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What are the difference between e-commerce and traditional commerce?
Traditionally, commerce is more than just the trading transactions, it involves a variety of processes such as information exchange, identification of items or services, price comparisons, buying, payment, delivery, customer support, marketing feedback and research design, manufacturing of new products, and their distribution.
In many cases, business processes use traditional commerce activities very effective, and these processes cannot be improved upon through technology. Products that buyers desire to touch, smell, or examine closely are difficult to sell using electronic commerce.
For instance, customers might be reluctant to buy high-fashion clothing and perishable food products, such as meat or vegetables, because they cannot examine the products directly before agreeing to purchase them.
In the case of conventional commerce, retail merchants have years of experience in creating store environments that help convince a customer to buy. The combination of store design, outline and product display knowledge is called merchandising.
Sales persons in course of time can develop skills that allow them to identify customer needs and find products and services that meet those needs. The arts of merchandising and personal selling can be difficult to practice over an electronic link.
Through ecommerce, branded products such as books or CDs can be easily sold. Because one copy of a new book is identical to other copies and because a customer would not be concerned about freshness, he would willingly order a title without examining the specific copy they would receive.
The advantage of electronic commerce includes the ability of one site to offer a wider selection of titles than even the largest physical bookstore, can be more important than the conventional bookstore, namely the facility to browse.
Difference Between E-commerce and Traditional Commerce
Commerce simply means business, i.e. selling or purchasing. And both traditional commerce and e-commerce concern the buying and selling of goods and services, just their way of performing the various activities involved are different. In fact, most of the activities involved in doing business traditionally are also involved in doing business electronically.
However, there is more speed, transparency and real time exchange of data etc. among the buyers, sellers, and the carrier. Traditional commerce involves communicating(ordering, buying, selling and paying) with customer and supplier using different applications in many time-consuming different steps; it needs a physical store or physical place of sale.
Various difference between e-commerce and traditional commerce are explained below:
- Interaction
- Immediacy
- Lower Returns Rate
- Privacy
- Identity
- Community
- Bargaining
- Advertisement
- Product Cost
- Shopping Time
Interaction
Whereas traditional commerce usually consists of a personal and one to one interaction between seller or his sales staff and buyer at a business place, e-commerce is usually done completely online and is impersonal.
There is no personal or one to one interaction involved between two parties. Though, in some e-commerce based websites buyer can have an online chat with some staff members but still their personal touch is missing.
Immediacy
In traditional mode of business, buyer can hold the merchandise, touch, weigh, smell and feel the product. This gives an advantage to sellers, as buyer’s tactile cues can drive the decision to buy.
This is missing in online shopping. Though, e-commerce based website nowadays show the product on the screen to the customer from different angles and also display the detailed description of the product. But still that touch-and-feel part is missing.
Lower Returns Rate
In traditional commerce method, a buyer buys a product after satisfying himself personally by taking a look, touch, feel etc. of the product. He knows exactly what he is buying, so the rate of returning the goods is lower. In case of e-commerce based purchasing, buyer may not get what he expected, so chances of returning the product is higher.
Privacy
In traditional commerce, a transaction that is direct, personal and face-to-face with the seller, is usually unmediated: your communication with the merchant is not in the hands of a third party or technology. In online purchase, the buyer may have to reveal his identity by giving his address for the delivery of the product, or may be asked to pay online using debit/credit card or online banking.
Buyer may not like to reveal his details. In case of traditional commerce, buyer simply visits the shopping store, buys the product, pays the cash and come back. Seller may not know buyer.
Identity
In traditional commerce, buyers can very easily authenticate the identity of a seller or merchant simply by walking into a bricks-and-mortar store. While buying online, the buyer may never know who exactly the seller is.
Community
In traditional commerce, when a buyer goes to a shopping store or showroom, he may interact with other customers present there and may get some feedback about the product or about the seller. This is missing in online shopping.
Bargaining
While buying from a store, the buyer may interact with the seller and can do bargaining. In online shopping, price of a product is mentioned in the database and buyer has to pay exactly the same price.
Advertisement
In traditional commerce, seller has to advertise his product using various channels like print media, electronic media etc. whereas in case of online shopping this may not be required.
Product Cost
In traditional commerce, product has to go through many intermediaries like wholesaler or stockist, retailer etc. before it finally reaches the end consumer. Every party takes his share of profit; it increases product cost which end user has to pay finally.
Whereas, in case of online shopping, the product may directly go to end user from the factory where it is produced. Wholesaler or retailer may not be involved, so it lowers product cost. And the advantage goes to the end user.
Shopping Time
Online shopping can be done 365x24x7 i.e. 24 hour, 7 days a week, 365 days. Whereas in traditional commerce, no shopping store is open 24 hours a day and apart from that, it may be closed on Sundays or some other holidays also.