Traditional Trade vs Modern Trade
Right from the ancient times when barter was the only form of trade, as there was no money to make profit, trade has gone through a number of changes, both monetarily and technologically. If we include barter in traditional forms of trade and compare it with modern forms of trade such as buying and selling products on the internet, we find a host of differences between the two. Not getting to see the face of the shop owner, choosing product on one’s own and getting it billed electronically is another important difference between traditional and modern trades. Let us take a closer look at the situation.
More than half of the world’s population of 7 billion lives on a paltry $2 per day (or less) and comes from developing (read poor) countries. This segment still buys and sells through traditional means of trading, which has been stagnant for quite a few decades now. This populace still buys items in retail stores, which are far smaller and much less sophisticated than the glitter and technology of modern retailing. The word traditional trade is collective representation of these small, simple stores.
Traditional trade also includes roadside vendors and food stalls on highways, cities and villages in all parts of the world. All markets in cities having single shops also come within the purview of traditional trade. There are countless examples of people opening up shops in the garage, or in the front section of their homes to do retailing in the traditional manner.
All big retail chains in the form of hyper stores and malls coming up in middle class cities after they have saturated in metro cities of countries like India, China, Brazil, Indonesia, and of course the developed world represents modern trade around the world. The big change to retail has come through multi-brand shops in malls and the way businesses are conducted; electronically on the net, with far less constraints of space and infrastructure. The marketing and supplying these electronic stores and big malls is totally different from the demand and supply chain of the traditional markets.
What is the difference between Traditional Trade and Modern Trade?
• In traditional markets, the shop owners are actually no more than gate keepers though they get to keep profit involved in transactions. On the other hand, there is virtually no owner to be seen by customers in modern trade such as multi-brand stores in big malls and electronic stores.
• When the entire market is in front of a customer in the shape of a 2X2” mobile screen, it makes all the difference between the way people bought in traditional markets and the way they do today in the modern world.
• Modern trade can be conducted at any time anywhere in the world even when the consumer is flying over skies or inside a moving train. On the other hand, traditional trade requires the presence of the customer in the shop and the display of all items on sale.
• Self service is the main feature of buying in modern trade while, in traditional trade, the onus of display and selling was on salesman and shopkeeper.