The Impact of Internet Marketing in Retailing - Essay Example

?Report: The Impact of Internet Marketing in Retailing Table of Contents Introduction………………………………………………………………………………………3 Retail Marketing…………………………………………………………………………………3 Internet Marketing & Retailing…….…...….………………….……………………………….4 Literature Review………………………………..………………………………………4 Current Scenario………………………………….……………………………….……..6 Analysis & Conclusion…………………………………………………………………………...8 References………………………………………………………………………………………...9 Introduction Internet Marketing can be defined as the marketing of products or services through the medium of Internet. Also known as online marketing or e-marketing, it has become the most exciting marketing form of marketing in years. This medium has been openly embraced by companies as it is creating value for customers and profits for companies (Hanson, 1999). While e-marketing has become an important tool for companies, it has its own different effect on each sector. Here, we will discuss the impact of internet marketing in the retail sector. Retail Marketing Retail consists of the selling of products from a fixed location; retailers are in direct interaction with the customers, and therefore are at the bottom of the supply chain. Retailers are at the end of the supply chain. They purchase goods either directly from the manufacturer or wholesaler in large quantities and then sell it to the customers (individuals or businesses) in smaller quantities. Retail marketing is all the activities related to the selling of these products. The retail sector is quite a competitive sector in the business environment and therefore, it requires and equally competitive marketing strategy to achieve success. If a retail business would only get caught up with its day to day operations and not emphasize on its marketing plan, it will be left far behind in the competition. Along with their focus on products and distribution, retailers need to also pay equal attention to management of customer relationships (Mulhern, 1997). Some of the ways retail marketers should adopt are: Depending on the type of shop one has, the look of the store, the display and the signage are an important part of a good marketing strategy. Offering promotions attract customers. Integrate the consumer feedback. This satisfies the customers and also increase customer base. Along with all these and many other strategies for effective marketing, the latest and most important is online marketing. Internet Marketing & Retailing With the Internet becoming an integral part of our lives, Internet marketing has become an important component of any company to increase its market share. While retailers can set up a website and sell products online to expand their business, this is not the only facet of Internet marketing. Products can also be advertised online. Maximum exposure of a product is required to increase its sale and with Internet usage increasing day by day, Internet marketing has become the most effective way for marketing. Literature Review Many authors have written on this important topic. While we find literature on how important marketing is in the retail sector, recent literature also emphasizes on the importance of Internet in marketing. Each and every field has been largely affected by the advent of the Internet and only those who are adapting to it are ahead in the race. Retail Marketing, a book by Peter McGoldrick, discusses in detail about retail marketing. Its revised version includes a chapter about retail marketing and Internet and how e-tail marketing is important today for retail businesses. Also, in recent times many books have been separately written about Internet marketing and how it needs to be incorporated to gain advantage in businesses. One such work is Internet Marketing: Building Advantage in a Networked Economy discusses this in detail. The importance of Internet marketing and how effective marketing programs can be implemented through the Internet to build a relationship with the customer is highlighted in this book. Along with books, various researches have also been carried out on this topic. Various researches have covered how various retailers are going in Internet retailing to expand their business or opening only and Internet retail store as it saves various costs. Others have focused on retail marketing and how it is applying Internet in its operations for advertising. One study in UK in 2000, Retailer adoption of the Internet – Implications for retail marketing, shows that some retail stores do not have a website, while many which have only use it for communication purposes and providing information to its customers. Most have not expanded into online selling, but Internet will become a new retail format, and dominance will shift from fixed location stores to online stores. As compared to 2000, now in 2010 we see that online selling has increased to a great extent. Another research article published in 1997, Exploring the implications of the Internet on consumer marketing, highlights the same fact how the increasing popularity of Internet will not only influence marketing by retail stores but also shopping behavior. Online shopping would become an important aspect of retailing. A review of the work done on this topic shows the strong an impact Internet marketing has on the retail business in terms of marketing the business, and also its expansion. Let us see now how the current scenario matches up to it. Current Scenario Internet has completely revolutionized the retail sector today. While e-marketing has become the most important way of advertising your product, online selling has also increased profits from companies. Moreover, online retailing with no fixed location stores is also becoming popular day by day. Let us consider each category