Impact of Online Retail on Brick-and-Mortar Stores

This assignment delves into the significant impact of online retail on physical stores. It examines how changing consumer preferences and the rise of e-commerce are influencing shopping habits, leading to challenges for traditional retailers. The analysis covers aspects such as online repurchase intentions, social e-shopping influences, e-store image perception, and the role of interactivity in online consumer experiences. Further exploration includes the economic implications of online retail, including its effect on store closures and vacancy rates.

Researching
and
Analysing Data

Table of Contents
INTRODUCTION...........................................................................................................................1
Question:.................................................................................................................................1
Information gathering.............................................................................................................1
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6
Illustration Index
Illustration 1: Vacancy rates of street Business ..............................................................................3
Illustration 2: Growth of Online retail.............................................................................................4

INTRODUCTION
As the technological changes are taking place, industries have identified different ways to
utilize it to earn more profit. Following report is about the Online Shopping and The High Street
business in UK. The report comprise of primary and secondary sources of data collection.
Further, effectiveness of the IT approaches on the following topic are evaluated. Complete report
is critical analysis on the mentioned topic.
Question:
 How digital technologies are impacting on High Street business in UK?
Information gathering
According to Bulter (2013), in her article she suggested that high street business must
adopt changes should implement new digital technologies. She mentioned that John Lewis, one
of the retail sector in UK is now completely shifting to the online store and is connecting to more
than thousands stores. It will increase the shopping industries standards. Moreover, there has
been rise in the shopping level in the company after they started online-shopping and their click-
&-collect option. Along with this, during the festivals the online sales has proved to be more
profitable. They have made Collect+ scheme where person is allowed to collect or pick the
clothes. There are great advantages achieved by the company through this process such as they
have reduced long-term costs (Nind, 2011). There customers/ buyers range has increased.
Moreover, it added value brand to Lewis. The service started by the company, collect+ has
reduced the number of customers. In contrast to this, they have certain disadvantages too. There
were more professionals required for maintaining the business. Further, during the time of
festivals there had been downtime in the websites. There were also expertise required which had
to maintain the site and sales.
As mentioned in the article of Harvey (2013), major street business are getting loss in
their street business. According to her research, government was getting taxes from high street
business which they were unable to receive now. Most of big retailers were shifting towards the
online store as there is very low tax further maintenance was more easy. Retail street firms have
to pay more than millions in terms of taxes. However, tax rate which was applied to the online
stores were too low. To increase the sales and profit, Kingfisher chief has taken new step. More
than 25% of stores were closed which would result in 25% less tax. They started their own online
store which is Screwfix, where major trade was done related to the tools and hardware. In
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opposition to this, there was so significant profit and increased in the sales level. Such moves
were made unaffected progress to the company (Fade and Swift, 2011). They mentioned that
without coming to the online stores they cannot manage to compete with any industry and
government policies will also affect them. Some of the best advantages mentioned by them are
online stores do not have to pay such high rents, they have higher energy and have least staff
costs which makes them more effective and efficient. The company acknowledged this as they
have to pay £120m, every year in terms of taxes (Mollen and Wilson, 2010).
In an another article of Lisa O'Carroll (2013), she stated that online stores and digital
technologies have affected all the sectors in UK. She mentioned that steps are taken at the right
period of time the most of the companies have to shift their business. As per the Saul Klein, who
is a British venture capital fund stated that online stores of US has taken the business in UK.
They said that digital technological growth has gone to far (Frost and et.al., 2010, Henwood,
Pidgeon, Parkhill and Simmons, 2011). These industries are contributing more than 8% of the
GDP in the year 2013. Digital Business has completely destroyed the street business. The tech
start-up company of Klein has earned more than €1bn in the starting 1 year. Klein estimated that
business growth in the industry will rise to more than 12.4% by 2016. However, there can be
great development seen in the industry. UK's digital tech industries have made faster growth.
