13 points of difference between e-commerce and traditional commerce
Difference Between E-commerce and Traditional Commerce
Difference between e-commerce and traditional commerce : Commerce has existed in the world for thousands of years. It started with the exchange of goods and services with other goods and services, called the barter system. Then it moved to the buying of goods and services from brick-and-mortar establishments with money. This is traditional commerce.
And, in recent years it shifted to buying goods and services online, called e-commerce or electronic commerce. In e-commerce, the selling of products and services happens over the internet. Since the internet is always on, e-commerce transactions can happen anytime and every time.
Then, there is m-commerce or mobile commerce that happens through smartphones. It is just another form of e-commerce, that is spreading around the world.
The basic transaction of buying goods and services remains intact; the difference lies only in the medium. Earlier, it was happening through physical storefronts; now, it is occurring over the internet. And, both co-exist, which is what is exciting.
Let us look at the differences between traditional commerce and e-commerce.
1. Definition Of E-commerce and Traditional Commerce
Buying and selling goods and services from a physical store or market is traditional commerce.
Buying and selling goods and services over the internet is called e-commerce.
2. Transaction Occurrence Of E-commerce and Traditional Commerce
In traditional commerce, the transaction happens in-person or face-to-face between an individual buying the product/service and a brick-and-mortar store selling it.
In e-commerce, the transaction happens online where the buyer and seller cannot see each other. The seller’s products and services are available on a website and the buyer buys them from there.
3. Availability in E-commerce and Traditional Commerce
In the case of traditional commerce, stores have specific opening and closing hours. So, buying and selling can occur only during those hours, until the store is open.
In the case of e-commerce, you can buy and sell goods anytime because the website is online round-the-clock, and shoppers can shop at their preferred time.
4. Process and business relationship in E-commerce and Traditional Commerce
Anyone can access a traditional store. Irrespective of education, knowledge, or access to the internet, any shopper can shop in a physical store. The business relationship is linear.
In the case of e-commerce, shoppers need to have access to the internet and basic digital knowledge to shop. The business relationship is end-to-end.
5. Time of transactions in E-commerce and Traditional Commerce
Transactions in traditional commerce take a lot of time to complete. Shoppers go to the market, do window shopping in several stores, shortlist products, make a final decision, and then buy.
On the other hand, in e-commerce, shoppers just scroll on the online website of their preferred brand or e-commerce giants. They can do this comfortably sitting in their living room and order while also making the payment online. That is why transactions happen speedily.
6. The physical touch of products in E-commerce and Traditional Commerce
Traditional commerce enjoys the merit of providing customers the chance to look at the product in real. They can touch the product, feel it, and inspect its features and functionalities. So, shoppers can make a more informed decision while shopping from offline, physical stores.
In the case of e-commerce, shoppers can only look at the images and read all the details available. But, customers cannot inspect the goods or touch them before buying. Shoppers on e-commerce sites make a decision based on the details available and reviews by others.
7. Cost-effectiveness in E-commerce and Traditional Commerce
For a traditional commerce business, you need to have a head office, warehouse, branches, and shops or stores as well as customer-facing people. This results in more money spent on rentals, maintenance, buying property, and hiring store staff. Thus, your expenses increase.
On the contrary, e-commerce business does not require middlemen. You just need a head office and get a website created. You have to spend only on website hosting and maintenance services. So, e-commerce is more cost-effective.
8. Profitability in E-commerce and Traditional Commerce
Because of the heavy costs of office, branches, property, staff, and overheads, the traditional commerce businesses have lesser profits.
Since the overheads are lesser for e-commerce firms and their operations are streamlined, they enjoy greater profits.
9. Geographical expansion
For firms engaged in traditional commercial business, geographical expansion means investing in strategies, building offices, and marketing. It turns out to be a highly expensive affair and legally time-taking as well.
On the other hand, for e-commerce firms, you just have to place advertisements targeted to other markets and comply with legal requirements. Thus, you can expand easily nationally as well as to international markets.
10. Interaction with customers
Traditional commerce allows you to have face-to-face interactions with customers. So, it is easier to observe their behavior and resolve their queries then and there.
There is no face-to-face interaction happening between businesses and customers in e-commerce. No relationship. No personal touch. It is all online. So, e-commerce firms need to make strategies for developing relationships with customers to increase their sales and build a loyal base.
11. Delivery of products
Brick-and-mortar stores deliver the products at the time of sale. You can also try the products before purchasing and get them altered. Return of products is also an easy process.
In the case of e-commerce, the delivery of products is after a few days, which can range between a few hours to days. Also, there is no possibility to try the product before purchasing. The process of returning goods is quite a big hassle.
12. Chances of frauds
Personal interaction between businesses and customers reduces the chances of fraud in traditional commerce. Here, shoppers get what they buy. Since they can inspect the products before buying, the quality is not compromised.
E-commerce transactions happen over the internet and cyber frauds have been increasing since the advent of the internet. Specifically, online payments and sharing of customer data are the biggest loopholes of the e-commerce space. Also, sometimes customers receive bad quality products, damaged items, or fraudulent materials, different from what is displayed on the website.
13. Possibility of errors
Traditional commerce involves interaction between humans. That can increase the chances of human-made errors.
Since e-commerce transactions happen over the internet, there are no human errors. But, errors such as the server being down or no internet or stuck payments occur.
It is not about one being better than the other. Shoppers have their own criteria for preferring one over the other. Even the businesses can have only an online store or only an offline store or both. It all depends on their strategy to reach customers and increase sales.
Also, considering the market dynamics, both will exist and continue to serve customers. Locations where the internet is not available or where people have no digital knowledge, witness a lot of traditional stores. On the other hand, e-commerce is gaining a lot of traction in urban areas because of convenient and comfortable shopping.
Whether you have an online store and planning for expansion or you have an offline store, but planning to move online – whatever it is, Digiwagon Technologies can help you.
We are a premium provider of web development and design, digital marketing, cloud, and IT consulting services. If you think your business needs a big digital transformation, we will provide an effective plan for it and implement it for you. We aim to take your business to the next level by harnessing the maximum benefits from digital technologies.
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