Online Shopping in the UAE - Essay Example

Online shopping in the UAE: Analysis of existing sites and proposal for new business development BY YOU YOUR ACADEMIC ORGANISATION HERE TUTOR HERE DATE HERE EXECUTIVE SUMMARY When comparing different online shopping companies to measure their design principles and overall performance, Musicroom.com and Amazon.co.uk were chosen for this research. Musicroom.com, though a much smaller company than its counterpart, maintained the most important aspects of design including colors, graphics and minimal use of pop-up advertisement technologies. Amazon.co.uk, however, was very difficult to browse through and complete a product purchase, as well as the site’s lack of eye-catching consumer appeal through design. These websites served as a template for a business proposal for a new Blackberry accessory company in the UAE, as a benchmark for how best to gain consumer interest and which specific aspects of design should be left out. This new business is described in this report, along with a discussion of the current business environment in the UAE in order to determine whether the new online company, Mobile by Design, can actually be competitive and turn a profit in a growing business climate. There is evidence that there is a high consumer demand not only for Blackberry and other mobile technology products, but a strong e-procurement system is also being developed which will assist in the supply chain needs of the new start-up internet commerce company. With various partnerships, trade show promotions, and print advertisements (amongst other opportunities for promotion), Mobile by Design intends to corner the UAE market in the sale of these devices. The promotional and consumer segmenting plans for this new business are described in this paper. Online shopping in the UAE PART A Two online companies selling different consumer merchandise were compared and contrasted in order to determine whether they were designed and launched according to web site design principles. These two e-commerce websites are Musicroom.com and Amazon.co.uk. Musicroom is an online company selling to specific niche markets in the music industry, with their products ranging from music sheets to musical instruments, as well as various CDs and DVDs associated with the music industry. Amazon.co.uk is a conglomerate online organisation selling everything from bedding sheets to bulk food products and services not only the UK, but the whole of the Amazon.com company services a multi-national consumer audience. Musicroom.com utilises very eye-catching graphics on the company’s home page, using a blend of different, vibrant yellows, reds and blues in order to enhance the users’ visual perception of the company and its website design. Seigel (2005) offers that consumers are often driven to make purchases in the online environment based on the opportunity for consumer incentives, such as coupon discounts and other free gifts associated with a product purchase. Musicroom.com seems to understand the drive for incentives as the company has created a very large banner-style advertisement, which is much larger than the rest of the graphics on the home page, offering a free music songbook with all purchases over £30. Having this strong advertisement on the home page reinforces that the company is all about value and is willing to provide extended benefits if the browser decides to make a purchase with this online company. Moreover, Musicroom.com also has very well-placed links to find the specific product variety the customer might be looking for, suggesting a site which is both easy to navigate and strategically-designed to ensure that the potential buyer can find everything they are looking for. Additionally, from order tracking benefits to returns policy, virtually everything the consumer could be looking for is available in a format which is easy to browse through. Amazon.co.uk is much less user-friendly than its counterpart Musicroom.com and the website design principles used here are both bland and forgettable. The website uses a rather drab orange font with a multitude of links posted on every web page, making it difficult to determine which link is the most appropriate to find out information about a specific product. The company also utilises pop-up advertisement technology to highlight specific deals of the week or deals of the day which often have little to do with the search parameters entered by the customer. For example, a search on a specific book brought up a banner advertisement for close-out blankets, which can be somewhat irritating to a customer who is looking for a specific product and does not wish to fill their virtual shopping cart. As far as web design principles are concerned, Musicroom.com is far superior to Amazon.co.uk in terms of layout, graphics and presentation, and the ability to navigate across multiple product-related links successfully. However, in terms of representing the specific product, Amazon.co.uk is hands-down the leader as even this website allows you to look inside different books to preview pages, from the casual fiction book to the classroom textbook. This look inside feature is something which is not common for most online website companies, which might speak to why the firm is experiencing such high profitability. Additionally, with Musicroom.com, there is no need to activate the pop-up blocker technology on the pc as the site does not inundate the buyer with needless, unrelated promotions like Amazon.co.uk. As far as the process of making a purchase is concerned, both websites are fairly easy to navigate through the process. Amazon.co.uk, however, seems to have much more security failsafes in the process of making a purchase, forcing the buyer to register even if they do not wish to do so. This could potentially turn away a customer who might be concerned with how their personal information is stored and distributed to third-party companies. Musicroom.com only requires the user to move through a short series of pages before finally confirming