Published on November 15, 2024 SaaS vs. Traditional eCommerce: Benefits Compared
Being the two most distinct and popular choices for selling and shopping online, it is a tough choice to compare SaaS vs. traditional eCommerce platforms and pick the better option out of the two.
Both have equally paramount benefits, and the two software platforms have been a bane for startups and well-established businesses trying to sell products or services online. But which one should you choose specifically for your business? A comparison of clarity will help!
In this article, we have vividly curated a detailed analogy and compared the benefits of SaaS vs. traditional eCommerce. By achieving this, the readers can gain helpful knowledge and form insights to choose the most suitable digital commerce platform based on business parameters and requirements.
But let’s start first by knowing both of them!
What is SaaS eCommerce?
SaaS, also known as Software as a Service, is a distribution model for application software in which the Software is centrally hosted and accessible over the Internet. Software users may not have licenses or need to install and maintain applications on separate computers or different servers.
Its key characteristic is upgrading and maintaining Software to make the latest version available. SaaS is so easy to access, affordable, and flexible that many companies, regardless of size, choose this type of Software as their primary choice for doing business.
Top examples- Microsoft 365, Google Workspace, Salesforce, ozcart.com, Slack, etc.
Traditional eCommerce- What is it? What are its key characteristics?
Traditional eCommerce refers to directly buying and selling products and services online without necessarily demanding a face-to-face encounter between buyers and sellers. Traditional eCommerce is distinguished from new business models that bring together online and offline channels into one, such as omnichannel retail or mobile commerce, by conducting its transactions wholly online.
Critical Characteristics of Traditional eCommerce:
- Online Storefront: The firm sells the products or services through an online site or any other platform where the clients can view and order.
- Digital Transactions: Here, online payments are used that would complete the purchase procedure entirely by credit cards and through PayPal, etc.
- Inventory-Based Sales: An eCommerce business generally holds an actual inventory of the products sold directly into orders.
- The Direct-to-Consumer Model: Most traditional e-commerce companies opt for the D2C route, selling directly to end customers instead of through physical stores.
One of the best examples to understand this conventional business model is Amazon. Very popular, Walmart, eBay, Tribulant, and others are also the most prominent examples of this.
Now that we have formed a clear understanding of each of the two software solutions, we can move forward in understanding which of the two fits your business appropriately and will bring maximum revenue.
Comparing SaaS vs. traditional eCommerce in respect to their differing attributes
SaaS (Software as a Service) and traditional eCommerce are two online business models. Still, they vary significantly in intended purpose, business enterprise, and products or services.
Important Similarities
- Store Front: Both can run with no physical storefronts.
- Marketing Strategies: Both involve only digital marketing to reach the customers and retain the customer base.
Key Differences
- Product Nature: SaaS offers Software. The eCommerce model sells tangible or physical products or digital goods.
- Revenue Model: The SaaS model depends on a recurring revenue model, but in traditional eCommerce, a significant revenue source often involves one-time transactions.
- Customer Interaction: SaaS is more long-term interaction, whereas e-commerce mainly deals with one-time or non-frequent transactions.
SaaS vs. traditional eCommerce – Detailed Comparison
- Essential Product- The SaaS business model has many potential software applications available on the Internet. On the other hand, the traditional eCommerce business model sells physical goods (such as clothing and electronics) or digital goods (such as eBooks).
- Business Model- SaaS deals with B2B (Business-to-Business) or B2C (Business-to-Consumer) business models, whereas your conventional e-commerce model predominantly deals with B2C but can also include B2B models.
- Delivery model- SaaS prefers cloud-based delivery models that provide customers access to Software over the Internet using a browser with no download required to a customer’s computer. The traditional eCommerce model delivers products (physical goods) to customer addresses or allows them to download (digital goods.)
- Revenue Model- The former is subscription-based, typically charged by month or year, and the latter allows one-time sales or, less often, subscription services like a monthly product box.
- Customer Interaction- Ongoing customers interact with the Software regularly, often with access to support and updates. In contrast, the former is transactional interaction, and the customer interaction usually ends right after the purchase and delivery are made.
- Maintenance and Required Enhancements- SaaS is serviced by the vendor with automatic upgrades and enhancements. It is rarely applicable to the older eCommerce model on products and will often give warranties or post-purchase support.
