The Impact of Morrison's slow migration to online sales and promotions - Essay Example

The Impact of Morrisons’s Slow Migration to Online Sales and Promotions Introduction Sales and marketing procedure can be considered as one of the major functions of any organisation. The marketing techniques and sales procedures of various organisations are facing rapid changes due to continuous development of technologies. This rapid development is enabling the population to easily access the details about any organisation and its offering from different corners of the world (Cho, Bae & Park, 2013). Digital marketing procedure is assisting organisations to custom their sales and marketing techniques as per the consumer behaviour. In today’s global environment, marketers are developing digital strategies which are assisting them to secure a competitive position in the market. This contemporary issue of marketing has provided a great impact on the global retail businesses. Most of the retail businesses are promptly shifting their traditional marketing approach to the digital marketing approach. This procedure is also allowing them to shift the consumer behaviour pattern. On the other hand, the inefficiency in digital marketing and promotional procedure is adversely affecting a number of organisations in terms of their global reputation and market growth (Belch & Belch, 2003). The further discussion will evaluate the impact of inadequate and slow online sales and promotional procedure on the market growth as well as global reputation of WM Morrison Supermarket Plc. Over the last few years, Morrisons had confronted huge competition from the local as well as global market competitors due to the rapid development of the digital marketing and sales procedure. Currently, the organisation has secured the fourth position within the largest supermarket chains of the United Kingdom. This organisation was established by William Morrison in 1899 as a single convenience store. Currently, the organisation possesses 113 local stores and 515 superstores across Wales, Scotland and England. The major competitors of the organisation are Tesco, Sainsbury’s and Asda (Hall, 2013). Contemporary Issues of Marketing Rapid technological development and its effect on the online marketing and sales procedures are the major contemporary issues for a huge number of organisations. These developments are playing a major role in shifting the consumer behaviour from the traditional marketing procedure to online sales and promotional process. The global retail industry is getting more inclined towards the online marketing and sales procedures to attract a wide range of diversified consumers. The online grocery retail sector of the UK is worth of over 6 billion pound (Cho, Bae & Park, 2013). In the present time, internet and other digital media are used in three major ways which facilitates the retail marketing and sales procedure. In the basic level, retailers are using internet facility to communicate information about their organisation, products and services with the potential consumers. The other way of using online marketing tools is to invite consumers to access their websites which enable them to gather extensive product information. This proactive interaction assist the organisations to facilitate the purchasing decision making process of the consumers (Cho, Bae & Park, 2013). Organisations are also using the various facilities of the digital marketing tool to gather information about the potential consumers and their product preferences which subsequently assist them to efficiently segment and target the local and global market. The third way of utilizing online marketing tool describes the practices of organisations to sell their product through direct online transaction with the consumers. The online selling process assists the organisations to provide an additional channel to the consumers apart from their traditional store based selling procedure. The success of the online retail selling has diminished the requirements of fixed locations of physical retail stores. It has also introduced various electronic retail formats (Bechmann & Lomborg, 2014). Organisations mainly prefer to use their own websites, various social media sites and online advertising procedure to attract the potential consumers. The development of smartphone applications has also emerged as one of the major parts of the online marketing and sales procedure of retail organisations. Designing an interactive website has become one of the prime concerns for various organisations to impart detailed knowledge to the consumers from different segments. Impactful and creative contents for website assist organisations to secure a competitive position within the potential consumers. Proper content of the website allow the marketers to establish a strong recognition within the particular business industry (Bechmann & Lomborg, 2014). Recent statistics have communicated that over 3% of consumers tend to take a purchasing decision during visit to the company-owned websites. Well-structured company websites have simplified the searching procedure as well as product searching cost for the consumers. Due to the availability of detailed information in the company-owned website, consumers are less interested to utilize uncomfortable and expensive way of traditional marketing (Bechmann & Lomborg, 2014). Apart from the well-structured content, organisations are also following email marketing campaign as their brand promotion strategy. Increased usage of smartphones has