Electronic Commerce: the Bookstore at Gloucester Road in Bristol, the United Kingdom - Essay Example

? E-COMMERCE Electronic commerce, or e-commerce, is the buzzword in today’s world, and its taking the market by a storm. Research scholars have defined e-commerce as a way to do transactions with the help of internet, and they have also stated that internet as key source of value chain for any e-commerce initiative. According to the Satterlee (2001), e-commerce comprises business to business (B2B), business to Consumer (B2C) and consumer to consumer (C2C) transactions. The study has selected a book store business to understand the advantages and disadvantages for a possible e-commerce conversion. The book store is located at Gloucester road in Bristol, UK. The study also took help from secondary sources such as “Love Gloucester Road” website in order to understand nature of business operation for a book store (Love Gloucester Road, 2013). Currently the book store operating in brick and mortar format but the owner of the book store is considering of changing from its traditional business into e-commerce. The store offers books on various topics ranging from Science, Commerce, Management, Fictions and Non-fictions. Target customers for the book store are students, professionals, senior citizens of local community. The book store earns significant amount of revenue by selling second-hand books to customers. It has been realized by the owner of the bookstore that floor space of the store is too small to accommodate large set of customers at a particular time hence they are planning to sell books through an online platform in order to cater to the demand of large pool of customers in systematic manner. Sweeney (2006) has pointed out that small businesses move into e-commerce platform for three reasons such as 1- creating brand awareness, 2- decreasing overhead cost and 3- competing with big players in the market. In the last decade itself, there has been a surge in second hand book selling in England, which can be a very prospective market to harp on. Industry trend is showing that demand for e-books, kindles and epub files is growing at steady rate for last five years (Davenport, 2012). Companies like Amazon, eBay have changed the concept of brick and mortar book stores by introducing online bookstores. Online bookstores are providing facilities like home delivery, cash on delivery and others which have helped them to create a large consumer base within last few years. Being a part of this ever changing book industry, every business house must try and adopt itself to suit the needs of customers who prefer online shopping over traditional brick and mortar retail shopping. Therefore, an online portal will give this book industry a common platform where all customers can mingle, interact and most importantly buy and sell books with the click of a button. It takes minimal effort and cost for a small book store to e-commercialize its business. For example, e-commercialization can help a book store to decrease various overhead costs such as maintenance cost, rent, electricity charges and wages. It is evident from the above discussion that lower overhead cost caused by e-commercialization can help a bookstore to adopt penetration pricing strategy in order achieve competitive advantage over other book stores. An online transformation has innumerable benefits, and one of it is its global reach. A physical store somewhere in Gloucester will only cater to customers from its surroundings, but an online business has no boundaries and people from all across the globe are its potential customers. An online business has numerous other benefits apart from reach and cost. It is much faster than the traditional method of business with faster transaction process, faster inventory management and faster information storage. An online shop never closes down contrary to the ordinary shop, which has its fixed timings when it remains open. One of the 4 Ps of marketing is Place, and every business strives to enhance it by broadening its distribution channels and its temporal and spatial convenience. An online portal fulfils just that purpose and it enables the customer to shop from the convenience of their home. This serves as a great opportunity to bring the customers closer to the business and therefore can potentially increase sales in the long run. Holden (2010) has pointed out that e-business companies can increase their online brand presence with the help of social networking sites like Facebook, Flickr, LinkedIn, and others. Discussed above are the benefits that the book store can enjoy if they go for a possible commercialization, but it has its fair share of disadvantages. The biggest and the most threatening of them all is competition. It is something which is expected considering how lucrative online business is and the prospects it holds. Online business environment is hypercompetitive in nature due to the fact that more than 200 million e-commerce websites are competing among themselves, and the number keeps on increasing day by day. The bookstore will face fierce competition from e-commerce giants like Amazon and E-bay who have been