Ecommerce 2024: Platforms, Payments, and New Growth

Global retail ecommerce is on track to surpass $6.3 trillion in sales in 2024, accounting for roughly 22% of total retail, according to eMarketer. In China, mobile-first shoppers now drive more than two-thirds of online transactions; in the U.S., Walmart’s ecommerce sales have grown more than 20% year over year; and short-video platforms like TikTok are turning entertainment into instant checkout. The stakes—and the opportunities—have never been higher.

Ecommerce is the digital buying and selling of goods and services across web, mobile, social, marketplaces, and connected devices. It matters now because the infrastructure stack—payments, logistics, ad tech, AI, and social discovery—has matured to the point where any brand can sell globally and fulfill same day, while consumers demand effortless, personalized, and trustworthy shopping wherever they are.

Understanding Ecommerce

Ecommerce spans several models and channels:

• Direct-to-consumer (DTC): Brands sell directly via their own sites or apps (e.g., Nike.com, Warby Parker).
• Marketplaces: Aggregators where third-party sellers list and transact (Amazon, eBay, Alibaba, Mercado Libre).
• Social commerce: In-app shopping within social platforms (TikTok Shop, Instagram Shops, Pinterest).
• Omnichannel retail: Blending online and offline with services like buy online, pick up in store (BOPIS) and curbside pickup (Walmart, Target).
• B2B ecommerce: Digital ordering for businesses (Salesforce Commerce Cloud, SAP Commerce, Alibaba.com).

Ecommerce differs from “just a website” by integrating the full commerce lifecycle: discovery, merchandising, pricing, payments, fulfillment, returns, and customer service—backed by real-time data and automation.

How It Works

Under the hood, ecommerce is an orchestration of services that turn intent into delivery.

The core technology stack

• Storefront and CMS: Platforms like Shopify, Adobe Commerce (Magento), BigCommerce, and headless solutions such as commercetools decouple the front end (React/Vue/Next.js storefronts) from backend services for speed and flexibility.
• Catalog and merchandising: Product information is managed via PIM systems (Akeneo, Salsify), feeding consistent data to web, app, marketplace, and social channels.
• Payments: Payment gateways and processors (Stripe, Adyen, PayPal) handle tokenization, fraud checks, 3DS authentication, and wallet integrations (Apple Pay, Google Pay). Digital wallets now account for over half of global ecommerce payments (Worldpay’s 2024 Global Payments Report).
• Checkout and conversion: Accelerated checkout (Shop Pay, PayPal One Touch) reduces form fill friction; buy now, pay later (BNPL) providers like Klarna, Affirm, and Afterpay offer installment options that can lift average order value.
• Logistics and fulfillment: Inventory, order management, and routing across warehouses and stores (ShipBob, Deliverr, Manhattan Associates) determine shipping speed and cost; last mile carriers (UPS, FedEx, USPS, DHL, local couriers) handle delivery.
• Marketing and measurement: Performance ads (Google, Meta), retail media (Amazon Ads, Walmart Connect), affiliate networks, email/SMS (Klaviyo), and analytics (GA4, Amplitude) drive and measure demand.
• Customer service and post-purchase: Support is handled by help desks (Zendesk, Gorgias), return portals (Loop, Narvar), and loyalty engines (Yotpo, LoyaltyLion).

Data and AI as the connective tissue

The modern ecommerce stack is data-first. Customer data platforms (CDPs) unify first-party data for personalization and audience targeting. AI models recommend products, optimize pricing and promotions, and automatically generate content. For example, Shopify’s AI tools can draft product descriptions, and Amazon uses machine learning to rank products, detect fake reviews, and forecast demand—contributing to more than 7 billion items delivered to Prime members with same-day or next-day speed in 2023.

Key Features & Capabilities

What makes ecommerce powerful is a set of capabilities that compress friction at every step.