influenced the consumers to access their email account frequently and easily. Therefore, this online medium has become one of the popular procedures to impart products and services awareness across the different segments of the potential consumers. It has also been used for providing personalized discounts and product choices to the potential consumers of any organisation (Bechmann & Lomborg, 2014). Various organisations utilize their email services to provide discount promotions to their regular customer to increase their consumer loyalty. For example, Kroger provides discount coupons to their online consumers through email which can be redeemed at any point on their online purchasing procedure. Different marketing researches have conveyed that product purchasing decisions of near about 65% of the consumers are influenced by the email marketing campaigns (Magrath & McCormick, 2013). The introduction of marketing procedure through various social media sites can be considered as one of the important contemporary issues for the marketing procedures of retail organisations. Social media can be utilized as a very powerful tool to share organisational information and distribute the contents of their product as well as service ranges. It also serves as an essential part in the product promotional campaigns of different organisations (Shimp & Andrews, 2013). Globalization and the development of internet usage within the general population have increased the intensity of consumers over different social media sites. The social media sites generally influence interactions between consumers, which subsequently reforms their product preference and decision making procedure. The social media sites also play an important role to connect the consumers and organisations. It influences the interactions between the management and customers to resolve their confusion and queries about product and service offerings (Shimp & Andrews, 2013). Different social media sites and social networking facilities have become an important platform for global retailers to connect with a wide range of customers and clients. The availability of a huge number of consumers within the different social media sites enables the organisations to effectively promote and advertise their products and services. This process allows them to reach to a wide range of consumers and their requirements. These platforms are also incurring very less cost to the retail organisation to reach to their potential consumers. The Global Ecommerce Report of 2014 has conveyed that almost 61% of the consumers prefer to spend considerable amount of time to search products through various online channels prior to take any purchasing decisions. It has also detailed that over 43% of these consumers generally visit various social media sites such as Twitter, Pinterest, Facebook and Google+ to gather information about different product types and their price ranges (Rapp, Beitelspacher, Grewal & Hughes, 2013). The introduction of digital marketing has also converted the promotional and advertisement procedures of the retail organisations. The increase in the internet usage within the global population has assisted the retail organisations to collect the information about their lifestyles, product preferences and consumption procedures. The advanced technologies have enabled the marketers to design online promotional packages and advertisements as per the preferences of individual consumers (Hart, Doherty & Ellis-Chadwick, 2000). The cookies enabled websites are allowing the organisations to gather minute information about the behaviour and demands of the consumers. It has also helped the organisations to properly segment the market and target the potential consumers. This procedure is providing a great help to the marketers to design their product ranges and services (Hart, Doherty & Ellis-Chadwick, 2000). The interest-based advertising method assists the organisations to tailor the online advertisement and promotional procedure as per the tastes, preferences and buying behaviour of consumers. A research on 300 multichannel retailers has illustrated that the growth in the usage of different online media has influenced the more personal promotional procedure within the organisations. These procedures are assisting the organisations to shift the consumer preferences by providing personalized deals and discounts to them. The adaption of this personalized online promotional methods are assisting the consumers to analyse the offerings of different organisations in terms of their quality, product ranges and pricing policy. Therefore, it is affecting the loyalty of various consumers as the product and brand switching cost is very low for them. This contemporary issue of marketing is influencing organisations to indulge their attention towards the online sales and promotional procedures. The introduction of Ecommerce and social commerce methods are also providing an undeniable impact on the sales and promotional procedures on the multichannel retailers. Various empirical researchers have found that within the last five years, online search advertisement and internet advertisement have positively influenced the Ecommerce sales process within the potential consumers. The research report on the US Ecommerce has indicated that by the end of 2014, the online sales of products and services in the US has reached to $300 billion which has demonstrated over 15% growth in comparison to the data of 2013. Ecommerce procedure is not only allowing the consumers to purchase their good