EDI has been a game-changing technology since the 1980s. Since then, the software has evolved to provide companies big and small with the best automation capabilities. Meanwhile, many ecommerce solutions have sprung up in recent years, offering businesses a much-needed alternative to traditional retail channels.
Manufacturers and wholesalers looking forward to the digital transformation of their business may need clarification on these two pieces of technology. While both are lauded as “solutions,” this might not mean they’re the particular solution a company needs. While both technologies improve the electronic interchange of information for business purposes, they have different features and can be used to achieve different things.
Is EDI part of ecommerce?
Electronic data interchange (EDI) is used to facilitate computer-to-computer business processes. Therefore, it is considered a business-to-business (B2B) ecommerce technology.
Thanks to EDI, trading partners can access a standard format they can use to exchange electronic documents such as purchase orders and invoices. EDI is implemented in industries across the board, including healthcare, retail, banking, manufacturing, and high-tech. Due to its worldwide proliferation, EDI is the most commonly used B2B ecommerce technology.
What are the differences between EDI and ecommerce?
B2B ecommerce and EDI systems are both used for electronic data interchange and to streamline manual processes, but their functionality tends to differ. EDI connects with business systems directly to facilitate purchases, while ecommerce platforms improve the shopping experience.
Ecommerce solutions use electronic media such as the Internet and private communication networks to simplify customer access to goods and services. If you’ve ever purchased an item online, you’ve come into contact with an ecommerce platform.
Types of ecommerce
There are a plethora of ecommerce platforms. The most important ones are:
- B2C ecommerce: When most people think of ecommerce, this model most likely comes to mind. From booking airline tickets to purchasing clothes online, B2C ecommerce platforms can be used to sell all kinds of merchandise to the general public.
- B2B ecommerce: B2B integration solutions are used by companies to handle business transactions between each other. For example, a B2B ecommerce platform can be used by a manufacturer to offer its products to conventional wholesalers and retailers.
Other types of ecommerce platforms include:
- Business-to-Administration (B2A): This ecommerce model enables businesses to deal with administrative bodies such as governments using online solutions.
- Consumer-to-Administration (C2A): The C2A model can be used by consumers to request information and provide feedback related to the public sector.
- Consumer-to-Business (C2B): A direct reversal of the B2C model, this type of ecommerce can be used by consumers to sell products and services to companies.
- Consumer-to-Consumer (C2C): These platforms facilitate the online exchange of goods and services between consumers.
Understanding B2B ecommerce
B2B ecommerce gives businesses the same functionality that B2C platforms offer consumers. Users of B2B platforms can compare products side-by-side, reach out to sales staff, create shopping carts, select shipping options, and handle the checkout process.
Benefits of B2B ecommerce
Acquiring a B2B solution offers many advantages to businesses. Intelligent ecommerce systems can be used to recommend products and simplify future purchases using the information from previous ones. Thanks to SEO-optimized product pages, new customers can be attracted via web searches.
Other benefits of B2B ecommerce include:
- Speed: Customers of B2B platforms can purchase items at their own pace without waiting for someone on the other end to handle the purchase process.
- Upselling: B2B platforms can enhance upselling and cross-selling capabilities by suggesting items that may be relevant to customers.
- Improved customer service: Customers can contact sales staff before, during, and after a purchase to ask questions and receive help.
- Intuitive product catalogs: By directly viewing and comparing different products available, customers can make more informed purchases without having to leave the platform to look for additional information.
- Attracting new customers: The SEO optimization of a B2B ecommerce platform helps reach new customers passively without needing any action to be taken by the company that owns it.
- Marketing: B2B ecommerce platforms can gather and leverage customer data to facilitate future purchases and improve marketing capabilities.
Benefits of EDI
EDI can be used for effective system-to-system communication, thus eliminating manual data entry needs while increasing productivity and supply chain visibility. There are many types of EDI integration, helping users directly connect to their ERP or through a value-added network (VAN).
The benefits of EDI implementation include the following:
- Automation: EDI systems eliminate all mundane, repetitive processes and facilitate the immediate transmission of information in an electronic format. EDI translator software allows companies to convert their documents into an EDI format automatically.
- Accuracy: Thanks to automation, the proclivity for human error is considerably decreased.
- Streamlined processes: Users of EDI have to spend less time filling out and signing forms and can instead redirect their time and energy to more intellectually demanding tasks.
- Better fulfillment: A single EDI interaction is enough to handle most of the ordering process. With EDI, orders are received, packed, verified, and shipped faster with minimal human interaction.
- Improved compliance: EDI ensures companies are sticking to all the regulatory standards the authorities and their partners set.
When to use eCommerce and when to use EDI?
One can use electronic data interchange for administration purposes like automating orders, accounting tasks, and shipments. B2B ecommerce makes a company’s catalog more appealing to customers.
Ecommerce and EDI are not mutually exclusive. The two technologies can complement each other. When working in tandem, ecommerce and EDI can automate and optimize the whole online ordering process.
According to research, the biggest B2B electronic sales channel is EDI. Over 75% of all digital sales in 2021 were enabled by EDI. In contrast, the combined sales of ecommerce sites, log-in portals, and marketplaces accounted for a measly 12.5%. EDI in 2021 grew by 8.3% compared to 2020, generating more than $8 trillion in electronic sales (source).
The benefits of EDI and eCommerce together
Improved automation capabilities
If a company only implements an ecommerce platform for its B2B sales, they are missing out on the deeper levels of automation provided by EDI. While B2B ecommerce systems allow for a certain degree of automation, EDI has been designed for smooth computer-to-computer ordering operations.
A more extensive network of business partners
When working with high-volume orders, EDI outshines other B2B ecommerce alternatives. Many companies, including major retail outlets, have adopted the EDI standard. Companies are missing out on many potential partnerships by not adopting the technology.
Better customer relationships
EDI is great for handling business documents and automated processes. However, the customer-facing capabilities of the technology are very limited. It is incredibly complicated to form relationships with customers who are not well-versed in EDI without a B2B platform to simplify online interactions.
Intuitive shopping tools
A B2B platform provides many Quality-of-Life features to the shopping experience. For example, customers using a B2B ecommerce system can browse, compare products, and add them to their shopping cart. Ecommerce systems are also better at pleasing customers who make irregular purchases or those who are making their first purchase.
Marketing and SEO implementation
Users who forego B2B ecommerce systems and implement an EDI-only solution are casting aside a great communication channel. As a digital storefront, a B2B platform can be used to offer customers the best deals. Meanwhile, a B2B site can implement an SEO strategy, helping reach out to new consumers via web searches.
EDI and eCommerce: Which option is better?
Both EDI and B2B ecommerce present companies with ample opportunities for growth. However, EDI is better at processing orders, while B2B ecommerce improves the customer experience. The best option is to use both systems in conjunction.
The competencies of B2B ecommerce platforms make them better for:
- Offering customers a platform where they can purchase items at their own leisure
- Displaying appealing and interactive product catalogs
- Adding value via upsells and cross-sells
In comparison, EDI is best suited for the following:
- Supporting the ordering of goods and services via an electronic format
- Automating orders using real-time stock levels as a base
- Complying with the supply chain requirements set out by trading partners
Acquire a state-of-the-art EDI solution directly through your Internet browser with Vantree’s Web EDI. Say goodbye to paper-based documents and leverage automation to achieve a seamless online ordering experience.
Vantree’s Web EDI empowers small- and medium-sized businesses to create, receive, turn around, and manage electronic documents from the comfort of their web browser. Additionally, users have access to 24/7 customer support from dedicated solution agents who can guide them through every step of deployment and implementation.