E-commerce, the selling of products or services using the internet, and traditional commerce, selling products in a brick and mortar store, through catalogues, or over the phone, have many things in common. Both involve the exchange of money for goods or services, two or more parties enacting a mutually beneficial process, and inventory, fund transfers, & transactions. However, e-commerce and traditional commerce also have many differences.
Cost effectiveness and profit
Hosting an e-commerce business is much more cost effective than traditional business practices. In traditional commerce, there is typically a middleman who also has to be paid. However, this cost is eliminated in e-commerce because there is a direct link between the consumer and the business. Additionally, labor, maintenance, and office rent costs are typically reduced in e-commerce. Although there are costs associated with hosting a website and running an online store, this is typically less expensive than traditional commerce.
E-commerce is convenient to both customer and business. Because online stores can be accessed anywhere and anytime, customers can browse products and services outside of normal business hours and in any location. Mobile devices such as cell phones and tablets can also be used to shop at an e-commerce business, so you are not required to be sitting at a desktop computer. E-commerce also does not require catalogues and it is easier to compare prices and specs online than it is to leaf through printed catalogues.
Traditional commerce has an advantage with physical inspection. Although you can look at pictures of products online, and you may also be able to interact with features such as 3D and zoom, there is no replacing the clear advantage of physically inspecting a product. Inspecting a product in person allows you to observe with all 5 senses, whereas looking at a product online only allows you to observe it through sight.
Face-to-face interaction is a huge benefit of traditional commerce. There’s no replacing the value of engaging customers in person. In recent years, many online retailers have added chat functions on their website, but even that interaction is not nearly as good as talking to your customers face to face. No matter how great a website is, you cannot replace the intimacy of having a customer visit a store or office.
Introduction of new products
In traditional commerce, introducing a new product can be a lengthy process. Creating displays, making space, creating a barcode, and designing signage for a new product can be time consuming and expensive. Adding a new product to an online store also involves a process, such as shooting and uploading pictures, writing descriptions, and entering pricing. However, this process is likely to be shorter than adding a product in traditional commerce.
Traditional commerce is better suited towards perishable goods and extremely valuable items. It doesn’t make sense to sell prepared food or beverages through e-commerce. They may be inconvenient to package or expensive to ship to ensure the items will make it to the consumer on time. Additionally, expensive items, such as jewelry and antiques are more suited towards traditional commerce. For these items, the customer wants to see and feel details that may not be able to be truly captured online. Many items, such as tickets, books, music, movies, and software are perfect for online selling. It all depends on what a business is selling and if it is suitable to be sold online.
There are advantages and disadvantages of both e-commerce and traditional commerce. E-commerce is typically more convenient, more cost-effective, and easier to integrate new products. Traditional commerce is better suited to physically inspect products, sell certain products, and interact with customers. Depending on a business’ product, they may choose to sell in a store, online, or a combination of both.
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