- Scalability- Highly scalable, and providers can add resources for more users with minimal friction: Limited inventory and logistics for physical goods, and only digital goods are scalable.
- Infrastructure Needs- Strong servers, security, high availability, many anticipated customers; Logistics and distribution, warehouses, inventory management.
- Sales and Marketing- Customer retention through trials, demos, and getting up and running; Tailored at acquiring and getting conversion through old-school methods for online marketing.
- Customer Support Service- At reach continuously, possibly with dedicated service channels just for troubleshooting: Available when asked questions related to an order or a return or a problem with something in the product.
Generally, the distinction between SaaS vs traditional eCommerce is their use of internet utilities. Both have unique advantages, and that’s where you can find the best fit for your specific goals, preferences, and business needs.
As SaaS continues giving its users subscription-based services comprising various Software, traditional eCommerce mainly relies on sales and delivery of physical or digital products.
What is Ozcart?
An eCommerce solution for your online or physical store, trusted by businesses worldwide, Ozcart started in 2006 and has provided businesses with a seamless process to sell both physical and digital products online through an easy-to-use shopping cart system that works right out of the box.
We serve a variety of businesses like yours, from brick-and-mortar shops moving online to dropshipping companies, digital product sellers, and established eCommerce stores. Whether running a traditional business or testing a new eCommerce idea, we make it easy for you.
Start Selling with Ozcart Today!
We are a hosted solution with country-specific features designed to be simple to manage and intuitive for your customers. We’re even more committed to helping you convert more visitors into buyers, whether you’re focused on local customers or reaching an international audience.
Ozcart was created to support small and home-based businesses like yours by offering a cost-effective online sales solution. Over time, it evolved to server large organizations like governments. Pre-configured for Australia, our shopping cart system also easily adapts to other countries, including Canada, the USA, and Europe, with integrations for local payment providers and shipping services. We’re here to support your business growth every step of the way.
We are here to help make your business successful with your eCommerce site
Ozcart offers a secure, hosted shopping cart which is behind the scenes protected with updates and bug fixes. You do not have to break the bank because we’re here at an affordable monthly or discounted yearly rate, and you are free to cancel anytime. We are behind your vision.
Ready to learn more? Get detailed info on our Ozcart tour page.
People’s preference for SaaS vs. traditional eCommerce differs from businesses and sellers to end users or consumers.
Finally,
For Businesses and Sellers
Most businesses have lately opted for SaaS solutions to meet diverse operational needs, such as CRM, project management, marketing, and eCommerce platforms. This is because it usually provides low up-front costs with predictable subscription-based pricing. Also, businesses can start small and scale up with growing needs. It also has minimal IT maintenance. SaaS providers manage updates, maintenance, and security, thereby burdening down business’s tech tasks.
To the End User or Consumers
SaaS applications are pretty attractive for its customers because it enables enjoying applications like cloud storage and streaming services as well as other productivity software. The reasons why people like SaaS applications include instant access and usability, user-friendliness, and cross-device accessibility. In addition, the SaaS applications do not require any added storage or inventory and the users who value convenience enjoy the facility it provides.
Preference for Traditional eCommerce
In the case of buying clothes, electronics, and groceries online, one finds that this traditional eCommerce is more favoured and convenient. Online shopping, along with home delivery, is one such facility that matches up with the customer’s requirements to get physical goods readily and easily.
Online product sale vendors opt for the traditional way of eCommerce because most of the eCommerce sites target the retail industry.
Recent Market Trends
Growth in the SaaS industry has been happening quite rapidly and fast, more so given that most firms are adapting to a remote or hybrid approach. SaaS products are extensively used in business-to-business operations to help a firm streamline its operations while concentrating on core competencies.
Stable Demand for Traditional e-commerce
The consumer shopping trends are slowly moving towards internet shopping, especially in retail and consumer goods. The demand for e-commerce skyrocketed after 2020; the platforms are still changing with new modes of payment, customer support features, and logistics options.
The Concluding Words,
SaaS is typically preferred by any business seeking scalable solutions with technical management to a minimum. Traditional eCommerce is preferred by most retail customers who shop for products, but it favours convenient and personal shopping experiences.
SaaS vs traditional eCommerce is equally popular in their respective domains; however, preference depends upon whether the user needs services or products.
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