VG Jones Multi-Channel Retail Store - Case Study Example

Business Report: VG Jones Multi-Channel Retail Store Executive Summary VG Jones’ brick-and-mortar business strategy should have been a perfect model to sell or retail diverse range of goods and services from physical stores from different parts of the world, tied with an online presence to aid it penetrate the online market. However, the real consistent challenge is the competition posed by Amazon.com in the online retail industry and the business model that it adopted, whether it will remain as the right strategy say, five or ten years from now? For being a pure-play company, Amazon.com remains to be the leader and a consistent source of inspiration, challenge, threat and opportunity to some, including VG Jones. From a sharp vision to provide an unparalleled customer experience, who would think any company would sprang as leader in that field. Amazon.com is such company, and fortunately the visionary is Jeff Bezos, whose mathematical acuity is so precise that he kept his faith on the idea that an online retail store for books would boom. He based his plan to set up Amazon.com out of his projections that online clicks to be generated in the coming years would be unprecedented as the web goes mainstream. To its advantage, and being the first in such field, Amazon.com today sells every conceivable items that one can think of. In this two-part business report, an appraisal of the online presence and the business model of the competitor will be presented, in the light of Amazon.com’s good track of business sense and logic combined with aggressive investments in technology, web presence and management. Critical Appraisal of Competitor Website An online presence is an essential undertaking in any e-business initiative as well as an effective tool to communicate a company’s brand values as this global medium sees the continued rise of consumers who engage in an ever-increasing and diverse range of services in the Internet. Having a website, however, neither immediately means that a company is already expending into e-business nor it already successfully delivered its brand message to fulfill the brand promise, said Rappa (2007) who further noted that like the physical business itself, a website must be created with clear vision in mind apart from keen attention to detail and architectural sophistication required for a website to meet the objective or vision mounted. VG Jones’ competitor, Amazon.com is a highly-diversified internet retail giant who seems more poised than any other companies in the world today to aggressively push through and exploit consumers’ switch from the traditional purchasing mode to the online web to remain the leader in this field. Industry experts believe it is not just luck but the combination of well-thought out factors that include a good use of its online brand and home-grown innovation. In April this year alone, Amazon.com domain was visited by up to 615 million visitors according to the Compete.com survey, more than double than that of walmart.com. To critically appraise Amazon.com’s web presence, several research-based usability standards and guidelines were surveyed and considered. Once such guideline is Web Marketing Association’s (WMA) Internet Standards Assessment Report (ISAR), which gives a comprehensive know-how to determining how a successful website should be judged. On its website, it said of the ISAR Index as “the benchmark … many organizations use to compare their Web development efforts.” WMA President William Rice noted how far should any company push forward at creating a holistic user experience on its website that “both informs and entertains the visitors who reach their sites." Using the WMA-listed qualities for a good website, Amazon.com may be appraised based on the following – Design. While it is generally believed that a good design of homepage may pave the way for further exploration of a website, but this may not always be the case, particularly with Amazon.com. Its design is never excellent nor it shows any creative balance and blending of type, graphics and rich media to match its information architecture. In fact, the homepage looked loaded and crammed, but Amazon.com was able to employ good precedence or “about how much visual weight the different parts of the design have as a consumer’s eyes are directed through a sequence of steps. However, from its upstanding popularity among people, the site seems to have created an enjoyable user experience; Innovation and Technology. Amazon.com consistently pushes the envelope by taking risks in implementing innovative features in order to give consumers enhanced online experience. Technology development had driven features such as product filtering system, finding product, services and information contents as well as transaction safety for customers; Interactivity. Features are considerably being developed that will ensure interactivity and communication among the company and its intended market who populate the site such as discussion forums, rating an item, joining communities, and AskVille feature, which is actually a user-generated site that allows user themselves to answer questions by their fellow members as well. Bezos said it is a constant task by Amazon.com to develop and introduce uniquely and original new technologies, giving it a clear edge in such line of business since innovations are kept refreshing every day, every week and every year (BW Online 2003); Editorial Ability. Amazon.com’s tendency as a retail company online is to bank on content and information delivery in a utilitarian format than as a highly designed entertaining experience. The site never sacrifice readability in lieu being tempted to stuff the pages with keywords that may have help it optimize the site for search engine considerations. In view of Amazon.com’s already dynamic database, coupled with busy marketing departments in the site’s office, one will still find the copy of the site not tainted with typographical lapses, bad grammatical choices and poor copy. In sum, Amazon.com’s copy manifest a consistent voice and style; Ease of Use. Usability or ease of use is central and one of the the most important aspects of any online presence. Visitors exploring a site should easily discover what he is looking for or figure out how to use the website even at first visit but when the