Opportunities of Online Retailing - Research Paper Example

E-Commerce Report Module Leader Executive Summary E- Commerce has received worldwide attention and recognition as an effective business tool. It is characterized by minimal or no physical contact between the seller and the buyer of the commodity. The business to consumer transactions (B2C) and business to business commerce (B2B) are the two common models today. For a company to benefit from E- commerce, the challenges faced with its implementation must be handled. It requires active participation and good will of employees at all level of employment. Table of Contents Table of Contents 3 Introduction 4  E- Commerce 4 Business to Business Model 5 Business to Consumer Model 6 Opportunities of Online Retailing 7 Challenges of Online Retailing 8 Current Consumer Behavior and Preferences 9 Conclusion 10 Recommendations 10 Reference List 11 Manzoor, A 2010, E-Commerce: An Introduction. LAP Lambert Academic Publishing, Saarbrucken. 12 Peacock, M 2011, PHP 5 E-commerce Development. Packt Publishing Ltd, Birmingham. 12 Plant, R 2001, Ecommerce: Formulation of Strategy. Prentice Hall Professional, Upper Saddle River. 12 Introduction E- Commerce has received worldwide attention and recognition as an effective business tool. When utilized properly, it allows companies and organizations to enhance their profitability, move into new markets and also provide the consumers with better services and products. It is due to the advantages of the practice that several enterprises, both small and large, continue to incorporate it into their operations and procedures. By 2005, the e-business revenue exceeded $2 trillion (Laudon & Guercio 2014). This is a strong signal that additional businesses are becoming aware of the opportunities that are available and exploiting them for their own benefits and that of the customers. Some of the brick and motor enterprises which had only physical presence have decided to embrace it to realize the benefits of the innovation (Chaudhury & Kuilboer 2002). It is, however, important to remember that for a brick and motor business to embrace and benefit from e-commerce, it must be ready to counter some of the challenges inherent in the practice. With the right approach, positive outcomes will be realized both in the short term and long term.  E- Commerce E-commerce can be defined as a business that is transacted electronically. In most instances, the internet is used (Frieden & Roche 2006). Majority of people take e-commerce to be only about buying commodities over the web. However, it is much more than this. The practice includes purchasing various items from online sellers, online banking services and paying for travel services and accommodation. The basic idea is that there is minimal or no physical contact between the seller and the buyer of the commodity (Graham 2008). This is unlike the brick and motor business model, which requires the buyer to come to the physical location of the commodities and products and buy them or pay for them. Brick and motor businesses rely on traditional selling platforms (Humeau & Jung 2013). This is the same model that Coventry Books has been using. For a customer to transact any business with Coventry Books, he must travel to the location of the enterprise, select the book he wants and pay for it. This is unlike e- commerce which can allow the customer to carry out these transactions and activities without having to physically visit the store. There are several businesses that have relied on this practice to increase their market base and profits. E-bay is one of the prime examples of successful e-commerce enterprises. Whereas no businesses have gone fully online, there are those that have incorporated e-commerce into the existing physical business models in a variety of aspects (Nissanoff, 2006). This has also proved to be very successful when implemented in the right way. There are three major e- commerce models. These include; the business to consumer transactions (B2C), consumer to consumer model (C2C) and business to business commerce (B2B). Business to consumer and business to business transactions are very common today. Consumer to consumer transactions also take place majorly inform of the auction sites. In the case of Coventry Books, the B2C and B2B are the two applicable e-commerce models. Business to Business Model This model involves two businesses dealing with each other. The seller and the buyer of the products are both business entities. In this model, Coventry Books may be dealing with other business enterprises and organizations that are interested in its products. This model focuses on the logic of the products which are being dealt with. This is done by concentrating on the features of that particular product. Seybold (2011) points out that there is usually minimal or no personal emotions involved when a business is transacting with another business or buying a product from a second business. As such, focus should be put on understanding the corporate buyers and how they operate within their procedures. Each organization has its own procedures. Coventry Books will have to understand these procedures in order to benefit from the business to business model. When relying on this model, in-depth marketing materials must be used in order to enlighten the potential business buyers on how the products which are being sold will help the organization based on the features they have (Eisingerich & Kretschmer 2008). In most instances, the business to business market is only interested in the logic behind any given product. They lookout