Impact of Digital Technology (E-Commerce) on Business Activity

This research study proposes to highlight the pros and cons of one of the most commonly used digital technologies, that is, e-commerce. The aim of this research is to study the impact of the e-commerce technology on the business activities in the UK. The researcher will explore the pros and cons of this technology and the challenges created by this, so that, the potential scopes for improvements can be identified and measures can be taken accordingly.

Running head: RESEARCH PROPOSAL
Impact of Digital Technology (E-Commerce) on Business Activity
Name of the Student:
Name of the University:
Author note:

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Chapter 1: Introduction and background
In the era of highly advanced technology, the business activities are significantly
dependent on the technology and its applications. Digital technology refers to all kinds of
electronic applications and equipment, which use the information in the binary form1. The
business world uses various types of digital technology to reduce the operational time and cost
and increase their profitability. Customers have also become tech-savvy and they prefer to get
the solutions faster. E-commerce is one such business category that is highly dependent on the
digital technology. The craze for e-commerce has gone up very high as the retailers as well as the
customers are now favoring the e-commerce sites for retail shopping2. The research study will
focus on the impact of digital technology, particularly the e-commerce technology on the
business activity. As the e-commerce sites operate in the retail industry, the research will focus
on the retail business activity in the UK.
1.1 Research aim
The aim of this research is to study the impact of the e-commerce technology on the business
activities in the UK.
1.2 Background of the research
E-commerce activities have become a quite prominent business activity in the UK in the
recent past. As the UK is one of the leading and developed countries in Europe as well as in the
western world, the economy has provided opportunities business growth. The e-commerce
1 Thomas, M. ed., 2011. Deconstructing digital natives: Young people, technology, and the new literacies. Taylor &
Francis.
2 Lu, Y., Zhao, L. and Wang, B., 2010. From virtual community members to C2C e-commerce buyers: Trust in
virtual communities and its effect on consumers’ purchase intention. Electronic Commerce Research and
Applications, 9(4), pp.346-360.

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business in the retail industry has been able to capture a big market due to the convenience
provided to the shoppers. E-commerce has many benefits and with time, the companies are
providing more and more convenience, in terms of returns, refunds and exchange. In 2015, the e-
commerce market in the UK was the third largest in the world3, which came up to second
position in Europe after Norway in 20174. The economy collected 533 billion pounds in 2015
only from the e-commerce sales. At the same time, the sales from B2B sales in retail e-
commerce accounted for around 96.5 billion British pounds and the total e-commerce sales
contributed around 19% of the total business turnover in 2015. As per the record of NASDAQ,
approximately 87% of the internet users in the UK did online shopping, which was highest in the
penetration rate of online shopping in Europe in 20175. The digital technology, such as, the
shopping websites and mobile apps have brought this revolution in the retail business industry in
the UK as well as in the whole world. Thus, going by the revenue numbers of the companies, it
can be inferred that digital technology has played a significant role in changing the shopping
pattern of the customers, which in turn had a great impact on the business activities of the
companies in that industry. Through this research study, the researcher will enlighten the positive
and negative impact of the e-commerce business on the business activities of the retail industry
of the UK.
1.3 Research objectives
The objectives of the research study are:
3 www.statista.com, 2017. E-commerce in the United Kingdom (UK). [online] www.statista.com. Available at:
https://www.statista.com/topics/2333/e-commerce-in-the-united-kingdom/ [Accessed 25 Jun. 2018].
4 Kitonyi, N., 2017. UK Online Shopping and E-Commerce Statistics for 2017. [online] NASDAQ. Available at:
https://www.nasdaq.com/article/uk-online-shopping-and-e-commerce-statistics-for-2017-cm761063 [Accessed 25
Jun. 2018].
5 Kitonyi, N., 2017. UK Online Shopping and E-Commerce Statistics for 2017. [online] NASDAQ. Available at:
https://www.nasdaq.com/article/uk-online-shopping-and-e-commerce-statistics-for-2017-cm761063 [Accessed 25
Jun. 2018].

