The Impact of Online Shopping on Asda's Business Performance

This research project investigates the impact of online shopping on the profitability and sales of Asda, a major UK retailer. The study explores the current trends in online shopping and its effects on businesses. It aims to comprehend the trend of online shopping on Asda, evaluate its impact on profitability and sales, and identify key challenges faced by the company in its online operations. The research employs a detailed literature review, examining the advantages and disadvantages of online shopping, and a research methodology that includes data collection and analysis to address the research questions. The findings section presents an analysis of the trends in online shopping, assessing the impact of online sales on Asda's profitability and sales figures, and identifying challenges faced by the company. The project concludes with recommendations to overcome the challenges and improve sales and profitability, offering insights for businesses navigating the e-commerce landscape.

RESEARCH PROJECT

TABLE OF CONTENTS
CHAPTER 1: INTRODUCTION....................................................................................................4
Research background..............................................................................................................4
Aim and objectives.................................................................................................................5
Research questions.................................................................................................................5
Significance of Research:.......................................................................................................5
Rationale:................................................................................................................................6
CHAPTER 2: LITERATURE REVIEW.........................................................................................7
Theme 1: To comprehend the trend of online shopping on business of Asda.......................7
Theme 2: Impact of online shopping in context of profitability and sales of Asda stores
limited.....................................................................................................................................9
Theme 3: To investigate key challenges face by Asda while operating their business through
online stores..........................................................................................................................11
CHAPTER 3: RESEARCH METHODOLOGY...........................................................................14
Research methods.................................................................................................................14
Research philosophy.............................................................................................................14
Research approach................................................................................................................15
Research design....................................................................................................................15
Data collection......................................................................................................................16
Data analysis.........................................................................................................................16
Ethical consideration and limitation.....................................................................................17
CHAPTER 4: FINDINGS.............................................................................................................18
Theme 1: Trends of online shopping ...................................................................................18
Theme 2: Evaluating impact of online shopping in context of profitability and sales of Asda
stores limited........................................................................................................................20
Theme 3: Investigating key challenges face by Asda while operating their business through
online stores..........................................................................................................................22
CONCLUSION AND RECOMMENDATION.............................................................................24
Conclusion............................................................................................................................24
Recommendation..................................................................................................................27
REFERENCES..............................................................................................................................29

Topic: The impact of online shopping on profitability and sales of a business: A case study of
Asda.
CHAPTER 1: INTRODUCTION
Research background
This research will lay emphasis on generating the impact of online shopping on sales as
well as profitability of business. Online shopping is an electronic commerce form in which
customers are allowed to buy goods as well as services directly from their official websites
(Parrott, Danbury and Kanthavanich, 2015). Customers from various geographic al areas visit the
official website and purchase products from retailer and get delivered at their convenient place.
Typical stores of companies through online website enables customer to get browse their desired
range of products and services through photos or images of product they demanded along with it
relevant information is provided on those products which is related with their price, feature and
other specification. Online shopping is a recent trend which is following under market of retail.
The customers due to their tight work schedule does not able to manage time for shopping. Thus,
this trend of online shopping enables time saving and efficient opportunity for them rather than
purchasing from physical stores.
The present study will focus on one of the biggest retail brand of UK which is Asda
stores limited. The company Asda was founded by the Peter and Fred Asquith in 1949 as a
British retailer in supermarket. Asda stores limited is a subsidiary branch of Walmart (Aldasoro,
Ehlers and Eren, 2018). Asda stores is third super market chain of UK which resembles their
brand position in retail market. Asda is operating in groceries, clothing, furniture, toys,
household items and skin care products. The company is engaged with large number of
employees who are carrying their business for further growth. They mainly deal their business
through online platform and through the online websites of Asda, it results in attaining success
and growth (Medway, Roper and Gillooly, 2018). Each product with their price and specification
is attracting more number of customer. As there customers are not limited till UK but also they
are attracting customers from different parts of the world.
This research will be executed in wide context but after narrowed down the approach
from whole retail trade business to outcome of sales and profitability this study will be attain in
more efficient manner. This research report will generate outcomes of online shopping by

