The Changing World of Retail Multi-Channel Retailing

Question: Task Following on from this your individual report will be based on the attached article about on-line shopping and will consist of: A critical analysis of the effects of on-line shopping on both consumers and retailers in terms of the advantages and disadvantages to each. You should include in this a discussion based around the articles contention that the future of on-line shopping could be about less choice for consumers, not more. Answer: Effects of on-line shopping on both consumers and retailers in terms of the advantages and disadvantages to each Introduction In the last 20 years, many technological changes had taken place, which has made the life easier for people in all parts of the world. Internet is the best medium for communicating with friends and relatives. Online shopping culture has also evolved in last few years, which has brought boom in the market, and retailers have also came online. Its the easy and secured medium for doing online shopping and customers are enjoying it. As Alba and Hutchinson (1987) have mentioned demographics are not so crucial for the purpose of determining the potential online shopping (Alba, Lynch, Weitz, Janiszewski, Lutz, Sawyer and Wood 1997). The propensity of the risk taking is referred as the powerful factor(Alba, Lynch, Weitz, Janiszewski, Lutz, Sawyer and Wood 1997). Its noted that online shopping is considered as the high risk holding tendency (Aldridge, Forcht and Pierson 1997). Consumers holding the high privacy as well as security concern hold the lesser rate of purchasing in the online shopping, but at the sametime they try to create balance through their quest for making sue of the information benefits (Aldridge, Forcht and Pierson 1997). Consumers are educated and even confident in decision making, they are even demanding, and online shopping tries to meet their demand by providing them with an effective purchasing process (Aldridge, Forcht and Pierson 1997). Advantages You could buy anything anywhere- It has been found that their purchasing power and income are quite consistent and they are shifting from Bricks and Mortar shopping towards online shopping (Bakos and Brynjolfsson 1999). Any websites buy any products- History of online usage as well as intensity also impacts the potential of online shopping so as people use the internet more, they use it more for shopping (Bakos and Brynjolfsson 1999). Save time - The online consumers of the 21st century are professional, young as well as affluent with a high income and good education (Adee 2002). Consumers at the present time give more value to money and time. Non store retailers are trying to target working people and households with the problem of time constraints (Bakos and Brynjolfsson 1999). Disadvantages Security- The main reason behind the online shopping reluctance is the difference as well as the cost incurred by distance shipping, along with various other factors like theimproper amount of online shopping associated information, obstacles that create experiences related to the purchase such as refund and delivery issues, general fear of security, and different perceived risks like product quality and financial risk (Bakos and Brynjolfsson 2000). Reliability- Reasons behind abandoning online purchase is often quite technical like the complexity of a transaction or the unexpected cost of shipping (Bakos and Brynjolfsson 2000). Need to have credit card or PayPal otherwise you cant pay it off through online- There are some consumers who accept online shopping, but the technical complexities tend to discourage them (Bakos and Brynjolfsson 2000). Most of the retailers try to communicate continuously with their consumers as well as business partners, in order to collect and disseminate information and even try to solve the issues of business immediately as well as effectively by the use of latest information technologies; therefore, exchange of information has become quite easy for the retailers online (Alba, Lynch, Weitz, Janiszewski, Lutz, Sawyer and Wood 1997). Advantages Geographic- The operational benefits related to online shopping include accessibility from various areas as well as time zones all over the world, which is mainly introduced through the international business opportunities (Alba, Lynch, Weitz, Janiszewski, Lutz, Sawyer and Wood 1997). Customer loyalty- Retailers get benefit from online shopping, as they are able to reduce the red tape in global operations, provide effective as well as interactive ads, create possibilities for conducting personalized business, and make marketing research and analysis tools available. Overhead cost- It also reduce the capital as well as overhead costs, reduce the operational costs, reduce the capital costs, gain benefits of tax andincrease