1) Frictionless checkout and payments

• One-click and wallet-based payments reduce cart abandonment (which still averages around 70%, per Baymard Institute analyses).
• Shop Pay has been shown to lift conversion versus standard checkouts; Shopify reports it outperforms other accelerated checkouts by up to 10%.
• BNPL continues to gain share online; Adobe reported double-digit growth in BNPL usage during the 2023 holiday season, and providers claim higher conversion and basket sizes for participating merchants.

2) Omnichannel fulfillment options

• BOPIS and curbside pickup provide near-instant gratification. Adobe’s holiday data has shown pickup options surging to around one in five online orders during peak periods.
• Ship-from-store turns retail locations into micro-fulfillment nodes, reducing last-mile costs and time.
• Returns automation offers printless, boxless drop-off and instant store credit to keep revenue on-platform.

3) Personalization and merchandising intelligence

• Recommendation engines and dynamic bundles drive higher order values. McKinsey has estimated personalization can lift revenues 10–15% for retailers that execute well.
• Visual search and AR try-on (e.g., Sephora’s virtual try-on, IKEA’s room visualization) reduce uncertainty and returns.
• Real-time pricing and inventory visibility improve customer trust and conversion.

4) Composable and headless architectures

• MACH (Microservices, API-first, Cloud-native, Headless) approaches let brands swap best-in-class components without replatforming.
• Progressive web apps (PWAs) deliver app-like performance on the mobile web, vital in regions where native apps face adoption friction.

5) Trust and safety at scale

• Built-in fraud detection, bot mitigation, and identity verification reduce card-not-present (CNP) fraud, which costs merchants and issuers tens of billions annually.
• Review authenticity and seller compliance are now regulated in many markets, pushing platforms to invest in content integrity.

Real-World Applications

Ecommerce’s impact is easiest to grasp through concrete examples across categories and regions.

Marketplaces: the dominant channel

• Amazon: More than 60% of sold units now come from third-party sellers. Its Fulfillment by Amazon (FBA) program and regionalized same-day network compress delivery times. Buy with Prime, which extends Prime checkout and delivery to non-Amazon sites, has reported an average 25% conversion lift for participating merchants.
• Alibaba/Taobao/Tmall: In China, Alibaba remains a key destination for branded stores, while live shopping on Douyin (TikTok’s China sister) has reshaped discovery-to-purchase journeys.
• Mercado Libre: In Latin America, it combines marketplace, payments (Mercado Pago), and logistics (Mercado Envios) to reduce friction in historically underbanked and under-delivered markets.

Retailers mastering omnichannel

• Walmart: U.S. ecommerce grew over 20% year over year in 2024, driven by grocery delivery and store-based fulfillment. Walmart Connect’s retail media offers brands closed-loop attribution.
• Target: Same-day fulfillment via Drive Up and Shipt has become a core value proposition, blending convenience with loyalty.
• Kroger and Instacart: Partnerships extend grocery delivery beyond first-party channels, with Instacart rolling out AI-driven in-app search and conversational shopping.

DTC brands evolving their playbooks

• Nike: DTC digital, anchored by the Nike app ecosystem and membership, complements wholesale for profitable growth. The brand uses data to personalize offers and manage inventory across channels.
• Glossier: Rebuilt its ecommerce foundation and expanded into wholesale with Sephora while keeping a strong DTC identity—illustrating hybrid strategies.
• Allbirds and Warby Parker: Both leaned into physical stores as acquisition and service hubs, using online for replenishment and long-tail SKUs.

Social commerce and discovery-led shopping

• TikTok Shop: By integrating short-form video, creator storefronts, and in-app checkout, TikTok has rapidly grown GMV in multiple markets. Small brands report outsized reach-to-sales conversion when creators demonstrate products live.
• Pinterest: Shopping surfaces let users pivot from inspiration to product pages, and catalog ingestion gives merchants shoppable pins with native checkout in some regions.
• Instagram and Facebook Shops: Meta continues to streamline in-app checkout, partnering with processors to reduce drop-off.