measuring increase in profitability and sales of business. The report will determine current trend
of online shopping in businesses. Along with it, the research will evaluate impact of online
shopping in context of sales and profitability of business. The researcher will also investigate key
challenges which will be face by company while operating their business through online
platform. The recommendations for overcoming these challenges will also be determined for
generating more sales and profit in Asda.
Aim and objectives
Aim – “ To investigate impact of online shopping on profitability and sales of business : A study
on Asda. ”
Objectives:
 To comprehend the trend of online shopping on business of Asda.
 To evaluate impact of online shopping in context of profitability and sales of Asda stores
limited.
 To investigate key challenges face by Asda while operating their business through online
stores.
 To recommend some ways to overcome such challenges in order to increase sales and
profitability of Asda.
Research questions
 What is the meaning of trend of online shopping in Asda?
 How the online shopping will impact on profitability and sales of Asda stores?
 What are the key challenges which is face by Asda stores while operating in business
through online stores?
 What are some suggestion on recommendation to overcome challenges to increase sales
and profitability of Asda?
Significance of Research:
This is mainly conducted to determine the importance of research. As by selecting this
topic, it helps the companies to take effective decision in respect of promoting their business
through online sources. The main reason of conducting this research is to help the other authors
to reviews the thoughts and ideas which is gathered at the time of conducting this research. The
impact of online shopping carries a crucial impact among the customer and companies who are

promoting their business online. Thus, various aspects are to be determined which helps the
society to take effective decision at the time of preferring online services. Thus, by conducting
this research, the main benefits is to be gained by the employees of the Asda who are working
hard to achieve the interest of customer towards their products.
Rationale:
This research is conducted for the purpose of generating outcome of impact of online
shopping on profitability as well as sales. The research on online shopping has been chosen by
researcher as per the study of prevailing current trend in retail market. This trend drag attention
of researcher towards selection of this topic of research. The researcher also selected this topic as
their own interest to enhance their knowledge in context of online business. The scholar also
select this topic in order to accomplish their academic research in terms of retail industry which
has been narrowed down by researcher. To accomplish this research the scholar generate
outcome of profitability and sales of businesses which are operating in online business. The main
reason of choosing this topic by the researcher is that lot of authors had already gathered the
information relevant to this topic. Thus, it is easier for the researcher to collect data from such
sources and bring changes in their research work.
Through this procedure, it also helps companies to bring changes in their working and
adapt new strategies by viewing the changes in business environment. The another main reason
of selecting the topic is that researcher find this topic interesting as nowadays customer are
preferring the online services. In such case companies are adapting new technology to attract the
interest of customer at large scale. Thus, lot of information is to be gathered from such sources
and that's the reason researcher are more excited to select this topic.

CHAPTER 2: LITERATURE REVIEW
Theme 1: To comprehend the trend of online shopping on business of Asda
According to the views of Parrott, Danbury and Kanthavanich (2015) online shopping is
a procedure of purchasing goods as well as services from retailers through the internet. The
customers can buy a huge range of items which are available on official websites of the
company. Customers can purchase them online and make deliver them at their place of
convenience. Clothing toys, books, hardware, household appliances, etc. are certain range of
products which companies sell through online websites. Asda also sell these products from their
official websites. For consumers who are interested in purchasing products of Asda need to log
on the interest on their official website. They visit the online store and make purchase according
to their relevance.
In addition to this Millar, Burnside and Yu (2019) stated that online shopping is the
platform or can be said the electronic market through which modern way of commercial
transaction take place. Online shopping helps the organisation in reducing the cost of the store
and the presentation and at the same time it also helps the consumer in management of the time
for the purpose of the shopping. As it takes the less time and it is convenient way of shopping for
the customer. This also helps companies to reach to large number of customer regarding their
products and services and also promote their new products easily. As by choosing the online
methods it reduces the cost of the company by promoting their business through personally
marketing or choosing the campaign to attract customers.
Also, Gössling, Hall and Andersson (2018) shared their views on Online shopping that it
also helps the organization in offering the variety of the product to the customer easily and at the
same time it also offers the variety of the choice for the customer to choose from available
products. The customers are showing their interest in online stores of retail market due to their
day to day work schedule. This is also beneficial for companies in attaining and attracting more
customers which assist them in accomplishing their target sales. By bringing business through
online sources, there are more chances of interacting with customers personally and examining
their reviews regarding such products in better manner.
In the view point of Jung, Ineson and Green (2013) the online shopping is adopted by
many people due to this align their convenience within their engaged schedule. The person can

