Cloud Computing In E-commerce: Benefits, Use Cases, and Challenges

Did you know that some cloud-based e-commerce businesses seamlessly stand out in the competitive market? Cloud computing in e-commerce is reshaping the industry, offering once-impossible business capabilities.

From checking out smartphones for the latest deals to the last-minute shopping we do as gifts for our special ones, online shopping has become a new normal. As of 2023, e-commerce is rising and is expected to be a $17.50 trillion market in the upcoming decade. Cloud computing is the heart of this industry, elevating the ever-changing online shopping industry like a silent engine.

Surprisingly, the growth of the e-commerce industry resulted in the popularity of cloud computing as a commercial solution. By adopting cloud-based E-commerce solutions, businesses gain access to flexible and scalable features, managing online storefronts effectively.

Therefore, if you are an e-commerce business owner, you should integrate cloud computing into your business. You can also choose a company that can provide future-ready E-commerce app development solutions. In this blog, we have mentioned the uses, benefits, and examples that demonstrate how you can leverage cloud services to skyrocket the growth of your e-commerce business. We have also mentioned the challenges of cloud computing to help you focus on things that should be avoided while integrating cloud computing into e-commerce.

Understanding Cloud Computing in E-Commerce?

Cloud computing refers to delivering computing services, including servers, databases, networking, storage, and software, over the internet to offer innovation and flexible resources faster.

Cloud computing for e-commerce refers to leveraging internet-based remote servers to process, read, and store data rather than local servers and computers. This innovative technology allows e-commerce businesses to increase productivity by eliminating the need for expensive site infrastructure, simplifying scalability, and providing powerful data management capabilities.

Integrating cloud computing in e-commerce systems opens doors of easy access with powerful software, cloud storage solutions for online stores, and processing power to handle the high amount of customer transactions.

Cloud computing in e-commerce also enables businesses to be highly responsive toward their customers, allowing them to react directly to market changes and customers’ requirements. This changing nature of cloud-based e-commerce solutions authorizes businesses to innovate flawlessly, experiment with new things, and deliver impressive user-friendly features.

It also provides easy access to business tools for managing customer relations, inventories, sales analytics, and other factors essential for business growth. Cloud computing utilizes AI and machine learning to empower customized recommendations.

It also ensures data security to let businesses maintain the trust and loyalty of their target audience. Amazon Web Services (AWS), Microsoft Azure, and Google Cloud are popular for helping developers deliver Cloud Application Development Services for e-commerce businesses.

Types of Cloud Computing Services Models Available for E-Commerce

There are three models of cloud computing that e-commerce can use;

Infrastructure as a Service (IAAS)

IaaS provides the building blocks for IT. It offers infrastructure elements like servers, storage, and networking resources on a pay-as-you-go model. This allows businesses to scale up and down according to the demand.

Software as a Service (SAAS)

This is one of the widely used models used in e-commerce. It offers the delivery of software applications on a subscription basis. This can range from customer relationship management (CRM) to email marketing tools. SAAS model allows businesses to leave worrying about their software maintenance and focus on core operations.

Platform as a Service (PAAS)

This refers to providing a platform and environment for developers to create applications and services over the Internet. It is a suitable option for businesses looking to develop, manage, and operate their apps without focusing on the complexities of building and maintaining the infrastructure required in a development project.

Use Cases of Cloud Computing for E-Commerce

Businesses are utilizing cloud computing in e-commerce to run their online stores. Cloud-based e-commerce solutions provide businesses with scalability and flexibility, effectively their businesses. Let’s take a look at the uses of cloud computing in e-commerce;

Online Availability of Marketplace

Online availability of the marketplace is the common use of cloud computing in e-commerce. Several vendors and business owners can send their products and services on online marketplaces like eBay and Amazon.

Due to the use of cloud computing, these marketplaces provide a lot of features to businesses to help them adjust to a large number of customers, sellers, and products without harming the user experience. Additionally, cloud computing helps fulfill the ever-changing demands of customers.