Cross-border and low-price disruptors

• Shein and Temu: Ultra-low pricing and algorithmic merchandising have driven massive U.S. and EU penetration with direct-from-factory shipping. Their rise spotlights trade-offs between price, delivery times (often 7–15 days), and sustainability considerations.

Industry Impact & Market Trends

Ecommerce is reshaping value chains, advertising, and logistics.

The macro picture

• Scale: Global retail ecommerce >$6.3T in 2024; projected to approach $8T by 2027 (various industry forecasts).
• Penetration: The U.S. hovers around 15–16% of retail online, whereas markets like the U.K., South Korea, and China have significantly higher online shares.
• Mobile first: Mobile accounts for the majority of ecommerce traffic globally and a growing share of transactions—often exceeding 70% in Asia.

Retail media becomes a profit engine

• Amazon Ads crossed tens of billions in annual revenue, becoming a core profit driver.
• Walmart Connect, Target Roundel, and Instacart Ads offer brands high-intent placements and closed-loop measurement. Retail media networks are forecast to be a $100B+ global category by mid-decade.

Payments shift to wallets and alternative methods

• Digital wallets exceed 50% of ecommerce payments globally; bank transfers and account-to-account (A2A) rails (e.g., India’s UPI, Brazil’s Pix) are growing fast and undercut card fees.
• BNPL penetration is rising among younger demographics, with providers integrating deeper into merchant checkouts and wallets.

Logistics and same-day expectations

• Consumers increasingly expect delivery options from same day to economy. Amazon, Walmart, and Target have built regionalized, store-based hubs to match expectations at lower costs.
• Third-party logistics (3PL) providers like ShipBob, GXO, and Flexport are expanding services from pick/pack to returns consolidation and cross-border compliance.

The rise of composable commerce

Mid-market and enterprise brands are adopting composable stacks to escape monolithic constraints. Vendors like commercetools, Elastic Path, and BigCommerce’s Open SaaS, alongside Shopify’s Hydrogen/Remix front-end tooling, let teams ship faster and iterate without replatforming every few years.

Challenges & Limitations

The momentum is real—but so are the headwinds.

Acquisition costs and attention fragmentation

• Customer acquisition costs (CAC) on Meta and Google have risen as privacy changes (iOS App Tracking Transparency), competition, and saturation push up CPMs. Many DTC brands report 20–60% higher CAC versus 2020.
• Short-form video compresses discovery but increases the creative production burden; winning requires continuous testing.

Actionable response: Diversify channels (SEO, affiliates, influencers, retail media), build first-party data via loyalty and email/SMS, and improve onsite conversion to make each click count.

Logistics costs, returns, and margins

• Returns are costly: the National Retail Federation reported total U.S. returns at around 14–15% of sales, with online return rates higher (often 17–18%) and apparel significantly above average.
• Free shipping and free returns set consumer expectations but pressure margins and sustainability goals.

Actionable response: Use fit tools, detailed sizing guides, and virtual try-on to reduce bracketing; offer instant credit to keep refunds on-platform; and test return policies that balance experience with cost.

Fraud, compliance, and trust

• Card-not-present fraud represents tens of billions in global losses annually. Friendly fraud/chargebacks remain a pain point.
• Regulatory shifts—EU’s Digital Services Act (DSA), Digital Markets Act (DMA), evolving product safety standards, and sustainability reporting—raise the bar for compliance, especially for marketplaces and cross-border sellers.

Actionable response: Layer risk scoring, 3DS, and behavioral analytics; invest in content authenticity checks; and centralize compliance data across SKUs and regions.

Technical debt and talent gaps

• Legacy platforms slow iteration, while composable architectures require integration expertise and strong product management.
• Data fragmentation across marketing, commerce, and service systems undermines personalization and attribution.

Actionable response: Start with incremental modernization—API layers, CDPs, and modular front ends—before full replatforming; define data contracts early and assign clear owners.

