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25 Difference Between Retail and Ecommerce | Ecommerce vs Retail

Shopping is a necessity, but it can also be therapeutic and fun. In some form or another, it serves a great purpose...

Written by Niel Patel · 6 min read >
ecommerce vs retail statistics

Shopping is a necessity, but it can also be therapeutic and fun. In some form or another, it serves a great purpose in today’s world. While we are used to seeing traditional shops for practically forever, now many prefer advanced technology and the digital shopping experience. 

Many retailers turn to online shopping platforms due to the demanding customers that prefer to save time rather than wait in physical queues. Thanks to technology, it managed to change many habits. But are there any challenges when it comes to the great advancement of e-commerce? Keep on reading to find out. 

Types of e-commerce models

  1. Business to Consumer (B2C)
  2. Business to Business (B2B)
  3. Consumer to Consumer (C2C)
  4. Consumer to Business (C2B)

Difference between ecommerce and online retail

Many businesses today are both retail and e-commerce. When comparing both of the matters, you can see a slight difference. That said, both involve selling items to people, but retail is known for being an in-store sales medium, and e-commerce is designed for selling stuff online. For instance, if back in the day Target was a retail store, now you can find its items sold on the internet. 

Nowadays, you can buy or sell anything online, starting from apparel or books, and ending in software and digital services. Before the presence of e-commerce, a popular business model was brick-and-mortar retail shops. In this case, retailers had to have at least one physical location. Due to digitization, this type of commerce is moving its business to the digital sphere. 

How E-commerce Became a Success

The internet, apps, cloud-based software and digital ads are all factors that determine online shopping and its popularity. The success of e-commerce is partly because of the borderless transaction possibility. The efficiency or accessibility of online shopping makes it so attractive to many customers around the globe. 

E-commerce doesn’t require salespeople, as online shoppers can see the prices, compare them and find information about the products online themselves. For this reason, the ease of digital shopping made a huge impact on traditional retail forms, setting a high standard for a seamless shopping experience. 

The Benefits of E-commerce

E-commerce has become mainstream. As the usage of the internet and mobile devices increases, more people love to benefit from flexible online services, including shopping. On top of that, the fintech industry has shown its value throughout recent years, simplifying and transforming the payment methods for e-commerce and other sectors of the digital economy. That’s why more businesses strive to run an e-commerce platform, as it helps:

  • Manage the business easier. E-commerce platforms can have one dashboard to cover all operational matters. By managing shipping, payments and orders, e-commerce businesses grow more insights on how to improve their companies and meet the ever-growing customer demand. 
  • Use smoother marketing solutions. There are various digital marketing tools that help e-commerce businesses to execute and analyze campaigns more effectively. Built-in services help reach a wider audience. 
  • Sell globally. There’s no need to open physical stores in multiple countries. Using an e-commerce platform makes it possible to sell from anywhere to anyone. 

How to Start an eCommerce Business and Make it Successful?

Naturally, let’s not forget that online retailers rely on digital transactions and are integrating cost-effective fintech solutions into their mobile apps. That’s a huge benefit to customers, as they expect fast and user-friendly payment options. E-commerce is also known for its data-driven nature, which contributed to making online shopping so popular. E-commerce players use data to track consumer behavior and find out more about their preferences, ensuring that such observations keep up the sales. 

Customer-oriented Industry

E-commerce players face competition; therefore, businesses need to search for innovative ways to bring out as many benefits to customers as possible. One of the holy grails, in this case, is the affordable discount prices. E-commerce offers new products and services that match the clients’ needs. They also use personalization tactics to improve the overall digital shopping experience.

Since e-commerce consumers are used to the comfort and not having to go to physical stores, online retailers need to go the extra mile to make it a unique experience tailored to the customers’ needs. Businesses gather insights collected from customers’ purchase histories to suggest items that match their needs. 

E-commerce companies can handle such personalization and overall competition due to the relatively low costs of running an online business. Specialists argue that it’s cheaper to create and maintain an e-commerce platform rather than open a physical store. That’s because e-commerce eliminates the need to store and catalog products in stores, which makes online shopping more convenient and accessible for today’s customers.

