How Has the Growth of Ecommerce Affected the Retail Sector in the UK in Over the Last 10 Years - Research Paper Example

Impacts of E-commerce on the Retail Sector in the UK TABLE OF CONTENTS TABLE OF CONTENTS 1 EXECUTIVE SUMMARY 2 1.0 INTRODUCTION 3 2.0 LITERATURE REVIEW 3 3.0 METHODOLOGY 4 4.0 FINDINGS AND DISCUSSION OF FINDINGS 5 4.1 Findings 5 4.2 Discussion of findings 5 5.0 CONCLUSIONS AND RECOMMENDATIONS 6 BIBLIOGRAPHY 9 EXECUTIVE SUMMARY The research aims at establishing how the growth of ecommerce has affected the retail sector in the UK over the past 10 years. E-commerce has altered the look of the retail zone, helping corporations to enlarge into new markets, connect more efficiently with consumers, decrease costs and drive revenue growth in future. In the UK, online retailing is outperforming high street with several structural changes in progress with the internet providing a powerful tool to connect customer data on preferences and to facilitate and react to customers’ requests and feedbacks, using it to form a competitive advantage. Data was gathered through use of primary and secondary sources from several authors and journals. Findings have been carefully scrutinized and analysed.The research reveals that retail sector in UK has undergone tremendous development and retailers have to apply and adopt online technology to be able to survive in that industry against their competitors. 1.0 INTRODUCTION E-commerce is the buying and selling of goods or service by use of electronic methods such as the Internet and other computer networks. Almost two decades, to when this fast-paced electronic business atmosphere was just starting to develop, its eventual achievement must have looked far less convinced. Over the last decade, e-commerce has altered the look of the retail zone, helping corporations to enlarge into new markets, connect more efficiently with consumers, decrease costs and drive revenue growth in the future. To thrive now, it is not just a question of selling online, but taking a tactical view of your online presence to make certain it delivers the utmost possible worth to your business. Fortunately, a new generation of e-commerce technologies, powered by web 2.0 techniques, is now heralding a new period for both businesses and consumers in a similar way. To accomplish this study answers are to be provided to the following questions: i. Will Internet retailing eventually replace, or radically reconfigure? ii. How will retailers develop strategies that are suitable for an on-line environment? iii. What types of people, in terms of their demographics and attitudes, are presumably to become regular Internet shoppers? In 2010, the United Kingdom had the biggest e-commerce market in the planet when measured by the quantity spent per capita. The UK e-commerce was larger compared to the USA. 2.0 LITERATURE REVIEW It is now extensively known that the Internet’s supremacy range and interactivity supplies retailers with the possibility to change their customers’ shopping familiarity (Evanschitzky et al,2004; Wolfinbarger and Gilly, 2003). According to Levenburg, (2005), e-commerce helps traders and suppliers to build up their own competitive positions. The Internet’s capabilities to provide information, eases two-way communication with customers, gather market research data, promote goods and services and eventually to support the online ordering of goods, provide retailers with a tremendously rich and bendable new channel. In so doing, the Internet gives retailers an instrument for expansion of target markets, improving customer interactions, extending product lines, improving price efficiency, enhancing customer relationships and delivering modified bids (Srinivasan et al, 2002). Eng and Kim (2006), assert that Consumers have responded earnestly to these innovations brought by E-commerce. Online retail sales have developed considerably within the past fifteen years and are forecasted to go on increasing into the future (Ellis-Chadwick & Doherty, 2002). Soopramanien & Robertson (2007), highlight that attempts to trade on-line started to appear in the mid-1990s when inventive, precisely savvy companies act in response to the opportunities and challenges posed by the Internet, to expand complicated web-sites to serve customers, in their homes [Rayport & Sviokla, 1994]. 3.0 METHODOLOGY The study adopts a wide and important review of the literature, with regard to the implementation, uptake and impact of Internet retailing, as published in the educational literature over the past ten years. Findings in perception it can be seen that numerous of the original predictions, made at the dawn of the Internet era, have not become authentically. Retailers have not cannibalized their own practice, effective merchants are not controlling the market place, and the high street has not, yet, been put out of industry. In contrast, other predications have come to go by; electronic intermediaries are playing a progressively more significant role. ‘one-to-one’ advertising has become a realism, prices are more aggressive, and perhaps most notably the end user has become more dominant. It is fair to say that the Internet offers businesses an exceptional chance to boost revenue, develop customer contact, drive faithfulness and improve margins. 4.0 FINDINGS AND DISCUSSION OF FINDINGS 4.1 Findings In the UK, online shopping is outperforming the high street with over £26.5 billion spent online, an increase of 38% over the previous years. In its latest discussions the KPMG/Synovate Retail Think Tank (RTT) approved that although online sales may be between six and eight percent of the complete UK retail market, footed on diverse information sources, establishing its specific size is no longer particularly relevant. Mainstream retailers employ online strategies that have evolved to become incorporated into the customary “bricks and mortar” and catalogue form. Such that internet retailing now harmonize rather than contend with the conventional channels. The number of “pure-play” retailers have pierced the market, they have not taken over an immense part of the sector as initially predicted. There still exists the problems of supply websites and logistics infrastructure to support industry that is more conventional. 