Mobile Commerce

Mobile commerce is one of the buzzing trends. However, the name is almost similar but the concept of mobile commerce is quite different from e-commerce. Mobile commerce allows e-commerce ventures to be available on mobile phones. The wide reach of cloud computing opens doors to reach a large audience.

Personalization and Analytics

Cloud computing in e-commerce can be used to offer personalization to business owners to help them gain customer loyalty. Business owners can leverage it to read consumer data. They can study the data and tailor their services using the powerful data analytics tool made by the cloud service providers.

Businesses can expand their reach and revenue by utilizing this combination of personalization and analytics. It can help them send personalized recommendations and updates to specific customers.

Inventory and Supply Chain Management

Inventory control and supply chain management are also the major works of cloud computing in e-commerce. By integrating cloud hosting, e-commerce companies can easily manage their inventory and supply chain because cloud service providers offer tools for management.

These tools allow businesses to keep track of stock, demand, and supply chain to streamline the work. This helps organizations save a good amount of funds that would’ve been spent on managing inventory and supply chain.

Benefits of Using Cloud Computing for E-Commerce

Cloud computing for e-commerce offers vast benefits and allows them to stay ahead in the competitive market. It helps businesses to earn more money on the Internet. It also helps the customers by giving them access to a wide range of stores, making it easy for them to search and choose their desired product. Here are some benefits of using cloud computing in e-commerce;

Easily Accessible From Anywhere

Cloud-based e-commerce allows easy access to data and apps from anywhere around the world, with the use of an internet connection. Due to this, e-commerce businesses can operate remotely, opening doors for collaboration with teams based at different locations, and reach a larger customer base.

Cloud computing allows businesses and stakeholders to access confidential data, manage inventory, and handle payment transactions seamlessly as it increases productivity and adaptability.

Highly Scalable and Flexible

Businesses can achieve flexibility and scalability in e-commerce with cloud computing as it helps e-commerce businesses quickly scale their resources up or down as per the changing demand in the market.

This assures unmatched performance and cost-efficiency. During the time of peak sales, such as holidays or events, the companies can handle the increased traffic by expanding their servers, preventing performance issues. This flexibility allows businesses to adjust their resources to customer demands.

Low Cost of Operating

Companies can do cost savings with cloud computing in e-commerce. Cloud computing defeats the demand for significant investments in hardware and infrastructure. With the use of cloud-based e-commerce solutions, businesses can leverage resources on a ‘pay-as-you-go basis,’ enabling them to pay only for the resources they utilize.

This model allows businesses to allocate their budgets properly as they don’t have to bear the expenses of acquiring, managing, and upgrading their physical servers. Furthermore, E-commerce cloud hosting providers are capable of reducing operation costs and freeing up internal resources from key initiatives by handling the maintenance and upgradation of infrastructure.

Top-Notch Security

Security is a major concern in cloud-based e-commerce platforms. Cloud providers invest a large amount of time and money in security, offering robust security measures in cloud to protect infrastructure and user data. They use advanced firewalls, encryption, and access controls for the safety of confidential data. With the use of cloud computing, businesses can receive the advantage of advanced security measures, avoiding the risks of data breaches and unauthorized access.

Faster than Expected

Cloud providers have a network that covers the world. This allows e-commerce platforms to deliver their services in a faster and reliable way, regardless of their location. By using this, businesses can launch their new products, features, or market campaigns to stay ahead of the competition and stand out in the market. The fast speed enables businesses to respond to the market demand on time and satisfy their customer needs.

Effective User Experience

Cloud services for e-commerce businesses use advanced algorithms and data processing capabilities to enable an effective and personalized user experience for every user. It gives recommendations to users based on their search history on internet browsers. This increases the use of the brand and customer loyalty.

Expansion and Collaboration

Cloud computing enables e-commerce platforms to increase a wide range of audiences on a global level. Companies can launch their product in multiple regions worldwide with just a few clicks, providing a consistent and fast experience to the customers.

Due to the use of cloud-based solutions, the team members of a company can be connected, increasing connectivity and collaboration among them. This works for a company that has its team members located at different locations.