opposite is achieved, users or consumers will be repelled to return to that site. Despite Amazon’s huge collection of items, people, however, return to the site to find and buy anything they want online. While it is a herculean challenge too for Amazon.com to organize or classify the voluminous items it offer, with the aid of technology and a well-thought out navigation system, it was able to neatly organize its products into four (4) principal groupings - a) books, music, video, DVDs segment; b) electronics, tools, kitchen segment; c) international segment, and; d) services segment. In sum, Amazon.com’s website aims to be as customer-focused as possible, and while not completely adhering to industry-set or research-based guidelines to creating a website, it is nonetheless noticeable that the company placed high regard to good navigational structure, good copywriting, functional features and interactivity that will keep the customers or consumers engaged or coming back. Critical Appraisal of Competitor’s Business Model Amazon.com’s long-term approach to developing an e-busines model is an open book to everyone. In 2002, Bezos indicated the company’s two-throng strategy was to offer 'both world leading customer experience and the lowest possible prices.' To achieve this, Amazon.com’s Bezos identified specific tasks that will underpin the strategic move of the global retail giant for continued success and long term market leadership, namely – 1) relentless focus on customers; 2) make bold rather than timid investment decisions; 3) measure the effectiveness of investments analytically to jettison those that do not provide acceptable returns and step up those that will boost the company’s market leadership advantages. Heightened brand values. Over the years, the company managed to increase its brand values as consumers continue to trust the company for keeping its brand promise of offering on the website the world’s largest collection of goods and services at the cheapest rates and prices ever. In the case of Amazon.com, its brand values are based on these factors, namely: consumer sentiment, future growth potential, brand’s ability to command a price premium, customer service, and heritage of the brand. It also helps that Amazon.com’s online presence complemented it to its branding campaigns, to differentiate it against new and emerging retail or e-business competitors. An American Institute of Graphic Arts (AIGA) study showed that one primary means of differentiation today is through the execution of approach that will provide means for companies to effectively communicate to their markets and constituencies. It further noted: “There has been increased pressure more than ever within companies to establish environments and attitudes that support the success of creative endeavors, internally and externally” (AIGA, 2007). Global Network Expansion and Acquisition Binge. Combining the advantage of increasing its strategic alliance and investments in acquisitions, Amazon.com has continually reinforced its market leadership position over the years which it already started two years after going live in 1995. Among the companies acquired by Amazon.com includes Bookpages of UK and Telebook of Germany, that goes along with its European expansions. It also forged an agreement for the buyout of popular film and television destination, IMDB.com, which opened the window for the company to enter the online video sales market. Strategic alliances it entered into include the partnership with pc maker Dell Corp. in 1999. Among the salient reasons why company consider strategic acquisition is that it helps reinforce Amazon.com’s financial portfolio such as its online resources (Sinkwitz 2003). In the case of Amazon.com, these are to help the company 1) to expand reach of advertising; 2) increase value chain of its web; 3) mark synergies; and 4) absorb talent against specific technology. Sources of Competitive Advantage Amazon’s source of competitive advantage are as follows – First-mover edge. When Amazon.com went live online on 1995, it enjoyed being the first and pioneer company to employ such business model. However, such first-mover advantage it was able to exploit was faced with competitions, and many similar ventures followed suit including Barnes & Nobles, etc. Amazon.com realized it need to aggressively implement strategies it deemed fit or suited to the business strategy it adopted. Ambitious and aggressiveness drive Amazon.com to consistently gun for the leading position in the market. Human resources. Amazon.com hired some of the best minds in the industry, investing to obtain these people to work for the company. Bezos whose expertise is not in the pure business management frame, hired some of the leading industry men who are experts in the supply chain and distribution, technology and product development. Technological Innovation. As a pure play company, which means Amazon.com is a pure online retail brand, it is constantly driven by the need to innovate and invest on technologies that will help achieve its brand promise as a one-stop retail destination online which is house to the widest collection of products and services that can be had in the cheapest price, making it the only company to beat in the world for this advantage. To provide customer the convenience and ease of locating what they need since Amazon.com lists millions of products and services in a vast array of categories, the company deployed features that will – 1) filter choices, 2) find product, services, and information content, and 3) transact safely. Amazon.com also developed technology centers to keep its promise to continually provide new and novel ways to doing business with the company. Recently it introduced Kindle, an electronic handy reader of downloadable books or magazines, that is providng to be successful. The company also just recently entered the mobile technology spectrum, which now paved the way for mobile commerce to be adopted by the company, to help boost its online brand. It believed the services of text messaging will play a central role in maintaining "another touchpoint between consumers and a retailer they trust," It also helps that Amazon.com, in its full commitment to technological development, registered its products and inventions for protection through patents and intellectual property rights. Recommendation In the final