Online and Offline Shopping Environment - Essay Example

Online and Offline Grocery Shopping AFFILIATION: Online And Offline Shopping Environment For Grocery An increase in the understanding of the prevailing online shopping behaviour has led to various studies being conducted which mainly is research on the online and offline buying behaviour of consumers. Recent advent of online supermarkets and their prevalence has further led researchers to become curious of the reasons that led to these increases. The researchers have done this by considering the purchase environments of online supermarkets and the offline supermarkets. The product group taken up for this paper is the category of product stores. The paper discusses the online and offline mode of grocery shopping. For purchasing groceries in an online mode, one of the most crucial aspects are that the buyers of groceries should be computer savvy. Online Shopping Environment According to a research conducted by Chu et. al. (2010), the shopping behaviour of the households, especially those purchasing groceries side by side from online and offline sources is dependent upon their brand loyalty, price sensitivity and size loyalty. These offline-online differences are more prominent in the purchase behaviours towards food products which include the grocery category. According to the research, there is more brand loyalty, size loyalty but less price sensitivity in online shopping behaviour of consumers than in the offline shopping behaviour. The online environment for grocery shopping mostly consists of elements like purchasing carts, grocery categories mentioned with prices, the online navigation facilities to know the products’ features, online communication with the seller on specifications of the grocery. The product details and the prices of the product are the main information that is reviewed by the customer. The categories of groceries are present which could be viewed and grocery from these categories could be added to the purchase cart and ordered online after online payment. The online shopping environment also includes in-store displays which mainly attract the customers to buy the particular groceries. Also online displays help the customers search for grocery they need to buy easily. The search option present on the website is a convenient option that allows users to review their preferred products just with one or two clicks. According to a research conducted by Breugelmans and Campo (2010), online in-store displays (ISD) help increase brand sales and make grocery shopping easier and ISD that anticipates competition through first-order or isolated position outperforms the ISD that aims to make the items stand out in the online display. This reflects upon the online display option on the websites. The online shopping process is also preferred by consumers since they do not have to physically travel for hours to shop the necessary grocery, rather they order online by selecting their required grocery in just a few minutes in the luxury and comfort of their home. This is one of the major advantages of online shopping, customers do not have to move around which saves up their time and is also very convenient for them. Within a matter of clicks, they can view the products and decide about whether they want to make purchases or not. Online shopping may not be time specific as well, this means that as and when the customer has the time, the online grocery website can be viewed and order can be placed. The store size is not a constraint for online stores and the only thing they are concerned about is the bandwidth of the brands or categories of groceries they are offering customers (Duffy, 2004). This is an advantage for the grocery store that have made their online presence. They do not require any space for rent when operating on an online mode. The online website need to ensure that they are offering all products with exact specifications that are found in the grocery stores. Moreover, Rothwell (2008) anticipated that the UK grocery market will be worth £170 million by 2013. Also, Fulgoni and Morn (2009) states that online grocery stores are further expected to increase owing to the increasing demand of the customers. However, despite this environmental support, online grocery shopping is observed to be used in a limited mode. This is mainly because getting customers to visit the online websites of the grocery stores is a cumbersome task. For these too, the companies need to market their websites through billboards and posters at various customer touch-points. Moreover, since grocery products are perishable items, customers do not feel like taking up the risk of purchasing online since they might end up with stale groceries which could be a high off point for online grocery stores (Kwon and Lennon, 2009; Kantabutra, 2006). The issue of trusting online mode of shopping is an important issue as convincing customer about credibility and reliability of products when purchased online is a challenging task. Offline Grocery Store Environment Offline store environment is all about shop’s ambience, window and other shop displays. In an offline mode customer receive services from the grocery staff which is employed to help the shoppers find their required grocery categories. The customers also review the prices charged by the grocery store as compared to its competitors. Although the customer has to be physically present to buy the grocery and though it might take various hours to do so, the satisfaction of buying the product physically at the store is totally different from when the customer purchases online. The customer is observed to be carefully looking into all details on the product and seeing physically whether the product is of good quality and fresh, good hygiene of the store, all these factors contribute to the environment of an offline grocery store. Moreover, the customer does not have to bear any shipping costs and communicate with the staff of the store to let them know the products required in case they are not present at the premise (Dennis et al, 2004). Also, according to a research (Liu, 2007; Duffy, 2004 and Adcock, 2002; Degeratu et. al., 2000; Bruce et al, 2004)., offline stores are more prone to create greater customer loyalty than online stores since in online stores the customer interaction is limited, while in offline stores, customers could be personally dealt by the retail store staff. The staff can communicate with the customers in a friendly manner and help them look for the products they want and provide