Challenges of Cloud Computing in E-Commerce

However, cloud computing brings numerous benefits for e-commerce but it has several challenges that need to be addressed. These things will help you understand the things you should keep in mind while choosing cloud computing for your e-commerce startup.

Dependency on the Internet

Cloud computing mostly relies on internet connectivity. The performance and availability of cloud-based e-commerce solutions can be majorly impacted due to any disruption in internet connectivity. These issues can cause a lot of harm such as downtime, affecting the ability to process orders, and customers’ data, and provide a smooth user experience. A good contingency plan can make e-commerce business work even after the interruption in connectivity.

Security Concerns

Security concerns are one of the primary challenges of using cloud-based e-commerce. Despite integrating robust security measures, data stored in the cloud is very defenseless ahead of cyberattacks, such as data breaches and ransomware attacks.

Furthermore, businesses should ensure that their data is secure while transferring it between the cloud platforms and services. To avoid these security concerns, businesses should invest in extra security and two-factor authentication to avoid cyberattacks.

Limited Control

While using cloud computing solutions, businesses may have limited control over their infrastructure. Cloud providers use basic hardware and software for their customers, resulting in limitations in managing Cloud infrastructure for e-commerce websites as per their preferences and needs.

Vendor Lock-in

Vendor lock-in means someone is forced to use a product regardless of the quality because changing that product or service is not practically possible. Using a specific cloud platform can become challenging and costly for e-commerce to switch providers or switch on-premise infrastructure. Businesses need to focus on the risk of vendor lock-in to avoid the risk associated with this.

Compliance Issues

Cloud providers didn’t offer compliance certifications which makes businesses responsible for assuring that their data and processes meet the required standards. To operate legally and securely, e-commerce businesses need to adhere to the legal regulations and laws of the industry. It is crucial to understand the compliance requirements and evaluate the capabilities of providers to meet them.

Examples of Brands Using Cloud Computing in E-commerce Apps

Cloud computing offers unmatched reliability, scalability, and flexibility. It has become an integral part of e-commerce business. Several big businesses have used cloud computing to boost operations, client satisfaction, and productivity. Let’s take a look at these examples;

Shopify

Shopify collaborated with Google Cloud as a cloud provider. This helps Shopify merchants deliver their services 24/7. After the collaboration, Shopify became available on Google Cloud Marketplace for customers to more easily manage and access Shopify.

The e-commerce platform uses Google Cloud to provide an easy-to-navigate shopping experience, a tap-to-buy feature integrated with social media, and other updated features. Kylie Cosmetics is a popular company that utilized Shopify to rapidly expand and reach a larger target audience.

Walmart

Walmart is a global retail company which is the perfect example to understand how cloud computing enhances online retail. The company uses cloud computing to manage its online stores. They use the cloud services of Microsoft Azure. They leverage cloud service provider Azure for data management and machine learning models.

The scalability and flexibility of Azure help Walmart manage processes, cut costs, and deliver to unlock a more enhanced customer experience. They chose to provide mobile app development for startups and created a top-notch software, Intelligent Retail Lab with the proper use of Microsoft Azure. This software is based on machine learning and computer vision to improve the stock-keeping of the company.

eBay

eBay is one of the most popular online marketplaces around the world. It uses the private cloud platform OpenStack cloud which was created by eBay itself. eBay utilizes the cloud for the company’s critical applications and platforms that are used by the developers. The cloud has improved its asset transparency. The company designed the cloud facility to fulfill compliance and regulatory requirements, including high-security features.

The Bottom Line

The arrival of cloud computing has reshaped the e-commerce industry, offering numerous benefits including reliability, scalability, top-notch security, and high-quality performance, among other advantages.

Several examples from industry leaders like Walmart, Shopify, and eBay exemplify the transformative impact of cloud computing on e-commerce. Since the number of people using online shopping is increasing, retailers need to be active to keep up with the demand.

Cloud computing offers essential support to businesses to help them concentrate on their core capabilities to expand the business. As a result, e-commerce businesses that choose a cloud-based e-commerce app have the privilege to stand out in the market. You can also hire app developers to create a cutting-edge e-commerce application.