for information on how a given commodity or merchandise will help them save money, time or their limited resources. The corporate customers provide a market which Coventry Books can rely on. This requires having e-commerce engines that revolve around this particular target market. To facilitate B2B sales, it is usually imperative to offer the corporate clients individualized interfaces. These interfaces are customized to suit their needs and organizational procedures (Forsythe & Shi 2013). Business to Consumer Model This is an e-commerce model that involves dealings between the consumers of a product and a business. This may be in the form of the various individual book buyers who buy the Coventry Books products. Such buyers have personal attachment to the books and stationery they buy from the enterprise. Consumers are very different in that they may demand variety of distribution conveniences. As such, they may be less interested in lengthy messages about the products. All they want is to get right to the point (Oliver 2009). For example, when Coventry is to sell books and stationery online to its buyers in this model, the consumers want to be enlightened on the how they will personally benefit from the products and from buying it online. They will also choose specific distribution conveniences that suit their personal inclinations and wishes. When it comes to paying for these items, they will prefer to use a payment mode that suits them. As such, it will be imperative to have a variety of payment channels so that the consumers can choose one that best suits them (Peacock 2011). Opportunities of Online Retailing Online retailing will provide Coventry Books with several opportunities, which it can exploit to increase its sales and overall profitability. E- Commerce will allow it to exploit market segments that it had not taken advantage of before. According to De Wulf (2001) there are several buyers who rely purely on the web to shop. This is a group looking for convenience and also wants to save time and money. Reaching out to this market segment will only be possible through e-business. Coventry Books will, therefore, be able to expand its market base and consumer base without having to open up stores in new locations. Online retailing broadens the company’s customer base as the website that is used to sell the product can be accessed from any place and region in the world. All one needs is the access to the internet. There are consumers who want to carry out their shopping at a time which is convenient for them. Some consumers have very tight work schedules and may not find time to buy books physically even though they would love to. By having an online retailing platform that is functional twenty-four hours, seven days a week, Coventry Books will be able to tap into this market. Online retailing will also call for the automation of various systems to replace the traditional manual systems. When this is effectively done, it ends up freeing some of the staff. This allows them to focus only on the core areas of the business thus adding to the overall efficiency and productivity of Coventry Books. It is also worth pointing out that only a small number of individuals will be required to maintain the online retailing platform. Challenges of Online Retailing Despite the advantages and opportunities associated with e-commerce, it also has some challenges that need to be identified and mitigated so that a business can achieve its full potential and profitability. With the use of internet as a business tool, there have been increased risks of internet insecurity. This is typically seen in form of internet frauds and the cyber-attacks directed towards businesses using the online retailing platform (Miller 2002). With the increasing cases of internet frauds, there is a need to put in place measures that will safeguard the business from the high-level swindles. It is imperative to use safe and effective online payment channels and systems (Manzoor 2010). There are several payment systems which can be used. These systems have different safety procedures which may include the encryption of the consumers’ passwords and confirmation emails. They also monitor the transactions round the clock in order to detect any abnormality. Other safety procedures that can be employed include the use of a working code, virus protection software, firewall, and backing up of data to prevent loss (Chiou 2004). The other major challenge in online retailing is building trust through the website. When engaging in online retailing, the website gives the first impression to the potential clients about the business (Chandon, Wansink & Laurent 2000). If it is poorly designed, there are high chances of losing traffic and potential buyers. Coventry Books must use all the available means to win the trust of the consumers and the corporate buyers. This can be done by making it easy to navigate. In addition, contact information, clear layout and description of the products should be found in the website. These basic elements of website design are known to drastically increase trust between the website and the consumers. Payment is also another problem likely to be faced. Online payment models have very high gateway errors. About twenty-five percent of these transactions fail at a gateway. This makes it hard for the consumers to wire the money for the items thus eating into the organization’s sales significantly. Studies have also shown that customers have incredibly tight delivery plans and schedules. Some buyers want the items to arrive immediately they are ordered thus giving rise