Ecommerce vs Traditional Commerce: How Consumerism Shifted From Bricks to Clicks

Current-day consumerism is influenced by both traditional commerce and ecommerce. While the traditional transaction system of mom-and-pop stores is characterized by trust and familiarity, ecommerce helps bridge the gaps of accessibility with doorstep delivery.

For business owners, relying exclusively upon one selling method might not deliver the desired results in addressing customer requirements. Both systems govern different realms of commerce and thus create unique opportunities to collaborate for several instances depending on opportunities.

This article will take you through the pros and cons of ecommerce vs traditional commerce carefully highlighting their features, benefits, and ecommerce and traditional commerce differences.

More importantly, you’ll learn how both systems come together to offer the most befitting solution for your customers.

What is Traditional Commerce?

Traditional commerce businesses refer to the selling and purchasing of physical goods in a brick-and-mortar setting. Currently, the mode of transaction can be in both physical currency and online/card payment. This setup involves buyers evaluating a product in real-time before making a purchasing decision.

Historically traditional stores have always dominated the retail or wholesale market enticing people with tangible displays or human interactions. While the process remains easy and simple, these businesses are geographically limited and availability becomes an issue for customers.

Gas station stores, local supermarkets, shopping malls, and takeout booths all fall under the traditional commerce business model. While the advent of ecommerce may have diverted some people from weekly trips to Target to quick commerce solutions like Amazon Fresh, traditional business setup is very much a part of modern-day business.

Ecommerce does offer the convenience of doorstep delivery but traditional commerce still does have an advantage for the experience it provides. This is because people buy not only for their requirements but also for the experience of the purchase.

Advantages of Traditional Commerce

Ecommerce may have caused several traditional stores to convert to online stores, but the relevance of it is often realized when well-known online brands are seen to launch their store outlets or sell the products at a third-party brick-and-mortar store setup.

Take Farsali for example. A well-known makeup brand based in the UAE which has dominated the US market over the past few years. After their highlighter jelly went viral on Instagram, they quickly started filling up shelves in Sephora.

Why?

The Farsali team was well aware of the fact that the online hype would die down. So, they were willing to explore new markets grabbing the attention of the customers passing by the shelves. Let us elaborate.

Personal interaction

So, here are some of the biggest benefits of traditional commerce businesses. The biggest edge traditional commerce has is the scope of buyer-to-seller communication. This leads to a heightened chance of customer loyalty.

A sensory experience

Traditional store setups are where a customer gets to interact with a product before making a purchasing decision. This not only lets them build a relationship with the product increasing desirability, but buyers get to experience the process with all their senses. This makes the customer seek the experience as well as the purchase leading to a better chance of conversion.

Instant gratification

The rush of feel-good hormones a customer experiences immediately after a purchase also adds to the experience. No buffer time for getting it delivered. A product when seen on shelves can create a sense of urgency as it is physically under threat of being acquired by another customer. So when a customer swipes a card and swings the bag as they leave the store, they feel a sense of satisfaction tied to the purchase.

You trust what you see

No need for internal back and forth when you see the establishment businesses running in their full glory. Not only are you making an informed decision about the particular piece that you’re buying but also when you see other customers making a purchase, it reinforces trust, leading to quicker conversion. And once a customer gets familiarized with your brand, the chances of repeat purchase grows to a greater extent.

Geo-specific needs

The localized presence of physical shops often serves some geo-specific needs or acts as a better cultural fit. Say you’re from an ethnic community and certain practices are ingrained into your lifestyle. A physical store in closer proximity will be aware of your specific needs they will always have those products in stock.

No brainer

Slightly twisting the scenario, you can see a store setting of traditional commerce offering adding value to your purchase by guiding you through its usage and application; no requirement to figure it out by yourself.

Disadvantages of Traditional Commerce

Certain limitations and challenges can make traditional commerce (between ecommerce vs traditional commerce) disadvantageous where the growing dominance of traditional commerce can be noticed.

Limited reach

In traditional commerce, the potential for easy expansion is stunted as its foundation is rooted within a localized area. Thus the market size they aim for is naturally more stunted.

Higher cost of operations

Unlike ecommerce setups, traditional commerce businesses require rented spaces, and storage units for inventory holding, staffing, and maintenance which takes away a portion of the profit margin increasing the overall operations cost. The acquisition of different spaces (that traditional stores require) not only strains the budget at hand but also requires a significant upfront investment.

