E-Commerce And Marketing For Traditional Retailers

Strengths of E-retailing over traditional retailers

One of the most promising trend emerged in the recent time is the success of the e-retailing. E-retailing is proving a huge challenge for the traditional brick and mortar retailers. This is due to the reason that, market penetration and market coverage of e-retailers is significantly higher than that of the traditional retailers. Moreover, customer convenience is more in the E-retailing than in the traditional stores (Burns, 2018). Thus, with time, customers are more inclining towards the E-retailing. However, with the boom in his sector, there are various factors also emerging, which should be determined effectively in order to have the maximum benefit and return from the market.

Moreover, with the increase in the competition, it is also important for the e-retailers to consider various factors related to the customer satisfaction in order to stay ahead in the competition. This is due to the reason that, competition is rapidly increasing with the entry of more number of e-retailers.

This report will discuss about the qualities, principles and strengths that are important for the e-tailing in the current competitive scenario. Moreover, the factors that should be considered to be successful in the E-retailing will also be discussed in this report. The current trend and potentiality in the E-retailing will also be discussed in this report.

• Customer convenience is one of the strengths possessed by E-retailers over the traditional retailers. This is due to the reason that, in the case of the E-retailing, customers has the shopping experience from their conveniences rather than visiting the stores in the case of the traditional stores (Elbeltagi & Agag, 2016) Thus, the preferences for e-retailers are increasing.
• Huge product assortment is strength of E-retailing over the brick and mortar stores. This is due to the reason that, according to the reports, online marketplace offers more sort of diversified products compared to the traditional retailers (Digital Commerce 360, 2018). It is easy for the e-retailers to offer different products from their portal and on the other hand, it is difficult for the traditional retailers to offer diversified products under one roof (Sardar & Lee, 2015).
• The cost of operation is lower for the e-retailers compared to the traditional retailers. This is due to the reason that, major cost for the e-retailers is involved in the warehousing and logistics (Lu & Liu, 2013). On the other hand, traditional retailers such as departmental stores are having the cost of store maintenance, warehousing and logistics. Thus, the operational cost for e-retailers is low and it helps them to offer lower price to the customers compared to the traditional retailers.

• One of the key principles being followed by the e-retailers is the product diversification. It helps then to have their presence in different and diverse product category (Kang, 2013). Thus, it is one of the key competitive advantages for them. Customers will have the advantage to have holistic shopping experience from the e-retailers.
• Another business principle followed by them is the cost leadership. According to the Porter generic strategies, cost leadership is one of the key sources of gaining competitive advantages (Teeratansirikool et al., 2013). As discussed earlier, the less cost incurred by the e-retailers in their operation enable them to offer products at discounted rates, which further cementing their position in the market.
• Another key business principle considered by the e-retailers is the effective identification of the need in the market. This is due to the reason that, e-retailers gain competitive advantages in the market by offering products according to the latest trend in the market (Chan & Yazdanifard, 2014). Thus, they have the effective mechanism of identifying the need in the market and offering products accordingly.

• One of the key factors to consider in starting the e-retailing is the market penetration of the internet in the target segment. This is due to the reason that, the basic criterion for the e-retailing is the internet. Thus, prior to the starting of the e-business, it is important to determine and identify whether the target market is having internet connectivity or not.
• Identification of the need is also an important factor. This is due to the reason that, in the earlier section, it is discussed that, one of the key competitive advantages for e-retailing is offering products according to the market trend. Thus, it is important to first identify the need in the market and then starting the E-retailing in the particular sector.
• Determination of the competition in the market is also important due to the reason that, the current online shopping scenario is having multiple players catering to similar set of customers (Markarian, 2014). Thus, prior to the starting of the E-retailing, it is important to determine the intensity of the competition in the market. In accordance to the competition, sector with having less competition should be chosen or offer distinctive products in the market.

