Describe about the E-Commerce Industries for Brick-and-Mortar Retailers.
E-commerce industries are growing with a very high speed from the last few years. People prefer more of the e-commerce business instead of retail business as it reduces the human efforts. This vast growth in e-commerce industry has challenged the retail industries.
Large number of varieties in various things whether it is clothing, accessories, furniture, household items, etc. are available in e-commerce business. The main reason behind the people’s preference to e-commerce is the doorstep delivery and return & exchange policy of the items. Even the cash on delivery option has increased the trust of customers on the e-commerce industry.
This report covers the various information such as how e-commerce has affected the retail industry, how e-commerce is rising these days, what are the security issues related to e-commerce industries and how they could be solved and what is the role of social media in the growth of e-commerce industry.
E-commerce industries such as Jabong, Flipkart, Snapdeal, Myntra, etc. are challenging stakeholders of wholesale and retail industries by offering attractive discounts to the customers. Brick and mortar retailers and wholesalers are getting worse hit by the e-commerce industries and so they are pressurizing various bands to support them for competing with ecommerce websites.
Due to increasing growth of e-commerce industries, retail industry is lacking behind because the density of sales get reduced. Also, retailers are forced to spend investment so that new channels can be developed for competing with the ecommerce industries. Due to all these issues, retailers face worse environment with high fixed costs, and capital expenditure is also increased which in turn leads to decrease the margins of retailers (Dalal & Tandon, 2014).
Retailers need to adapt the changes in market for surviving a better life. In India, FDI is not allowed in the online retail but foreign funds are allowed for marketplaces. Many brands are happy because their products are on these marketplaces but there are many brands too which get lower margins by selling their products online. In India, there are many e-commerce companies which are funded by the private firms but still they do not have that much profit. This means sometimes e-commerce companies cut down their own profits with affecting the offline retailers (Bakos, Lucas, Oh, Simon, Viswanathan, & Weber, 2005).
A survey was done in which it was discovered that companies like Lenovo and Toshiba have cautioned that e-commerce sites are not their authorized sellers . Even brands like Canon and Amazon have banned selling their products on e-commerce sites. The reason in not the reduction in volume of sales, but they are afraid of that their reputation may get hurt if e-commerce give large discounts on their brands. There are many clothing brands such as Puma, Lee, etc. which are working with e-commerce sites and provide discounts on the leftover stock. Even large brick and mortar retailers such as Croma, Spencers, Shoppers stop are adapting the strategy of combining their stores with the websites and making it the important medium of sales.
There are number of benefits that an ecommerce company may have by collecting the information of customers. While doing business, it should be known that who is the target and it can be possible by collecting the data of customer. The products in which a particular customer gets interested, then the information of that product could be sent to the interested customer. Keeping the email addresses of customers helps to get in touch with the new and previous customers so that special deals could be provided to them accordingly via email. With the help of email, companies can offer various coupons and promo codes to the customers with a particular validity that may attract the customers (Meyer, 2013).
If the company has details of customers, then any issues that customer might have can be solved easily whether it is in terms of payment, shipment, or any other matter. These kinds of issues can be dealt efficiently if the company has contact details of the customer. In any kind of business, it is important to keep the customers happy to have a long term relationship with them (E-commerce and the Market Structure of Retail Industries, 2009).
The details such as buying pattern of customer and what the customer usually buys can help to improve marketing and service of customer. Company may then easily analyze about the buying habits of customer and making sure that product is always available with them (Steel, Daglish, Marriott, Gemmell & Howell, 2011).
It is important that if an e-commerce industry has been set up, then a proper marketing strategy should also be planned for it. Marketing strategy is important for E-commerce industry because of the following reasons (Zorzini, 2016):
Some marketing techniques which are used by e-commerce industries are as follows (Roberge, 2009):
Content is always a main concern for the introduction of any kind of business. Before introducing the industry to people, it is important that there should be a pre-introduction process which can be done by awaring people about the industry with the help of blogs, posts, and articles. Quality content is responsible to market the content to people.
Therefore, Content Marketing is one of the important marketing strategies in a e-commerce industry.
Email marketing is one of the effective marketing techniques for e-commerce industry. This technique is used to convince and influence the customers via email to buy more and more products. Email marketing campaign is used to keep in touch with customers so that important information regarding products can be send to the customers.
Social media is the strong source of marketing about the new e-commerce industry as almost everyone is active on the social media in this digital era world. E-commerce industries must create their pages on various social media websites such as google, facebook, linkedin, twitter, and pinterest. Contents such as posts or articles can be shared with the audience via social media websites and some tools for social media analysis can be used for understanding that which source of social media is doing it well.
Sometimes, customers feel risk to spend money on the companies which they have never visited or they have never seen. So, in that case personalization marketing strategy performs well. In personalization strategy, while addressing people; names of employees can be send with emails that show out the videos of employees working and making the products so that customers feel special and take interest to invest and spend their money in the company.
A loyalty program is always helpful to get customers back to your store again. You can offer some rewards or cash back on the particular amount of shopping bill so that customers could feel happy and thankful.
The massive use of Internet Business is leading to the number of security attacks that harms the security. Therefore, in order to have secure business, e-commerce system should meet following four security requirements (Pigford, 2013):
These attacks are those attacks which attempts at making a machine or resource unavailable to its authorized user by interrupting or suspending the services of a host connected to internet (O’Raghallaigh, 2010).
Phlashing is also referred to as a Permanent Denial-of-service attack in which a system is damaged such that the hardware is reinstalled or replaced in a system. Attackers make flaws in hardware, printers, routers or other networking resources so as to open the doors for attackers to update the firmware of device and making it unusable for its purpose.