separately: Retail Fixed Location Stores: Various retail stores have not expanded their business to online selling. However, the importance of E-marketing for these stores is even more. Businesses nowadays have everything on their website. Store listings, product information, promotional offers, and some even provide a complete catalogue of all the products available. This increases convenience of the customers. This suits various businesses like home stores. Many home stores do provide a shop online option but for such buying people prefer to look at the furniture in person before making the buying decision. However, the catalogues and product details online saves a lot of time for the customer at the store. Similarly for buying shoes and clothes, buying online option is present but trying them before purchasing is preferred. Nowadays, the trend towards finding everything through the Internet has increased so much that people always refer to store websites for any products they want to purchase before actually visiting the store. In this case, businesses which have a good website with all appropriate information present definitely gets extra points and an edge over the one which does not. Retail Fixed plus Online Stores: Many retail businesses have added a shop online option to their website which increases the convenience of customers by a great extent. Home stores like IKEA, various fashion lines like NEXT, Guess, and gadget stores like Apple and many more have e-shopping available. While some people do not prefer online shopping for various products, but many do use this option for saving time. Moreover, some products are such that shopping physically is not necessary for them. Like cosmetics or jewelry or even for sending flowers or chocolates as a gift, physical presence at a shop is not required. Therefore, for time-saving and convenience, many customers appreciate the fact that if they can’t go to the store for some reason, a buying online option is always available. Online Stores: Internet has completely changed the way we shop today. Many new businesses have now opened online because what was not possible for them earlier due to various costs of opening a physical store have now become possible through the internet. Social media marketing also plays a very important role here. Many small home businesses don’t even have a proper website. They advertise on Facebook or some other social media website and carry out their business through that. From product information to photographs to open discussion, everything is available on that single page. Many other retail businesses also use these social media websites for advertising if not selling. While some of these stores only have a local delivery system, many provide international services too. This form of shopping is extremely successful and people use it all over the world to shop for products locally and internationally both. One point of concern with consumers while shopping online is the risk regarding privacy and security. Internet privacy poses a major obstacle for online retailing (Miyazaki & Fernandez, 2001). While steps are always taken to solve these issues, and well-known websites and brands minimize this concern to a great extent, some people still avoid online shopping for this reason. Analysis & Conclusion Whether it is retail shopping through a store or online, the impact of Internet on this sector cannot be undermined. Many retail stores have adapted to this trend and reaping its benefits. Many are extending or re-vamping its business and marketing strategy to bring it in line with these trends. Expanding the retail business to online selling operations definitely helps the business because regardless of the various concerns present, shopping online is becoming a popular mode. While that decision is dependent on the business strategy of a product, an online presence and a complete online presence is inevitable for any retail business. So retail businesses should have a proper website and they should be updating it continuously to meet the consumer demands. Complete product, business and other information essential to a particular business should be present on the website. Additional features like promotions and discounts, sharing extra knowledge related to your product, employing email and newsletter marketing, advertising through social media websites etc are also helpful in increasing online exposure. In short, Internet marketing and retailing go hand in hand and it is equally or even more important for a retail business. References: Bustos, Linda, 110 Ways Retailers are Using Social Media Marketing, Internet, (2007), http://www.getelastic.com/social-media-examples/ Hanson, Ward A., Principles of Internet Marketing, South-Western College Publishing Company, (1999) Hart, Cathy, Doherty, Neil, & Ellis-Chadwick, Fiona, Retailer adoption of the Internet – Implications for retail marketing, European Journal of Marketing, (2000). McGoldrick, Peter, Retail Marketing (2nd Edition), (2002). Miyazaki, Anthony D., & Fernandez, Ana, Consumer Perceptions of Privacy and Security Risks for Online Shopping, Journal of Consumer Affairs, (2001). Mohammed, Rafi, Fisher, Robert J., Jaworski, Bernard J. & Paddison, Gordon, Internet Marketing: Building Advantage in a Networked Academy, Mc-Graw Hill Inc., (2003). Mulhern, Francis J., Retail Marketing: From distribution to integration, International Journal of Research in Marketing, (July 2004). Peterson, Robert A., Balasubramanian, Sridhar, Bronnenberg, Bart J., Exploring the implications of the internet for consumer marketing, Journal of the Academy of Marketing Science, (1997). Spiller, Peter & Lohse, Gerald L., A classification of Internet retail stores, International Journal of Electronic Commerce, (1997). Read More