The Future of E-Commerce

Table of Contents

Introduction

Characteristics of Traditional Retailing System

Key Features of E-commerce

Similarities between E-Commerce and Traditional retailing

Cross-Over Marketing Approaches

Market Research

Providing Incentives

Differences between E-Commerce and Traditional Retailing

Literature and Statistical Review

Why E-Commerce is Over Taking the Retail Business

E-Commerce Challenges

Future of E-commerce

References

Introduction

Traditional retailers have been serving a huge percentage of the population who are dependent on them for the provision of various products (Zhou & Zhang, 2007). However, buying goods or services over the internet has been a growing trend attracting huge popularity in the past few years (Cebi, & Bayraktar, 2003). This is principal because more people find it expedient and simple to shop from their offices or homes without the conventional work of going from one shop to another looking for goods and services (Chaffey, 2002). E-shopping or online shopping includes a kind of e-Commerce that lets customers to directly shop for various products and services through the internet's virtual shop (Sivakumar & Roy, 2004). With the new e-Commerce platform characterized by e-stores that have incentives and broad varieties of products, the traditional retail system has been significantly affected. E-commerce has slapped the face of the conventional retail business with the fear of helplessness and uncertainty (Teece, 2010).This paper explores the effect of the increasing trend of e-Commerce over the traditional bricks and mortar shop retailing system. It highlights several aspects regarding the manner in which the conventional retail businesses have been affected by the invention and growth of e-Commerce and whether there any strategies that traditional retail businesses are employing as a comeback strategy.

Characteristics of Traditional Retailing System

Traditional commerce refers to a business segment that focuses on the exchange of services and products. It includes all the activities that initiate exchange (Heizer & Render, 2001). In traditional retail systems, inspection of goods can be done physically and there is no common platform for information sharing regarding the market and products offered (Sherer, 2005). The traditional retail system focuses more on the supplier side, unlike the e-commerce that concentrates on demand of products. Marketing in traditional retailing is done on one way while means of payment include the conventional platforms such as Cheque, cash or credits cards (Sherer, 2005).

The traditional retail business was characterized by logistics. The movement of products from manufacturers to the end consumers was rather slow. There are more inventories involved in distribution along the supply chain. Further operational costs of the retail facilities are exorbitant. Processing of transfer of goods in the supply chain is done manually at all stages and is dependent on people instead of machines.

There is a general decrease in efficiency of the process as a result of human errors and lack of appropriate resources needed to swiftly process the documents (Sivakumar & Roy, 2004). The conventional approach to logistics witnesses in the traditional retailing has become a past memoir that finds it hard to thrive in the present day age of digital technology and automation where time is a significant factor of products and service delivery (Sivakumar & Roy, 2004).

Key Features of E-commerce

E-Commerce is an approach of conducting business transactions electronically mainly via the internet. Powered by consumer and technology preference, current logistics in the e-commerce platform is characterized by swift deliveries of goods and services from the suppliers and service providers to the customers. This has enabled items ordered on a different region of the globe to reach their destination within a specified time (Sherer, 2005).

In e-Commerce, the focus is on the direct transport delivery across several stages of the supply chain. The e-retailers execute a multi-channel distribution model that requires handling of the products with precision and real-time access to the inventory. These approaches are made possible because of the increased technology that is the backbone of e-retailing business (Dogan & Sahin, 2003). People across all parts of the globe are now in a position to order quite expensive products from their place of choice and expect to get them within a short time (Chou & Tan, 2004). Logistics in the delivery of the goods to the clients do play a great role in the efficiency of the approach. It helps the e-retailers to win the trust of their customers with time (Sherer, 2005).

Similarities between E-Commerce and Traditional retailing

Cross-Over Marketing Approaches

Both e-commerce and conventional business models possess equivalent needs in regard to the promotion of business organization through both physical and online adverting and marketing platforms (Lamber & Ellram, 2001). With an eventual objective of reaching out to the highest number of potential clients, there happens to be significant of crossover. Online retailing seeks to expand their efforts into broadcast and print media. On the other side, traditional retailers are also investing in stepping up their businesses through web-based social and marketing platforms (Laseter & Oliver, 2003).

Market Research

Both e-commerce and brick and mortar invest in understanding their customers and their needs. The process includes shared information needed for carrying out market research (Sherer, 2005). Online retail businesses basically have the opportunity of expanding to a global level while brick-and-mortar businesses are starting to take a similar approach. An innovative traditional retailing business that has national and universal shipping policies can extend their effort past the country or region (Lamber & Ellram, 2001).

Marketing Innovation

Every business use marketing approaches meant to reach out to potential clients through marketing strategies that appear to be innovative. These approaches include mobile phone promotions, e-newsletters, and e-mail marketing campaigns (Richard, Yougang & Gordon, 2008). Several retailers use mobile technology and apps to increase their marketing inputs by creating easier platforms where their customers can click, find and purchase their desired goods (Mackay, Altman & McMichael, 2003).

Providing Incentives

Both E-Commerce and traditional retailing employ similar tools as incentives to reach out to clients. E-commerce enables business organizations to have an easy time introducing a new product on the website because clients respond immediately. With e-commerce, it becomes simpler to introduce a new product on the business's website and obtain an immediate response from the customers. Through this approach, one can get to know how customers think about the new products (Kothari, 2010). This is a quick way of understanding about a product as compared to the traditional system where the customers might not even get the time to write their feedback in some papers regarding a service or product (Chou & Tan, 2004).

This includes carrying promotions between goods provided both offline and online (Laseter & Oliver, 2003). They also implement similar customer rewards approaches and offer perks for making referrals to potential customers (Larson, 2005). A huge part of any retailing platform includes the level of customer service that in return brings customers back to buy goods repeatedly from the retail store. Both platforms have identical need to attract, serve, and retail customers and make them repeat clients (Richard, Yougang & Gordon, 2008).

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