Brute Force attacks are attacks of cracking the cryptographic schemes by trying large number of encryption keys to break the encryption.
Phishing is the process of attempting to get important or sensitive information such as usernames, passwords, credit card details or other payment details by masquerading as an authorized entity in the system.
A firewall is a both hardware and software which really acts like a wall between the computer system and network that stops any unauthorized network to enter into the private network.
Strong password policy is one of the strongest methods to control the security of the system. All e-commerce companies should adopt the strong password policy. Weak passwords should not get access to register on the website. Strong passwords are like which have at least one uppercase letter, at least one lowercase letter, at least one special character and at least one numeric value so that attacker could not easily guess the strong password.
Security Socket Layer is basically a protocol which is used for transmitting the private or sensitive documents using the internet. In SSl, a cryptographic system is used which makes use of both public key and private key.
HTTPS stands for Hypertext Transfer Protocol Secure. It is basically used for determining that how a message gets formatted and how it is then transmitted and what are the precaution that are to be taken by browsers and web servers.
Social Media has a great importance in Ecommerce as it helps companies to establish stronger presence, to generate high audience and to increase the traffic on their websites. It is an effective way to create interest and attract the audiences in large number that use social media. Social media provides various innovation options such as liking a post, commenting on a post, sharing a post. As much as the posts are liked, commented, or shared, popularity of the ecommerce business increases and it is seen by large number of audience that helps in increasing the growth of business. There are various social media platforms in which marketing can be done so effectively such as Facebook, Pinterest, LinkedIn, Twitter etc.
Recommendation: It is good that e-commerce business is growing but it is recommended to have good practices for customer satisfaction so that business could not get affected. If Retail marketers involve with e-commerce, then the possibility of growth of business also gets increased. Therefore, there is need to maintain balance between the retail market and e-commerce business. It has been surveyed that almost 70% of the total population is active on social media,so it is also recommend that social media can play an efficient role to promote the e-commerce business.
Conclusion
Ecommerce businesses are being widely used these days because it not only reduces the human efforts to go outside and shop but it also offers various discounts, deals, rewards and cashbacks which attract the customers a lot. This is a main reason why ecommerce business is growing nowadays. It has affected retail market in a bad way that sales are going down in retail market, profit margin is getting decreased. That is why; many offline retailers are also getting engaged with the ecommerce business to survive their lives.
This report has been prepared to discuss all the aspects that are related to the ecommerce business starting from its negative side to its positive side. This report helps readers to know about the growth of ecommerce business.
References
Dalal, M. and Tandon, S. (2014). E-commerce boom hurts brick-and-mortar retailers. [online] https://www.livemint.com/. Available at: https://www.livemint.com/Industry/f6eARBcJOWrTZTzuDcZZzI/Ecommerce-boom-hurts-brickandmortar-retailers.html [Accessed 23 Jul. 2016].
Bakos, Y., Lucas, H., Oh, W., Simon, G., Viswanathan, S. and Weber, B. (2005). The Impact of E-Commerce on Competition in the Retail Brokerage Industry. 1st ed. [ebook] Information Systems Research. Available at: https://www.jstor.org/stable/23015803?seq=1#page_scan_tab_contents [Accessed 23 Jul. 2016].
Pigford, J. (2013). Why customer data is important for your ecommerce business. [online] The BigCommerce Blog. Available at: https://www.bigcommerce.com/blog/customer-data-important-ecommerce/ [Accessed 23 Jul. 2016].
Meyer, C. (2013). E-commerce boom triggers transformation in retail logistics. 1st ed. [ebook] Jones Lang LaSalle. Available at: https://www.jll.com/Research/eCommerce_boom_triggers_transformation_in_retail_logistics_whitepaper_Nov2013.pdf [Accessed 23 Jul. 2016].
E-commerce and the Market Structure of Retail Industries. (2009). 1st ed. [ebook] uchicago.edu. Available at: https://home.uchicago.edu/syverson/ecommerce.pdf [Accessed 23 Jul. 2016].
Steel, W., Daglish, T., Marriott, L., Gemmell, N. and Howell, B. (2011). E – Commerce and its effect upon the Retail Industry and Government Revenue. 1st ed. [ebook] ISCR. Available at: https://booksellers.co.nz/sites/default/files/E-Commerce-and-its-effect-upon-the-Retail-Industry-and-Government-Revenue.pdf [Accessed 23 Jul. 2016].
Zorzini, C. (2016). 50 Unbeatable Ecommerce Marketing Tips for 2016. [online] Ecommerce Platforms. Available at: https://ecommerce-platforms.com/articles/50-unbeatable-ecommerce-marketing-tips [Accessed 23 Jul. 2016].
O’Raghallaigh, E. (2010). Security Issues in E-Commerce. [online] Webscience.ie. Available at: https://webscience.ie/blog/2010/security-issues-in-e-commerce/ [Accessed 23 Jul. 2016].
Roberge, M. (2009). Internet Marketing Strategies for Ecommerce Websites. 1st ed. [ebook] Hubspot. Available at: https://cdn2.hubspot.net/hub/53/file-13204589-pdf/docs/internet-marketing-strategies-for-ecommerce-websites-webinar-slides.pdf [Accessed 23 Jul. 2016].
Sharma, L. (2015). Essential Role of Social Media Networking in Ecommerce. [online] Socialnomics. Available at: https://socialnomics.net/2015/09/15/essential-role-of-social-media-networking-in-ecommerce/ [Accessed 23 Jul. 2016].
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