from the company-owned websites, it is also influencing the customers to buy products through various social media sites and mobile applications (Magrath & McCormick, 2013). The Ecommerce procedure is altering the buying behaviour of the potential consumers which is therefore creating challenges in the sales and promotional procedures of various organisations (Constantinides, 2002). According to a survey of the UK digital shoppers, near about 78% of the consumers are researching the product ranges over different channels of internet before heading towards the retail stores. At the same time, the store trips of various potential consumers eventually lead to online purchasing. The same survey has indicated that over 65% of these consumers prefer to purchase a product through Ecommerce sites after comparing it with the substitutes of different organisations (Fang, et al., 2014). This procedure has declined the physical store visits of consumers. It has also affected the on-store purchase tendency of the consumers. The Ecommerce procedure enables the organisations to reduce the cost for human resources, utilities and marketing campaigns (Constantinides, 2002). Therefore, it is assisting the organisations to offer huge discounts to the consumers which are eventually enhancing their overall sales ratio. Therefore, these procedures are threatening the physical retailing procedures of various organisations across the world. Impact of the Contemporary Issue on Morrisons Within the last few years, the retail market of the UK has also demonstrated significant changes due to the introduction of the online marketing as well as procedures. Most of the supermarket chains and convenience store owners are utilizing their own websites or third party websites to communicate their organisational information and sale their product directly to the consumers (Jones, Comfort & Hillier, 2013). The grocery market of the UK is undergoing an extensive structural shift that is witnessing huge split of sales through different channels. Core supermarket sales are facing a downfall while the online and discount channel sales are grabbing a huge share of the market. Within the span of two years, the online sales of the UK grocery retail industry have recorded a growth of 3% to 7%. This represents changing pattern in the buying behaviour of the UK consumers (Delivanis & Gutowski, 2014). The busy lifestyle of consumers is providing them very less time to visit various supermarket and convenience store. The largest grocery retailers of the UK have already responded to this rapid change of the marketing and sales procedure. During the last two years, Sainsbury’s and Tesco have displayed notable changes in their online sales and promotional activities which has assisted them to secure the leading positions in the retail market of the UK (Ellis-Chadwick, Doherty & Anatasakis, 2006). On the other hand, the lack of sufficient online exposure has caused a huge downfall in the market share and sales ratio of the supermarket chains of Morrisons. By the end of 2013, the organisation had witnessed over 5.6% decline in their overall sales ratio. The management of the organisation has highlighted their lack of online offering as the major reason behind this downfall (Shea & Zivic, 2011). The operating profit of the organisation has also recorded near about 7.5% downfall. The sharp decline of their market share and market reputation has triggered the organisation to close a huge number of small and medium stores across the UK (Jones, Clarke-Hill, Comfort & Hillier, 2013a). By the end of 2014, the organisation has been forced to close near about 15 non-profit stores. This situation has caused job losses for almost 800 employees of the organisation. The slow movement of Morrisons in the online sales and promotional activities and their insufficient online facilities has caused only 1% of total sales growth through digital activities (Hall, 2013). A number of consumers have shown dissatisfaction regarding the online website and sales procedure of the organisation. During their visit to the online stores of Morrisons, consumers need to enter postcode to find out whether the organisation is delivering products to that particular location of the UK or not. This situation caused discomfort to a huge number of consumers who want to indulge in the online transaction procedure with the organisation (Hall, 2013). The slow growth of the digital marketing procedure has still restricted the organisation to start their online activities within limited portion of the UK. On the contrary, the Asda and Tesco are offering online services to almost all part of the UK. This situation is influencing the consumers to switch their grocery providers for the ease of their transactions and communications (Arneil, 2015). The search navigations play an important role in the success of the organisational websites. Though Morrisons has introduced a well-structured website, the search navigations are creating confusion and ambiguity within the visitors. The search navigators need to be fairly standard and helpful to the consumers. On the contrary, the complex navigations such as ‘Food Cupboard’ and ‘Market Street’ create confusion within the consumers. The online shopping cart facility of the organisation also lacks various important attribute. The online shopping cart of Morrisons discourages the consumers to add new items to it after they reach to the checkout page. This page includes a minus button to reject their previous selection but it lacks a plus button