The Use of Smartphone in E-Retailing - Coursework Example

The Use of Smartphone in E-Retailing (E-Commerce) Technology is a major turning point in modern society, since it has influenced the way people interact, relate, live, work and transact business (Schmidt, et al., 2002). With the establishment of technology, there has been a shift in matters environmental, political, social and economical (Khanh & Jay, 2002). This has been felt by organizations that are using technology to improve the performance of workers, increasing the capacity of production, improving the quality of distribution, marketing and delivery of goods and services (Hsi-Peng & Philip, 2009). Among technological tools invented is the innovation of the design of normal mobile phones to smart phones. The invention of smart phones has influenced greatly how retailers produce, market, promote their goods and services and reach out to their customers (Korper & Ellis, 2001). The rapid growth in numbers of people using smart phones has meant more and more people are using their smart phones to search, research, shop, search entertainment, make orders, make bookings in the internet using Third-Generation telecommunication signal (Bauknecht, et al., 2003). This report shall critically analyze the use of smart phones in e-retailing or e- commerce. The increase use of smart phones in shopping Due to tight working schedules and limited time offs; more individuals are opting to shop online, and using their mobile phones due to their accessibility, and mobility characteristics. (Hsi-Peng & Philip, 2009) claims that, the Internet access numbers of mobile phones users have been more than desktop users. Moreover, the possible benefits for the Business-to-Consumers (B2C) retailing markets have increased with the growing number of mobile phone population. Therefore, the invention of smart phones has played a fundamental role in the development of e-retailing in a stimulating ways, such as accelerating the business cycle, reducing overhead and limiting service costs (Khanh & Jay, 2002). Business cycle acceleration One of the stimulating aspects to the e-retailing by smart phone is business cycle acceleration. The life cycle of a business can be shorten to the advantage of the retailer, thus increasing their profitability through constructing customer databases, promotions, product differentiation, providing a friendly interface for ordering, assortment and size and providing an effective delivery system (Hsi-Peng & Philip, 2009). Due to these factors, there are numerous advantages that are produced. The revenue of the online retailing store will rise steadily; because of the customer databases, can provide more opportunities to advertise services and products, product catalog, and product and service content engine (Bauknecht, et al., 2003). Furthermore, a friendly interface and clear directions help people understand and purchase the products without any complication (Khanh & Jay, 2002). Finally, an effective delivery system will provide better customer satisfaction, receiving immediate customer comments and reviews and thus will increase the number of return customers (Dennis, et al., 2004). Although, accelerating business cycle for online purchase by smart phone provides many benefits, there are still some challenges that come with it. The customer database management and controlling the delivery costs are major considerations for online retailers. Even though e-commerce reduces time on business cycle, customer relationship on the Internet requires a period of time to be built up, which is harder and complex compared to traditional commerce (Bauknecht, et al., 2003). Therefore, the customer reliance of internet retailing has to be improved and constantly emphasized. Additionally, building up a customer database not only needs the reliance of customers, but a complete and effective management system is essential. Lack of good organization systems, personal details about the customer is at a higher risk, this includes missing data, incorrect purchases or mistaken deliveries (Khanh & Jay, 2002). Reducing Overhead Reducing overhead costs and limiting service costs is an essential issue for retailers; many business persons have been considering decreasing their overhead in any possible way (Hsi-Peng & Philip, 2009). Therefore, e-retailing style provides an opportunity to effectively drop the overhead in several ways. This includes costs incurred by retailers to conduct marketing researches, promotions and advertising, and potential buyer identification (Dennis, et al., 2004). For the buyers, they