Sustainability and ethical considerations

• Packaging waste and last-mile emissions draw scrutiny. Ultra-fast fashion raises concerns about labor standards and environmental impact.
• Consumers increasingly reward brands with transparent, credible sustainability commitments.

Actionable response: Right-size packaging, consolidate shipments, surface carbon information at checkout, and invest in repair/resale programs (e.g., Patagonia’s Worn Wear, IKEA’s buy-back).

Future Outlook

Several developments will define ecommerce for the next three to five years.

AI-native commerce

• Generative AI will move from copywriting to full-funnel orchestration: auto-generated product imagery and video, dynamic storefronts per user cohort, conversational shopping that understands intent and constraints, and autonomous agents handling service and replenishment.
• Early results: Retailers piloting AI-guided search and chat report double-digit improvements in conversion and support deflection. Expect more AI co-pilots for merchant operations—forecasting, merchandising, and fraud response.

Payments innovation and lower costs

• Account-to-account rails will gain share in more markets, with variable recurring payments enabling subscription and one-tap experiences without cards.
• Wallets will expand loyalty and identity features, further compressing checkout friction and fraud.

Commerce everywhere

• Connected TV (CTV) shoppable ads, in-car commerce, and voice assistants will offer new entry points. Live shopping will continue to scale outside China as logistics and creator monetization improve.
• B2B ecommerce will accelerate as procurement digitizes; expect buyer portals with real-time pricing, inventory, and financing embedded.

Supply chain resilience and nearshoring

• Retailers will diversify manufacturing and inventory positioning to reduce geopolitical and disruption risk, increasing use of nearshored facilities and micro-fulfillment centers for speed.

Regulation and trust as differentiation

• Platforms that invest in safety, transparent reviews, and sustainability reporting will win consumer trust—and retailer participation—amid stricter rules.
• Expect clearer standards for AI usage in content and recommendations, plus more robust protections against counterfeits.

Actionable Playbook for 2024–2025

If you’re building or optimizing ecommerce, prioritize:

1. Speed to value

• Adopt an open, modular platform; start with the highest-ROI pieces (checkout, search, and PDP speed).
• Use wallets and Shop Pay/Apple Pay/Google Pay to reduce drop-off on mobile.

2. Profitable demand

• Shift budget into retail media where you can tie ad spend to SKU-level sales.
• Build owned channels: email, SMS, and loyalty with meaningful rewards and exclusive access.

3. Conversion and retention

• Implement A/B testing on PDPs, offer bundles/subscriptions, and deploy smart cross-sell at cart and checkout.
• Add BOPIS/curbside if you have stores; display delivery dates and thresholds early.

4. Returns minimization

• Improve product content (fit notes, UGC photos, AR try-on); analyze return reasons and fix upstream.
• Offer exchange incentives and instant credit to keep customers engaged.

5. Data and AI foundation

• Centralize first-party data in a CDP; set privacy-safe measurement.
• Pilot AI chat for support and AI merchandising for recommendations; measure uplift against control.

Conclusion

Ecommerce in 2024 is both a distribution channel and a full-stack capability that blends technology, logistics, and media. The market’s sheer scale—over $6 trillion and growing—reflects a consumer mandate for convenience, price transparency, and trust. Platforms like Amazon, Shopify, Walmart, and TikTok have proven that speed, discovery, and payments can coexist to produce step-change growth. At the same time, rising acquisition costs, complex compliance, and the real costs of returns and fraud demand sharper execution.

The winning formula is clear: build on modular, data-driven architecture; compress friction at checkout and fulfillment; shift media dollars to measurable, high-intent placements; and ground every decision in first-party data and rigorous testing. Add a credible approach to sustainability and authenticity, and you’ll turn transactions into durable relationships.

Looking ahead, AI-native experiences, alternative payments, and commerce that follows the customer across screens and channels will redefine the shopping journey. The brands and retailers that move first—modernizing their stack, partnering smartly in marketplaces and retail media, and operationalizing AI—will set the pace for the next decade of ecommerce growth.