to a very serious logistical problem (Burgess, Sellitto & Karanasios 2009). However, with the right kind of logistic tools such as the Sterling Transportation Management System, the entire process can be streamlined thereby allowing Coventry Books to turn around orders quickly. The final challenge is the need to manage the customer relationship to ensure repeated buying or recommendation to other people. In the B2B model, a sales person is required to carry out coordination between the inside and the outside sales representatives. Interactive platforms may also be included on the website to aid the managing of consumer relationship. Current Consumer Behavior and Preferences The current buyers are focused on saving money and getting value for what they buy. They want the products at the right place and at the right price. Kotler (2009) points out that the buyers are always looking to derive value from whatever item they buy. As such, Coventry Books must carry out research on the needs of the potential buyers and ensure that it stocks the right kind of products. The information on these products and the value the buyer will get should be clearly provided in the website. Time-saving is a very important consideration among the current online buyers. The delivery time and schedules may determine whether a consumer purchases a product or not (Plant 2001). As such, the right kind of logistical approaches should be put in place to reduce the lag time between the payment and the receipt of the commodities. The other observable characteristic of the consumers is their emphasis on experiential value. Kessler (2003) says that experiential value depends on the kind of experience the buyer will have during the shopping session. When the experience is not good, there are higher chances that there will be no repeated buying. Coventry Books must ensure that it creates a unique and memorable experience for its clients in the online retailing platform. It can do this by having an interactive platform such as the live chat which will be vital in helping the consumer find whatever he wants. The impact of mobile phones cannot go unnoticed. They are now accounting for nearly one-fifth of the online sales. Conclusion E- Commerce is an integral part of any business that wants to succeed and remain profitable in the current dynamic and competitive market. Through it Coventry Books will be able to improve its efficiency and streamline its operations to compete effectively with the already existing stores. Recommendations There are three main recommendations which can be executed by Coventry Books. The first one is the creation of an online shopping platform. This entails building of a company website which is easy to navigate and well secured. The second recommendation is that Coventry Books needs validate a secure and efficient payment system which uses e-payment platforms such as Master Card and PayPal to make it easy for consumers to pay for the selected items. Finally, to attract more customers, Coventry Books must optimize its shopping experience to allow for mobile buying by allowing the platform to be launched from mobile handsets. This will give the buyers the convenience and flexibility they require when shopping. Reference List Burgess, S Sellitto, C & Karanasios, S 2009, Effective Web Presence Solutions for Small Businesses: Strategies and Successful Implementation. IGI Global, Hershey. Chandon, P, Wansink, B & Laurent, G 2000, “A benefit congruency framework of sales promotion effectiveness,” Journal of Marketing, vol. 64, no. 65, pp. 10. Chaudhury, A & Kuilboer, J. 2002, E-Business and E-Commerce Infrastructure. McGraw-Hill. New York. Chiou, J. 2004, “The antecedents of consumer’s loyalty towards internet service providers,” Information & Management, vol. 41, no. 685, pp. 23. De Wulf, K. 2001, “Investment in consumer relationships: a cross country and cross-industry exploration,” Journal of Marketing, vol. 65, no. 33, pp. 19. Eisingerich, A & Kretschmer, T 2008, “In e-commerce, more is more,” Harvard Business Review, vol. 86, no. 23, pp. 20–21. Forsythe, S & Shi, B 2013, “Consumer patronage and risk perception in internet shopping,” Journal of Business Research, vol. 56, no. 867, pp. 12-13. Frieden, J & Roche, S. 2006, “E-commerce: legal issues of the online retailer in Virginia,” Richmond Journal of Law and Technology, vol. 13, no. 2, pp.12. Graham, M 2008, “Warped geographies of development: the internet and theories of economic development,” Geography Compass, vol. 2, no. 3, pp. 771. Humeau, P. & Jung, M 2013, “In depth benchmark of 12 ecommerce solutions,” NBS 21 June, p. 12. Kessler, M 2003, “More shoppers proceed to checkout online,” USA Today 22 December, Available from . [5 March 2015]. Kotler, P 2009, Marketing Management. Pearson, Upper Saddle River. Laudon, K & Guercio, C 2014, E-commerce: Business, Technology, Society. Pearson, Upper Saddle River. Manzoor, A 2010, E-Commerce: An Introduction. LAP Lambert Academic Publishing, Saarbrucken. Miller, R 2002, The Legal and E-Commerce Environment Today. Thomson Learning, Boston. Nissanoff, D 2006, Future Shop: How the New Auction Culture Will Revolutionize the Way We Buy, Sell and Get the Things We Really Want. The Penguin Press, London. Oliver, L 2009, “Customer loyalty,” Journal of Marketing, vol. 33, pp. 81. Peacock, M 2011, PHP 5 E-commerce Development. Packt Publishing Ltd, Birmingham. Plant, R 2001, Ecommerce: Formulation of Strategy. Prentice Hall Professional, Upper Saddle River. Seybold, P 2011, Customers.com. Crown Business Books, New York. Top of Form Bottom of Form Bottom of Form Read More