Online Shopping versus Traditional Shopping - Coursework Example

Online Shopping versus Traditional Shopping Online Shopping versus Traditional Shopping Introduction In the last ten years, there has been a steady exodus from traditional shops to online shopping stores, a trend that will most assuredly go on as forecasted by experts and academicians. Many entrepreneurs with traditional shops have acknowledged this fact and they have gone ahead to create an online stores for their clients. Majority of other organizations, especially start-up ecommerce companies have been contending with traditional shops. As the online shops continue to expand absorbing new Internet users that continue to grow with each passing day, both forms are experiencing challenges to in their endeavour to maintain competitiveness and profitability. In this expansive environment, clients have expectations concerning shopping experience, expecting that they will attain a high quality of service from each of these models. It is therefore no wonder that modern day online shoppers are carrying out intricate online searches before they can make a purchase decision. All this is done with an expectation that they will get adequate information concerning the products and services of their interest. Most customers are more apt to purchase goods online as well as search for other information that is related to their services. In addition to this, individuals who are conversant with the internet have bigger expectations in relation to online shopping experience. It is also widely accepted that both the online and traditional shoppers are more likely to get peer recommendation (Pride, & Ferrell, 2011). Research conducted in the last few years has confirmed the earlier presumptions that there is a big influence of reference groups, opinion leaders, and product testing services on the manner that consumers evaluate products. In most cases, clients who search for information online end up buying using the same medium and for that reason a retailer should not see these courses of action as being autonomous of each other. Research has also shown that most consumers do not consider prices during their initial stages of looking for information over the internet but all that they look for is the convenience of the location and the type of product that they want to purchase (Pride & Ferrell, 2011). Similarities between Online Shopping and Traditional Shops In the current period where technology has taken a centre stage, every individual thinks that they can start an online shop. Although this seems to be true in many aspects, people also need to realize that online shops are simply shops that contain numerous challenges just in the same manner as the traditional shops. Like traditional shops, online shops adhere to the existing rules of business and economics and this means that in both models there must be demand for what one is offering. This means that in both models an individual has to conduct much research to be able to come up with products that clients are looking for. This is because the idea of supply and demand is vital to the development and success of any business enterprise set up. This similarity means that both online and traditional shoppers undergo the same processes before they can settle on the product that they want to buy. While shoppers getting their goods from traditional shops go for physical widow shopping, those shopping online search for the good in a strenuous manner before they can settle on the product that they want to purchase (Bankinter Foundation of Innovation, 2011). Although many people claim that traditional shopping is disadvantageous due to the numerous delays, the truth is that even online shopping has its set of unique delays. Once a shopper buys a product online, he has to wait for some period for it to be shipped and this causes delays since the customer does not get the goods immediately. This makes these two types of shopping almost identical to a certain point (Bankinter Foundation of Innovation, 2011). Online Shopping One of the advantages with shopping online is that people get to save time, as they do not have to go to a physical store to select the goods they need to buy. Saving time is much more important especially during the festive season when the stores are characterized by long queue of shoppers. For online shoppers one does not have to stand in a queue and wait to be served, as the website in most cases is able to handle multiple customers operating from different computers. Therefore, online shopping provides a more convenient way for customers who do not want to stay in queues (Jin & Lin, 2011). Due to the use of World Wide Web in online shopping, one is able to access any online market in the world, which enables a customer to compare prices for goods and services from any place. The customer is able to access certain goods and services not produced in the home country or those of higher quality or low prices from other countries by placing an order from where the customer is located. Therefore, online shopping increase the variety of goods and services that a customer can get access to thereby increasing the chances of customer satisfaction and reduces the reliance on a small market that offers low quality or highly priced goods and services (Jin & Lin, 2011). Another advantage of online shopping is that Part of the advantage of being able to access goods and services from all over the world that comes with online shopping is