their order, with no mandatory registration in the process. Musicroom.com, unlike Amazon.co.uk, does not complicate the check-out process and the stages at Musicroom.com are much less hassle than with its counterpart website as the process completes much easier. The search options on Amazon.co.uk, additionally, do not always return the results the user is looking for. For example, a search on electric guitars returned not only the instruments, but completely unrelated humor books and even clothing, which can only serve to frustrate the user and potential buyer. Musicroom.com, however, since their product selection only serves the music client, provides exact search information which is completely congruent with the parameters being entered by the user. This is a major advantage and attractive feature for return buyers at Musicroom.com. Therefore, as far as being able to respond as the product browser, Musicroom.com outperforms Amazon.co.uk in the search process and results listings technologies. Amazon.co.uk would benefit from improvements in web design, largely by making the visual presentation of the website more attractive. The dull usage of orange and light blue, combined with the bland black and white body text areas, makes this website look far too professional and not inviting to consumers looking for good products at a good value. There are no incentives or promotions listed on the main page and there is a conglomerate of various links which are very difficult to navigate. Amazon.co.uk seems to offer so many different analyses for each product, including customer testimonials and product descriptions, that the user is forced to click multiple pages just to add the item to their shopping cart. In terms of design, these extra product-related features should be segregated from the shopping experience and added as supplementary links at the bottom of the web page rather than right in the consumers’ main view. This excess of information and available extras confuses the process and could likely be a turn-off to many potential buyers. Musicroom.com, however, seems to utilise the most modern website development and presentation techniques, especially with the online company’s use of eye-catching colors and graphics on each and every product page. The different product categories are clearly identified on a menu bar at the top of each product page, making navigation simple and easy. In terms of design, there are no noticeable deficiencies in this area which is likely why the site has been awarded a top ten website award as the highest-visited music website across the world for the second time in a row (Musicroom.com, 2009). Companies like Amazon.co.uk (and others) could benchmark their design efforts modeling Musicroom.com as a template for design. Amazon.co.uk has a very in-depth and rather confusing privacy policy. This, too, consists of multiple links in which the customer must click through multiple links to find out important information about how their information will be stored and distributed. In fact, the privacy policy goes on page after page until the user simply gets tired of reading the mass of information. Musicroom.com, however, has a very simple and easy to follow privacy policy, which clearly outlines how information is used once it is registered into the company’s database. It consists of only a page, with supplemental information links available (but to the side of the page), spelling out the legal agreements and how the company intends to use consumer information. Both have secured check-outs and strongly reinforce the technologies supporting a safe and threat-free purchase process. Basically, Musicroom.com’s privacy policies are streamlined and straight-forward while Amazon.co.uk spells out so much information that it seems both irritating and potentially misleading. PART B The United Arab Emirates (UAE) is a booming opportunity for a variety of businesses, both consumer-focused and business-focused. Clarke (2008) identifies growth in international tourism in this region to be up by nearly 10 percent since 2006, with growing travelers from Europe and North America included in these statistics. Much to the delight of businesspersons looking to create new business opportunities, the UAE offers significant advantages for new start-up companies, both bricks-and-mortar and in the e-commerce environment. The country has established free trade zones in which companies are given significant tax breaks (Clarke). This is true for business and industry as well as consumer-oriented companies looking to start-up in the UAE. Additionally, the gross domestic product of the UAE increased by 23.5 percent in 2005 and the local population is expected to exceed 10 million by 2010 (Landi, 2007). This represents a significant economic strength at the governmental level and the available consumers who are willing and able to buy different consumer or industry-related products. With all of the taxation incentives being offered by the UAE government, starting a new e-commerce website aimed at consumers is a tremendous opportunity. The UAE has also joined the World Trade Organization and has signed the Trade and Investment Framework Agreement with the United States (Al-Khatib, Rawwas, Swaidan and Rexeisen, 2005). This suggests that the UAE is working toward creating open markets and make the UAE more attractive to entrepreneurs looking to start-up a new business opportunity. For companies looking to start an online commercial venture, the free market mentality in the UAE will provide opportunities for international expansion and the ability to use modern marketing and promotion to compete with other companies in the same industry. One expert in business offers that negotiators in the UAE have a very strong reputation for being “shrewd and knowledgeable about money-making” (Acuff, 1997). At the same time, business leaders in this area seem to value human resources principles, strategic management, financial management, and organisational ethics as the key behavioural values of business