Depending on simple transportation

When sellers are physically maintaining an inventory, renting a place out for the storefront, and depending on local logistics for stock-ups, they get bombarded with challenges such as stockouts, overstocking, and understocking.

A classic example would be sourcing root vegetables from a nearby farm. Due to a natural calamity, the road to the nearby farm gets blocked and your customers are deprived of the regular daily grocery requirements.

Lack of data leveraging

We can equivocally admit to the fact that these days physical stores are pushing to obtain data like your phone number, email address, reference, etc like their life is dependent upon it.

Quite literally they lack a tracking system which they are aggressively trying to make up for. The system was found to experience some hiccups due to a lack of understanding of human behavior leading to gaps in growth strategies. Based on the data, the strategies of growth are implemented which affects the overall scalability.

SellerApp offers the best eCommerce data API for businesses looking to enhance their online sales performance.

Slow pace

Traditional commerce business setups are mostly time-bound and lack convenience by limiting the accessibility for customers.

Scalability limitations

The little or no potential for expanding beyond borders makes it challenging for traditional businesses to thrive without launching an ecommerce counterpart.

What is an ecommerce?

Ecommerce is a system that works virtually with an online persona delivering real results. It has an online storefront displaying products and their descriptions under a web page or mobile application offering physical products and services— both having equal dominance.

More like an offline store, customers can browse through the products, judge by the quality (from the descriptions), choose a product, and make an online payment upon which the order is confirmed. Based on the nature of business, delivery can take up to a few minutes to a few weeks. Their doorstep delivery also offers easy returns in most cases. Since customers do not get to physically pick the product, it is compensated with easy returns to encourage them to never back down from choosing convenience.

Businesses also offer payment on delivery to overcome the uncertainty of online purchases, as the digital world faces frequent cases of fraudulent businesses. However, these days, cyber security measures do protect customers to a great extent and encourage overseas buying and selling. Thus, sellers get an easy opportunity to reach a global audience.

Several major responsibilities of ecommerce businesses can be automated requiring significantly less manual labor. While it’s hard for us to imagine a single person running a store and managing major inventory levels, contradicting this thought, we can find the concept of solopreneurship in ecommerce businesses is rising.

They either automate services or outsource responsibilities to other businesses upholding the concept of shared success. The abundance of scalability options makes ecommerce suitable for rapid growth.

Ecommerce businesses contain major industry players such as Amazon or Alibaba or ecommerce growth accelerators such as SellerApp.

Types of ecommerce setups

There are 4 basic eCommerce types: Business-to-business (B2B), business-to-consumer (B2C), consumer-to-consumer (C2C), and consumer-to-business (C2B)

B2B

Where business establishments collaborate to help each other reach their goals. For example, when SellerApp provides PPC ad automation services, it helps sellers worldwide reach their target audience by maximizing sales. Indeed it is transactional but it results in mutual benefits.

B2C

It is the first thing that comes to mind after saying online business— where you go and place an order expecting it to be fulfilled. It is as simple as placing an order at Target.com and you get your order delivered within a stipulated time.

D2C
In D2C wholesalers or retailers directly deal with customers without intermediaries. For example, Allbirds, an eco-friendly footwear brand, sells sneakers on its official website.

Quick commerce

Another major hyped-up segment is Quick commerce or q-commerce. Quick commerce brands, as the name suggests, deliver within minutes and it is operating on hyper-local supply chains. Their goal remains to deliver daily essentials and impulse purchases— anything that initiates the urgency.

C2C

This model has been adapted by product-based platforms such as Etsy and service-based companies such as Upwork. This is where the customers of a certain business communicate with each other and establish a transactional relationship while the connection is facilitated by the business platform.

C2B

It is a unique aspect of ecommerce. When an influencer posts a viral-worthy reel on social media platforms, they not only target viewers but businesses as well. Once noticed and assessed on their reach, they will land brand deals. While the brands receive the attention.

Advantages of an ecommerce Business

Global Reach

The world is within your reach when it is ecommerce you’re dealing in. The boundaries diminish as people look for possibilities beyond borders.

Although cross-border transactions come with a cost, the wave of consumerism drives people to overlook the adversities and still choose to purchase beyond borders. This trend has led the ecommerce industry to surpass the 4.1 trillion U.S. dollar market valuation.

As an ecommerce, seller if you’re even getting one tiny piece of the pie you can expect ample revenue.