being able to get the ordered products delivered to any country the customer is located. The customer gets the ordered product shipped to the address indicated with a more convenient price, which does not represent a significant increase compared to those provided by the local stores. Online shopping business have transportation infrastructure that covers land, water and air depending on the kind of transport that is convenient for the ordered product where bulky or light in weight, big or small and perishable or with long shelf life (Moon, n.d). Additionally, online shopping has made it possible for customers to receive the latest products before everyone else can access them from the market. Many companies post their new products that have been introduced into the market on their online shopping website before such products can reach the conventional markets. Such moves enable those who do online shopping to get first access to new fashions before others get them and therefore, online shoppers are always in the forefront when it comes to fashion and trying out new products. Being able to access goods and services before others does makes online shoppers trendsetters in their society as others learns about new fashions from them (Holl, 2013). Traditional Shopping Although many people are moving away from it, the truth is that traditional shopping has its own advantages. The first and perhaps the biggest plus that brick and mortar shops offer to shoppers is immediate gratification. Unlike in online shopping where a customer has to wait for days for the product to be delivered, a customer gets what they were searching for almost immediately. In most cases, people prefer to touch the product before they can purchase. In online shopping, this aspect is not possible and this makes traditional shopping superior than online shopping. An example of this is a situation where an individual would not buy expensive jewellery simply based on an image from the Internet since most people would prefer seeing the exact image (Singh, 2011). Despite the growing popularity of online shopping, it is virtually impossible to the internet to get a hold of the market of industries, which are more suited for traditional shopping. While consumers are capable of conducting an online research to search for the items that they are in need, it is virtually hard for them to purchase high priced items such as real estate online since they would want to inspect the piece of property before they can settle on the final deal. A person selling goods traditionally offers the shoppers human contact something that cannot be offered through online shopping (Singh, 2011). For numerous people, shopping is a source of entertainment and many people consider it. Most shoppers like to handle things like clothes before they can purchase to have a feel of their texture before they can settle on what to purchase and this factor is clearly not available for online shoppers. In addition to this, online shoppers have to factor in things such as shipping costs and this increases the prices of the product. There have also been cases where online shoppers are offered products that they did not purchase something that is impossible to happen in traditional shopping. This is usually the case especially given that most online shoppers make their orders mostly through emails and this makes it impossible for the seller to get the finer details of the order. There are also other cases where online retailers advertise for products that do not fit the exact specification of what they have and this means that customers end up getting goods that do not match their expectations (Chen, 2008). In every business venture, marketers know that advertising is the key to increased sales and most online shoppers use this to lure unsuspecting people to purchase products that are not even near the specifications that they have given. This aspect cannot happen in traditional shopping (Singh, 2011). In this age of technological advancement, it is also worth noting that criminals are technologically savvy. In the recent past, there have been numerous cases where unscrupulous people have swindled online shoppers off their money and this has led many people to question about the security of shopping online. Although traditional shoppers have to content with long queues to be able to make their purchases, one thing that they have a guarantee is on the security of their payments since in most cases they make their payments on cash basis. When an individual is making an online payment, most retailers require them to submit their credit numbers, phone numbers and even their physical addresses and this may be a tool for criminals to carry out attacks on the client. This is impossible to happen for traditional shoppers since their security is guaranteed in all their dealings and although they might be required to spend some extra time in completing the purchase, this is advantageous since the shopper is always safe. Apart from this, it is also worth noting that some criminals set up fictitious online shops that they use to swindle unsuspecting clients since there is usually no way that customers can verify whether the company they are dealing with is fictitious or not. This scenario is almost impossible to happen in the traditional form of shopping since shoppers have an ideal opportunity of looking around to ensure that they get the shop with the ideal products (Singh, 2011). Business Effects of Online and Traditional Shopping