Online vs “Traditional” Commerce

Essays in this ecommerce series:

Expectations Are Learned Offline

Users come to online commerce with some key experiential understandings of the characteristics of traditional commerce.

Identity. Customers can easily authenticate the identity of a merchant simply by walking into a bricks-and-mortar store. Stores can be members of a community and neighborhood; they can be part of customers’ daily experience. There is a concreteness about a physical store that no amount of HTML will ever match.

Immediacy. Customers can touch and feel and hold the merchandise. Tactile cues can drive the decision to buy. A transaction that is face-to-face is usually unmediated: your communication with the merchant is not in the hands of a third party or technology (as with ordering by phone).

Value. The item at the center of the commerce transaction — the product, service, or property that is to be sold/bought — has some kind of value. Its price is determined and validated through the performance of the transaction. The seller agrees to a selling price, and the buyer agrees to a buying price. The value of an item, especially the relative value an item has for the buyer, is much easier to appraise if that item is close at hand.

Discourse. Customers can converse with the merchant face-to-face; unmediated conversation is basic to human communication. People want the feedback available from non-verbal behavior, which forms a large part of our judgment process.

Community. Customers can interact with other customers and gain feedback about the merchant from other customers, as well as by observing the merchant interacting with other customers.

Privacy. Customers can make purchases anonymously with cash; they usually don’t have to give their name or address. They don’t usually have to worry about what a store will do with their personal information, although this is becoming more of an issue with various recent attempts by lawyers to access private sales and rental records. Privacy is often a measure of how much of his or her identity a buyer wants to invest in a transaction; sometimes, we just want to quietly make our purchase and leave with it.

An online commerce customer faces mediation in every element and at every stage of the commerce transaction. Customers can’t see the merchant, only the merchant’s website; they can’t touch the merchandise, they can only see a representation; they can’t wander a store and speak with employees, they can only browse HTML pages, read FAQs, and fire off email to nameless customer service mailboxes; they can’t explore the store’s shelves and product space, they can only search a digital catalog. A customer at an online commerce site lacks the concrete cues to comfortably assess the trustworthiness of the site, and so must rely on new kinds of cues. The problem for the online customer is that the web is new — to a large sector of the online audience — and online commerce seems like a step into an unknown experience.

Different Kinds of “Traditional” Commerce Models

Not every commerce transaction is identical, and not every transaction is the same type of transaction. In my experience, I have dealt with roughly five types of commerce transaction offline (this is not an attempt at a taxonomy of commerce transactions, just my common-sense exploration of my own experience):

retail store
This is by far the most common commerce experience in American culture: you walk into a store that is stocked with merchandise for immediate sale — bookstores, grocery stores, hardware stores — and find what you want, then purchase it. You leave the store with the product, assuming immediate ownership.
retail special order
When a retail store doesn’t stock the product you want, or is currently out of stock, you often have the option of special ordering the product. If a bookstore doesn’t care a small press book title that you want, and the title is in print, you can usually special order the title from the store; the store locates the product, buys it, then resells it you. Delayed gratification, but you have the advantage of dealing with a merchant face-to-face. I would consider rain checks in this same category.
catalogue store
Smaller towns sometimes have catalogue stores, where a large merchant doesn’t see a local demand to keep a store stocked with merchandise, so they instead provide a storefront where people can come in and look at catalogues, and order from a company representative. Sears is a company that operates catalogue stores (or at least they used to), and Service Merchandise functions as a catalogue store for much of their “stock”.
phone order from a catalogue
Mail order catalogues, with their operators standing by, have been around longer than the internet. While you can’t touch and feel the merchandise prior to ordering, you can at least speak with a live person when placing the order; I’ve had some excellent shopping experiences with mail order catalog customer service reps.
bargaining
I find this the strangest form of commerce transaction; I simply am not used to bargaining… just give me a price, and I’ll decide whether or not to pay it. The United States is not a country with a vibrant bargaining culture, but if you travel internationally you will encounter cultures that thrive on bargaining. In the U.S., buying an automobile or shopping at collectors conventions is often a bargaining experience.

While these may be different types of commerce transactions, they are all clearly related. They share elements like the roles involved (seller and buyer), steps in the transactions (price must be agreed upon, money must change hands), and underlying concepts (the value of this merchandise to me, do I know this merchant?). Ultimately, these different transactions differ only slightly on some few elements, with the bulk of the transaction adhering to the internal models that we have built for what commerce is like.

In fact, based on our experience, we build frameworks to describe these transactions, with steps and meaningful elements, and we use these frameworks to understand every new commerce transaction in which we engage. These frameworks are called schemas, and we use these schemas to make sense of ecommerce web sites when we take our shopping online.

[ Read the next essay in this ecommerce series, Schemas & Concept Mapping.]