Relatively lower cost operations

The upfront expenses are significantly lower when we compare ecommerce vs traditional commerce. This leaves little room for incorporating scalable features due to the glaring expenses.

Ecommerce on the other hand spares you from these obvious expenses letting you grow without the need to occupy extra space thus reducing costs.

Ideal for the ambitious ones

Automation drives multichannel growth for ecommerce businesses. The manual efforts required to scale brick-and-mortar stores can hardly match the ease and convenience of tools and strategies offered by the current SaaS companies which prime the ecommerce platforms for multichannel growth.

We would undermine the potential of these scalability options if we only highlight the ease and speed; it streamlines operation and drastically cuts down on the requirement of your involvement. In the process, the online business setups become self-sustaining programmed to handle and deliver exactly what the customer wants.

Traditional commerce and ecommerce together may be the answer to quietly win over a massive portion of target customers, but nobody can deny the effectiveness of AI-powered chatbots which can support customers 24/7. While offline retail is limited in the resources it can leverage, ecommerce is meant to overhaul the former’s pace with one-click email campaigns designed to nurture the individual requirements of the leads.

The advanced strategies grab all possible opportunities for a quick upsell while providing excellent customer service through post-purchase follow-ups. Even without any human communication, the advanced automation features of ecommerce make sure the existing customers feel valued at the same time it hooks new customers with captivating UI methodologies. Visuals play a key role here, and high-quality packshot images ensure that products are showcased in the most appealing, conversion-ready way possible.

Target marketing simplified

When we consider target marketing as a competing factor between ecommerce and traditional commerce, ecommerce becomes a sure-shot winner. So imagine how often you come across an attendant trying to suggest products to buy.

When you compare it with the frequency of product suggestions from Amazon, it is negligible. So we can arrive at a common conclusion that the potential of upselling or cross-selling when it comes to ecommerce websites, becomes significantly higher.

The system is sophisticated enough to recognize the purchase patterns, browsing history, etc to develop product recommendations that hit the spot and lead to uncountable successful sales. These product suggestions appear on multiple pages, at multiple stages of product purchase leaving no chance of maximizing sales.

Availability

Between ecommerce and traditional commerce, we can find limited offline establishments to offer 24/7 availability. At the same time, ecommerce stores operate round the clock because it is automated. This unbeatable convenience of round-the-clock availability makes it a boon for the internet-driven generation and thus gives ecommerce sellers the edge over traditional retailers.

Quick commerce platforms have redefined availability and accessibility. Uber, Doordash, Instacart, etc. are equipped to fulfill deliveries in minutes keeping this instantly-gratified generation wondering if patience is even virtuous!

Data dominance

Target marketing strategies are fuelled by data-driven insights. Data is the powerhouse that helps ecommerce businesses optimize their performance. A major reason why ecommerce could boom in such a limited time is because of the derived insights.

Be it running targeted PPC ad campaigns to implementing data-derived personalization of marketing campaigns, the weightage of it can be sensed throughout the user journey.

We at SellerApp leverage the same data to offer services such as product intelligence, and customized PPC ad campaigns for sellers starving to make it big in major ecommerce marketplaces.

In addition to that, we also help you understand your sales data better by providing a well-visualized output of sales once you connect your Amazon Seller Central account with our SellerApp dashboard. So take advantage of the SellerApp database to analyze profits, order estimation, and understand different metrics based on your requirements.

Retail systems are now trying their best to incorporate data into their strategies— adding to the similarities between Traditional commerce and ecommerce.

Disadvantages of an eCommerce Business

We have raved about ecommerce having a special edge in the current market; that does not mean we’ll skip out on its disadvantages while drawing a comparison between ecommerce vs traditional commerce. Staying aware saves you from losing. As a business owner, one should proceed with selling online while keeping these facts in mind.

Constant effort to keep up with the lack of physical presence

The lack of physical presence will need you to go overboard with excelling UI/UX parts of your storefront. Partnering with a professional UI/UX design company can help elevate user experiences, but there will always be sectors where the limit will be drawn to the effectiveness of UI/UX strategies.

There, as a business owner, you’ll be required to work and think levels ahead to stay relevant.

Solution for competition

Intense competition leads to mandatory incentivization to gain favor; one of the primary ways a seller tries to gain an edge over the competition is by offering lower prices.

When multiple competitors are targeting a single section of customers, you are naturally inclined to offer them the best price, leading to a drop in profit margin.