Online retail businesses offer the most appropriate form of business for entrepreneurs with minimal capital to invest up front given that the costs associated with setting up a physical store is avoided in online business model as an entrepreneur can operate from home. Further, online business does not involve payment of rent for those who do not own a store. However, the entrepreneur might need to pay for specialized storage facility when dealing in perishable goods like foodstuff and flowers. Online business also requires fewer amounts of finances for advertisement compared to physical stores as the owner of online shopping business will only depend on increasing the number of traffic to the business website (Gellman, & Dixon, 2011). Owning an online business removes the need to create more branches whenever the company expands to new markets within or outside the country. Online business owners expand their business by improving their presence in the online media and not opening more offices and branches. An avenue for this type of business owners to reach more markets includes advertisement in social media such as Facebook, twitter, MySpace among others. Such methods further cuts costs of operation for the business and therefore results in higher profits for the owners. Therefore, the business headquarters serves all the markets and customers adequately without requiring physical presence of the business in these areas (Gellman, & Dixon, 2011). Creating an online business presents the owner with the freedom to live and run the business from anywhere not necessarily near the point of operation. Further, the owner can travel while running online business without compromising business operations. All one needs is a computer and internet to be able to supervise business operations that include taking orders, processing payment and arranging for the purchased product to be shipped to the customer (Holden, et al, 2008). Business owners are currently taking advantage of the ‘click and collect’ concept to increase sales given the widespread consumer acceptance. This concept of shopping online allows customers to select a product, make an order and process payment but then visit the nearest pick up point designed by business enterprises. This concept has enabled online business owners cut the cost associated with transportation and reduce chances of packing the wrong order (Wallop, 2013). By choosing to do business online, business owners contribute to environmental conservations. Online business companies limit the amount of paper and office waste output that characterize conventional workplaces as they use online, digital methods for communication amongst members of staff, suppliers and with customers. Additionally, paperless technology have been used by online businesses to produce contracts and invoices where tools such as adobe software that help in making e-contracts. Digital marketing is also an environmental friendly method used by online companies to pass new information to their customers or attract new customers instead of using posters and billboards (Jin & Lin, 2011). Business Reasons why People prefer Traditional Shops The world we live in is constantly changing. Although most businesses are trying as hard as they can to create an online presence, other businesses have refused to create an online presence and still insist on run the traditional mortar and brick businesses. The main reason for this is that most businesses want to create a sense of trust with their clients and they feel that transforming their businesses into online stores would make their clients to lose their trust on the stores. Apart from this, traditional shops present a sense of security since the business owner can control what happens and this is something that most businesses do not want to lose (Holden, et al, 2008). Another reason why businesses would want to maintain traditional shops is that their targeted population might not be active Internet users. Although the use of internet is fast spreading in most places, there are still places where the use of the Internet has still not been adopted. Apart from this, only a certain age group uses the Internet and for that reason if the target population is not within that age group, then an organization would consider running brick and mortar shops. In most cases, online buyers make their choices on what to buy depending on their Internet searches. Given the high proliferation of online businesses, most online businesses find themselves edged out the market by those businesses that have the best websites. In most cases, such businesses might not have the best products but the nature of their website makes it the ideal choice among many people. This unworthy competition can best be abolished by maintaining traditional shops (Gellman, & Dixon, 2011). Another reason why some businesses like maintaining traditional shops is due to the high cases of credit card fraud. The current trend shows that most banks only give credit cards to clients who are financially stable and this means that only wealthy people can purchase products online. This locks out a large section of shoppers who might be willing to purchase the product but they are locked out for lack of the credit cards. Apart from the people who do not have the credit cards, still a larger part have them but fail to use them simply because they feel that their money is not secure online and that is why businesses are forced to still run traditional motor and brick