• One of the key trends being identified is the popularity of the mobile marketing. With the boom in the internet and sales of smartphone, majority of the global population is having the access to the internet in their mobile device (Watson, McCarthy & Rowley, 2013). Thus, all the major e-retailers are opting for mobile friendly user interface. This helps them to target more number of potential customers.
• Another important trend is the combo and suggestive selling by the e-retailers. Leading e-commerce retailers such as Amazon offers the option of suggesting the products to the customers according to their search pattern (Soderlund, 2013). Moreover, they also offer combo products, which enable them to cross selling other products also.
• Popularity of the e-retailing in the entertainment sector is also trending. Traditionally, E-retailing is based on the fast moving consumer goods. However, in the recent times the popularity for the e-business in entertainment sector is rapidly growing. Market for online streaming of movies and songs is increasing at good pace.
• In terms of the delivery also, various new trends are being introduced in the market in order to initiate fast delivery (Morganti et al., 2014). For instance, Amazon has initiated the use of the drone to deliver their products in less time. Other leading e-retailing majors are also initiating different options to transport the products to the customers in less amount time. The less time will be taken by the e-retailers, the more will be the customer preferences. Thus, one of the recent trends in the e-business sector is more concentration on the delivery options over others.
• Another identified trend in the recent time is the social selling. The current e-commerce sector is highly competitive in nature and thus more e-retailers are adopting latest technologies to target the customers. One of the key trends is the selling of the products through the means of the social media. This will help the customers to have the shopping experience from the social media itself. On the other hand, it helps the e-retailers to enhance the exposure of their products with the help of the social media.

In the current business scenario, a huge variety of products and services are being sold through the e-businesses. Thus, for the new startups to start their business in the e-business sector there are various categories being available. However, some of the categories are having potentiality over others. One of the e-business categories that are having potential in the recent time is the service providers. This includes the online movie streaming and others services such as insurance (Nguyen, Dejean & Moreau, 2014). Providing services through the help of e-business is a new trend and having huge market potentiality. This sector will be successful due to the reason that, e-retailing business is highly competitive in nature and in addition, current customer segments are having less time to avail different services in conventional way.

For instance, customers in the current social scenario are having less time to visit the insurance broker and discuss with them regarding the ideal insurance policy. Thus, providing these customers online services, where they can avail from their convenience will be more beneficial. This is the reason behind the fact that, this business is witnessing rapid growth in the recent time.

Another business category that will also be successful is the e-retailing of the FMCG and fashion products. Traditionally, this business category is the major contributor in the entire online business market with having the highest number of competitors. However, entering in this business will have huge potential for the new startups due to the reason that, FMCG and consumer goods are having huge varieties and assortments along with having highest market penetration. Thus, entering in this sector will have competition but it will also provide huge market opportunities.

Conclusion 

Thus, from the above discussion, it can be concluded that e-retailing has evolved extensively in the recent years and changed entirely from the state it was started. This report discussed about the strengths and the advantages of e-retailing over the traditional retailing. Moreover, the business principles being followed by them in gaining competitive advantages over the traditional retailers are also being discussed in this report. Recent trends in this sector are also being discussed in this report along with identifying the potential sector that will have more opportunity in the market. 

Reference 

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Chan, J. M., & Yazdanifard, R. (2014). How social media marketing can influence the profitability of an online company from a consumer point of view. Journal of Research in Marketing, 2(2), 157-160.

Digital Commerce 360. (2018). Digital Commerce 360. Retrieved 24 January 2018, from https://www.digitalcommerce360.com/2015/02/19/e-retailers-beat-stores-customer-satisfaction-study/

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Nguyen, G. D., Dejean, S., & Moreau, F. (2014). On the complementarity between online and offline music consumption: the case of free streaming. Journal of Cultural Economics, 38(4), 315-330.

Sardar, S., & Lee, Y. H. (2015). Analysis of product complexity considering disruption cost in fast fashion supply chain. Mathematical Problems in Engineering, 2015.

Söderlund, M. (2013). Positive social behaviors and suggestive selling in the same service encounter. Managing Service Quality: An International Journal, 23(4), 305-320.

Teeratansirikool, L., Siengthai, S., Badir, Y. and Charoenngam, C., 2013. Competitive strategies and firm performance: the mediating role of performance measurement. International Journal of Productivity and Performance Management, 62(2), pp.168-184.

Watson, C., McCarthy, J., & Rowley, J. (2013). Consumer attitudes towards mobile marketing in the smart phone era. International Journal of Information Management, 33(5), 840-849.