Shopping for goods online is the latest consumer trend. The concept of online shopping, technically known as e-commerce, dates back to the 19th century when Boston Computer Exchange launched the first-ever e-retail platform. Since then, numerous e-commerce companies have entered the market and have witnessed tremendous success.
Speaking from the consumer’s point of view, shopping for goods online is not just convenient but also cost-effective in many cases. Clearly, delivering a similar shopping experience is challenging for traditional businesses. This is creating a difference between traditional retail businesses and e-retail businesses.
Let’s find out more about the eCommerce vs. brick-and-mortar commerce conundrum in detail.
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The E-retail vs. Traditional Retail Verdict
Source: UK Essays
Traditional retail has existed for centuries and has evolved over time to become an integral part of human society. Retail businesses form the backbone of an economy and have a significant contribution to the country’s GDP, employment, and overall infrastructure.
However, the rapidly increasing adoption of e-commerce and online shopping has resulted in a decline in traditional businesses. With more and more people preferring to shop for goods online, traditional retailers are losing their customers as well as business to e-retailers.
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Looking at the bigger picture, it is becoming challenging for traditional retail businesses to survive in the highly competitive market with their present strategies. In this case, planning to expand a business traditionally is a far-fetched situation.
However, what exactly does an eCommerce store provide to a customer for them to abandon traditional stores?
Why Are Consumers Shifting to eCommerce?
Customers always prefer convenient and hassle-free shopping experiences. Traditional retailers are well aware of this fact and have tried to deliver up to this consumer requirement by integrating customer-friendly practices.
However, the scope of ‘convenient shopping’ is highly limited in traditional shopping, especially with the emergence of e-commerce, which has taken shopping convenience to the next level.
The present-day e-retail stores are a digital mega mart with millions of items available on a single platform. The buyers can compare and choose from numerous product options available on these stores and fulfill all their shopping requirements at one place.
This is just not possible in traditional retail, where the stores sell a limited number of products. Moreover, even though large-scale shopping centers sell a wide range of products, it is challenging and time-consuming for customers to walk around in the mart and look for the products on different aisles. As a result, shopping for goods online is overall a more convenient option.
Before the advent of eCommerce, the idea of shopping was highly limited to certain hours during which shopping stores operate. As a result, the customers were left with no choice but to visit the stores during these hours to shop for goods. This made it challenging for shoppers to buy goods in case of emergency shortages.
However, things are no longer the same with e-retail. Online shopping enables customers to shop for goods of their choice at any time of the day, without any hour restriction. Owing to this factor, customers are preferring online shopping over conventional shopping.
Moreover, numerous online retailers offer services like same-day delivery and 30-minute delivery. As a result, consumers can easily get their emergency goods through online shopping. This feature of e-retail is especially useful while shopping for medicines, groceries, and other daily need items.
Product Quality Assurance
In traditional shopping, consumers often consider either the brand’s promises or the salesperson’s words for the assurance of the product’s quality. In many cases, the consumers end up disappointed, as the actual quality of the product is far from the promised one. Therefore, it is safe to say that in traditional retail, there is no rigid assurance about the product’s quality.
On the other hand, eCommerce makes it possible for buyers to get assurance of the product’s quality. One of the most prominent features of e-retail stores is customer reviews, where the previous buyers share their experience of using a certain product. This makes it easy for the buyers to make a purchase decision and shop for desired goods while staying assured of the product’s quality.
Shop From Anywhere
E-commerce makes it possible for buyers to shop for goods from anywhere in the world. You can easily find numerous online sellers and connect with them to get the best deals on the goods of your choice.
For example, buyers from India can now connect with sellers from the USA and purchase their goods. This not only promotes global commerce but also gives buyers a wide range of options to choose from.
This factor is often missing in conventional shopping, where the shopping options available to buyers are limited to a certain geographic region. Moreover, the buyers have to physically visit the stores and spend time going through the products to make a purchase, thus defying the convenience factor.
Detailed Product Information
Every customer prefers to have detailed information on a product before making the purchase decision. This is especially the case for customers looking to purchase electronic items and gadgets. However, providing detailed information on a product isn’t always viable for traditional businesses.
Moreover, in many cases, the salesperson of a business is unaware of the product’s technical aspect and is therefore incapable of providing the potential buyers with satisfactory technical information on the products.
E-commerce platforms, on the other hand, are known to provide highly detailed and precise information on products to buyers. Consumers shopping on e-commerce platforms can get A-Z information on a product, such as its features, technical capabilities, manufacturing details, visual appearance, etc.
What’s more? Consumers can easily compare the information of two or more products and find out which one is the best match for their requirements. This makes it easy for them to make the purchase decision and get the most relevant goods for their requirements.
These are a few of the many ways in which customers benefit from online shopping. However, while e-retailers and customers are benefitting from eCommerce, traditional retailers are far from happy with the e-shopping trend.
Businesses that have failed or refused to keep up with the ongoing trend of digital shopping are massively suffering and are witnessing a tremendous decline. The following section will cover the ways in which the paradigm shift from conventional retail to e-retail has impacted traditional businesses and their employees.