analysis, VG Jones may not become the world's leading shopping and retail destination but must remain as UK's leading retail brand. Undergoing a website revamp that implement heavy branding, refreshed user interface design and information architecture and visual identity must be considered and thoroughly planned. While a website redesign may be expensive, however, VG Jones must take the risks and invest for this endeavor in view of long-term goal of obtaining a sizable share in the ecommerce industry in the United Kingdom if not in the Pan European sphere. In principle, the website must also be able to communicate and reach out to the new generation of online shoppers who are into rich social media networking sites like Facebook, Myspace, Youtube and and Bebo. Features must also be developed at the site that will help promote such social media features like Facebook-like apps, to further drive traffic and open up the site to as many medium as possible. By implementing intelligent information architecture and design, the VG Jones website will be easily accessible for consumers who are looking for the products or services. However, like Amazon.com it must also continually review and establish a vision for its website that it will consistently look at and strive to achieve. In the ebusiness field, and in any field for that matter, it will always be a combination of ambition, aggressiveness and boldness to take risks, especially in a bottleneck competition as the world continue to become globalized. In terms of business model, the leading UK multichannel retail brand must break through with the conventional and traditional brick-and-mortar boundary in conducting its business. More specifically, it may help for VG Jones to consider integrating an online download centers in its website as well as in key strategic physical kiosks that it may eventually establish. Amazon.com currently try as much as possible to make every transaction online and remain so for as long as this will give cash flows. For VG Jones, the challenge to remain competitive does not only reside in the virtual spectrum but also in the physical places as well, to target new breed of consumers who prefer to have an item downloaded and immediately seen by them. Example of these crowd are those who are independent book authors or photographer. It is said that doing e-business has risks associated in it such as: 1) instability of vendor and technological immaturity; and, 2) invasion of privacy and other legal obstacles (Mitchell 2003, 9). This calls for e-commerce features like secure online payment schemes to be addressed. As existing online users become more confident of transacting over the Internet, but they only do so in trusted sites. In view of this, more secure and transparent system must be deployed to give the impression about how safe it is to transact with VG Jones, which is also one key features that people look forward to in a website. Adoption of e-commerce, for instance, take couple of years to test and then to implement. Second, this system must be viewed as a business principle rather than just merely the implementation of technology. Third, how users would access the technology must be considered. Fourth and important, proper training and skill sets are required when technology is involved (Mitchell 2002, pp.75–76). Works Cited Regan, Keith. “Amazon Aims to Light M-Commerce Fire with TextBuyIt.” E-Commerce Times. Retrieved 12 May 2008 from http://www.ecommercetimes.com/story/62417.html Sinkwitz, Joe (May 2003). Google's Acquisition Report Card. Retrieved 12 May 2008 from http://www.paydayloanaffiliate.com/blog/GooglesAcquisitionReportCard.aspx. Thompson, John L. (1997). Lead with Vision. Manage the Strategic Challenge. London: International Thompson Business Press Publishing Co. 1997. Appendices The key components of Amazon.com's offerings to customers purchasing its products included – 1) Browsing. The site offered users a variety of features geared to enhance product search and selection. 2) Searching. The site implements provision of interactive, searchable catalogues of products and services. Selection of search tools are integrated on the site to help users find products based on tags, title, subject, author, etc. There is also the more complex search tool like Boolean search queries. 3) Reviews and content. To enhance shopping experience and encourage purchases, different contents were made available and one of its key content is the review of products. 4) Recommendations and personalizations. Product and service offerings are personalized, (e.g., greeting customers by name, and provided instant and personalized recommendations, bestseller and chart-topper listings, personal notification services and other related features.) 5) One-click technology. This is a streamlined ordering processing that allows a customer to place an order by clicking one button without having to fill out an order form. Their shipping and billing information was automatically referenced on the company's secure server. 6) Secure credit card payment. The company employ secure server software for secure commerce transaction. It also makes sures ll of a customer's personal information, including credit card number, name and address, etc. are encrypetdm. 7) Availability and fulfilment. It makes sure products are available for shipment within 24 hours, others were available within two or three days and the remainder within four to six weeks. Homepage Features 1. The search facility is easily recognized and seen 2. Get books in less than a minute ... 3. Amazon Blog 4. Come on Features a. Your Amazon.com b. Today's deals c. Gifts and wish lists d. Gift Cards 5. Shopping made Easy 6. Left navigation - Departments/Categories 7. Check this out 8. Selling on Amazon.com 9. Amazon.com Exclusives 10. Partner Services 11. For Business 12. For Developers 13. For Advertisers Other Features 1. Rate items to improve recommendation 2. Search Tags 3. See most Popular tags 4. Customer Review with chart 5. Create Review 6. Search Newest 7. Customer Discussions 8. Forums 9. Active Discussions 10. Explore Community 11. So you'd like ... 12. Look for similar item by category 13. Look for similar item by subject 14. Listmania 15. Customers who viewed this item viewed ... 16. Compare selected items 17. Askville 18. Feedback 14. 19 My Recent history 19. Video Review Upload Read More