incur searching costs. Smart phones offer an easy and cheap way to advertise, and for e-retailers to showcase their different products, learning customer comments, reviews and opinions while buyers search information easily just by the touch or click of a button (Hsi-Peng & Philip, 2009). Reducing overhead however, has been difficult. This is because e-retailing is susceptible to infiltration by fraudsters, viruses and hackers which puts customers at risk, and costs retailers greatly (Khanh & Jay, 2002). Reducing service cost of electronic retailing By smart phones helping retailers to reduce their service cost, they are able to set aside resources to develop new ideas and designs for the products to meet changing consumer needs, choices, tastes and preferences. Moreover, the reduced service costs mean increased productivity for e-retailers (Hsi-Peng & Philip, 2009). However, due to the inability of the e-retailers meeting expectations of the customers, there are extra operating costs. This is because it is hard to strike a balance between quality service and product provision and delivery and revenue saving owing to the fact that e-retailing is advertising- based (Pankaj, 2010). The Advantages of using smart phones over other mediums in commerce Through smart phones, e-retailers are not only able to easily give their clients information on their products and services, access the client’s reviews and are able to give their clients a complete package, value, present their wares and options on delivery systems (Zheng & Ni, 2006). But smart phones help e-retailers follow up on the doings of their clients, evaluate various consumer trends, learn various consumer behaviors, identify consumer tastes , needs and preferences and are able to make customers access timely and location based products and service offers (Korper & Ellis, 2001). Individuals with smart phones are also able to check out, compare and contrast competitive pricing, services and products that e-retailers offer (Grant & Meadows, 2008). According to Chetan Sharma Consulting President Mr. Chetan Sharma, “Mobile is not just a high-volume personal fashion statement that is always on you, but it is also location- and context-aware, which makes it different from other mediums. Mobile is also unique in that it has built-in payment mechanisms.” This is in line with the integration and co-operation of e-retailers and financial institutions like Master Card and Visa who ease payment of e- purchasing. He states that “Looking at mobile, the PC Internet, TV, print, radio and outdoor, mobile is the most effective advertising medium due to its unique characteristics, mobile is the most effective advertising medium in terms of reach, targeting, viral spread and audience engagement, all of which lead to transactions.” Through use of smart phones, retailers are able to negotiate challenges that arise from traditional advertising, where phones makes the buyers more aware, engages them, and buyers are given the chance to check out what competitors have to offer thus allowing them to make informed decisions and purchases (Hsi-Peng & Philip, 2009). Among other benefits that customers derive from using smart phones in e-retailing include the fact that retailers can custom make products and services that suit consumer needs, choices and preferences (Dennis, et al., 2004). Furthermore, buyers are able to purchase anything, any time of the day and night and anywhere (Bauknecht, et al., 2003). Since majority of people world wide own or have access to smart phones, e-retailers have an added advantage of a universal market reach which translates to increased market shares (Khanh & Jay, 2002). They are able to facilitate target trading, are able to offer value added services to their customers and more so offer better and effective customer services (Shaw, 2006). The disadvantages of using smart phones over other mediums in commerce Although smart phones offer a great leeway for retailers, there are disadvantages that come with it. Smart phones are susceptible to infiltration by other people like friends and families who can easily access it and use it t make personal purchases that may cost the smart phone’s owner (Zheng & Ni, 2006). Retailers who deal with perishable goods cannot rely on e-commence on phone to make sales, because they cannot predict consumer behavior (Grant & Meadows, 2008). Retailers, who use the advantage of smart phones of opening up larger markets, are faced with increased risks and competition from international brands and companies (Dennis, et al., 2004). A mistake in poor purchasing, delivery