operating for years and enjoy huge market loyalty. Internet security threats such as identity hacking, transactional fraud, phishing are the major drawbacks for any online business model. Cyber world is plagued by adware, viruses, trojans, spywares and key loggers, which have increased the security concern for the customers over online payments. As a result, most of the potential customers avoid online stores which simultaneously results decrease in demand for the products offered through online platform. Since most of the transactions in online businesses are done through the website, the only way customers gets to choose their product is by browsing through images in demonstration. Kurtz (2010) has stated that 2D images of products in the online store can create doubt in the mind of customers because generally people prefer physical and 3D demonstration of product while taking purchasing decision. Another small glitch which e-commerce faces is from intermittent technical failures of servers which can create adverse effects on sales. Conducting business over the internet requires the business operator to be in constant touch with its suppliers, distributers and other collaborating organizations through the internet only. It is like managing a virtual team of people with whom one has little or no face to face interaction. In order to go for e-commercialization, there are lots of things that a company needs to do. Schwalbe (2010) has stated e-commercialization is a form of project management which requires systematic analysis of internal and external environment. The first thing that it needs to do is to register in a domain for itself. A domain is a unique ip address on the internet just like a patent or a trademark which will be the company’s virtual market space in the internet. In the next stage, the bookstore needs to rent a server space from a webhost in order to create the website. After these things are successfully done, the book store needs to register to some of the online payment service provider such as “PayPal” or “Google checkout” to take care of the customer’s online payments. The next stage would be to determine product delivery methods which could range from downloadable information products to physical goods sent through courier. The bookstore should take help of local courier companies to deliver products to customers. In the final stage of e-commercialization, the bookstore needs to draw traffic from various online promotions so that the company’s website comes at the top of the search result page whenever a Google or yahoo search is done. Moving from a traditional brick and mortar format to an online platform is complemented with plenty of advantages for a small book stores. Generally, the advantages outweigh the disadvantages that are associated with e-commercialization of book store. Selling books online is a relatively safe option for business owners due low cost and non perishable nature of books. A small book store can encounter technical and financial constraints in the initial stage of e-commercialization. They can overcome this problem by channelizing the revenue from other sources of e-commercialization like web advertisement, social media marketing etc. As far as internet security is concerned, it is getting more and more safe and secure by the day, especially with the advent of new age antivirus and firewalls. An online supply chain system is much more efficient and faster than traditional supply chain of a brick and mortar retail book store; customers can buy and sell second hand books at the convenience of their homes that too at the click of a mouse of mouse. There is a huge potential of untapped customers in the market in the form of second hand book sellers and e-commercialization of business would be a great way of grabbing on the opportunity with open hands. Porter (1985) has stated that every business needs to identify competitive advantage in order to conduct business in sustainable manner. The bookstore needs to change its management structure while incorporating e-commercialization. The management needs to introduce two separate posts such as chief technical officer and system engineer in order to control its online activities. The book store needs to recruit one search engine optimizer in order to maintain its online marketing activities. Reference Davenport, C., 2012. As demand for e-books soars, libraries struggle to stock their virtual shelves. [online] Available at: [Accessed 10 January 2012]. Holden, G., 2010. Starting an Online Business For Dummies. Hoboken, New Jersey: John Wiley & Sons. Kurtz, D. L., 2010. Contemporary Marketing. Stamford, Connecticut: Cengage Learning. Love Gloucester Road., 2013. Bishopston Books. [online] Available at: [Accessed 10 January 2012]. Porter, M. E., 1985. Competitive Advantage. New York: Free Press. Satterlee, B. C., 2001. E-Commerce: A Knowledge Base. Bloomington: IUniverse. Schwalbe, K., 2010. Information Technology Project Management. Stamford, Connecticut: Cengage Learning. Sweeney, S., 2011. 101 Internet Businesses You Can Start from Home: How to Choose and Build Your Own Successful E-Business. 3rd ed. Toronto: Maximum Press. Read More