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The Retail Shopping Experience

Despite the convenience that e-commerce platforms are known for, retailers have other benefits to offer. While shopping in stores, customers can review the items and consult sales professionals in real-time. On top of that, many retailers, especially outlets, have better discounts compared to online platforms, leaving some of the goods exclusively for in-store shopping only. Additionally, retailers don’t need to worry about shipping and lost parcels. 

Another great thing about retail is that you can inspect the item carefully before buying it in-store. Also, since you see and review the goods before you make the purchase, there’s less of a chance that you’ll return the item. Of course, in this case, there’s no need to worry about shipping prices as well as the need to wait for the package to come. Besides, you can ask consultants for help while in stores. 

Ecommerce Trends Dictating the Future of Retail Industry 2022

Common Risks with E-commerce

E-commerce is continuously growing. Up to the point that 95% of all purchases are expected to be done through e-commerce by 2040. With such volumes comes a risk. Since the main focus of selling online is to protect data, businesses need to know more about the ways they can achieve this goal. The first step is to be aware of the online threats that could potentially lead to data breaches. Check out the challenges that e-commerce faces today:

  • Data leak risks. Bad actors are getting away with more complex schemes when it comes to hacking and stealing data. They tend to find their way into internal networks by deploying ransomware and malware or by gaining access to the staff’s personal details through phishing.

For this reason, e-commerce players need to save their reputation by implementing a stricter data policy and training employees regarding good cybersecurity hygiene. To prevent cyberattacks, e-commerce businesses implement protocols such as two-factor authentication (2FA). 

  • Human error. It’s more common than you think. There are cases when employees accidentally delete important information or send an email to the wrong recipient. This way, they lose or leak data.

Sometimes, the cause of human error is the lack of experience or an innocent mistake. Despite that, it can cause data leaks and millions in damages. To prevent these scenarios, businesses need to monitor their staff, train them, and, most importantly, have a data recovery solution. 

  • Unauthorized access. It’s important to control access to essential business data. To begin with, e-commerce businesses need to strategize data access security, meaning that not all employees have to access all company files.

There’s a limit for a reason, as internal data breaches are a real risk; therefore, a stricter policy helps prevent cyberattacks and data leaks. Another golden rule when it comes to a good cybersecurity policy is maintaining proper password hygiene. Don’t forget that recycling credentials can open a wide door for hackers to strike. 

How to Prevent Cybercrime in E-commerce? 

One of the most effective ways to prevent cybercrime and stop fraud is to perform Business Verification. This digital procedure is powered by artificial intelligence, helping e-commerce companies scan and review their business partners.

This is vital, as Business Verification helps detect shell companies and safeguards the business from becoming a money-laundering channel. Monitoring your partners’ activity helps prevent the misuse of assets, and, once again, protects your company’s reputation as well as helps avoid regulatory compliance fines. 

Difference between E-commerce and Retail

RetaileCommerce
In Retail, the commercial activities are carried out person-to-person commercial activities like malls, supermarts, and departmental stores to the consumer in a small quantity.In e-commerce, commercial activities like buying and selling products, transactions, etc are carried out through an electronic network means the internet.
Retail is time-consuming as searching for products sometimes takes time along with making payments but product availing is so fast.E-commerce is not time-consuming as searching for products is easy, and making transactions is easy only arrival time depends.
In retail one customer can physically interact with the product means the customer can hold/touch the product, can feel the product and makes the decision.In e-commerce one customer can not physically interact with the product means the customer can only see the image and videos of the product and makes a decision.
In retail comparing prices with different vendors is not easy for a customer.In commerce comparing prices with different vendors is easy for a customer.
Customer needs to travel to the retail store physically for shopping.The customer does not need to travel to the retail store physically, all activities performed online just sitting at one place.
In retail, a customer can avail a product quickly.In e-commerce, a customer can not avail the product quickly as it takes some time to come to the customer.

Concluding Remarks

Retail and e-commerce have their own benefits, that’s why many businesses still own physical stores, and, at the same time, run online shops. Due to the fast-paced environment and many predictions, it’s a fact that e-commerce is here to stay. The efficiency and comfort that it brings help consumers receive an excellent shopping experience. To maintain high standards and ensure complete security, e-commerce players should update their data policy and use digital tools to prevent fraud and online crime. 


What are the similarities between e-commerce and e-business?

Retail and online shopping both are centered on the concept of selling goods and services and offering support, assistance, and information to customers as needed.

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