A Detailed Article on History of Commerce

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History of Commerce

In order to understand Commerce, one must first understand the history of commerce. Trade has accompanied people from biological to cultural evolution. Especially in the past two centuries, there have been relatively far-reaching changes both in the appearance of trade and in the trade itself. This temporal relationship coincides directly with the development of the consumer society.

A total of three eras can be distinguished. At the outset, the trade is traded, in which people had to provide themselves for the most part. The consumer, as it exists today, was still unknown, demanded almost exclusively craftsmanship. Retailers and wholesalers were not yet separated, there were weekly markets, and in larger cities, products were sold directly at the production sites. In the middle of the 19th century, smaller traders started to sell and sell products in attractive sales areas.

From this idea developed the first department stores and successful retailers developed a first simple branch network. A separation between wholesale, retail, and industry was slowly becoming visible. At the beginning of the 21st century, stationary trading continued to grow abroad, while online trading created new conditions. This created the challenge for retailers to address consumers across all channels.

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Closely connected and a requirement for the trade is, of course, the consumption, which has meanwhile shaped a whole society. Consumption and trade belong together.

Emergence of the consumer society

The term “consumer society” is broadly defined and so far not clearly defined. Consumer society can be understood as a replacement for other forms of society and viewed as a further social period. The majority of the population takes part in new forms of consumption available, making consumption a mass phenomenon. This, in turn, has a cultural, social and economic significance.

Among historians, there is a common opinion that a differentiated consumer culture began to develop since the eighteenth century. Until then there was scarcely any freedom of choice, actually the basis for the consumer society, because of a lack of supply. However, the necessary preconditions were created by the already described branching of trade.

Before the First World War, consumption, though still different, is expanding in the social strata. In the inter-war period, consumption is not increasing any further; in the Nazi regime, armament and self-sufficiency even limit consumption accordingly. It was only with the economic miracle in the 1950s and 1960s that consumption began to pick up again.

An exciting sociological theme

Consumerism is not to be equated with materialism. The material properties of a product usually affect the purchase decision less than the ability to stimulate the consumer’s imagination. The consumer society does not happen to happen parallel to the advent of passion for novels in society.

The sociologist Colin Campbell interprets this as an expression of the desire for strong feelings and change. In addition to literature and fiction, consumer goods also help to forget everyday life. Today, consumers spend their money on many different things. Nutrition, clothing, housing, sexuality, mobility as well as entertainment and pleasure can be cited as central themes. Above all, the goal of personal individualization is at the forefront. The consumer provides a way to establish individuality while to integrate into social circles and shapes the modern zeitgeist.

Within the consumer, society leisure has a much larger share than working time. As a result, a large part of the income is also spent on leisure activities, eg amusement parks, cinema or entertainment electronics. In the course of the twentieth century, expenditure on community and collective entertainment has declined and expenditure on individual leisure activities is rising disproportionately and is a first indication of the trend towards media entertainment.

Consumers’ wishes are difficult to estimate

This change already shows that the consumer culture is characterized by a constant change. Consumers’ wishes are leaps and bounds and lead to a certain degree of uncertainty in trade. Trade can no longer plan as long as it did in previous periods. In addition to the consumer factor, an ever-shorter innovation cycle contributes to the fact that new products are coming onto the market and that consumers are constantly challenging new manufacturers and traders.

This has given trade a new challenge. In this context, the question arises of the most important and at the same time elementary framework conditions in trade.

Framework of trade

After the financial and economic crisis, domestic consumption has contributed to a positive overall economic development in recent years. The potential of trade for the next few years is the result of a closer look at the distribution of total household income in consumption and saving and a further subdivision into other consumption expenditure and expenditure on the retail trade itself.

The development of household income is seen as positive in the short term, supported by tax relief or insurance relief. The income itself, however, develops differently. Especially in Germany, the difference in salaries has grown as much as in hardly any other country. The top ten percent of the population earn eight times more than the lower tenth of the population.

Wages rise, purchasing power stagnates

Overall, the wages have only increased slightly in recent years, which were also directly offset by about two-thirds due to higher consumer prices. This increases the total income, but the purchasing power stagnates. This is also due to the fact that the German population, despite low-interest rates, continues to save a lot and the available budget is more in other consumption expenditures. This includes, among other things, electricity, expenditure on medicines and health, or spending on mobility, such as cars and travel.

The share of private consumption in private consumption has steadily declined in recent years and was only around 29% in 2013. The forecast of the political situation is more difficult to estimate than the macroeconomic conditions. It is not possible to predict whether the Eurozone will continue to exist within a few years and which governments will continue to change the framework conditions. The bauxite shows the development clearly. These uncertainties are feared by the financial and real markets. Surprisingly, these circumstances have little influence on the German economy, which, as already described, has proved to be stable and should remain so in the coming years. We hope.

The trend towards the single household

In contrast, the demographic conditions can be assessed better. On the one hand, the main focus here is the aging of the society in Germany and thus also the population decline in Germany as a whole. 2050, according to current estimates, only 69 million people live in Germany, more than half of the population is 50 years and older. The Group’s approach is therefore particularly important for retailers in the coming years.

Despite the decrease in the total population, the number of households is increasing, the trend towards a smaller household continues. In 2050 about 74% will live in 1- or 2-person households. Since every household has to be individually equipped with furniture, electrical appliances or entertainment electronics, this is a positive effect for the trade and particularly for the relevant sectors. The inclusion of these frameworks naturally also poses new challenges for the marketing communication of the trade.

Transactional orientation to a sustainable relationship

Historical Background of Commerce of trade and consumption and its developments and the basic conditions make the communication of a company with the customer strongly gain in importance. Ultimately, consumers’ decisions are the foundation of every company and the goal of customer communication is to establish a long-term relationship. In marketing, the transaction-oriented approach with the acquisition of new customers came first. Today, a move towards a sustainable customer relationship has been established, as the structure and maintenance of such a relationship is overall more profitable. However, there is relatively little to note in the telecommunications sector – but this is another construction site.

Dialogue communication as a new concept in marketing

There is a change from mass to dialogue communication. This includes all the measures of a company that enables a permanent, interactive information exchange between companies and current and potential customers in order to maintain and expand profitable customer relationships.

The customer communication is integrated into a voltage field with four central factors. These include the

  1. customer expectations and expectations,
  2. the context of interaction between companies and customers,
  3. the market environment, and the
  4. social trends. The term “communication” is understood above all as entrepreneurial communication between the supplier and the consumer – the marketing communication thus comprises the totality of all communication instruments and measures of a company that is used to represent the company, the products or services to the relevant target groups and interacts with them to kick.

According to the history of commerce and consumption and the up-to-date inventory, the next part will look at the future through trends and scenarios in trade.