visit to any online store beyond any time. They enable growth of trend of online purchase all
over the world.
Beswick, Fisher and Hurt (2019) articulates that due to benefit of convenience customers
prefer online shopping but on the other hand, there is a fear of exploitation of information from
credit card. The customer’s during purchase make online payment in which it is necessary to
undertake relevant credit card information on the website. There are many cases of cyber theft
observed from increasing trend of online shopping. This not only affects the integrity of the
company but also distract the customer interests towards such services. As by preferring lot of
online services there are chances of infringement of their client’s information. Customer insert
lot of their details at the time of ordering the products through online. In such cases many
customers reflect the online services as their personally information are to be shared in company
profile and there are chances of fraud in ordering their online products.
In the views of Medway, Roper and Gillooly (2018) another reason for which customer
avoid online shopping because of the products which is depicted in the picture is not delivered
same. The quality compromises is generally observed by customers when they make any
purchase from online. In addition to this (Medway, Roper and Gillooly, 2018) shared their views
about online shopping is that the delivery is generally delay in shipment. The buyer need to wait
for at least 24 hours to receive the product at their door step. The delivery of the products can be
cancel at any time due to changes in environment. This distract the mind of the customers to
avail such products and prefer the company products for future perspective.
In accordance with Parrott, Danbury and Kanthavanich (2015) online shopping has
certain disadvantages but it attracts many customers towards them. The companies are attaining
profitability and increases their sales up to 20 % by operating their business online. The company
by operating through online website able to attract new customers from different geographies.
Also, the customer satisfaction ratio of Asda increases by past year due to their efforts and
establishment of customer base through online platform. The online trend of shopping enables a
customer base which have an attribute of loyal customers.
Aldasoro, Ehlers and Eren (2018) expresses their positive views about online shopping
that it is becoming popular among people residing in UK, US and Europe, etc. The people are
getting shifted from shopping to physical stores from online stores. Companies which are
operating business from online websites are attaining success. The companies which are dealing

in retail such as Asda stores limited, Tesco group plc, Sainsbury group plc are dealing with their
customers outside different geographical boundaries which attracts many customers to make
purchases with their website through online portal.
In addition to above statement Goet, Fleming and Zubek (2019) expressed their views
that companies are offering many offers of discounts for their customers which execute
increment in their sales. The ratio of sales and revenue are showing an upward trend from past 4
- 5 years. This result in bringing positive impact by grabbing the online procedure in respect of
fulfilling the customer needs and demands. But in return it brings lot of competitors in market
regarding the same discount scheme which the company is offering. Thus, different strategies to
be used to bring the promotional scheme among the customers. So in that case, they can avail the
services of the company in better manner.
Theme 2: Impact of online shopping in context of profitability and sales of Asda stores limited.
In the view point of Lin, Wei and Lekhawipat (2018) the online shopping offers a lot of
convenience to both customer as well as company. It impacts company face by opting for online
shopping has two wide aspects. They are both positive and negative aspect. The positive aspect
varies from increase in sales of a company which directly impact on its profitability. The
companies mainly which are dealing in stores of retail are attain huge success because they have
increased their sales up to 25 % from sales from physical stores which lead them towards
profitability. Also, Dolega, Pavlis and Singleton (2016) argued that there is threat of window
shopping arose from online shopping. There is an alarming situation arises by the introduction of
online shopping that people prefer window shopping through physical stores to identify the
quality of product and purchase the same from online stores. This is becoming a big threat in
present times.
According to the views of Cheah, Phau and Liang (2015) Many of the popular retail
stores of UK observed that their sales is almost rises by 25% when they operate their online
businesses through official website. As by online purchasing, companies are creating a strong
and loyal base of customers from all over the world. In addition to this Gössling, Hall and
Andersson (2018) stated that earlier when companies offer their products and services only
through physical stores they only able to attract customers from countries in which they have
opened their stores. The retail online shopping enables these companies to capture a huge market
and a loyal customer base by offering homogeneous quality through online retail shopping. This

not only saves time of buyers but the stores are also utilizes their time in multiplying their sales.
Parrott, Danbury and Kanthavanich (2015) states that many retails are attaining customer
satisfaction which help them in attaining competitive advantage against other rivalries which are
operating both in physical as well as online stores. The customers are satisfied by online
shopping executed by such retail stores of UK like Asda, Tesco, Burberry, etc. because they trust
their quality and mitigating superior quality of products at their door step enhances their level of
satisfaction.
Jung, Ineson and Green (2015) articulates that along with many positive impact, there are
few negative impacts are also there for online shopping which affects profitability as well as
sales of the company dealing in market through online platform. The company in order to attain
success and growth through enabling online platform for the sale of their products must deal with
certain expenses. The first and foremost additional expense is marketing and promotional
expenses. The retail stores while operating through platform of online need to bear expenses for
executing promotional activities. Companies undertake social media paid ads, Advertisement
through television, newspaper, magazines, etc. Also, they pay for endorsing certain celebrities
too for exploring their promotional activities to influence wide base of customers.
In addition to the above statement Melero, Sese and Verhoef (2016) shared their views on
this that the company in order to increase their sales and profitability enables huge expenditure
which eventually increases their cost of products as a whole. Beswick, Fisher and Hurt (2019)
argued on this statement that customers are ready to bear high cost because by purchasing
products through online shopping customers are able to save their time. The trend of online
shopping have emerged in developed nations because of their packed schedules they did not able
to take out extra time for going out of shopping. Thus, online shopping increases expenditure of
company which executes rise in particular product price but it is acceptable to customers because
it saves their time of shopping which they can utilize in something more productive place.
In accordance with Parise, Guinan and Kafka (2016) their views that online shopping is
limited to users which prefer access to internet services. Due to technological advancement, the
usage of internet facility is accessible to numerous countries. For online shopping, it is necessary
that buyer must have secured with good internet connection. This is a limitation of online
shopping because company and their buyers are fully depended on internet connection. The
dependability on internet enables the company to get access to services of their delivery of