What Does the Rise of eCommmerce Mean for Traditional Business Sector?
The market size of e-retail is increasing, while the same for traditional retail is diminishing every day. What does it mean? Well, now that customers have started buying goods from online sellers, traditional sellers have less business than before.
As a result, it is becoming challenging for businesses to remain profitable. This is one of the major reasons why more and more traditional businesses are adopting the e-commerce trend and are taking their business digital.
You must also note that the cost of operating an e-retail business is generally lower than that of a traditional business. Therefore, shifting to e-retail not only enables sellers to remain in the business but also increases profitability.
Traditional businesses are a major source of employment and are therefore necessary for every economy. On the other hand, operating an online business requires less human resources as compared to traditional business.
As a result, one of the major side-effects of the tradition-to-digital business shift is reduced overall requirement for human resources. Owing to this factor, many people are losing their jobs and are facing unemployment.
This aspect of e-commerce might look ideal from the business profitability point of view. However, it can have adverse effects on a country’s employment market paradigm in the long run.
Thanks to eCommerce, consumers have more options than ever before to choose from in terms of brands and products. Many e-retail giants like Amazon operate with a managed marketplace model, where the platform enlists numerous sellers selling similar types of products.
This factor of e-commerce makes it easy for consumers to compare and choose products. However, it should be noted that it is ultimately the business that has to work harder to stand out among the competition and sell its goods successfully.
Nowadays, the competition that traditional retailers face is no longer limited to other retailers in the same geographical area. These retailers also have to compete with online retailers to sell their goods. Of course, every business cannot survive in this competition and gets shut down after sustaining loss.
Now that you are aware of the impact that eCommerce has on traditional businesses, you would have realized that it is a good time for businesses to go digital. However, it is often a struggle for businesses to determine which digitalization approach they should go for. The next section will thoroughly discuss the ways in which a traditional business can transform into a digital one.
Is It the Time to Go Digital?
The digital-only model of eCommerce refers to only having an online presence and not a physical one. Generally, startups go with this model, as it enables them to start a new business with significantly less investment requirement.
Here, a business can either build its own e-commerce website and/or mobile application or enlist itself on an already existing third-party platform. The former ensures high profitability, while the latter enables businesses to launch themself in the market without investing a big amount in digital platform development.
Omnichannel Commerce Model (Traditional + Digital Presence)
The omnichannel model is a combination of digital commerce and traditional commerce. Here, a business has not only an online presence but also a physical one. Naturally, the initial investment for starting a business with the omnichannel model is high, but it is noteworthy that with the right strategies and business plan, you are certain to get optimal ROI in no time.
Businesses usually do not go with the omnichannel model and choose between either digital or online presence. However, market trends are constantly changing, and therefore it is difficult to tell whether or not eCommerce will be a relevant consumer preference in the future.
As a result, it is always a good idea to have both physical and online presence to ensure business sustenance. Just like the digital-only model, you can either build your own eCommerce platform or register as a third-party seller on an existing eCommerce marketplace platform.
Regardless of whether you choose to go with the digital-only model or the omnichannel one, you will need an e-commerce platform to take your business online. That is until you choose to enlist on a third-party website. Therefore, it is essential to understand how much it will cost to develop an e-commerce platform. The following section will cover this topic in detail.
How Much Will It Cost to Develop an eCommerce Platform?
Cost of eCommerce Website Development
Websites are the oldest form of eCommerce, and are a popular choice to this day among businesses looking to go digital. E-retail websites enable buyers to shop for goods from anywhere. All it takes to use an online shopping website is an internet connection and a device like a laptop, mobile phone, tablet, etc.
It can take anywhere from $5,000 to $200,000 to build an eCommerce website. More depends upon the features that you wish to integrate into the platform. Therefore, the price can be higher or lower than the above-mentioned range.
Cost of eCommerce Mobile App Development
Developing a mobile application for your e-retail business is a million-dollar idea in 2022. With changing times, consumer preferences are shifting from websites to mobile applications. As a result, businesses are shifting from e-commerce websites to mobile applications as well.
Moreover, mobile applications make it possible to integrate high-end technologies like AR/VR into the e-commerce platform, an aspect often missing in e-retail websites. The cost of developing an e-commerce mobile application can range from $25,000 to $30,000 for a single OS platform. However, if you wish to integrate complex-level technologies like AI and VR, the cost will undoubtedly go higher than this range.
This was for the cost of developing an eCommerce website and mobile application. You can build a website, a mobile app, or even both of them according to your business’s requirements.
The scope and size of e-retail are rapidly increasing, and so is the growing customer preference for online shopping. This is because of the benefits that eCommerce provides to customers.
However, the same e-commerce has made it challenging for traditional businesses to survive in the market. To combat this, traditional businesses are going digital as well and are adopting e-commerce.
This is enabling them to keep up with the market trend and gain customer preference. Overall, by investing in e-retail, businesses can maintain their profitability and survival in the market and gain long-term success.