management (Barhem, Salih and Yousef, 2008, p.124). This all paints a portrait of the UAE business environment as one in which people are valued for their contribution to meeting bottom-line (profitability) expectations and are respected for having a financially-based and strategy-based business model. Because there is going to be a great deal of interpersonal communication between business leaders in the UAE upon the start-up of a new e-commerce website, having these values as part of the business model might suggest many opportunities for relationship-building and partnering so long as the company’s values fit the business profile described above. Additionally, e-procurement, which is the process of receiving necessary products for sale or the materials to manufacture these products, is on the rise in the UAE (Johnson, 2006). There seems to be a well-developing e-commerce supply chain established in this area, headed by government-owned Tejari, which serves some of the largest business in this area for their supply chain needs (Johnson). This suggests that there is a demand in this area which is driving innovations in e-procurement and would be very beneficial for a new business which might rely on foreign product imports in order to establish a sales inventory of goods for a new e-business model. There is also evidence of demand, especially in terms of mobile phones and Blackberry products in the UAE, as there are already websites in existence which provide accessories for consumer electronics products. UAEmobiles.net is one of these websites which offers a group-trading forum to post and receive bids for different mobile phones and accessories for sale or to buy (Uaemobiles.net, 2003). This type of online environment, along with the growing population in the area, indicates a demand for electronics products but not enough websites developed to sell them. This could give a new business selling these products a significant competitive edge by being an innovator for consumer electronics. Clearly, there is a market availability in the UAE. There is also evidence that the UAE consumers rank in the top five in terms of global consumer confidence levels. The UAE consumer confidence index is currently at 111, which was only a drop of two points from 2007 (Ameinfo.com, 2009). Other developed countries experienced drops in consumer confidence to an index level of 88, which was the largest drop in recorded history (Ameinfo.com). What all of this suggests is that there is a booming consumer mentality regarding the future of business in the United Arab Emirates, which is higher than most other industrialised nations across the globe. This is a significant opportunity for a new businessperson as they will be entering a market which is not necessarily fearful about spending consumer incomes and will likely make purchases due to their high confidence levels. This high confidence might, in the long-term, eliminate the heavy burden of marketing and promotional costs to attempt to lure customers to buy different consumer products on a new e-commerce website. Based on the research evidence provided about the state of the UAE, in terms of new business opportunities, an appropriate business model for launch in the UAE is the sale of Blackberry mobile accessories such as case covers, long-life batteries, and various Blackberry skins. This is a growing market opportunity across the world as new mobile technologies develop and consumers genuinely seem to find significant value in these product varieties across the world. Additionally, the mind-set of different business and governmental leadership toward strategy and finance will provide opportunities for joint promotional ventures, using well-known UAE brand names, to build support for this new business concept. The new online business will be named MOBILE BY DESIGN and will carry the latest technological and packaging breakthroughs for Blackberry accessory products. Much to the advantage of Mobile by Design, there is already the aforementioned existence of e-procurement in the UAE, which will likely make the process of having these items imported much easier and cost-effective. There is already a large emerging mobile technology industry in this area, therefore the procurement of these accessory pieces can be accomplished through trading agreements with local manufacturers of these products and their distributors. Mobile by Design will utilise modern marketing and advertisement efforts to position the company as an upscale, reputable seller of Blackberry accessory pieces. There are many vendors who sell these products in the UAE in local marketplaces, however these sales environments lack the incentives and reputation which needs to be associated with technology accessory sales. The online website of Mobile by Design will utilise the most appropriate presentation and graphics in the development of the product sales website to make the company appear to be a sales leader in this industry. As far as customers are concerned, recruiting the appropriate market segments will not be altogether difficult since there is already a demand for these products and not enough sellers to meet this demand. The website will have a mass-market promotional strategy, designed to appeal to a wide variety of different consumer demographics. The company will reinforce the absolute value of Mobile by Design products on all of its print advertising literature, as well as online banner ads which can be partnered with different Blackberry-related product websites. Value is the most important element to this new business plan in the UAE as there is evidence of price declines all across the area. One business expert identifies that many retail chains in the area have placed sale signs in shop windows in order to lure consumer spending (Augustine, 2009). This represents a value-conscious environment, despite the high consumer confidence levels previously mentioned, in which sales and incentives should be on the forefront of advertising and promotion. For instance, a Blackberry cover