Traditional trade vs electronic commerce – Digital transformation has had a definite impact on all industries, including commerce. Its spectacular growth has redefined the landscape to such an extent that many doubt the differences between traditional and electronic commerce.
At Practics we are specialists in offering the best omnichannel solutions, which implies having very clear concepts. In the new entry of our technological blog, we want to tell you about the differences between both types of commerce as well as their advantages and disadvantages.
State of electronic commerce in Spain 2021
Pay attention to the graph below these lines from the National Competition Market Commission . Impressive, isn’t it? The growth figures for the ecommerce sector are unstoppable and it is, together with the health sector, one of the big winners of the health crisis.
And no wonder. When the internet is the only way to communicate or get food and goods, exponential growth is to be expected.
Does this data mean that all businesses have done well during the pandemic? Unfortunately, not.
Although e-commerce and traditional commerce have the same purpose and objective, there is a big difference between them. We are going to explain their similarities and differences in this article.
What is traditional commerce and electronic commerce?
The origin of trade is as old as the world. It is also the common thread of almost all other industries, because the movement of goods is essential for almost everything else.
Thus, the definition of conventional commerce is any business that is conducted in public and typically happens in marketplaces, department stores, shops, or marketplaces.
Conversely, it is an electronic form of commerce that occurs over the internet and involves the exchange of products without the need to handle the thing in person.
Don’t lose sight of the fact that apps, something that is becoming more popular every day among the big brands, is also framed as electronic commerce.
It simplifies things a lot, because it is not necessary to have a store, sales assistants, display products and you can serve millions of customers at the same time.
Similarities Between Traditional Commerce and E-Commerce
First of all, it is convenient that you understand that traditional commerce and electronic commerce or ecommerce have the same objective.
Both depend on sales, or what is the same, on customers.
Whether you sell online or in a physical store, you must take into account the same aspects: how to attract them, how to retain them and how to improve the customer experience so that they do not opt for the competition.
Differences between traditional trade vs. electronic commerce
Now that you know how they are similar, it is time to analyze the differences of traditional vs. electronic commerce.
The main difference between traditional commerce and electronic commerce is accessibility. With few exceptions, traditional shops have hours and you must travel to buy the products.
In the case of electronic commerce, you can buy (and sell) 24 hours a day, 365 days a year, something that is very interesting in terms of efficiency.
However, online sales are not a panacea either. You will need to control many key aspects such as logistics, web infrastructure, or the way to promote to place your online business in front of potential buyers.
The impossibility of touching the products is a great barrier that you will have to overcome. In a store, you can always review or decide if the product is what you want. In an online store, the decision will be based solely on what users can see, although things like reviews or videos can help users get an idea of what your products are like.
Advantages and disadvantages of traditional trading vs. electronic commerce
Both options are equally attractive, although there are many who say that the store’s days are numbered.
Regardless of what your opinion is about it, we are going to analyze the sales of both models.
Advantages of traditional trade
The biggest advantage of traditional commerce is the biggest disadvantage of electronic commerce.
In other words, traditional commerce will always have the advantage of being able to implement sales techniques to get the customer to buy the product.
however In an ecommerce, the client does not have so many elements of decision, and you will have to implement other types of techniques.
In addition, in traditional commerce customers do not have to wait, unless they are bulky or custom-made products. In electronic commerce, the wait inevitable, although options such as click and collect already offered, a booming modality that favors the merger between the physical and digital stores.
Disadvantages of traditional trade
There is no doubt that traditional trade requires a much larger investment of resources. You need a store, merchandise, staff to serve customers and much more.
E-commerce is within the reach of almost everyone with cheap and easy-to-implement solutions.
Advantages of an ecommerce
As we have mentioned before, the biggest advantage is its accessibility, you do not need to open a physical store in another country to sell. In fact, starting to serve products online before opening a physical store is one of the most used internationalization strategies, so that you can obtain a loyal customer base before making the large investment of opening stores in the destination country.
Disadvantages of e-commerce
The main disadvantage is that you cannot apply traditional sales techniques, those that are studied in sales training courses and that are still very effective today.
You can include certain elements that resemble having dedicated staff, such as ecommerce chatbots .
And of course, there the great disadvantage of having to wait to get the product purchased. In some cases, several days or weeks.
Conclusion on traditional trade vs. electronic commerce
The choice between traditional commerce vs. E-commerce isn’t always easy and, to be honest, it’s not a fair comparison either.
Both models have their advantages and disadvantages, and both models can coexist seamlessly, especially when they are part of an omnichannel strategy.
If you want to launch an ecommerce project that needs the support of business management software, at Practics we can help you , contact us to find out how.