There had been 32% rise till 2016 and there were more than 58000 online active digital stores are
doing business. The individual industry has gross turnover of more than £161bn in 2014. In same
year London, Reading and Bracknell were considered to have highest turnover.
In the newspaper, there was clip about the High street in year 2013. Most of the these
were converted to homes. As per published analysis of The Centre for Retail Research, they
suggested that there will be reforms in the retail sectors in UK. Street business have to change
there business-style or they have to change their profession in order to survive. During the era of
digital marketing and business, many street owners have to shift to Administration or some other
profession (Procter, Vis, and Voss, 2013, Pearce, and et.al. 2012). Retail industries have to pay
taxes to the government for their stores and parking areas. Not only this, more than 320000
people have lost their jobs. All the major retail stores were shifting to the online business and
digital marketing.
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For every business, customers are considered as main source for selling the products.
There are great crises faced by the company. The industry has to overlook to the new areas if
they want to make development or survive in the market.
Illustration 1: Vacancy rates of street Business
Sources: Retail in 2018 - Shop numbers, Online and the High Street, 2013
Moreover, the vacancies rates are also increasing as people are not getting enough from
such areas. In terms of the store closer, the graph clearly states that there was great fall of street
business after 2000. There was impact to the high street business but this has also affected the
top most retailers ASDA, B&Q, Tesco and Wickes. They too have dramitally reduced their
physical stores as they were facing problems in operating the stores. Online stores are operated
24/7 so there is also chances of customers to buy the products at late night (Goworek, 2010,
Clarke, 2013). Moreover, there are very less chances of getting damage in the online stores
which can be seen in the physical stores.
Online stores and digital technology has also affected the other industries like agriculture,
education, hospitality and many more. These industries have shifted and adopted the changes of
utilizing the online stores. High street retails would stay but there great fall of lower street
retailer as they are unable to manage both the stores together.
The best advantages are received by the customer as they have multiple option for the
shopping. They can either prefer the visiting to online-shop or they can check-out at the local
stores. Moreover, they can effectively identify the prices of the products outside of the stores. It
has provided them better option whether they have to purchase the product or they can chose it
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from the online stores. In online stores people have more than millions of different products
which they need to prefer. It helps to spend more on the shopping rather than travelling or
wasting time. Along with this, there is home deliver which customer can avail at any time (Bruce
and Daly, 2011, Keval and Sasse, 2010).
From the above it can be analysed that there is huge impact which is faced by the UK's
High street retail sectors through the digital technologies. Changes can be seen in the shopping
preference of the people and the way retailers have adopted this methods. It has lead people to
use to more of the technologies. There are various changes which can be seen in the online stores
which retailer owners have adopted to influence people. Online stores are have increased the
level of showing the products as well as their customers have also increased. Stores which have
adopted the Digital Technologies have now greater extent. Their business range has increased as
well as their customers. Retailers are also getting profits as they do not have to pay taxes for the
physical stores, online has more sales option is less costly to operate, less space is required and
sales density has increased.
As per the analysis, street retailers are provided more personalized services. They are
utilizing the data of the personalised customers shopping experience so that their sales can be
increased. They are adopting more brands in their stores so that customers can get choices and
they can have variety in their choices (Har Lee, Cyril Eze and Oly Ndubisi, 2011, Dennis and
et.al., 2010). B&M retailers as chosen different approach where they have used multi-channel
approach which is more integrated form of marketing. The company ha focused on the area of
higher productivity, efficient layouts, high shopper traffic, Growth potential, positive competitive
dynamics.
Illustration 2: Growth of Online retail
Sources: Retail in 2018 - Shop numbers, Online and the High Street, 2013
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As per the 2013, retail future details these was the level of increase in online retail stores
which has completely changed (Chang and Tseng, 2013, Simonovska, 2010). In 2016, the
industry has reached to 32% till 2020, there will be further development in this area. However,
the street business have adopted new ways to survive market.