shops even if they still have some online stores (Gellman, & Dixon, 2011). Social Culture of Online and Traditional Shopping Wherever buyers decide to buy any product or service, they do not make the decision in haste simple because they are unable to determine whether all their buying objectives will be attained with that particular purchase. This means that both online and traditional shoppers see a certain extent of risk in most of their buying decisions. Regardless of the shopping model used, most buyers take into consideration the social, financial, physical as well as the psychological risks before making a purchase (Gellman, & Dixon, 2011). Social Culture and Online Shopping The introduction of online shopping has undoubtedly have had an effect on our social culture. Unlike in traditional shopping where a person can go into a store and purchase products at random, online shoppers usually know what they want to purchase before they can make the order. In addition to this, online shopping is usually accompanied by online information on the product and this means that buyers have information before purchasing any product. In addition to this, online stores have a team of dedicated customer care representatives who are more than ready to answer all the questions that a client might be having before making their purchase. Since the Internet is all encompassing, having an online store means that an organization products are seen all over the world even in areas where the business might not even be having a physical presence. This aspect helps in the transference of both social and cultural norms around the world. Regardless of any part of the world that a consumer might be in, it is possible for them to have an access of items that are used in other cultures and for them to become a partaker in such cultures by purchasing the other culture’s products online (Preece, 2000). Social culture and Traditional Shops Any people’s culture is integral to their existence. Across the world, there are cultures that might be acceptable in certain places but they are abhorred in others. It is therefore not surprising to see some cultures that embrace and appreciate some things that are detested in other cultures. This cultural aspect means that there are some goods and services that might be accepted in some cultures but they are allowed in others. While a physical shop would not be allowed to sell a banned product in their locality, an individual would be able to get the same product with ease online. This is an effective way of ensuring that banned products such as books remain in circulation despite the prevailing social climate in any culture (Preece, 2000). Although to a small degree, online shopping encourages impulse buying since most of the adverts that are put up online are usually so enticing and they end up convincing people to buy products that they had not budgeted for simply because they looked appealing online. Unlike traditional shopping, online shopping does not allow people to interact physically and this ends up destroying the existent social structure. Most societies are closely knit and a way of socializing was through online shopping but this is no more possible as people turn toward online shopping (Preece, 2000). Conclusion There is no doubt that online shopping has brought a revolution into the manner in which people purchase goods and services. Unlike in the past where the only mode of shopping was in brick and mortar buildings, things have changed and today most businesses have online stores that allow individuals to shop from the comfort of their offices or homes. Ideally, there are numerous benefits that are associated with online shopping and hence the reason why this new trend is fast catching pace. However, there are also challenges associated with online shopping and that is why most businesses still have physical shops running besides the online stores. As online shopping has continued to gain even more acceptance, it has destroyed the existing social structure since people do not meet anymore to shop together as they socialize as it used to be the case when the only model of shopping was through brick and mortar shops. References Bankinter Foundation of Innovation. (2011). The Internet of Things: In a Connected World of Smart Objects. Madrid: Bankinter Foundation of Innovation. Chen, T. (2008) Online impulse buying and product involvement, Communications of the IBIMA, 5, 74-81. Gellman, R., & Dixon, P. (2011). Online Privacy: A Reference Handbook. Connecticut: ABC-C Holden, G., Belew, S., Elad, J., Gulbrandsen, D., & Rich, J. R. (2008) Wiley Pathways E-Business. New Jersey: John Wiley & Sons, Inc. Holl, S. G. (2013) Online Shopping Tactics. Clinton Gilkie. Jin, D., & Lin, S. (Eds.). (2011) Advances in Computer Science, Intelligent System and Environment. New York: Springer. Moon, A. (n.d) How to Start a Business Online, Entrepreneur [Online], Available at: http://www.entrepreneur.com/article/175242 Preece, J. (2000). Online communities: Designing usability and supporting sociability. New Jersey: John Wiley & Sons, Inc. Pride, W. M., & Ferrell, O. C. (2011). Marketing. California: Cengage Learning. Singh, N. (2011). Localization Strategies for Global e-Business. Cambridge: Cambridge University Press. Wallop, H. (2013) Click and collect – the new way to go shopping, The Telegraph [Online], Available at: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9785532/Click-and-collect-the-new-way-to-go-shopping.html Read More