4.2 Discussion of findings From a customer and an operational view, the lines differentiating the channels have become vague. Indeed, the RTT considers that the internet is now a fundamental part of the fabric of UK retailing and its future development rather than the threat to traditional retailing it was once supposed to be. Major structural changes can be seen in the progress within retail industry. Many have a purpose to split internal teams for e-commerce and amass operations built around separate procedures, but the more sophisticated they are integrating them into one flawless business structures. The RTT considers that the economic recession has speeded this up as retailers seek to restructure, rationalize and secure cost savings and effectiveness gains, although to some level this been offset by the obligation to endow in IT for extended term benefit. The internet is having a positive change on procurement and the supply chain by dropping expenses for retailers and developing chances for development. The internet has enabled a decline in sourcing costs and closer incorporation of supply chain activity to shift worldwide sourcing which would not have been possible without web based IT applications. This permit competence and increase in the charge reductions in the supply chain with retailers and suppliers with real time entry to sales information. The internet offers a dominant tool to connect customer data on preferences and to facilitate and react to customer communication and criticism, which a number of retailers are now using to form competitive gains. 5.0 CONCLUSIONS AND RECOMMENDATIONS With online retail still not fully incorporated, knowing where to direct effort now presents an unfamiliar challenge for businesses. On an optimistic note, the internet permits retailers to slowly alter their products and branding more easily than conventional retailing, where amass fascias and interiors are usually changed periodically on a rolling percentage basis. Websites allow recurrent development with updating and refreshing functionality possible on a continuing basis, which helps to retain a current and related experience for customers. Online is no longer an option to store-based or catalogue business and the speed of change will only get quicker as technology continues to progress. However, the process of retailing activity continues to advance the fundamentals of retailing have not and will not alter Customers now have the finest when it comes to retail in UK. They can decide how they interact with retailers and brands and frequently navigate more than one channel before creating a purchase hence distinguishing and considering retail as various separate channels is no longer predominantly relevant. Because of altering consumer lifestyles, thriving retailers are motivated or are in the process of moving away from separate in housed structures. More retailers are also avoiding procedures to build a business in which all are incorporated into one seamless intention. The customer are the beneficiaries as the retailers incorporate the internet into other non-customer facing aspect of their industry. Although the Internet makes it much simple to access and converse with customers, by making sure you contact prospective customers now they have a want, you’ll move one step closer to a capable sale. With the Internet open for business to anybody, you must invest in ways of attainment your defined target audience. When probing for goods and services, many people will initiate by visiting a search engine site. Placing “intelligent advertisements” (based on defined keywords) on search engines such as Google can help draw clients who are actively searching for the types of goods you bid. Selling online offers businesses the opportunity to react more quickly to changes in market conditions or to weak merchandising strategies based on sales performance. Businesses can simply add or remove goods from their online catalogue, change pricing, create promotions, and communicate these changes to consumers. E-commerce makes it easier for clients to do business with 24/7 particularly critical when you have clients in different time zones, which will boost revenue in UK from foreign exchange. Self-service capabilities make it possible for clients to surf or look to what they need, place orders based on an authentic time view of records accessibility, and check existing orders and follow where they are in the fulfillment process. The research recommends that the key to achieve in online retailing, the retailer should have understanding of potential risk, pitfalls of online retailing, so that you can safeguard against them. With all the benefits illustrated above and the projected rise in the reputation of e-commerce sites, retailers have to cast a close glance over their online products and trends in that industry so that they can cope with other players in the same industry. BIBLIOGRAPHY Eng, T.Y., and Kim, E.J., 2006. An Examination of Antecedents of E-customer Loyalty in a Confucian Culture: The Case of South Korea’, The Service Industries Journal, 26(4): 437 – 445 Evanschitzky, H., Gopalkrishnan, R., Hesse, J., and Dieter, A., 2004. E-satisfaction: A Re-examination’, Journal of Retailing, 80: 239 - 247 Doherty, N.F., and Ellis-Chadwick, F.E. 2003. The Relationship Between Retailers’ Targeting And E-Commerce Strategies: An Empirical Analysis. Internet Research: Electronic networking Applications and Policy, 13(3):170-182 Doherty, N.F., and Ellis-Chadwick, F.E, 2009. 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