Cybersecurity threat

Wherever there’s a possibility of you making a profit, there is also a chance someone’s waiting to steal the fruit of your labor. Similarly, when the dependency on technology rises, needless to say, the cybersecurity threats dangle by a thread ready to drop anytime.

Unless you take highly sophisticated cyber security measures, it is impossible to stay assured and scale up a business with peace of mind. The payment gateways require encryption so do the third-party tools and the websites. Otherwise, it is one step away from being hacked.

Delivery hassles

Between ecommerce vs traditional commerce, ecommerce businesses involve the fulfillment of orders. This includes shipping logistics and even movement from products to warehouses scattered across the world. Short period delivery fulfillment, international shipping and customs and constantly being on edge to provide good services can be problematic to keep up with.

Your concern does not end at paying extra prices for shipping; sending a package across a longer distance adds to the carbon footprint as well. Constantly adapting to improved warehousing and shipping strategies with 3PL logistics groups to achieve speed and sustainability becomes a part of the routine for sellers— which is often strenuous for small to mid-sized companies.

Return handling

Returns, and returned package handling, are dreadful to online businesses. It escalates the operational cost to a significant percentage and this is something you cannot turn a blind eye to. The easy return process adds to customer satisfaction and being unable to provide it can result in adverse situations.

What is the difference between traditional commerce and ecommerce?

We’ve elaborated on both of these major types of commerce in our previous segments, now let’s quickly compare the difference between traditional commerce and ecommerce, to understand their strengths better.

Feature | Traditional commerce | Ecommerce
Type | Involves in-person transactions. | Involves digital transactions.
Mode of payment | Digital, currency, and card payments are applicable. Requires human intervention. | Digital payment or cash on delivery; can be done without human intervention if you’ve chosen digital payment.
Location | Access through a physical storefront. | Digital access only; located virtually as an app, or website.
Reach | Geographically limited. | Accessible worldwide.
Accessibility | Limited hours of operation (store hours vary). | 24/7 availability.
Delivery span | Immediate. | Delivery depends on shipping methods and locations. Can take as short as 5 mins (in quick commerce) to several days.
Payment processing | Manual. | Automatic processing via online systems. Quick with no manual error.
Marketing | Mass media advertising channels and promotional offers. | Personalized approach. Relies on user data.
Cost | Higher overall expenses. | No requirement for physical space and staff, leading to lower investment.
Judgment | Physical examination before purchase. Customers can be in complete control of what they choose which significantly reduces the chances of return. | Customers do not get to choose their products increasing chances of a return due to defects or dissatisfaction.
Data dependence | Minimal. | High.

An example to differentiate between ecommerce vs traditional commerce

Let us give you a real-life perspective of traditional commerce and ecommerce.

Say you choose to sell hand-knitted sweaters in a traditional brick-and-mortar store setup, as a small business owner you:

Knit the sweaters and keep your stock ready.

Hold a garage sale and put your products on display.

People gather and interact with your products— they touch the sweaters to judge your knitting skills, feel the quality of the yarn, or even wear it once to check the fit.

Some don’t find it useful, so they leave. Rest, they may bargain with you; you may lower the prices slightly to acquire your initial clientele.

Both you and your customer settle for a certain price– say $37.

They give you $40, you return the balance, wrap the sweater in packaging, and hand it over to them.

They may come back later with some feedback and you graciously promise them a better quality next time.

That’s all for the retail setup.

On the contrary, say you feel like selling the sweater online,

You keep your inventory ready. Each design has several sizes.

You set up a digital storefront, maybe Etsy.

You upload the product listings, add a bank account number, and add your identification and tax details.

Once the store is approved, you run ads, and do some online publicity, maybe by some local micro-influencers.

People visit your storefront on Etsy, zoom into the product images, read product descriptions, and make a choice based on it.

They click on the “Buy now” option.

They enter their address of delivery, and payment details, approve the payment, and the order is placed.

You get notified about the order on your marketplace dashboard.

You pack the product, label it, and ship it; maybe via a 3PL delivery associate.

They receive the delivery, use it, and drop a review of their experience.

There, we’ve simplified the entire process. It will now be easier for you to differentiate between traditional commerce and ecommerce.

Similarities between Traditional Commerce and ecommerce

Although they differ in operation, the fundamental similarities display the common goal they serve. Let’s take a look at the similarities between ecommerce vs traditional commerce to understand better.

Both are focused on facilitating sales.

The bigger goal is to maximize revenue and attain long-term sustainability in the market.