them information on other required products as well. This may also allow the customer to build a positive image of the brand and the grocery store can gain the loyalty and satisfaction. Value-Chain Analysis Model And Resource-Based View Value-Chain Model’s application here could help us further elaborate on the offline and online store environment of the grocery stores. This model describes the activities within and around the organisation and then uses this to analyse the competitive strength of the organisation. In short, this model evaluates that each and every transaction or activity adds to the organisation (Evans and Berman, 2001). This is further explained in the diagram below where (Brown, 2009) has further elaborated on each of the elements or areas of a business which adds value to a business since the operations identified below help a business run and so deem to be important to be evaluated to see how much value each of these adds to the organisation. In offline stores, the grocery delivery from the manufacturer to the grocery store is all that is included in logistics. While for online stores, logistics include the delivery of grocery to the customer and thus include surcharges of transport and shipping costs in case the customer lives overseas. Operations would mainly include the operations of managing offline store shelves, assigning staff in store, conducting the billing procedure for customers payment and managing the stock. For online stores, the operations would include management of the website, communication with customers pertaining to their specifications, and delivery of products to customers. Marketing and sales mainly include marketing through billboards, newspapers, television and posters for offline stores and all the offline marketing mediums including the online marketing through social media websites. (Brandenburger, 2002) Considering this model, the value that an offline store could gain from is through its efficient human resource management since the staff for assisting customers in the store must be trained and should possess knowledge about the details of the product. Human resources need to be managed in a systematic and disciplined manner so that the desired results are attained from the business operations (Evans and Berman, 2001). Also, marketing and sales evaluation could help see the stores in finding out where they lack and what they can work upon to increase the customer’s value derived from the service offering. This aspect brings us to the most important area of concentration which is the value derived from the service offered by the grocery retail store, which is the grocery products offered to customers for purchase. Logistics is important since quick delivery of products to the store is important to display fresh products. In case of online stores, marketing and sales is important which also includes the online marketing techniques, in-store marketing as well as online marketing. These activities if done efficiently show that marketing is adding value to online store’s value to customers. Logistics is important owing to quick delivery of grocery products to the customers to gain their value. Operations like website management, customer communication and delivery of products can allow the organisation to become highly successful if these tasks are conducted efficiently and effectively. The store can gain high customer value as well via this strategy. Resource-based view is basically the view of the firm as a resource bundle since these resources are the elements that lead the firms to create their differentiating factor when compared to other firms (Hamel and Prahalad, 1994). The idea of Resource-based view is simply the evaluation of the resource endowment within a firm and its effectiveness and impact on the company’s operations (Wernerfelt, 1984). Considering this view, the offline stores resource endowment mainly pertains to the use of human resources, the location or place where the store is situated, suppliers of the groceries, supply chain and intermediaries involved and the storage and logistics purposes of the grocery products and lastly financial resources required for conducting marketing activities and including the management skills and resources. While for online shops, the resources would mainly include technical experts for running the website, logistics resources for delivery of products and financial resources required for marketing and other management skills and resources. The cost of investment in online mode is considerably less than in the offline mode of grocery retail stores. If managed effectively, online mode can prove to be highly profitable for organisations. Recommendations The three strategies that could be used to convert customers from being offline shoppers to online grocery shoppers are as follows: The first measure that an online store could take is position itself as a store that provides fresh and high quality grocery to remove the fear of being delivered stale or un-fresh products. This would mean revising its marketing strategy with main emphasis on the positioning of the product. Maintaining this position is also important as customers need to remain satisfied with the service on a constant mode. For this purpose, the company will have to take an extra measure of improving its supply chain and delivery system to ensure the product is delivered to the customer as fast as possible so that it can maintain the quality of the grocery products keeping its promise of delivering high quality products. Lastly, in order to divert customers to online grocery purchases, the offline store owners could be encouraged to create their stores online rather than spending money on setting up a store at a premise and therefore encourage customers through effective marketing to make use of online grocery shopping stores. This could also be attained by providing customers with training about how to navigate online on the online stores website’s through helpful instruction manuals sent to households with an added advantage of marketing the online stores. References Brandenburger, A., 2002. Porterʼs added value: High indeed! Academy of Management Executive, 16(2), p.58-60. Breugelmans, E. & Campo, K., 2011. Effectiveness of In-Store Displays in a Virtual Store Environment. Journal of Retailing, 87(1), p.75-89. Brown, G.W., 2009. Value Chains , Value Streams , Value Nets , and Value Delivery Chains. Management, (April). Bruce, M Moore, C & Birthwistle, G., 2004. 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