CONCLUSION
From the above report it can be concluded that retails sectors are completely changed
after the online stores have came into market. Further, these are the areas where development can
be made. There is great scope of digital technologies and online-business in every sector.
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REFERENCES
Books and Journals
Nind, M., 2011. Participatory data analysis: a step too far?. Qualitative Research. 11(4). pp.349-
363.
Fade, S. A. and Swift, J. A., 2011. Qualitative research in nutrition and dietetics: data analysis
issues. Journal of Human Nutrition and Dietetics. 24(2). pp.106-114.
Frost, N. and et.al., 2010. Pluralism in qualitative research: The impact of different researchers
and qualitative approaches on the analysis of qualitative data. Qualitative
research. 10(4). pp.441-460.
Henwood, K., Pidgeon, N., Parkhill, K. and Simmons, P., 2011. Researching risk: narrative,
biography, subjectivity. Historical Social Research/Historische Sozialforschung. pp.251-
272.
Procter, R., Vis, F. and Voss, A., 2013. Reading the riots on Twitter: methodological innovation
for the analysis of big data. International journal of social research methodology. 16(3).
pp.197-214.
Pearce, N., Weller, M., Scanlon, E. and Kinsley, S., 2012. Digital scholarship considered: how
new technologies could transform academic work. in education. 16(1).
Goworek, H., 2010. An investigation into product development processes for UK fashion
retailers: A multiple case study. Journal of Fashion Marketing and Management: An
International Journal. 14(4). pp.648-662.
Clarke, T., 2013. The advance of the MOOCs (massive open online courses) The impending
globalisation of business education?. Education+ Training. 55(4/5). pp.403-413.
Bruce, M. and Daly, L., 2011. Adding value: challenges for UK apparel supply chain
management–a review. Production Planning & Control. 22(3). pp.210-220.
Keval, H. and Sasse, M.A., 2010. “Not the Usual Suspects”: a study of factors reducing the
effectiveness of CCTV. Security Journal. 23(2). pp.134-154.
Har Lee, C., Cyril Eze, U. and Oly Ndubisi, N., 2011. Analyzing key determinants of online
repurchase intentions. Asia Pacific Journal of Marketing and Logistics. 23(2). pp.200-
221.
Dennis, C. and et.al., 2010. The influences of social e-shopping in enhancing young women's
online shopping behaviour. Journal of Customer Behaviour. 9(2). pp.151-174.
Chang, E. C. and Tseng, Y. F., 2013. Research note: E-store image, perceived value and
perceived risk. Journal of Business Research. 66(7). pp.864-870.
Simonovska, I., 2010. Income Differences and Prices of Tradables: Insights from an Online
Retailer (No. w16233). National Bureau of Economic Research.
Mollen, A. and Wilson, H., 2010. Engagement, telepresence and interactivity in online consumer
experience: Reconciling scholastic and managerial perspectives. Journal of business
research. 63(9). pp.919-925.
Online
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Retail in 2018 - Shop numbers, Online and the High Street, 2013. [Online]. Available
through:<http://www.retailresearch.org/retail2018.php>. [Accessed on 5th August 2017].
Carroll, L. O., 2013. City must wake up to digital growth, says tech investor. [Online]. Available
through: <https://www.theguardian.com/business/2013/mar/04/kingfisher-warns-of-
store-closures>. [Accessed on 5th August 2017].
Harvey, F, 2013. Kingfisher chief warns of store closure over online firms' tax advantage.
[Online]. Available through:
<https://www.theguardian.com/business/2013/mar/04/kingfisher-warns-of-store-
closures>. [Accessed on 5th August 2017].
Bulter. S., 2013. John Lewis to extend online shopping empire via thousands of corner stores.
[Online]. Available through: <hhttps://www.theguardian.com/business/2013/feb/21/john-
lewis-online-shopping-collect?INTCMP=ILCNETTXT3487>. [Accessed on 5th August
2017].
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