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 To examine the advantages and disadvantages of e-commerce on digital technology
 To find out the growth of e-commerce activities in the UK retail market in the past
 To assess the impact of the e-commerce on digital technology in the business activities in
UK
1.4 Research questions
1. What are pros and cons of digital technology, especially, e-commerce technology?
2. What are the challenges that the e-commerce technology creating for the traditional
businesses?
3. What is the impact of e-commerce on the traditional business activities in the retail
industry of UK?
1.5 Scope of the research
This research study proposes to highlight the pros and cons of one of the most commonly
used digital technologies, that is, e-commerce. This technology has brought a huge revolution in
the field of retail shopping all over the world. It is also seen that, the application of the e-
commerce technology has different impacts on the business and the customers. As the online
shopping market is growing hugely in the UK, as well as, in the world, the business industry is
changing strategies and marketing techniques to sustain in the market as well as expand their
business. This study will identify the areas, where the businesses can make improvements to
capture new consumers as well as retain the existing ones.
1.6 Summary
The purpose of the study is to evaluate the effect of the digital technology of e-commerce
on the business activities in the retail market of the UK. The researcher will explore the pros and

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cons of this technology and the challenges created by this, so that, the potential scopes for
improvements can be identified and measures can be taken accordingly.
Chapter 2: Literature review
Mastilo (2017) conducted a study on digital growth and its impact on the modern
business. In the study, the author found that business digitization had a significant role in
bringing dynamic changes across the global economy and the reforms in the information
technology have been beneficial in getting increased productivity6. Sokolov-Mladenović (2014)
pointed out that, the large companies often implement Information and Communication
Technology (ICT) to identify the scopes for increasing competitiveness, and the governments
and managements of the MNCs in the developed countries are now focusing on the development
of innovative digital technologies, which sometimes bring about digital disruptions or disruptive
technologies, that change the course of business of the industry7.
Digital disruption is brought about by new technologies and the business models that
change the value propositions of the existing products and services8. Although digital disruptions
are occurring in almost every field of business, Karimi and Walter (2015) focused on the internet
and its impact on the changing dynamics of the newspaper industry in their study. From the
paper, it can be inferred that, creative innovations in the digital technology can create significant
challenges in the traditional business activities of the incumbent firms in a market or industry9. In
this regard, it can also be said that, e-commerce business is a digital disruption to the traditional
6 Mastilo, Z., 2017. Impact of Digital Growth in Modern Business. Business and Management Studies, 3(4), pp.59-
63.
7 Sokolov-Mladenović, S., 2014. Globalizacija i digitalna ekonomija. Sinteza 2014-Impact of the Internet on
Business Activities in Serbia and Worldwide, pp.143-147.
8 Fitzgerald, M., Kruschwitz, N., Bonnet, D. and Welch, M., 2014. Embracing digital technology: A new strategic
imperative. MIT sloan management review, 55(2), p.1.

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brick and mortar business of the companies. With the emergence of e-commerce sites, such as,
Amazon, Alibaba, ebay and many more, the shopping pattern of the consumers have changed
drastically in the past decade. The usage of internet, computers and smartphones has brought
about a big revolution and the e-commerce companies had successfully grabbed the opportunity.
Convenience of shopping from anywhere and anytime with easy shipping, return, refund and
exchange policy, has made people to prefer the e-commerce sites instead of the brick and mortar
stores10. The success of these companies has influenced many traditional retail and departmental
stores, such as, Waitrose, Tesco, Marks & Spencer, Fenwick, Harvey Nicholas etc. and clothing
and accessories brands, like, Zara, Gucci, Prada and many more to launch their own websites and
mobile shopping apps, from which the consumers can shop online, like the e-commerce sites.
Shahjee (2016) showed in his paper, that emergence of e-commerce had altered the
traditional way of business in the finance, communication and retail trade, while it has the
potential to improve the activities in the health, education and public sector. The integration of e-
commerce and the traditional business leads to the implementation of integrated marketing
communications, which brings the customers more closer to the companies11. This allows the
businesses to get ideas new products or services or strategies and test those against the existing
customer base, without losing the market share all together when a new technology enters.
As shown by Apăvăloaie (2014), internet plays a major role in bringing a significant
development in the business environment. The businesses need to innovate and improve
9 Karimi, J. and Walter, Z., 2015. The role of dynamic capabilities in responding to digital disruption: A factor-
based study of the newspaper industry. Journal of Management Information Systems, 32(1), pp.39-81.
10 Fuciu, M. and Gorski, H., 2012. Online social networks–a comparative analysis for the marketing
world. REVISTA ECONOMICĂ.
11 Shahjee, R., 2016. The Impact of Electronic Commerce on Business Organization. Scholarly Research Journal
for Interdisciplinary Studies. 27(4), pp. 3130-3140.