the effectiveness of the business to business transactions (Chary and Christopher 2003). Reliabilities- Retailers are also able to conduct flexible ordering, try to level the playing field with various other companies, do better tracking of orders, increase the image of the company through appearing better in the cutting edge of technology, and meet the huge audienceof prospective clients in the online market (Chary and Christopher 2003). Disadvantages Security- Retailers often face the problem of security as well as privacy, along with various other problems including strategic, operational as well as cost based issues (Christian 2001). Competition- Retailers are also affected through the challenges occurring in controlling the online transactions, measuring the results, entering high cost online business, challenges in setting the prices at the global level, cultural issues, and increasing intensified competition (Alba, Lynch, Weitz, Janiszewski, Lutz, Sawyer and Wood 1997). Cost- Retailers are also impacted through the variation in the global tradelaws, changes among the infrastructure of telecommunications, and the technical standards of various countries, high individual delivery costs, challenges in dealing with virtual transactions, issues related to the disintermediation, lack of socialisation, technological fear from the experience of the consumers, and lack of tactility by consumers (Neeraja 2005). Therefore companies need to implement systems for the purpose of determining thecosts as well as financial rewards of going for online business to ensure that the advantages are more than disadvantages (Alba, Lynch, Weitz, Janiszewski, Lutz, Sawyer and Wood 1997). Discussion on future of on-line shopping could be about less choice for consumers, not more. Online business is most likely to continue to grow overtime, as there are more individuals thatare focused towards fulfilling their personal requirements and shopping aims (Ruddick 2014). The article heading of whether online shopping will be preferred by consumers, provides a glimpse of the problems, and what retailers might get wrong, in the market where massive choice is considered as good and limited choice is referred to as bad (Ruddick 2014). Itstrue that in the present time consumers expect more choices; therefore any restriction imposing on choice is considered as a bad thing. (Ruddick 2014). It is likely that where there is a tradeoff, small choices will be seen as a priority (Ruddick 2014). For example, Amazon considers it provides the ultimate offers with an unlimited selection. Thereare many consumers who find it highly frustrating, as it does deals with the media as well as using reviews of consumers doing their own marketing for the brands as well as through word of mouth (Ruddick 2014). Conclusion Its expected that consumers choices will get increase, as more and more companies are entering in online market for offering their products. Its noted that online sales in the UK market is up to 100 billion for the first time. The future of online business is bright and the consumers choices will increase with the increasing companies and innovation taking place in the market. References Alba, J.W and Hutchinson, J.W. 1987. Dimensions of consumer expertise.Journal of Consumer Research, 13(4), pp.411-54. Alba, J.W., Lynch, J., Weitz, B., Janiszewski, C., Lutz, R., Sawyer, A. and Wood, S. 1997. Interactive home shopping: consumer, retailer, and manufacturer incentives to participate in electronic marketplaces Journal of Marketing, 61(7), pp. 38-53. Aldridge, A.; Forcht, K. and Pierson, J. 1997. Get Linked or Get Lost: Marketing Strategy for the Internet.Internet Research, 7(3), pp. 161-9. Adee, A. 2002. Internet Users Intention to Purchase Air Travel Online: An Empirical Investigation Marketing Intelligence Planning, 20(4), pp. 234-242. Bakos, J.Y. and Brynjolfsson, E. 1999. Bundling Information Goods: Pricing, Profits and Efficiency.Management Science, 45(12), pp.1613-30. Bakos, J.Y. and Brynjolfsson, E. 2000. Bundling and Competition on the Internet.Marketing Science, 19(1), pp.63-82 Chary, S.T. and Christopher, M.T. 2003. E-commerce and Indian Consumer. Indian Journal of Marketing, 23(4), pp. 29-31. Christian, R. 2001. Developing an Online Access Strategy: Issues Facing Small-To Medium-Sized Tourism Hospitality Enterprises. Vacation Marketing, 7(2), pp.170-78. Neeraja, G. 2005. E-Business-Trends and Issues. Indian Journal of Marketing, 25(12), pp. 22-23. Ruddick, G. 2014. After 20 years of online shopping, why the future could be about by less choice for consumers, not more.[Online]. Available at: https://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/11035572/After-20-years-of-online-shopping-why-the-future-could-be-about-by-less-choice-for-consumers-not-more.html[Accessed on: 1st May 2015].