normally selling competitively for $30, could be discounted by $10 if the buyer purchases two Blackberry accessories from the website. This is a form of incentive-based marketing and also helps to build relationships with buyers to ensure they return for extra business to Mobile by Design. Because incentives have been listed as the primary catalyst for why consumers make online purchases, there must always be a discount mentality for all technology accessories offered by the company. The use of trade show promotions, in which different products are spotlighted in an informal street market environment, will give UAE customers an opportunity to visualize the different product selections and even test them on their current mobile devices. This will give Mobile by Design more than just an online presence, but also instill the brand name into the buying public to make Mobile by Design the first name in Blackberry accessory products. Taking the business out into the mainstream public in this fashion would only require achieving the necessary permits or governmental permissions to build a trade show promotion model. Since this will be an online-only company, having the ability to connect interpersonally with potential customers will avoid the high costs of operating a bricks-and-mortar business as well. Cost is a significant issue in the retail sale of these products and reducing costs whenever possible is part of a strong business model and a mentality which will be widely-accepted by different business leaders in the UAE. Print literature will also be utilised most extensively for Mobile by Design, using local news publications and commercial trading journals to promote the company’s brand name and focus on upscale value. Readership in these traditional formats will give Mobile by Design more brand exposure in this fashion and also eliminate the heavy costs of promotion in attempting to lure more mass-buyers to the business. Along with print literature, as part of a customer-relationship management focus, customers who visit the Mobile by Design website will be invited to enter their personal Blackberry information so that new promotions and discounts can be sent directly to the buyers’ mobile devices. This will give the company more personalised service in the minds of consumers, especially at a time when they are looking for excess value and incentives before making a purchase. This interactive sales promotion philosophy will be key to securing return customers and bringing extra profitability to Mobile by Design. There will also be a business-to-business promotional effort on behalf of the company in which business leaders will be targeted for potential sales of these accessory products. Because many businesspersons in the UAE rely on mobile technologies to communicate with other business leaders, this is an ideal promotional opportunity. One monthly, low-cost, one-sided pamphlets/flyers will be distributed to local UAE businesses offering sizeable discounts if the business agrees to purchase Blackberry accessory products directly from the Mobile by Design website. This strategy is to build a stronger business clientele and ensure higher volumes of product sales at the same time. This will also give Mobile by Design the opportunity to meet with different business leaders to discuss branding partnerships for mutual promotion and build a strong reputation for the company’s leadership at the same time. All of these advertising and promotional efforts will make Mobile by Design stand apart from other low-cost or unreputable street vendors who carry these Blackberry accessory products. With the growing e-commerce infrastructure in the UAE and the prevalence of internet technologies in consumer and business environments, Mobile by Design can revolutionise the sale of these products and create value and relationship connection with a wide variety of mass market audiences. CONCLUSION There is clearly a market availability in the UAE, along with a growing population year-for-year, which speaks of a business environment where sales of Blackberry accessory products can be secured. The evidence provided suggests that even though consumer confidence in the UAE is much higher than in most other developed/developing countries, there is a growing demand for value and incentives prior to making a purchase. Mobile by Design recognises this trend and will utilise incentive marketing as a regular part of promotional efforts and in order to build long-term customer commitment to Mobile by Design for all of their accessory product needs. The current environment, including business and governmental leaders, have provided the infrastructure necessary to start up a new business, ensure a free market operation, and will be willing to partner with other companies so long as they remain focused on positive human resources and can provide evidence of a strong business strategy for long-term profitability. This is a sizeable resource for a company like Mobile by Design which must reduce costs whenever possible and create partnerships for a more extended promotional campaign. One further benefit of establishing Mobile by Design in the UAE is that the new free trade mentality and the country’s addition to the World Trade Organization can provide future opportunities for business expansion into markets outside of the local region. By conducting research on foreign consumer behaviour patterns and cultural values, Mobile by Design can implement an international selling strategy to offer Blackberry accessory products to overseas businesses and consumers. This is a long-term strategy, however, the evidence suggests that there are venture capitalists and other investors in the Arab world who will be willing to partner so long as there is strong evidence that a solid business strategy is in place. Bibliography Acuff, Frank L. (1997). How to Negotiate Anything with Anyone Anywhere Around the World. AMACOM Books. Al-Khatib, J., Rawwas, M., Swaidan, Z. and Rexeisen, R.J. 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