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continuously to sustain in the industry. Be it the product or service or be it the business
operations, improvisations are a must, in which internet is required. As the tastes and preferences
of the customers are changing, and businesses are going global, the implementation of digital
technology has become very important. This has been pushing the companies to launch their own
online shopping facilities with discounted prices to retain their existing customer base12.
As stated by Lu, Zhao and Wang (2010), since internet has created large sphere of
opportunities and challenges for the existing organizations and industries, which have direct
relationships with the consumers, the industries have been developing new business models
which incorporate the digital technology with the aim of gaining competitive advantage in the
market13. Some businesses understood this dynamics quite fast, and followed the path shown by
Jeff Bezos of Amazon. Thus, it can be inferred that, digital technology, such as, the e-commerce
technology has become quite a significant factor in influencing the business activities. While
some businesses have flourished by this technology, some have been negatively affected by this.
Thus, through this study, the researcher will focus on various aspects of the e-commerce
activities and their impact on the business operations, along with the challenges faced by the
companies.
12 Apăvăloaie, E.I., 2014. The impact of the internet on the business environment. Procedia Economics and
finance, 15, pp.951-958.
13 Lu, Y., Zhao, L. and Wang, B., 2010. From virtual community members to C2C e-commerce buyers: Trust in
virtual communities and its effect on consumers’ purchase intention. Electronic Commerce Research and
Applications, 9(4), pp.346-360.

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Chapter 3: Research methodology
3.1 Theories on research methodology
Research methodology represents the approach and strategy that will be taken by the
researcher to conduct the research study. Based on the data to be collected and analysis process
to be applied, the research methodology is determined14. In the given research, the researcher will
apply mixed methodology, that is, pragmatism research paradigm, in which both the quantitative
and qualitative analysis method are applied to get the findings. Both the exploratory and
explanatory research approaches will be followed as the research phenomenon will be explained
by the findings from the quantitative study and explored through qualitative study. The
researcher will take a case study research design to explore the research topic. This will help in
narrowing down the horizon of the research topic and focus on a specific direction. Toys R Us,
UK will be taken as a case study company, on which the researcher will base the study, that is,
impact of e-commerce business by various sites, such as, Amazon, ebay etc. on the business of
Toys R Us, UK will be studied in this research.
3.2 Data collection
Data is of two types, primary and secondary. Primary data refers to the one which is
collected directly from the field of study by using instruments like survey questionnaire,
interviews, observations, focus group etc. On the other hand, secondary data is the one which is
collected from published sources, such as, official websites, books, journals, newspaper articles
etc.15 The researcher will collect both the primary and secondary data to conduct the study.
Primary data would be collected through a survey. The employees of Toys R Us, UK will be
14 Marczyk, G., DeMatteo, D. and Festinger, D., 2017. Essentials of research design and methodology. John Wiley.
15 Larsen, R.J. and Marx, M.L., 2017. An introduction to mathematical statistics and its applications (Vol. 5).
Pearson.

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chosen for the survey that would focus on their perceptions and knowledge about the e-
commerce activities and its impact on their business. In the given study, the researcher will
collect the secondary data, that is, sales data of Toys R Us, UK in the past three years from their
annual reports and how the online shopping is affecting their business.
3.3 Sample and sample profile
Sample represents a smaller subset of a larger population, which is used for data
collection. Since, entire population cannot be studied, a subset is drawn using appropriate
statistical sampling technique, which features the same characteristics as the population16. It is
mostly used for collecting the data through surveys, interviews or focus groups. The researcher
will use simple random sampling to draw a sample of 25 people from the employee base of Toys
R Us, UK. This is a probability sampling technique, in which each sample has equal and random
chance of being selected and it also reduces the chance of biasness and sampling fluctuations in
the data17. The sample profile would contain 25 employees, holding various positions in the
company.
3.4 Qualitative method
Qualitative research method puts emphasis on the qualitative or descriptive aspect of the
study to understand the underlying reasons and opinions. This method helps in getting an insight
about the problem and creates a scope for developing hypothesis for quantitative study18. The
secondary data will be analyzed using thematic analysis under qualitative study.
16 Lane, D.M., Scott, D., Hebl, M., Guerra, R., Osherson, D. and Zimmer, H., 2017. An Introduction to Statistics.
Rice University.
17 Peck, R., Olsen, C. and Devore, J.L., 2015. Introduction to statistics and data analysis. Cengage Learning.
18 Larsen, R.J. and Marx, M.L., 2017. An introduction to mathematical statistics and its applications (Vol. 5).
Pearson.