Expansion is a common goal for both traditional commerce and ecommerce. Be it geographically or extending target markets.

Both traditional commerce and ecommerce focus on building a long-term relationship with customers, the efforts may take different routes considering the unique capabilities of both systems.

Ecommerce and traditional commerce both have to abide by certain laws; in addition to that, there are standards of quality they require to maintain to stay legal and operate.

Traditional commerce vs ecommerce: How to choose the right one

As we’ve seen the major similarities in the goals of traditional commerce and ecommerce, it won’t be hard to understand the combined approach of both of these systems.

A hybrid approach will let you access the best of both worlds and target different layers of customers by

Extending geographical and market reach: Market penetration becomes 2x efficient when you can leverage the expandability of online stores and the trust and familiarity of local stores. You not only can cater to different populations but tap into the needs of the different layers of the same market.

Best accessibility options: Using a hybrid model people can be the best judge of their own choice while picking their products and also get them delivered to the doorstep according to their convenience.

Omnichannel dominance: The Buy Online, Pick Up In Store (BOPIS) system is a rapidly growing system that was born out of the hybrid model. It allows customers to make decisions and book online to make a purchase, where they can pick up the products on the go. It joins the rapidness of in-store pick-ups with easy decision-making of online systems.

Curbside pickup is another subsection of BOPIS. Here customers get to pick up orders without the hassle of parking, and entering the store; it operates in a drive-through system. Apart from that in-store returns are equally popular these days to promote eco-friendliness.

Sharing data across both modes: Imagine how profitable it can be if you get to club the data generated by both models and share it for making informed decisions. The horizons are open— currently, analysts are stressing hybrid strategies and that’s the way to thrive in this highly competitive space.

How to harmonize the brand identity of a business with both traditional commerce and ecommerce

It is easy to gauge that the current pace of business growth that can bring anticipated returns lies in developing a hybrid channel. If you are trying to balance that hybrid approach, there are a few strategies to implement to achieve a harmonious balance between traditional commerce and ecommerce brand identities.

Consistency in branding

To have a unified image the first step is to start with having a shared voice. This calls for a rework in branding so that

People start identifying the two separate entities as one
and

There is a cohesiveness between both the channels of the same brand.

Starting with the color palette, logo, typography, and UI designs, aesthetics and communication should find commonalities. Communication (visual and literal) reinforces the brand image. This will not only add prominence to the brand but will bridge the disconnect.

Customer experience at its best

The multichannel service is extremely beneficial to the users but the successful businesses that nailed the omnichannel presence went far ahead than just simply playing on the obvious edge (the dual interaction channel). What sets them apart is the smooth transition in operation across all the devices they use for purchase and consistency across services.

For example, if a customer purchases a product from the online platform, the brand facilitates easy return at the physical storefronts as well as doorstep pick-up. Similarly, if a customer searches for Blue track pants on the website, it should be capable of locating the customer’s area and showing if the product is available at the nearest stores. Many brands like Zara and Victoria’s Secret have nailed their omnichannel presence with this strategy.

Leveraging technology

Linking retail and ecommerce and managing inventory has never been easier! It monitors the real time stock levels and uses data analytics to collect insights on customers’ purchasing behavior. This further adds to a smoother experience across channels. Businesses looking to streamline these efforts often turn to digital transformation consulting to integrate legacy systems, improve operational efficiency, and ensure a consistent omnichannel customer experience. Implementation of new-age technology directly impacts and results in improved customer experience.

Storytelling

To personally connect with your brand, customers need an emotional or purpose-inclined ground. Thus storytelling becomes important. Narrate your USP to grab attention keeping in mind it should resonate with all target customer pools to bring them together and choose your business.

Final thoughts: How has the rise of ecommerce impacted traditional commerce?

The rise of ecommerce has finetuned the retail landscape to an extent people are pushed towards e-retail— after all, convenience wins overall. Traditional commerce setups are trying hard to catch up to the fast-moving pace and fighting the risk of obsolescence. The time has come when most of the retail giants have merged with or acquired big ecommerce establishments to share resources and assert dominance over the market.

Integrating both traditional commerce and ecommerce these entities are solidifying their existence in the moving market.

Having a presence in the market is as important as marketing your services the right way. Your Amazon presence can guarantee to help your brand reach its target audience. Book a call with SellerApp Amazon PPC Agency to target the best-performing keywords on Amazon to maximize your reach.

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