessly integrate with most third-party systems, such as ERP (enterprise resource planning), PIM (product information management), CRM (customer relationship management), CMS (content management system), marketing automation tools, and more. Once a third-party system is integrated with a headless platform, APIs enable software platforms to facilitate easy connections and data transmission. 

Headless commerce can save money to your business in long-term 

At first, it seems that operating a headless commerce platform is more expensive in comparison to traditional ecommerce. Online businesses should look in the long run. Of course, in the beginning, you need to invest in the front-end development costs to create a unique digital sales channel. However, you should take into account that when developers build customization into the front-end, you will eventually spend less money on sales and marketing campaigns. 

Magento is the leading choice of retailers all over the world for the back-end of a headless website. Learn more about the advantages and disadvantages of the Magento platform:
Choose Magento
Pros and Cons of Magento Ecommerce Platform: Is Magento Worth Your Money?

Progressive Web Apps (PWA) 

The last technology that has a significant impact on the ecommerce market is PWA (Progressive Web App), a game-changing trend that represents the next evolution in mobile-driven commerce. Today the merchants don’t have to face the dilemma of selecting between developing a store or a mobile app to get more traffic as now they can adopt PWAs which combine the best of both mobile apps and websites.

Ecommerce leaders such as Alibaba and AliExpress are focusing on improving user experiences with PWA technology. Prominent brands claim that PWA has allowed them to grow their business two times faster and reduced expenses in comparison to an ecommerce site. 

Check out the list of seven PWA ecommerce companies that gained tremendous success.
Guides & Advice
Progressive Web App Ecommerce Examples to Inspire Your Own

Understanding PWA

Progressive Web App is a web technology of developing websites that feel like applications while functioning as a normal web app on browsers. The fundamental idea behind this mobile technology is to provide a superior user experience on all devices. 

Alibaba PWA
Alibaba PWA

The idea of PWA dates back to 2015 in an article written by Alex Russell, a Google senior engineer. He proposed a new web application technology called Progressive Web Apps and created a set of requirements web apps should have to get qualified as a PWA. 

Progressive Web Apps can be a great alternative to the ever-expanding number of native applications, as they reduce development costs, are easy to build, provide an engaging experience, and are incredibly fast. Due to service workers, PWAs can also work offline. A service worker is a JavaScript code that works in the background of an application and runs in response to events like network requests, cache material, push notifications, connectivity changes, store data sync, and more. 

Reasons why PWA technology is the future of mobile commerce 

The number of mobile users has been growing by leaps and bounds, and it’s projected that more purchases will be made via mobile devices than desktops by 2021. Most mobile phone users don’t buy from apps frequently, and this is where PWA steps back in. 

PWAs make the mobile experience as user-friendly as possible and are expected to dominate the ecommerce market for the below-discussed points:

  • With PWA, no installation is required and customers can easily access the application using a pre-installed web browser. 
  • PWA technology reduces the device storage space.
  • Can be accessed on any browser including Google Chrome, Opera Mini, Mozilla Firefox, and more. 
  • Supports push notifications feature.
  • Provides native app-like experience, making your store truly compelling.
  • PWAs come with the ability of caching, which results in faster page loads.  
  • Limits the bounce rate as compared to mobile websites.
  • Operates effectively across all devices.
  • Works offline in the background. If your customers are offline or have poor networks, PWAs would offer them basic navigation. 
  • PWAs let customers add the site to their home screen.
  • In comparison to traditional websites, PWAs are more responsive and are highly interactive. 
  • A web stack for PWA development is more cost-effective compared to native apps. 
  • PWA is web-based, which means it can be crawled by search engine spiders, delivering better SEO.
  • Accessed via https to guarantee safe content and prevent malicious attacks

The difference between PWA, native app, and responsive website

Here’s a table that compares the PWA vs native app vs responsive website:

PWANative appResponsive website
Offline mode+
Push notifications++
Home screen access++
No download required++
Works across all devices++

Adopting a PWA is a future-proof solution, as this technology introduces multiple benefits to the industry of app development.

When it comes to developing a PWA for your store, there are two major competing projects: Vue Storefront vs Magento PWA Studio. Read more here:
Guides & Advice
Vue Storefront vs Magento PWA Studio: What’s Better For Your Store?

 What is the future of ecommerce?

Technology is changing the ecommerce market for both merchants and shoppers. It is crucial for your business to stay on top of modern technology for the best ecommerce experience. The future of electronic commerce is certainly going to be full of striking changes and innovations.

Headless commerce, PWAs, and cloud-based services are here to stay and are the future of online shopping. From attracting new customers to reducing expenses, these technologies will take your business to a new level. 

To assess your budget effectively and avoid any surprises in the process, check out our article about the Magento total cost of ownership.
Choose Magento
Magento Commerce and Open Source Total Cost Of Ownership

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Nency Kundra

Thanks for sharing this content. I think online commerce completely changed the face of eCommerce and helped companies to improve customer service, generate fresh leads, and drive more conversions. In this post, you have clearly explained that how technology is changing the eCommerce industry.

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