Ecommerce: What it is and how it works

Ecommerce is now a structural driver of the economy and competitiveness. In 2025, global online retail sales will reach around $6.4 trillion, with the digital channel accounting for more than 20% of total retail sales; growth is moderating but remains positive.

In Spain, ecommerce turnover reached €25.752 billion in Q1 2025 (+18.2% year-on-year), after closing Q4 2024 with €25.742 billion (+13.4%).

What is ecommerce?

Ecommerce is the purchase and sale of products or services over the Internet, covering the entire cycle: attraction, registration and shopping cart, payment, logistics and returns, and after-sales.

Brief evolution

From EDI in the 1970s to web catalogs in the 1990s (Amazon, eBay), the sector has become more sophisticated with marketplaces, mobile payments, social networks as a sales channel, headless architectures, and intensive use of AI (semantic search, recommendations).

Advantages and benefits of ecommerce

• Global reach and precise segmentation.
• Scalability with less fixed structure.
• 24/7 availability and automation.
• Actionable data to improve offerings, prices, and margins.
• Integration into omnichannel models (BOPIS/Click&Collect).

Types of ecommerce

By transactional relationship

• B2C: business → consumer.
• B2B: business → business (SaaS, supplies).
• C2C: second-hand and P2P platforms.
• C2B: freelancing, creators.
• D2C: brand → consumer, experience and data control.

By revenue model

• Direct sale (one-off).
• Subscription (recurring).
• Dropshipping (no own inventory).
• Marketplace (commission/intermediation).
• Freemium/pay-as-you-go (digital/services).

By channel ownership

• Own (branded online store).
• Third party (marketplaces, social shopping).
• Hybrid (combination for coverage and control).

How to set up an ecommerce business step by step

1) Research, strategy, and pricing

• Define ICP (ideal customer), jobs-to-be-done, and value proposition.
• Validate with searches, surveys, competitor analysis, and smoke tests (landing + waiting list).
• Structure pricing according to perceived value, elasticity, and costs (including logistics and returns).

2) Choice of platform and architecture

• Shopify: SaaS, fast time-to-market, app ecosystem.
• WooCommerce: WordPress, high flexibility and hosting control.
• PrestaShop: open-source, widespread in Europe, mature modules.
• Adobe Commerce (Magento): enterprise, complex catalogs, B2B.
• Consider headless/composable if you need performance, PWA, multiple front ends, or deep integrations.

3) Compliance and security

• GDPR (privacy/cookies), LSSI, clear return policy.
• PSD2/SCA in payments, TLS, WAF, backup, and vulnerability management.
• VAT: check OSS/IOSS if you sell in the EU.

4) Catalog, content, and on-page SEO

• Clustered architecture (categories → subcategories → product).
• Product sheets with original text, own photos/videos, FAQ, and comparisons.
• Structured data (schema.org: Product, Offer, Review, FAQ) and clean URLs.

5) Technical SEO for ecommerce

• Crawling and indexing: robots.txt, sitemaps, control of facets/filters (not indexable if duplicated).
• Canonicals and pagination (rel=“next/prev” now deprecated: use canonicals and link logic).
• Internationalization with hreflang.
• Core Web Vitals and mobile performance.
• Log analysis to understand how Google crawls your templates.

6) UX/UI and conversion (CRO)

• Simple navigation, effective internal search, clear microcopies.
• Trust: reviews, seals, local payment methods, visible policies.
• A/B testing on titles, photos, badges, attribute order, and checkout.

7) Payments: methods and minimal friction

• Integrate Stripe, PayPal, Redsys, Bizum, Apple/Google Pay, and, if appropriate, BNPL.
• Auto-fill, tokenization, soft recovery after SCA.
• Multi-currency options and contextualized taxes.

8) Logistics, last mile, and returns

• Define preparation and delivery SLAs; offer pickup points/lockers and Click&Collect.
• Optimize picking/packing, sustainable packaging, and traceability.
• The average online return rate was ≈16.9% in 2024 (NRF/Happy Returns): estimate costs, anticipate return fees if applicable. National Retail Federation+1

9) Customer service and after-sales

• Self-service (Help Center/FAQ/guides), chat, and automation (email/SMS/WhatsApp).
• Loyalty programs (points, tiers), recommendations, and post-purchase cross-selling.

10) Analytics and data governance

• GA4 + BigQuery, event tagging, and funnel modeling.
• Data-driven attribution, dashboards by cohorts and margins (POAS/contribution).

Platforms and tools: how to choose

Shopify

Ideal for launching quickly with a medium catalog and app stack; strong in performance and native payments.

WooCommerce

Maximum customization on WordPress; recommended if you already manage content and SEO in WP.

PrestaShop

Open-source, widely used in Europe; good cost-control ratio if you have technical support.

Adobe Commerce (Magento)

For enterprise/B2B, complex catalogs and advanced pricing rules, multi-store, and OMS.

When to go headless?

• You need PWA, multiple front ends (web/app/kiosk), your own marketplaces, or to integrate advanced CDP/CRM/OMS.
• Technical team capable of maintaining microservices and observability.

