What are the Major Difference Between Traditional Commerce and ECommerce?

difference-between-traditional-commerce-and-ecommerce

Traditional commerce and e-commerce, both are branches of business. They are the branches which help to complete the sales cycle by providing the goods to the customers. But the methodology of traditional commerce is lessened these days. Traditional commerce is when the customer goes to market, chooses products, purchase and pay, this is the flow of traditional ecommerce.

Because of the huge revolution in technology, e-commerce is the era. People can simply browse the website and make purchases. There is also a huge opportunity to start ecommerce business in india and earn a good income.

Let us see in detail what is traditional commerce and e-commerce and what are the major differences between them.

What do you mean by Traditional Commerce?

Traditional commerce is a branch of business associated with the exchange of goods or services in person (face to face). It is the most ancient system of purchasing goods and services, started with the barter system. It is followed by everyone across the globe. Going to a marketplace, purchasing goods and paying for it is what is traditional commerce.

Traditional commerce facilitates trade. Trade is a subset of commerce. Trade is buying and selling goods or services in exchange for money or money equivalent.  Once trade is completed, there are other activities involved such as the transportation of goods, advertisements, insurance etc which are done under the commerce segment.

Moreover, traditional commerce  includes all the activities that transfers goods or services from manufacturer to the customer. It requires a retail store and inventory warehouse.

What is E-commerce?

Electronic Commerce or E- commerce is no different than traditional commerce. The major difference between traditional commerce and e-commerce is that e-commerce is carried out online via sales portal using an internet connection, whereas traditional commerce follows offline approach.

Due to an increase in the number of internet users, e-commerce os faced an immense growth. Nobody likes to visit a shop and purchase goods these days, people shop online more.

All the activities are done online right from placing an order, making payments, selling, ordering etc.

Various technologies such as Electronic data interchange, automated mails and electronic fund transfers are used to complete the transactions. All the transactions are automated in e-commerce. Just go and start with slogan of amazon and you will definitely success if you start an online business.

As all the activities are carried online,  you just need to sit at home and chill, the items will arrive at your doorstep.

E-commerce is categorized as below:

  1. B2B E-commerce: Business transactions involve two business entities via the internet.
  2. B2C E-commerce: Occurs between a business and customer when there is a transfer of goods or services between them.
  3. C2C E-Commerce: Occurs between two customers when there is buying and selling of goods or services between customers using electronic medium.
  4. Intra-B E-Commerce: Occurs when goods or services are exchanged within an organization using electronic channels.

What are the major differences between Commerce and E-commerce?

1. Definition

Traditional commerce involves the exchange of products/items or services in person with one to one interaction. Hence it is a manual process. E-commerce involves shopping goods or services online via the internet, which is an automated process.

2. Communication Medium

The major difference between ecommerce and traditional commerce is the communication medium. The communication takes place face to face in traditional commerce through personal interactions whereas in e-commerce the entire process takes place online with the help of internet, all the transactions are automated.

Also, the exchange of information on e-commerce is digital in forms of EDIs, emails etc. and in traditional commerce is via hoardings or pamphlets.

3. Availability

traditional-commerce-Availability

E-store is available 24*7*365. Customers can shop from anywhere around the globe .at any time in e-commerce. However, in traditional commerce this is limited to only a few hours of the day.

Due to 24*7 availability, the number of sales are more in e-commerce in comparison to traditional commerce

4. Marketing

e-commerce-marketing

Digital marketing in e-commerce has widened the growth in marketing. All the campaigns are conducted online to reach out to the customers. Digital marketing and SEO has taken the marketing methods to an excellent level. Huge number of users turn into potential customers due to these online campaigns.

In commerce, marketing is done offline through various other channels and various agents and middlemen are hired for this job.

5. Payment modes

E-commerce involves online payment methods such as payment wallets, net banking, debit card, credit card, and sometimes cash on delivery. Traditional commerce mostly uses cash, cheques, credit card and debit card.

6. Reduced Costs

what-is-traditional-commerce-cost

The whole process of e-commerce is automated. So, there are chances of elimination of the middlemen or agents. In traditional commerce there are various middlemen and agents to sell the products.

As there is a direct link between customer and the business, the middlemen is eliminated in ecommerce reducing the commision costs. The overall business cost is less in e-commerce as compared to traditional commerce.

7. Customer Experience and Services

advantages-of-traditional-commerce-customer-experience

In ecommerce, the e store has a wide number of products from which the customer can choose, an attractive layout, designs which will have the customer to spend more time on the website. Separate customer portal has been designed for customers which keep information about them, their previous orders, track order etc.

However, in traditional ecommerce, all the transactions are face to face and on-paper.  Selection of products, Invoices, bills, account details, everything is on paper. So the customer is less likely to have an enriched experience in traditional commerce.

E-commerce provides customer services such as chat options, email, or call the customer care executives. While traditional commerce offers no such services.

8. Profits

similarities-between-ecommerce-and-traditional-commerce-profit

As the availability of ecommerce is 24*7, the number of sales are more as compared to traditional commerce. So the profit is also more in e-commerce.  E-commerce helps in increasing profits, reducing costs, streamline the process. In short it builds a robust system for the business.

Traditional commerce involves various middlemen which increases the cost and reduces the profit margin.

9. Outreach

Traditional commerce is limited in locations aspect. It requires huge efforts to expand the business to a national, multi-national or international level. Business firms will have to spend a lot of money.

The outreach in e-commerce is already at a global level simply by hosting a website, advertising on various channels, digital marketing etc. It is easier to attract customers across the globe in e-commerce.

10. Workflow

The entire workflow and all the business transactions in e-commerce are automated, which results in quick actions and reduces errors.

However, as traditional commerce is a manual process with manual business transactions, it is a time consuming process with a possibility of human errors.

11. Delivery of goods

The delivery of goods in e-commerce depends on the availability of products and the logistics. Also due to geographical gaps, it may take time when compared to the traditional commerce.

However, there are various cases in e-commerce where the delivery takes less than a day!

Conclusion

As discussed above, both are used as a mode to exchange goods or services. Both traditional commerce and e-commerce have pros and cons. E-commerce is trending these days as it saves time as well as money. Moreover it sets a comfort zone for the customers. Most of the traders and business organizations now use e-commerce. Moreover, traditional commerce is also followed over the places where delivery of goods takes time, mostly in urban areas. The people who are not aware about the digitalization and use of hi-tech gadgets, they still shop using the traditional commerce method.

So, both have pros and cons and are equally important for the economy of the nation as well as for the people as per the reachability.

Leave a Reply

Your email address will not be published. Required fields are marked *