Impact of E-Commerce on Business Activity

The paper describes the findings of a study on how e-commerce has impacted the business activity around the world and in UK. The study approached the investigation by making a case out of Toys “R” Us and how e-commerce has impacted the fortunes of the company. The study took into consideration managerial interviews and employee insights through survey analysis.

Running head: IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
Impact of E-Commerce on Business Activity
Name of the Student:
Name of the University:
Author note:

1IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
Executive Summary
The paper describes the findings of a study on how e-commerce has impacted the business
activity around the world and in UK. The study approached the investigation by making a case
out of Toys “R” Us and how e-commerce has impacted the fortunes of the company. The study
took into consideration managerial interviews and employee insights through survey analysis. It
was found that e-commerce has resulted in making the market more aggressive. Competitive
prices, door step deliveries and the diverse product range of big companies like Amazon and
Walmart have made it increasingly difficult for brick and mortar businesses to keep holding onto
their customer bases and maintain profits. Traditional businesses who lack the foresight and
understanding of the digitized business world thus have been facing crisis. E-commerec has
slowly become a necessity in retail business as internet continues to touch all aspects of life
including business.

2IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
Declaration
I hereby declare that the sources used in the study are authentic and that I have conducted the
research by abiding all the ethics as per the guidelines of research to the best of my abilities.
Date: Name

3IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
Acknowledgement
I would like express my appreciation and thanks to my professor, ___________ for giving me
the guidance to carry out this project.

4IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
Table of Contents
Executive Summary.........................................................................................................................1
Declaration.......................................................................................................................................2
Acknowledgement...........................................................................................................................3
Chapter 1: Introduction and background.........................................................................................7
1.1 Research aim..........................................................................................................................7
1.2 Background of the research...................................................................................................7
1.3 Research objectives...............................................................................................................8
1.4 Research questions.................................................................................................................8
1.5 Scope of the research.............................................................................................................9
1.6 Summary................................................................................................................................9
Chapter 2: Literature review............................................................................................................9
Innovation of digital technology and implementation in Business.............................................9
Disruption due to Digitization...................................................................................................10
Business Environment after Digitization...................................................................................10
Effect on Traditional Business...................................................................................................11
Chapter 3: Research Methodology................................................................................................12
3.1 Research Approach..............................................................................................................12
3.2 General Theories on Digital Marketing..........................................................................13
3.3 Research Methods................................................................................................................13

5IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
3.3.1 Data Collection: Quantitative Part................................................................................13
3.3.2 Data Collection: Qualitative Part..................................................................................13
3.4. Research Design.................................................................................................................14
3.5 Sample Selected...................................................................................................................14
3.6 Sample Profile.....................................................................................................................14
3.7 Method Summary................................................................................................................14
Chapter 4: Results..........................................................................................................................15
4.1. Introduction.........................................................................................................................15
4.2. Qualitative Analysis............................................................................................................15
Theme 1: Investment in E-commerce....................................................................................15
Theme 2: Customer Reach.....................................................................................................16
Theme 3: Competition...........................................................................................................17
Theme 4: Debts , Profits and Loss.........................................................................................17
Theme 5: Adaptability..........................................................................................................18
4.3. Quantitative Analysis..........................................................................................................19
4.5. Summary.............................................................................................................................27
Chapter 5: Discussion....................................................................................................................28
Chapter 6: Conclusion...................................................................................................................29
Chapter 7: Recommendation.........................................................................................................29
References......................................................................................................................................31

6IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
Appendix........................................................................................................................................33

7IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
Chapter 1: Introduction and background
Technology has reached a stage where it determines and touches all aspects of life and
business. The period of internet has ushered in a new era of high velocity transactions and high
volume of interactions in the business world. The digital world is the new frontier where
information in form of binary codes are used to conduct business via electronic equipment and
applications (Thomas 2011). This has enabled businesses to reduce operational time, cost and
hence increase in their profitability. The age of internet has sped up life and expectations, for
which customers yearn for faster and often door step solutions. E-commerce is a business
industry that is founded on this very reality. Retail shopping is one of the key business areas
touched by it (Lu, Zhao and Wang 2010). The focus of this research paper is the impact of digital
technology, particularly the e-commerce technology on the business activity, specifically the
retail industry.
1.1 Research aim
The research aims to study how e-commerce technology has impacted the traditional
business and their activities.
1.2 Background of the research
E-commerce has become quite a prominent business activity both in the United Kingdom
and in the world within the past couple of years. Retail industry is one of the fields which has
been significantly changed by the emergence of this new technology. The internet and its
integration with the business process have been able to capture a large share of the market as it
becomes a daily commodity to more and more shoppers around the world. The benefits that e-
commerce enable is manifold. Companies are able to afford to offer benefits, such as, customer

8IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
friendly policies of returns, refunds and exchange. The e-commerce market of UK in 2015 was
the 3rd largest in the world (www.statista.com 2017), coming up second in Europe after Norway
in 2017.The e-commerce sales had yielded 533 billion pounds in 2015 alone. Again, B2B sales
in retail e-commerce came up around 96.5 billion in British pounds while total sales in e-
commerce was around 19% of the total turnover in business in 2015. As per NASDAQ, about
87% of the internet users in UK shopped online in 2017, marking a record penetration rate of
online shopping in Europe (Kitonyi 2017). Mobile apps and shopping websites have brought
about this revolution in the retail business industry in the whole world including UK. Hence as
per the revenue numbers, it is safe to say that digital technology has indeed played the role of
game changer in the retail industry. This paper intends to investigate and infers the positives and
negatives of e-commerce in light of how it has changed the retail industry.
1.3 Research objectives
The objectives of the research study are:
 To investigate the advantages and disadvantages of e-commerce on business performance
 To investigate the growth of e-commerce in the retail market
 To assess the impact of the e-commerce in the business activities of traditional businesses
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?

9IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
1.5 Scope of the research
E-commerce has revolutionized the field of retail shopping worldwide. This paper aims
to study the pros and cons of the new digitally operating business avenue. The consequence of
the rise of e-commerce has varying effects on customers and businesses and these effects in their
range and scope are manifold. The online marketing is growing at a huge rate in the UK, and
around the world. The businesses therefore also have had to change strategies and approach to
marketing to keep up and be successful. This study aims to identify the areas, where the
businesses can act to improve their performance, capture new consumers and retain the existing
customer base.
1.6 Summary
The study aims to evaluate the effect of e-commerce technology on the business activities
in the retail market. The research is based around exploration of the pros and cons of this
technology and the challenges created by this by making a case study of Toys “R” Us. The
analysis would be designed such that, potential scopes for improvements and what not to do can
be identified and dealt with.
Chapter 2: Literature review
Innovation of digital technology and implementation in Business
Mastilo (2017) in his study on the impact of digital growth on modern business, found
that digitization of business has had a significant role to play in the implementation of dynamic
changes in economy all across the world. The author noted that the reformations in information
technology have been instrumental in increasing productivity. According to Sokolov-Mladenović
(2014), large companies often make use of Information and Communication Technology (ICT)
to identify scopes for enhancing their competitive capability, and MNC administration and

10IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
management from developed countries are now committed to focus attention on developing and
innovating digital technologies. This sometimes may bring about digital disruptions, effecting
change in the course of how business is run in the industry.
Disruption due to Digitization
Every time new technologies and business models are introduced the industry
experiences digital disruption. These can cause a change in the value propositions in the market
for the existing products and services (Fitzgerald et al. 2014). Technological innovations are
being achieved at a high pace resulting in a race for acquiring technological superiority and this
race is ongoing in every field. Karimi and Walter (2015), in their paper gives key focus to the
internet and how it affects the dynamics of the newspaper industry. The paper talked about how,
creative innovations in the digital technology have proved to have been a challenge to incumbent
firms by outperforming traditional marketing approach. Consequently, the e-commerce business
itself is a digital disruption, disrupting the traditional brick and mortar businesses. The fast
growth of e-commerce sites, such as, Amazon, Walmart, Alibaba and ebay among others are
testament to this. Their rise have heralded a change in the shopping pattern and preferences of
consumers drastically in the past decade world over.
Business Environment after Digitization
Ever since internet, computers, tablets and smartphones have become common
commodity, e-commerce has been able to organically mold with traditional retail to the point of
becoming the preferred mode of shopping for many. The convenience of making transaction at a
click from anywhere, at any time and having it delivered to the doorstep has obviously caught
public appeal over brick and mortar stores. This of course comes with the necessity for easy
shipping, return, refund and exchange policy (Fuciu and Gorski, 2012). Their success have

11IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
influenced many traditional retail businesses, such as, Tesco, Waitrose, Marks & Spencer,
Harvey Nicholas , Fenwick, etc. and brands, like, Prada, Gucci, Zara among a few to invest in
and launch their own e-commerce ventures. Websites and mobile shopping apps, from which the
consumers can shop online, like the e-commerce sites have become the expectation for any retail
business.
Apăvăloaie (2014) said that the internet has a major role to play in bringing about
development in the environment of business. The fast advancement in IT and the expansion of
the internet has made it imperative for businesses to continuously innovate and improve
themselves to sustain themselves in the industry. Changing preferences of the customers and
globalization of businesses has rendered the implementation of digital technology to become
very important. The companies have been pushed into launching their own e-commerce ventures
and compete with discounted prices to retain their customer base alone.
Lu, Zhao and Wang (2010) state that given the large range of opportunities and
equivalently challenges created by the wave of digitization for existing business organizations,
they are put in a position to either embrace the change in stride or get left behind. Business
requires direct relationships with consumers, to understand their wants and needs. The new
business models incorporating digital technology allows just that hence making way for
competitive advantage in the market. Businesses that understood this dynamic in time were quick
to take up path as shown by Jeff Bezos of Amazon while others still struggle to salvage their
business.
Effect on Traditional Business
Shahjee (2016) discussed, how the advent of e-commerce had been altering the
traditional approach to business in fields like finance, retail trade and communication and the has

12IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
the potential it has to impact positive change in the health, education and public sectors as well.
The ongoing integration of digital marketing and traditional businesses, resulting in
implementation of integrated marketing communications, have been making headways in bring
customers closer to the companies. This has allowed businesses to gather new insights,
formulate ideas for products and services and then to strategize and test those against the existing
market, all the while minimizing risk of losing market share when new technology enters the
field.
Consequently, digital technology, especially the e-commerce technology has become a
major player in business and come to be a significant factor to determine fate of a business. It is
as promising as it is challenging. Businesses have flourished by owning this technology,
however many have been negatively impacted by it as well. This study, intends to investigate the
various aspects of the e-commerce activities and address the impact they have on the business
operations and the industry.
Chapter 3: Research Methodology
3.1 Research Approach
The research follows the mixed research approach, that is, the pragmatism research
paradigm, where both quantitative and qualitative approach to analysis are implemented to get
reach the research aims and objectives. The study makes use of both exploratory and explanatory
research whereby the primary data collected via interviewing Toys R Us employees was used to
explore the area under study and quantitative data analysis by making use of sales data from
Toys R Us was used to explain the phenomenon. The data analysis here makes use of case study
design, using the example of the company Toys R Us to understand the scenario of the e-

13IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
commerce market. The study analyses the performance of Toys R Us in the e-commerce market
and the impact of other e-commerce giants such as Amazon and ebay on the company.
3.2 General Theories on Digital Marketing
The advent of the virtual space marks an era of rapid business expansion opportunities.
The convenience availed by online shopping sites to make transactions from anywhere and
anytime, and having the upper hand of a diverse inventory of products provide there are easy
shipping, exchanging and retail policy has made online shopping immensely successful in
drawing consumers’ preference from the regular retail stores (Fuciu and Gorski 2012). E-
commerce when integrated with traditional business amounts to the enhanced marketing
communications which allows the company to gather market insight more easily and the
opportunity to test new ideas in a more informed way which can work wonders in reducing risk
(Shahjee 2016).
3.3 Research Methods
3.3.1 Data Collection: Quantitative Part
Primary data was collected using survey questionnaires from twenty five employees from
various designations of the company Toys “R” Us from the UK. The survey targeted their
perception and insight about the sales and profit of Toys “R” Us and the e-commerce initiative in
general between the years 2016 and 2017 and how much it was related to complete liquidation.
3.3.2 Data Collection: Qualitative Part
The qualitative analysis was done on the basis of what managers of Toys “R” Us had to
say with regard to the company workings, challenges and benefits that was faced while
undertaking the e-commerce initiative. Four managers from sales and operations were
interviewed using semi structured interviews (Marczyk, DeMatteo and Festinger 2017).

14IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
3.4. Research Design
The interview questionnaire consisted of three questions, namely, what the managers
thought about the general potential that digital marketing, specifically e-commerce can have on
business. Secondly, what the opinion of the management is about the pros and cons of the online
marketing venture was on their end. Thirdly, it explores the reasons behind the bankruptcy of
Toys “R” Us and just how much impact the e-commerce industry had on the tragedy. The
qualitative analysis of the interview transcripts of the managers was done using thematic
analysis. The survey questionnaire consisted of ten items divided in five subsections with each
section referring to five themes underlined in the qualitative analysis. The variables were
categorical ratings in likert scale of 1-5 (Lane et al 2017).
3.5 Sample Selected
A sample of size 25 employees assigned at various posts in Toys “R” Us were asked to be a part
of the survey. The sample was selected using simple random sampling technique from a
population which met the profile requirements (Peck, Olsen and Devore 2015).
3.6 Sample Profile
The sample constituted of Toys “R” Us employees with at least 3 years of experience in the
company or having had an experience of over 5 years of working in the retail industry.
3.7 Method Summary
The study explored the role and impact of e-commerce business on the retail industry,
specifically as a case study of Toys “R” Us in relation to companies like Amazon and Walmart.
Thematic analysis of transcripts of 4 mangers of the company was done. The findings of the
investigation of the way that e-commerce affected the company’s fortune was cross-verified by

15IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
use of survey data from the employees of the company to analyze whether the findings are
substantiated or not.
Chapter 4: Results
4.1. Introduction
The study first conducted interviews of management personnel of Toys “R” Us trying to
gather their opinions and insights about the digitization efforts of Toys “R” Us and why they
may have failed. It tries to target the question whether their online shopping venture and the
competition provided by their e-retail competitors had a role to play in the downfall. The
transcripts were analysed by means of thematic analysis and broad themes were developed to
explain the underlying research queries. The study then collected primary data from other
employees of the firm to collect data on their opinion on the same themes identified. The primary
data analysis was used to validate the findings of the qualitative analysis and to check whether
the management were on the same page as the ground level employees.
4.2. Qualitative Analysis
Five broad themes were identified initially. The themes are labeled as, namely,
Investment in E-commerce, Customer reach, Competition, Debts, Profit and Loss and
Adaptability.
Theme 1: Investment in E-commerce
A key theme that was found to be common and had consensus among all the managers
being interviewed was that the company Toys “R” Us did not invest in e-commerce as much as
they should have had. The required investment came late and it was untimely.

16IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
“The management should have invested more in the e-commerce sector. More enhancements to
keep up with the trends could have been implemented and this ought to be have done well around
2005. The changes were of course introduced eventually but by then it was too late ...”
According to the interviewees it was a shared sentiment that the necessary attention came
to late and that by the time the management had begun to focus on the digital aspect, the damage
had already been done and it ended up costing the company in the long run as they struggled to
keep up with the competitors and make up for lost time.
“The management made some bad calls initially by not investing in ecommerce earlier. We paid
the price for that.”
This theme speaks about one of the primary reasons why the company may have failed to
bear the brunt of their losses. This theme can also be related to the lack of understanding of the
managers and the financial handicap that may have existed due to debts and losses that the
company was subject to.
“The management was not so equipped with the e-retail side of business with constraints in
investment and an already shaky history”
Theme 2: Customer Reach
This theme deals with the direct impact of e-commerce retail on the market and
customers. The e-commerce businesses draw in people who would prefer to shop from their
homes instead of having to go seek out the product at any time. Toys “R” Us faced this handicap
of their business being limited largely to their physical shops and its working hours whereas
Amazon and Walmart attracting customers from remote areas anytime.
“Our primary business is done via our stores. The trend among people to buy products cheaper
and without the need to go out and buy it has most definitely hit us in a negative way.”

17IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
The theme also talks about how the online venture by the company benefitted the
company by being able to improve sales for a while.
“The sales demography did see an expansion after we started our online sales. People who
otherwise did not live close to our physical stores could purchase our products..”
Another issue was their customer segment. The company is limited to the toy industry
whereas big players such as Amazon deal with a range of products. Thus the source of income is
limited in this aspect as well.
Theme 3: Competition
One key aspect of online retailers that the managers pointed out was that they offered
discounted prices of products that would otherwise cost more when purchased from actual stores.
This aspect they said affected their sales as they would lose customers to big e-retailers who sold
similar products as them such as Amazon and Walmart.
“existing e-commerce business is cut throat and the other competitors being not solely
dependent on toys could afford to slash prices. That is what attracts customers who look to
online stores to find the same product in lower costs.”
The theme identified how the fact that competition provided by these e-retailers ate away
a chunk of the market by offering lower prices and that the company failed to counter the move
by lower its own price. This could be related to issues in maintaining profits as discussed in the
theme named Debts, Profits and Loss.
Theme 4: Debts , Profits and Loss
The company was steeped in debts with its initial failure in 1998, general decline sales in
toys affecting business. This naturally would have created stress for the management in making
investments. The accompanying trend of losses was also pointed out.

18IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
“Impediment in growth and mounting longstanding debts coupled with consistent loss over the
past couple of years made is extremely hard for us keep the business stable.”
This theme could perhaps be related to the hesitation of the management to invest in e-commerce
again after their initial failure. The business being limited to toys, the declining toy market also
was pointed out to be impacting profits leading to runs of losses.
“.. with our existing debts and dependence on toy profits, the business failed to make profit while
keeping up with the competition.”
It was suggested that perhaps such conditions also contributed to the incapability to cut
costs by the company which suggests that it was caught up in a vicious circle of losses.
Although it was seen that after they re-launched their online venture, they were able to reduce
losses quite a bit before falling prey to the blows to their financially shaky foundation.
“we were able to reduce loss by a large margin which was around -$140 in million in 2015 to -
$126 in millions in 2016”
Theme 5: Adaptability
This theme underlines how lack of proper understanding on part of the decision makers
about the significance of the online industry and how to make it work, how to go about
conducting the e-commerce aspect or make use of it to maximize the benefits and create a safety
net also played a role in the delay in investments and the subsequent slow progress of the
company till its liquidation.
“being a traditional retailer of toys our approach was still focused towards the in store sales and
most of the employees lacked the insight and experience in dealing with a digitally motivated
environment”

19IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
4.3. Quantitative Analysis
Based on all the five themes discussed so far, a primary survey has also been conducted.
The primary survey was mainly conducted to assess the view of the employees on these issues.
The survey was conducted on 25 employees of the company. The responses of those 25
employees were analyzed and displayed with suitable graphical representations.
At first, the investment of the company for the introduction of the E-Commerce business
has been considered. The employees were asked whether the company made any investments in
the introduction of their E-Commerce business and whether the investment made by them is
optimum or not. From the analysis, it can be seen that according to the employees, most of them
agree to both the facts that there have been investments made on account of the introduction of
this new business aspect but the investment made was not optimum. Figure 1 shows the opinions
of the employees on investments.
Investment
score
Frequency
3 1
4 9
5 15
Grand Total 25
Table 1: Investment policy in e-retail was not optimum

20IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
3 4 5
0
2
4
6
8
10
12
14
16
Investment
Figure 1: Investment policy in e-retail was not optimum
Secondly, how much the company was able to reach its customers has been assessed. In
order to analyze that, two most important attributes such as the increase or decrease in the sales
values and comparison of the price of the products with other e-commerce businesses has been
considered. It can be seen from the responses of the employees that most of them have agreed to
these facts. The sales value decreased with the introduction of this aspect and the price is also
high. Figure 2 shows the opinions of the employees on customer reach.
Customer
Reach
Frequency
3 3
4 17
5 5
Grand Total 25
Table 2: Online medium increased customer reach

21IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
3 4 5
0
2
4
6
8
10
12
14
16
18
Customer Reach
Figure 2: Online medium increased customer reach
The third factor that has been considered is the competition of the company in the market.
A lot of other E-Commerce businesses persists in the market. People always tend towards buying
products at cheaper prices. Thus, for a new company to flourish in the market, the prices need to
be competitive with other existing companies. According to the employees of Toys “R” Us, the
prices are higher compared to others and the discounts provided are also less. Thus, this can
explain the cause of the decrease in sales of the company with the introduction of this new
facility. Figure 3 shows the opinions of the employees on market competition.
Debts, profit
and loss
Frequency
3 3
4 16
5 6
Grand Total 25
Table 3: Company had hard time competing with market prices

22IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
1 2 3 4 5
0
1
2
3
4
5
6
7
8
9
Competition
Figure 3: Company had hard time competing with market prices
According to the employees, the sales of the company has decreased gradually in the
years. With the decrease in the sales, the profit margin has also decreased over time. Thus, the
company started to suffer loss. The decision of the company in re-launching the e-commerce
venture however has been beneficial to them in decreasing the margin of the loss suffered by the
company according to the employees’ responses. The employees have mostly agreed to these
attributes as can be seen from the graph provided in figure 4.
Count of
Debts, profit
and loss
Frequency
3 3
4 16
5 6
Grand Total 25
Table 4: The Company faced loss and debt

23IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
3 4 5
0
2
4
6
8
10
12
14
16
18
Debts, Profit and Loss
Figure 4: The Company faced loss and debt
According to the employees, the decision of the company in re-launching the e-
commerce service has been a late decision. The delivery time taken by the company is also
higher than other competitors. Thus, the adaptability of the company in this business has not
been successful at all so that they can be benefitted. Thus, this can be another cause for the
company to be bankrupt. The employees opinions on adaptability of the company has been
illustrated in figure 5.
Adaptability
Score
Frequency
1 1
3 2
4 12
5 10
Grand Total 25
Table 5: Employees had a hard time adapting to digital marketing

24IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
1 3 4 5
0
2
4
6
8
10
12
14
Adaptibility
Figure 5: Employees had a hard time adapting to digital marketing
4.4. Demographics
The distribution of the age of the participants of the survey is given in the following
table:
Row Labels Count of Age
26-35 20.00%
36-45 20.00%
46-55 40.00%
56-65 20.00%
Grand Total 100.00%
Table 6: Age distribution of participants

25IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
26-35 36-45 46-55 56-65
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
20.00% 20.00%
40.00%
20.00%
Age
Figure 6: Age distribution of participants
The distribution of the gender of the participants of the survey is given in the following
table:
Row Labels Count of
Gender
Female 28.00%
Male 72.00%
Grand Total 100.00%
Table 7: Distribution of Gender
28.00%
72.00%
Gender
Female
Male

26IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
Figure 7: Distribution of Gender
The distribution of the number of years in the organization of the participants is given in
the following table:
Row Labels Sum of No of Years in Organization
3-7 64
8-12 59
13-17 105
18-22 20
Grand Total 248
Table 8: Number of Years in Organization
3-7 8-12 13-17 18-22
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
25.81% 23.79%
42.34%
8.06%
Number of Years in Organization
Figure 8: Number of Years in Organization
The distribution of the number of years in the organization of the participants is given in
the following table:
Row Labels Count of Experience in
Industry
7-11 28.00%
12-16 28.00%
17-21 20.00%
22-26 8.00%

27IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
27-31 12.00%
37-41 4.00%
Grand Total 100.00%
Table 9
7-11 12-16 17-21 22-26 27-31 37-41
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00% 28.00% 28.00%
20.00%
8.00%
12.00%
4.00%
Experience In Industry
Figure 9: Experience in Industry
4.5. Summary
Five themes were found from the thematic analysis. They are Investment, or rather delay
and misjudgment of management regarding investment on digital marketing. Customer reach or
the increase in market reach prior to digitization, Competition or the high competitiveness in the
market owing to emergence of e-retail, Profit, loss and debt or the decrease in loss after investing
in e-retail and the heavy debts that hampered the venture and finally Adaptability or the lack of
thereof among the employees with regard to the new digital market. The survey analysis further
supported what the thematic analysis suggested about lack of adaptability, delay in investment
and inadequate investment, reduction in loss experience owing to e-retail sales and failure of
company to compete in terms of price with others in market.

28IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
Chapter 5: Discussion
Toys “R” Us is a classic example or rather a cautionary tale of how potent e-commerce
has become for the market. Analyzing the findings of the qualitative analysis, it could be
understood that rise in e-commerce has led to an era of cut throat competition which can cause a
company dearly if they fail to grab the opportunity at the right time in the right way. It is
understood that although demise of Toys “R” Us cannot be solely attributed to their failures in e-
commerce which they later did rectify, but delay and their incapability of competing with the
established players served to be a big catalyst. E-commerce had increased capacity for sales of
those who deal with it and companies well versed in digital marketing have been aggressively
acquiring market shares running companies like Toys “R” Us whose primary business is through
in store retail and focused on a limited kind of product out of business. It was understood that
such companies could bear the brunt of reducing price given that they have other products to fall
back on and this also protects them from fall in demand of certain products as there are always
others. But traditional companies fail to bear the burden and often fall behind. These industries
when they attempt to break into e-commerce face challenges in adapting to the new format as its
employees are more accustomed to the traditional marketing strategies, thus failing to each full
potential. Toys “R” Us having faced failure and loss found itself hesitating to invest and by the
time their condition worsened as e-retailers ate up the market, they ran out of funds as their
business became wholly unstable.
Further, from the perspective of the employees of the company, there has been a
significant match with the perspective of the service managers. The investment made by the
company has not been optimum to run the business properly. The company had to sell their
products at a higher price as the brand was not that large and had limited resources in terms of

29IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
products. Thus, their sale was limited in comparison to other companies. The delivery cost thus
has been decreasing the profit for Toys “R” Us. This resulted in higher product prices and lesser
discounts. In order to curtail the delivery cost, the company started to accumulate some orders
and deliver them together. Thus, the higher delivery time. All these factors have proved to be
vital for the company. The customers are hence expected to be unsatisfied with their service and
switch to better options. All these factors together have resulted in the decrease in sales and
hence loss and debt increased.
Chapter 6: Conclusion
The study concludes that e-commerce is an eventuality that will quickly end up sweeping
away the traditional modes of business to a large extent. The existing businesses therefore need
to prepare themselves by equipping their business approach with digitization in addition to their
brick and mortar stores. To do so, the company also ought to have a strong management which
understands the technological aspects of the business as well as how to make use of their e-
commerce operations to communicate effectively with customers. For companies dependent on
only one type of items, another challenge is that e-markets such as Amazon could out strategize
them by lowering prices since they don’t rely on one product for profits, These companies face
trouble when the demand for their products fall.
Chapter 7: Recommendation
Management needs to be able to understand how digitization works, its challenges and its
potential and be up to date with the advancements. The company ought to look into inducting
more experts in IT and analytics to enhance their marketing team and site functionality.
Customer insights though retail and market analytics though the site activities could work

30IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
wonders for management to decide on how to balance demand, supplies and invest in shipping
all the while anticipating market trends. The company also ought to try to create a loyalty base
either through providing products unique to them which would not be affected by changing
trends or by diversifying their product range so that when sales of one falls, the other can provide
support.

31IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
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33IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
Appendix
Survey Questionnaire
The following questions are to be rated on a scale of 1 – 5, where
1 – Strongly Disagree
2 – Disagree
3 – Neutral
4 – Agree
5 – Strongly Agree
Theme 1: Investment in E-commerce
1. Toys “R” Us invested in E-Commerce business 1 2 3 4 5
2. The investment made was not optimum 1 2 3 4 5
Theme 2: Customer Reach
3 The product sales decreased with the introduction of E-Commerce 1 2 3 4 5
4 The price of the products are higher compared to other E-
Commerce businesses
1 2 3 4 5
Theme 3: Competition
5 Discounts provided was less than other E-Commerce businesses 1 2 3 4 5
Theme 4: Debts, Profits and Loss
6 The sales of products decreased significantly each year 1 2 3 4 5
7 The margin of loss increased each year 1 2 3 4 5
8 Re-launching online venture reduced the loss margin 1 2 3 4 5
Theme 5: Adaptability

34IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
9 The re-launching decision is too late to benefit the company 1 2 3 4 5
10 The product delivery time is higher than other E-Commerce
businesses
1 2 3 4 5
Semi-structured Interview
1. How has e-commerce industry impacted your business in general?
2. What are the challenges and benefits that the web channel presented to your business?
Was it helpful?
3. What went wrong?
List of Tables
Page
Number
Title Table Number
19 Investment policy in e-retail was not optimum 1
20 Online medium increased customer reach 2
21 Company had hard time competing with market prices 3
22 The company faced loss and debt 4
23 Employees had a hard time adapting to digital marketing 5
24 Age distribution of participants 6
25 Gender Distribution 7
25,26 Number of Years in organization 8
26 Experience in Industry 9

35IMPACT OF E-COMMERCE ON BUSINESS ACTIVITY
List of Charts
Page Number Title Chart/Figure Number
20 Investment policy in e-retail was not optimum 1
21 Online medium increased customer reach 2
22 Company had hard time competing with market prices 3
23 The company faced loss and debt 4
24 Employees had a hard time adapting to digital
marketing
5
25 Age distribution of participants 6
25 Gender Distribution 7
26 Number of Years in organization 8
28 Experience in Industry 9