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3.5 Quantitative method
This type of research involves empirical investigation of the research topic by applying
statistical and mathematical techniques19. The researcher will convert the survey response into
numerical data and conduct the empirical investigation to test the research topic. Statistical tools,
such as, reliability test, cross tabulation, correlation, regression and descriptive statistics, will be
applied based on the requirement.
3.6 Summary
Following the pragmatism philosophy, mixed research methodology will be chosen by
the researcher to conduct the study. Toys R Us, UK is the case study company under case study
research design. Primary data will be collected through a survey on a sample size of 25
employees of the company and this will be analyzed using quantitative analysis method.
Secondary data, that is, the sales data of the company of the last 3 years will be collected and
will be analyzed using qualitative method.
19 Carlson, K.A. and Winquist, J.R., 2017. An introduction to statistics: An active learning approach. Sage
Publications

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3.7 Gantt chart
Month
Task 1 2 3 4 5 6 7 8 9 10 11 12
Making a strategy
Making a framework
Literature review
Primary data collection
Conducting survey
Secondary data
collection
Data analysis
Presenting the findings
and discussion
Providing the conclusion
Thesis submission

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References
Apăvăloaie, E.I., 2014. The impact of the internet on the business environment. Procedia
Economics and finance, 15, pp.951-958.
Carlson, K.A. and Winquist, J.R., 2017. An introduction to statistics: An active learning
approach. Sage Publications.
ecommercenews.eu, 2018. Ecommerce in UK grew to €15.6 billion in 2017. [online] Ecommerce
News. Available at: https://ecommercenews.eu/ecommerce-in-uk-grew-to-e15-6-billion-in-2017/
[Accessed 25 Jun. 2018].
Fitzgerald, M., Kruschwitz, N., Bonnet, D. and Welch, M., 2014. Embracing digital technology:
A new strategic imperative. MIT sloan management review, 55(2), p.1.
Fuciu, M. and Gorski, H., 2012. Online social networks–a comparative analysis for the
marketing world. REVISTA ECONOMICĂ.
Karimi, J. and Walter, Z., 2015. The role of dynamic capabilities in responding to digital
disruption: A factor-based study of the newspaper industry. Journal of Management Information
Systems, 32(1), pp.39-81.
Kitonyi, N., 2017. UK Online Shopping and E-Commerce Statistics for 2017. [online]
NASDAQ. Available at: https://www.nasdaq.com/article/uk-online-shopping-and-e-commerce-
statistics-for-2017-cm761063 [Accessed 25 Jun. 2018].
Lane, D.M., Scott, D., Hebl, M., Guerra, R., Osherson, D. and Zimmer, H., 2017. An
Introduction to Statistics. Rice University.

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Larsen, R.J. and Marx, M.L., 2017. An introduction to mathematical statistics and its
applications (Vol. 5). Pearson.
Lu, Y., Zhao, L. and Wang, B., 2010. From virtual community members to C2C e-commerce
buyers: Trust in virtual communities and its effect on consumers’ purchase intention. Electronic
Commerce Research and Applications, 9(4), pp.346-360.
Marczyk, G., DeMatteo, D. and Festinger, D., 2017. Essentials of research design and
methodology. John Wiley.
Mastilo, Z., 2017. Impact of Digital Growth in Modern Business. Business and Management
Studies, 3(4), pp.59-63.
Peck, R., Olsen, C. and Devore, J.L., 2015. Introduction to statistics and data analysis. Cengage
Learning.
Shahjee, R., 2016. The Impact of Electronic Commerce on Business Organization. Scholarly
Research Journal for Interdisciplinary Studies. 27(4), pp. 3130-3140.
Sokolov-Mladenović, S., 2014. Globalizacija i digitalna ekonomija. Sinteza 2014-Impact of the
Internet on Business Activities in Serbia and Worldwide, pp.143-147.
Thomas, M. ed., 2011. Deconstructing digital natives: Young people, technology, and the new
literacies. Taylor & Francis.
www.statista.com, 2017. E-commerce in the United Kingdom (UK). [online] www.statista.com.
Available at: https://www.statista.com/topics/2333/e-commerce-in-the-united-kingdom/
[Accessed 25 Jun. 2018].