Traditional commerce refers to the practice of selling products and services within a single industry and in some cases, within a specific geographical area. Traditional commerce relies on operating business hours during a specific period of time and requires housing inventory or occupying a retail store.
In contrast to e-commerce that relies on online sales, drop shipments and 24 hour access for consumers, traditional commerce relies more on local consumers interacting with sales executives, managers, customer service personnel and accountants personally versus through electronic mediums.
Businesses deemed as traditional commerce handle advertising, inventory shipping and creation of products and services in-house with a staff of employees in close proximity. Traditional commerce does not typically share information with competitors whereas e-commerce prices, specials and inventory are ready available online for consumers and competitors.
Traditional commerce often relies on face to face interaction with consumers and thrives based on word of mouth, networking and customer referrals for new and repeat business. Personal interaction is a key component of businesses experience success with traditional commerce. Many businesses network within the community, establish rapport with city leaders and chambers of commerce and sponsor local events and sports teams to develop a relationship with the community to draw in business.
Traditional Commerce or Commerce is a part of business, which encompasses all those activities that facilitate exchange. Two kinds of activities are included in commerce, i.e. trade and auxiliaries to trade. The term trade refers to the buying and selling of goods and services for cash or kind and auxiliaries to trade, implies all those activities like banking, insurance, transportation, advertisement, insurance, packaging, and so on, that helps in the successful completion of exchange between parties.
In finer terms, commerce encompasses all those activities that simplify the exchange of goods and services, from manufacturer to the final consumer. When the goods are produced, it does not reach to the customer directly rather it has to pass from various activities, which are included under commerce. Its main function is to satisfy the wants of consumers by making goods available to them, at the right time and place.
|Meaning||Traditional commerce is a branch of business which focuses on the exchange of products and services, and includes all those activities which encourages exchange, in some way or the other.||e-Commerce means carryng out commercial transactions or exchange of information, electronically on the internet.|
|Processing of Transactions||Manual||Automatic|
|Physical inspection||Goods can be inspected physically before purchase.||Goods cannot be inspected physically before purchase.|
|Scope of business||Limited to particular area.||Worldwide reach|
|Information exchange||No uniform platform for exchange of information.||Provides a uniform platform for information exchange.|
|Resource focus||Supply side||Demand side|
|Marketing||One way marketing||One-to-one marketing|
|Payment||Cash, cheque, credit card, etc.||Credit card, fund transfer etc.|
|Delivery of goods||Instantly||Takes time|