Marketing strategies for ecommerce

SEO for ecommerce

• Keyword research by intent (informational, comparative, transactional).
• Clusters of categories and guides that answer questions and solve “jobs.”
• Internal linking and EEAT (authorship, references, transparency).

SEM and product ads

• Shopping/Performance Max with flawless feed (GTIN, attributes, availability, dynamic pricing).
• Defend brand and optimize by margin/contribution (POAS) in addition to ROAS.

Social & creator commerce

• Synchronized catalogs (Meta, TikTok, Pinterest), UGC, live shopping, and affiliation.
• Native creatives by platform and scroll optimization.

Email, SMS, and loyalty

• Automated flows: welcome, abandonment, post-purchase, winback.
• Segmentation by RFM/LTV and personalized offers.

CRO and checkout

The average cart abandonment rate is around 70%; main causes: extra costs, obligation to create an account, and friction in payment/checkout. Apply guest checkout, show costs and delivery times beforehand, reduce steps, and test forms.

Mobile-first

M-commerce already accounts for ~70% of global ecommerce (2024) and will continue to grow in 2025; prioritize mobile performance and native payments.

Internationalization and marketplaces

Glocal strategy: local prices, taxes, payment methods, and shipping. Marketplaces provide reach and trust, but watch out for commissions and cannibalization.

Essential metrics for running your business

Commercial performance

• Conversion rate (CVR), AOV, revenue/user, margin per order.
• CAC, LTV, and LTV/CAC ratio.

Advertising and channel mix

• ROAS/POAS, incremental cost, contribution per channel and per campaign.
• Attribution (data-driven) and geographic/temporal experiments.

Operations

• Preparation time, delivery SLA, incidents, and return rate.
• Stock availability, fill rate, and unit logistics cost.

Common mistakes (and how to avoid them)

1. No value proposition → summarize the “why you” in one clear sentence.
2. Ignoring margin → calculate contribution per order (product + shipping + returns + marketing).
3. Indexed facets → control filters and canonicals to avoid duplicate content.
4. Friction checkout → guest checkout, autofill, and local payment methods.
5. Promising deadlines you can't meet → define realistic SLAs and communicate them.
6. Not measuring → without KPIs and improvement cycles, there is no sustainable growth.
7. Neglecting mobile → design and test mobile-first.
8. Opaque policies → clarity on returns and exchanges reduces costs and contacts.

2025 trends to watch

AI applied to ecommerce

• Semantic search, assistants in product listings, real-time generation of descriptions and recommendations.

First-party data and privacy

• Fewer third-party cookies → more email/SMS/loyalty, modeling, and well-managed consent.

Mature omnichannel

• Unified inventory, BOPIS/ROPIS, single CRM, and warehouse/store prioritization rules.

Operational sustainability

• Eco-friendly packaging, efficient routes, and return fees to contain returns (a framework that is gaining traction).

Quick commerce and high-frequency verticals

• Growing in food and convenience, with a focus on profitability outside of large cities.

Key data and sources (updated)

• Global ecommerce 2025: ≈$6.419 trillion; >20% of retail; moderate growth.
• Spain Q1 2025: €25.752 billion, +18.2% year-on-year (CNMC).
• Spain Q4 2024: €25.742 billion, +13.4% year-on-year (CNMC).
• Average cart abandonment: ≈70% (Baymard meta-studies).
• Online returns: ≈16.9% (2024) (NRF/Happy Returns).
• Weight of mcommerce: ≈70% of ecommerce (2024), upward trend in 2025.

Express checklist to launch (and not stumble)

• Defined value proposition and ICP.
• SEO architecture (categories, filters, controlled facets).
• Product pages with original content + schema.org.
• Core Web Vitals and guest checkout.
• Local payments and frictionless SCA implementation.
• Logistics with clear SLA and visible return policy.
• Analytics (GA4 + events) and metrics dashboard.
• Active email/SMS abandonment and post-purchase flows.
• CRO plan with 2–3 tests/month.
• POAS/margin sheet per campaign.

Frequently asked questions (FAQ)

1) What exactly is ecommerce?

The online sale of products or services via the Internet, including promotion, payment, shipping, and after-sales.

2) Which platform is right for my online store?

If you're looking for speed, Shopify; if you want control and already use WordPress, WooCommerce; if you need European open-source, PrestaShop; for enterprise/B2B, Adobe Commerce.

3) How much does it cost to set up an ecommerce business?

It depends on TCO (platform, apps, gateway, logistics, marketing, equipment). Start lean and scale with evidence.

4) How do I drive qualified traffic?

SEO (categories + useful content), SEM/Shopping, social commerce/creators, email/SMS and affiliation, orchestrated with measurement by margin.

5) How do I reduce cart abandonment?

Show costs and delivery times upfront, enable guest checkout, offer native payments, and simplify forms. Continuous A/B testing.

6) What KPIs should I monitor daily?

CVR, AOV, CAC, LTV, POAS, margin per order, delivery SLA, and return rate.