Modern Commerce: Traditional vs. Digital & The Prosumer
Traditional Trade vs. E-commerce
Traditional trade refers to a branch of business that focuses on the exchange of products and services through manual processes, often with limited accessibility. Transactions are conducted face-to-face, and goods can be physically inspected before purchase. The scope of traditional trade is usually restricted to a particular area, and there is no unified platform for information exchange. Marketing follows a one-way approach, targeting consumers with generalized messages. Payments are made through cash, checks, or credit cards, and goods are typically delivered instantly. The focus of traditional trade is primarily on the supply side, and business relationships tend to be linear.
In contrast, e-commerce involves conducting business transactions or exchanging information electronically over the Internet. Transactions are processed automatically, and businesses operate 24/7, offering global reach and convenience. While goods cannot be physically inspected prior to purchase, customers interact with businesses through screens, whether via video calls or website interfaces. E-commerce provides a uniform platform for information exchange, shifting the focus to the demand side. Marketing is personalized (one-to-one marketing), and payments are made through digital methods like credit cards and funds transfers. However, the delivery of goods may take time compared to traditional trade. E-commerce fosters end-to-end business relationships and enables a more dynamic and customer-focused approach.
The Evolving Digital Consumer
Internet, Web 2.0, and the New Consumer
With the advent of Internet & Web 2.0, today’s markets are conversations. People have more power, not just consuming advertising, but actively interacting with advertisers. The user is at the center of everything, from product development to delivery and after-sale support. Digital users (often highly educated, upper-middle class, adept searchers, around 30 years old, and aware of their power) are also content producers, 24/7.
Understanding the Prosumer
The Prosumer is no longer passive; they not only accept messages but also generate new content that is shared by other consumers. Customers act as social activists, consuming content through various media, anytime, anywhere, across multiple devices. Prosumers desire customized products, often having participated in their design and production.
Types of E-commerce
E-commerce, M-commerce, and Social Commerce Defined
E-commerce refers to the buying and selling of goods and services over the internet, leveraging technologies like online payment systems and digital marketing to facilitate transactions.
Mobile commerce (m-commerce) is a subset of e-commerce that specifically involves transactions conducted through mobile devices such as smartphones and tablets, offering consumers the convenience of shopping anytime and anywhere.
Social commerce, on the other hand, integrates e-commerce into social media platforms, allowing users to buy products directly through platforms like Facebook, Instagram, and Pinterest, often combined with social interactions like product reviews, recommendations, and influencer marketing.
The key distinctions are:
- E-commerce: Encompasses all online transactions.
- Mobile Commerce: Focuses on transactions via mobile devices.
- Social Commerce: Combines social media’s interactive elements with online shopping.