Electronic Retailing: Online Shopping - Literature review Example

?Literature Review Online shopping is a modern shopping trend which is widely accepted by many s because they find it more convenient and easy as compared to traditional shopping. From retail perspective, it is also referred to as ‘electronic retailing’ or ‘e-retailing’ as the buying and selling transactions take place through internet. Generally speaking, online businesses provide a number of considerable benefits to business owners, as well as to customers. Online retailers are able to increase customer trust through efficient response and better customer relationship management (Hoffman, Novak & Peralta 1999, p. 80). For example, a 24/7 customer support service is available to customers in case of online businesses which is not there usually in case of traditional businesses. If we talk about online clothing sale business, we can say that it is a wonderful approach towards such business as it provides benefits for both customers and the company in terms of increased convenience for customers and increased customer base for the company. E-retailing actually started in 1997 by Dell computers. Today, there are a large number of companies that are doing their businesses online, such as, The Outnet, E-bay, and Amazon. The Outnet is one of the most successful UK clothing e-retailers. The company operates its business online and offers a wide range of luxury clothing products, such as, bags, shoes, clothes, and other garments to the customers. To ensure efficient working of business processes, the company has implemented an efficient management information system that keeps the business information up-to-date. The information system makes use of information technology tools for the processing of information and generation of reports (Earl 1996). As Oz (2009, p.9) states, “Information is the lifeblood of any organization”. The Management Information System helps the company in collecting, storing, documenting, and retrieving required information efficiently from the database of the computer system. Need of information management is the first factor which has driven The Outnet and many other online cloth retailers to implement an information system in the company. According to Lucey (2005, p. 4), the main purpose of a management information system is to process the data into information and to communicate the processed information to the users of the system. Almost every company having online presence needs to manage the details of business processes and other information in the database in order to carry out the business processes effectively. According to Stahl (2008, p. 1), management information systems promote efficiency and effective control of business processes. The Outnet would have been a failure without the implementation of information system because it is a customer-oriented company and needs to be efficient in managing the information about customers’ orders and payments. Therefore, information management is one of the basic needs of an online retailer company in order to succeed in today’s competitive environment. If we talk about the benefits of online shopping for customers, we can say that customers find it very easy and convenient to do online shopping as it saves them a lot of time, energy, and money in terms of reduced traveling costs. Similarly, in today’s busy world, customers do not have much time to go to stores physically and spend a lot of time to select and purchase clothes. They prefer to do online shopping because they can do it from anywhere and any time. They do not have to dedicate some part of their time for shopping; rather they can do it while doing other personal or professional life activities. For example, people can do online shopping within the break they usually get in office hours. Similarly, a woman can check out latest clothing fashions on the websites of online companies while doing household activities. Moreover, they can also easily search many other alternatives to choose the best bag, a pair of shoes, or any other clothing product. A very important point regarding online shopping is that customers can buy a product from international companies and enjoy the international standard without going to foreign countries for shopping. According to Assael (2008), buying procedure in online shopping is also very simple and easy as compared to traditional mode of shopping. Online retailers also enjoy a number of considerable benefits of doing online businesses. They can market their business more efficiently, as well as create a larger customer base as compared to the clothing companies doing businesses traditionally. Online retailers are able to reduce office premise costs, as well as salaries’ cost. Moreover, online retailers are able to reach larger audiences in a short span of time. Almost every people present in any particular place ion the world makes use of internet because of which he/she is able to do online shopping by just clicking on the website of any online clothing company. Online retailers do not need to dedicate their precious time on going to their physical stores to operate their businesses. Through e-retailing, they are able to operate their businesses being at home or on vacations. E-retailing also gives a competitive edge to companies over competitors based on increased customer base and huge returns on investments. The Outnet and other online clothing retailers are getting huge returns from customers because they are not only providing the customers with the facility to shop online but also they are using the online chat system using which customers can interact with actual sales persons over webcams in order to discuss the product offerings. The Outnet is using the customer oriented touch screen machine that enables customers to drag, drop, and scale the product images and options on their computer screen (Mitchell 2009). Customers can checkout with their purchases by logging into their respective login areas provided to them in the database. This is really a great thing for the customer, as well as for the company because it promotes purchase loyalty, as well as real-time interaction between the customers and the sales representatives. “Purchase loyalty, in turn, leads to greater market share, and attitudinal loyalty leads to a higher relative price for the brand” (Chaudhuri & Holbrook 2001, p. 81). Earlier, there were only buying options for the customers using which they could only see the images of their required product and they had to contact the sales representatives for further clarifications. However, through the system being used by the modern online companies, it has become easy for the customers to reduce most of their doubts about products and get special benefits through real time interaction with customer service representatives. Yen and Gwinner (2003, p. 483) state, “special treatment benefits mediate the relationship of efficiency and convenience with customer loyalty and satisfaction”. Although this facility cannot overshadow the experience of real physical shopping, yet it helps online customers to have a closer experience to the traditional mode of shopping. Along with many benefits for customers and online clothing realtors regarding online shopping and retiling, there also exist some concerns for customers. For example, customers may think that they would have done better shopping by visiting the stores physically instead of doing it online. They think that they could have touched the fabric to feel its quality, as well as they could have bargained well with the sales representatives. However, the customers’ perceptions vary a great deal and they mostly depend on the product category, shopping situation, price offered, and other factors (Mitchell 2009). According to Stone and Gronhaug (2003), customers’ perception of risk that they may face in online shopping is multidimensional. Some customers are also afraid of the difficulties they may face in case of returning the goods to the company or getting refund of their amount in case of receiving poor quality products. One of the main concerns about the customers is regarding the security of online modes of payments, as well as the safety of their private information, such as, credit card details and address. Therefore, many customers totally avoid online shopping and prefer traditional mode of shopping. Apart from these risks, online retailing is still a viable option for retailers. The only thing they need to do is to ensure security of customers’ information and provide best quality products to customers in a short span of time to raise the satisfaction level of the customers. References Assael, H 2008, Consumer behavior and marketing action in online shopping, South-Western College Publishing, Cincinnati. Chaudhuri, A & Holbrook, B 2001, ‘The chain of effects from brand trust and brand affect to brand performance: The role of brand loyalty’, Journal of Marketing, vol. 65, no. 2, pp. 81-93. Earl, M 1996, Information Management: The Organizational Dimension, Oxford University Press, New York. Hoffman, D, Novak, T & Peralta, M 1999, ‘Building Customer Trust Online’, Communications of the ACM, vol. 42, no. 4, pp. 80-85. Lucey, T 2005, Management Information Systems, 9th edn, Thomson Learning, London. Mitchell, V 2009, ‘Consumer perceived risk: Conceptualizations and models’, European Journal of Marketing, vol. 33, no. 2, pp. 163-195. Oz, E 2009, Management Information Systems, 6th edn, Cengage Learning, Massachusetts. Stahl, B 2008, Information Systems: Critical Perspectives, 6th edn, Routledge, Oxon. Stone, R & Gronhaug, K 2003, ‘Perceived risk: Further considerations for the marketing discipline’, European Journal of Marketing, vol. 27, no. 8, pp. 39-50. Yen, H & Gwinner, K 2003, ‘Internet retail customer loyalty: the mediating role of relational benefits’, International Journal of Service Industry Management, Vol. 14, no. 5, pp. 483 - 500 Read More