and packaging of goods and services may mean death for a small business with so much potential (Zheng & Ni, 2006). Since, unsatisfied clients can as easily post negative reviews and forward negative opinions to their friends. Additionally, some e-commerce features and processes are hard to integrate with software installed in smart phones (Pankaj, 2010). Conclusion In order to meet new consumer and market needs, tastes and preferences, modern society has relied heavily on technology to help innovate products and services in their production, marketing, distribution, deliveries, and consumption. Technology has helped increased the level of production, has improved the quality of services and products offered and has influenced on the competitiveness of how people do business. This has resulted in increased effectiveness and efficiency of business and work processes. Through technology, mobile phones have evolved to smart phones. The invention of smart phones has played a fundamental role in the development of e-retailing in a stimulating ways, such as accelerating the business cycle, reducing overhead and limiting service costs. Since majority of people world wide own or have access to smart phones, e-retailers have an added advantage of a universal market reach which translates to increased market shares. However, it has been hard to control increased operational costs and to eradicate fraud prevalent in e-commerce. Additionally, customer relationship on the Internet requires a period of time to be built up, which is harder and complex compared to traditional commerce. References Bauknecht, K., Tjoa, A.M., Quirchmayr. (2003). E-commerce and web technologies: 4th international conference, EC-Web 2003, Prague, Czech Republic, September 2003, proceedings. Sidney: Springer. Dennis, C.E., Fenech, T., Merrilees. (2004). E-retailing. London: Routledge. Available at http://books.google.co.ke/books?id=zrFlIcn7enwC&printsec=frontcover&dq=E-retailing&hl=en&ei=YLvoTK3EJcTvsgb-pvycCw&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCkQ6AEwAA#v=onepage&q&f=false Grant, A.E., Meadows, J.H. (2008). Communication Technology Update and Fundamentals. London: Focal Press. Available at http://books.google.co.ke/books?id=dBiiA87XnJIC&printsec=frontcover&dq=Communication+Technology+Update+and+Fundamentals.&hl=en&ei=jLvoTN3SIdDNswaKloS9Cw&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCUQ6AEwAA#v=onepage&q&f=false Hsi-Peng Lu, & Philip Yu-Jen Su. (2009). Factors affecting purchase intention on mobile shopping web sites. Internet Research, 19(4), 442-458.  Retrieved November 16, 2010, from Research Library. (Document ID: 1963641881). Khanh V La, & Jay Kandampully. (2002). Electronic retailing and distribution of services: Cyber intermediaries that serve customers and service providers. Managing Service Quality, 12(2), 100-116.  Retrieved November 9, 2010, from Pro Quest Central. (Document ID: 266779521). Korper, S., & Ellis, J. (2001). The E-commerce book: building the E-empire. Massachusetts: Morgan Kaufmann. Available at http://books.google.co.ke/books?id=f02Ekzxd1zAC&printsec=frontcover&dq=The+E-commerce+book:+building+the+E-empire&hl=en&ei=6LzoTN79GcfKswbblKSnCw&sa=X&oi=book_result&ct=result&resnum=1&ved=0CC8Q6AEwAA#v=onepage&q&f=false Pankaj. (2010). E-commerce. New Delhi: APH Publishing. Available at http://books.google.co.ke/books?id=-V4ot1Rbt9gC&pg=PA360&dq=E-commerce&hl=en&ei=qbzoTLObCIHxsgbgx5GPCQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCsQ6AEwAA#v=onepage&q&f=false Schmidt, I.D., Dobler, T., Schenk, M. (2002). E-commerce: a platform for integrated marketing; case study on U.S. retailing. Berlin: LIT Verlag Münster. Available at http://books.google.co.ke/books?id=14MMBA4sMa0C&printsec=frontcover&dq=E-commerce:+a+platform+for+integrated+marketing%3B+case+study+on+U.S.+retailing.&hl=en&ei=xrzoTIzjCYyVswa0zKmQCQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCkQ6AEwAA#v=onepage&q&f=false Shaw, M. (2006). E-commerce and the digital economy. New York City: M.E. Sharpe. Available at http://books.google.co.ke/books?id=-KE40ub_9OsC&pg=PR7&dq=E-commerce+inauthor:shaw&hl=en&ei=bLzoTKjqJZGSswbcsqSPCQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCoQ6AEwAA#v=onepage&q&f=false Zheng, P., Ni, L.M. (2006). Smart phone and next generation mobile computing. Massachusetts: Morgan Kaufmann. Available at http://books.google.co.ke/books?id=x4LUlN_e1bAC&printsec=frontcover&dq=Smart+phone+and+next+generation+mobile+computing&hl=en&ei=GLvoTILGKYjwsgbUoKyPCQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CC4Q6AEwAA#v=onepage&q&f=false Read More