to add new items to the shopping cart. This facility has created a complex online shopping experience for their core customers (Arneil, 2015). The product pages of the website of Morrisons are also very unclear in nature. Most information is bunched together which makes it difficult for the consumers to search for their preferred information. The product description over the website also lacks any up-selling as well as cross-selling activities (Hall, 2013). The online shopping basket of Morrisons requires minimum 40 pounds worth products to qualify for the home delivery facility. This pricing range seems to be very high in comparison to their immediate competitors. Therefore, it is hugely affecting their consumer loyalty. The unavailability of Ecommerce stores of Morrisons in the mobile applications has also caused a huge setback for the organisation. On the other hand, the convenient mobile applications of Tesco and Asda have attracted a huge portion of the potential consumers within the UK (Hall, 2013). The online promotional procedure is also very poor for Morrisons. The organisation is very new within different social media sites and the consumers are less aware about their online presence. The organisation also lacks proper integration of their online stores and social media sites. This situation hampers the consumer traffic in their social media site and online stores (Retail Technology, 2013). The online advertising and promotional activities of the organisation is still facing hard time to compete with the rival brands. Their limited presence in the leading social media sites is hindering their popularity within the young population as well as busy professionals. Most of the digital promotional activities of Tesco, Sainsbury’s and Aldi are capturing the huge market share of Morrisons (Retail Technology, 2013). By the Christmas Eve of 2014, the organisation had witnessed near about 8.2% fall in their traditional ‘Like-For-Like’ sales due to their inefficient online promotions and social media marketing. The organisation has provided very limited attention towards the personalized online advertisement for their potential consumers. The advertisement procedure of the organisation is very general in nature which discourages various consumers who are looking for customize product packages and deals (Yeomans, 2014). The organisation is still in planning phase to provide customized discount and loyalty programs to their potential consumers through email services. The organisation failed to introduce mobile barcode scanning facility to redeem the discount coupons and loyalty cards of the consumers. This situation is hampering the online Ecommerce facility of the organisation. It is also restricting the consumers to utilize various discount facilities during their online purchasing procedure (Hall, 2013). The current financial downfall and failure to seize potential market has resulted in the resignation of the former CEO Dalton Philips and online managing director Simon Thompson. The new management of the organisation has provided extensive importance to the online sales and promotional procedure to improve their market position and consumer database (Retail Technology, 2013). The organisation has initiated a tie-up with Ocado Group Plc., an independent online grocer, to improve their online marketing and sales procedure. This collaboration has indicated a fresh start for the organisation in the present era of digital marketing (Retail Technology, 2013). Conclusion The discussion has detailed the current trends of online marketing and promotional procedure. It has given an in-depth view about the different online facilities used by the organisations as well as consumers to simplify the shopping experience. The rapid growth of the online marketing methods is altering the consumer tendencies in terms of their buying behaviour, product preferences and brand selections. The study has also discussed that the availability of easy and well-structured websites and Ecommerce facilities are reducing the consumer tendency towards traditional retail purchasing procedure. In this current scenario, the grocery retail market of the UK has demonstrated a huge growth in terms of their online advertising, promotional methods and ecommerce facilities. It has also illustrated that this changes in marketing procedure has hugely affected the market share and sales growth of different organisations that face difficulties regarding the launch of their online marketing strategies. As per the market records of Morrisons, the organisation has faced a huge decline in their market share and profit margin due to their inefficient digital marketing strategies. The analysis has highlighted that the improper and insufficient online presence of the organisation has deeply impacted their market reputation and customer loyalty program. Therefore, the organisation has initiated a fresh start with a great focus on their digital marketing strategies and online selling procedures. References Arneil, C. (2015). Morrisons shares down after poor festive performance. Retrieved from http://knowledgetoaction.co.uk/news/801681296/morrisons-shares-down-after-poor-festive-performance/. Bechmann, A. & Lomborg, S. (2014). The Ubiquitous Internet: User and Industry Perspectives. London: Routledge. Belch, G. E. & Belch, M. A. (2003). Advertising and promotion: An integrated marketing communications perspective. New York: The McGraw− Hill. Cho, H. R., Bae, S. M. & Park, J. H. (2013). 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