products only on order placed under viable internet network. In the views of Baethge, Klier and
Klier (2016) Online shopping is not limited to internet sensitivity but also due to rise of online
shopping the personal relationship with customers are not focussed. The companies are failing in
building good relationship with their customers which could lead to affect customer’s loyalty in
long run. Also, the emergence of online shopping bring convenience to customers as well as
businesses but the customer satisfaction is necessary for a long term growth of a business entity
and their smooth functioning.
According to the above statement Parrott, Danbury and Kanthavanich (2015) states that
the online shopping is providing convenience and increasing sales of businesses which is not
possible by only operating through physical stores but it provides a downfall in loyal customers
in long run. The customers are not attached with the business entity also they are not getting
attached with products of the company by the wider availability of products through online
presence of various companies. The companies are focusing on increasing sales rather than
making good relationship with customers which can be found as biggest reason downfall of
businesses in coming years. (Millar, Burnside and Yu, 2019) argued that company is executing
their efforts in context of building relationship with their customers by availing them benefit of
after sales services. The business entities by providing after sales services to their consumers
able to attract trust of customers which build a goodwill among mind of customers which make
purchases with them.
Theme 3: To investigate key challenges face by Asda while operating their business through
online stores.
Koçoğlu, Akgun and Keskin (2017) sought to establish the fact that, online business is a
procedure that is conducted by the organization to sell their product or services through internet.
E-business includes different activity like buying and selling of product. The transition of
information sometimes considered as online business. Purpose of online or E-business is to
increase the number of target audience. Now day’s lots of people are connected to internet and
there is huge scope for a business organization to sell their product through internet. There are
many benefits of online business and it can provide marketing advantage to organization. Along
with many benefit organization have to face various challenges to conduct business on online
platform. According to Chen, Cheung and Tan (2018) the online business is not that simple as it
looks. In the process of online business different challenges faces by organization this challenges

are usually related to selection of product and services that can be used to conduct E-business.
For example of retail store there are many products that can be easily sold through physical store
but in online business company cannot sell all the product which are available in the inventory of
organization. It is important to make right selection of product that are good for online business
of company. So, it is a big challenge to make list of product of company that can be used to
conduct online business. These challenges are important to consider during the business and
strategy planning to minimise the chances of loss and failure in the implementation procedure.
As per view of Koçoğlu, Akgun and Keskin (2017) apart from the selection of product or
services for online business it is also a challenge to select specific people as target of
organization. The selection of target market is based on the product that is used by organization
for online business. As per the specification and use of product or service organization can target
people to sell their product or services. To attract particular group of people is difficult for
organization cause to complete online sales objective company have to plan different strategies
and planning. The strategy of marketing is depended on various attributes of target audience. As
per their age group, gender, profession strategy of organization varies. This is very difficult
challenge for organization to make efficient online marketing strategy to attract more people on
online selling platform of company. For example company is selling women’s clothing in online
business so they need to plan online marketing strategy to attract women of different age group
to sell their product in high number. Gillett-Swan (2017) stated that, online business also face
various challenges which adversely affects operational growth and efficiency of the business. It
also leads to various technological changes.
According to Alotaibi (2016) choosing right technology is also a big issue for organization
that is trying to sell its products or services to online market. Without using technology it is not
possible for organization to sell product through online platform. The technology used by
organization to perform business in physical store is not compatible for online business. To start
business on internet it is essential for organization to make a deal with third party that could be a
technology provider, software provider or an online platform provider company. By associating
business with technical support providing company will help the company to conduct E-business
with high efficiency, this is not easy for organization to deal with third party software Provider
Company. This is big challenge for organization to select right technical partner for online trade.
After selecting technical partner this will be also a challenge for company to make effective deal