Traditional

Business
vs
E-commerce
By Vinayak Singh and M. Tharun
 Introduction
A traditional business is the one in which the clients engage
through face-to-face contacts and tangible transactions,
conducted out of physical facilities. It depends on providing in-
person assistance, reaching out to a local or regional market,
and operating during designated business hours. Restaurants,
retail stores, and service businesses like salons are a few
examples.

E-commerce is the buying and selling of goods or services over

the internet. It allows businesses to reach a global audience,
operate 24/7, and manage transactions digitally without the
need for a physical storefront.
 Traditional Business
A traditional business is a commercial enterprise
that operates through physical locations, relying
on in-person transactions and face-to-face
customer interactions. Key characteristics include
a tangible storefront or office where customers
can visit, leading to higher operational costs due
to rent, utilities, and staffing. These businesses
primarily serve local or regional customers, with
expansion necessitating additional physical sites.
Operating hours are limited to specific times, and
inventory is managed on-site, often resulting in
higher warehousing costs. Marketing and sales are
conducted through traditional methods like print
ads and word-of-mouth, and customer experience
is enhanced by the ability to see, touch, and try
products before purchase, fostering personal
relationships and loyalty through direct
E-Commerce
E-commerce is the online purchasing and selling
of products and services without the need of
physical storefronts, via digital platforms and
electronic transactions. It functions on a
worldwide scale, is available around-the-clock via
websites or apps, and effectively manages
inventories through digital platforms like
dropshipping. To reach a large audience,
marketing initiatives concentrate on digital
platforms like social media, email campaigns, and
online advertising. The majority of client contacts
take place digitally, with chatbots, emails, and
online customer support being used for
convenience. Since they don't require physical
storefronts and can automate a lot of
administrative work, e-commerce companies
 Economic Impact of Traditional
Business
➤ Create jobs for people with a range of skill levels to help people support their
livelihoods and lower unemployment.

➤ Provide a consistent source of income for suppliers and employees to help

maintain economic stability.

➤ Encourage the growth of local economies by supporting local suppliers and

making infrastructural investments.

➤ Promote partnerships and lend assistance to neighbourhood nonprofits and

activities to improve community development.

➤ Promote innovation in their industries by investigating, creating, and

implementing novel technologies and methods.
 Economic Impact of E-Business
➤ E-businesses can reach customers around the world, breaking geographical
barriers.

➤ They benefit from lower operational and inventory costs due to reduced need for
physical storefronts.

➤ E-businesses offer 24/7 availability and personalized services, enhancing

customer satisfaction.

➤ Streamlined operations and automated processes lead to faster and more

efficient business activities.

➤ Job Creation: New employment opportunities arise in tech, logistics, digital

marketing, and customer support.

➤ Environmental Impact: E-businesses potentially lower their carbon footprint by

reducing the need for physical infrastructure and commuting.
 Comparison of Business Models

Traditional Business E-Business

Brick-and-Mortar: Physical Online Retail: Global reach, 24/7
stores, limited hours, local availability
reach
Lower Fixed Costs: Invest in
High Fixed Costs: Rent, utilities, tech, cybersecurity
staff
Customer Interaction: Digital
Customer Interaction: Face-to- (websites, chatbots)
face
Marketing: Digital (SEO, social
Marketing: Local ads, in-store media)
promos Streamlined Supply Chain
Complex Supply Chain
 Financial Reporting Differences
Traditional Business E-Business
1) Local brand recognition and 1) Increased scalability and
community engagement. potential for rapid business
2) Opportunities for impulse growth.
purchases and upselling. 2) Cost savings through reduced
3) Job creation and support for infrastructure and staffing
local economies. needs.
4) Secure transactions through 3) Enhanced customer targeting
physical payment methods. and personalized marketing
5) Higher customer loyalty strategies.
through personal 4) Quick and streamlined
connections. transaction process, reducing
6) Enhanced customer feedback manual paperwork.
and market research through 5) Data-driven decision-making
direct conversations. through analytics and customer
insights.
6) Seamless integration with
 Survey Methodology
S.no Questions Answers Participants
1. Education Bachelor 74
Master 26
2. Gender Male 66
Female 34
3. Have you ever used e-commerce Yes 66
shopping? No 34

4. From where do you purchase more E-commerce 45

often? Traditional 55
Business
5. Which sites do you use? Amazon 60
Flipkart 25
eBay 5
Myntra 10
6. What do you trust the most when it E-commerce 40
comes quality of service, satisfaction Traditional 60
and secured transactions? business
7. Which provide more employment and E-commerce 30
 Research Findings

100 local participants were participated in

the Survey. Most of them were
Government employees residing in RK
Puram Sector 2, New Delhi; and others
were in different professions. It can be
seen from the survey what was the gender
participation; education level; their
shopping experience and expectations for
e-commerce and traditional business in
the future.
Survey Results: Traditional
Business
Traditional Business comes at first preference
over e-commerce amongst 100 participants in
survey. Of them, 55 were frequently purchasing
from Traditional Business. According to them,
Traditional Business is mainly attributed to
quality of items that can be ensured on the
spot; whereas assessing the quality is
cumbersome and risky in e-commerce
shopping.

They also preferred traditional business to get

first hand experience and immediate
satisfaction. Secured transactions through
physical payment method is also a factor as to
 Survey Results: E-Business
E-Business comes at second
preference over Traditional Business,
amongst 100 participants in the
survey. Only 45 participants were
purchasing from ecommerce.

E-Business is assumed to be a major

threat to traditional businesses in
terms of direct employment.
However, participants preferred this
mode of shopping because it
provides them a wide range of items;
saves time and detailed information
of the product on desk.
Comparative Analysis
Traditional Business

E-Business
 Conclusion
E-commerce and traditional commerce are two different ways
that businesses can conduct business. E-commerce uses the
internet and digital platforms to its advantage, whereas
conventional commerce depends on in-person contacts and
physical stores. Every model has specific benefits and
drawbacks of its own. Businesses must comprehend these
distinctions in order to make well-informed selections about
how to approach commerce, taking into account variables like
target market, scalability, operational costs, and reach of the