Omnichannel Retailing and the Evolution of E-Commerce: A Case Study

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Assignment 1a E-Retailing Case Study
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1. Does the growth in ‘online shopping’ mean the extinction of the typical ‘high street’
store?
No doubt that the presence of online stores has hugely affected the physical stores, but this
does not mean this would extinct the traditional high street store. According to , in 2017, the
UK’s high street markets recorded over 5800 stores closures. These comprise shoe shops,
travel agents, estates, fashion stores. In addition to this, more than 1700 shops have been
closed as per the data of Local Data Company (LDC). However, there has been a rise in the
number of physical stores selling beauty products, dealing in food, coffee-shops, bookstores,
ice-cream parlour, and much more. In one of the surveys carried out by GFK in 2015 in 10
countries, it was determined that high street stores cannot be eliminated by online shopping
stores and website.
The survey revealed that young people within the age group of 16-21 years like the
environment of physical stores and different values offered by them. This has changed their
viewpoint up to some extent. In this age group, around 25 % of the customers do not care
about purchasing from online or offline stores. The survey revealed that nearly 36%, 40%,
and 35% respondents (22-65 years age group) do not care about buying online or offline
while purchasing grocery products, personal care, and clothing, respectively (GfK, 2015). In
addition to this, customer knowledge is something that is either missing or not enough to
instigate the customer to make a purchase through online stores. This shows that even if the
online retailing is among the favourite choices of the customers, it cannot completely make
physical stores go extinct. High street stores offer customers an advantage to touch, feel, and
see the products they are looking to purchase, thereby providing better information about the
products to the customers (***).
2. Examine the various models, ‘clicks’, ‘bricks’, ‘bricks & clicks’ and ‘clicks &
bricks’. Which if any is the most sustainable?
The ‘clicks’ models of business are characterised by the virtual businesses that operate online
through mobile apps or website or both. These businesses provide customers various options
and products at a lower cost than the physical stores. Businesses can operate in different
countries conveniently and can explore different market segment easily. The bricks model is
often called the bricks and mortar model of running a business in which all the operations are
carried out conventionally rather than online. There has been a tremendous demand of clicks
model in today’s business world but ‘bricks’ model is still significant for the 21st-century
business. It provided better credibility as business has been started by putting a great amount
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of money. This brings some amount of confidence in customers (Fox Business, 2017). In
addition to this, it can be profitable for businesses selling perishable products, such as
groceries, beauty products, foods, automobile, and gas refill, etc. In addition to this, a
business can gain different customer base that is reluctant to online shopping. Talking about
‘bricks and clicks’ model, it is referred to those businesses that used be brick and mortar
earlier but with the rise of the Internet, they started online business operation. The
characteristics of such a business model are that the original brick model's logistic model can
be utilised for the new e-commerce sites. In addition to this, customers have the option to
visit the stores and purchase or buy online as per their convenience (Lieber and Syverson,
2012). Business can be able to reduce the shipping cost as customers can purchase from
physical stores. Customers have better information about price, quality, and material used.
The last model is ‘clicks and bricks’ model and is the new paradigm of the business world. In
this type of model, online businesses open physical high street stores. An example of such a
model is Amazon that has opened its offline retail stores in various parts of the world. The
purpose is to provide better interaction between services and customers (CBS This Morning,
2014). GFK's survey has revealed that young people prefer buying from both online and
offline stores. In addition to this, businesses can serve those customers who prefer purchasing
costly and luxury items from physical stores only (GfK, 2015).
3. We are increasingly hearing the term omnichannel retailing what does this mean
and how can businesses exploit this new phenomenon?
There are two types of sales approach followed by the business organisations in the modern
era, namely the Omni-channel approach and other is multi-channel e-commerce approach.
The former is characterised by unified sales and marketing approaches to developing a
common commerce experience across a single brand. On the other hand, multi-channel e-
commerce is characterised by less integrated multiple channels that allow customers to buy
from different sources that they find suitable, such as promotional event, package, retail
shops, etc., (Blázquez, 2014). In the Omni-channel approach, the customers have the liberty
to shop from different platforms, such as mobile, computer, brick mortar stores, and others.
The two approaches are different in various aspects, such as consistency, customer
engagement, optimisation of time and efforts, etc. Both of these aim at reaching potential and
existing consumers by anchoring multiple customers.
The modern business world, customer satisfaction, and improving experience are two
different aspects that are quintessential for sustainability. Customers need consistent and
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better retailing experience while interacting with a particular retailer. Businesses can be able
to acquire and manage customer data in a secured and efficient manner (Klaus and Nguyen,
2013). The omnichannel approach can be a comprehensive shopping option for potential
customers. It can help in providing better convenience and realistic impression of the items
that consumers are planning to purchase. Businesses are embracing the fusion of digital and
physical approaches. On one hand, it is leveraging the efficiency and flexibility of the online
method and on the other, it is making powerful immediacy of the offline shopping
experience. Nearly two-third of the businesses are providing customer supports in stores and
on online stores. For this purpose, they are providing integrated services with all the
information about the products across various channels (GfK, 2015).
4. Why are online travel services such a popular Internet application? Why do so
many web sites provide free travel information?
In the past two decades, there has been a remarkable growth in the disposable income of
people worldwide and this has resulted in an increase in the desire to travel. In addition to
this, there has been a tremendous change in the behaviour of the travellers as instead of
visiting the local travel, agents, they are inclined towards online travel booking services. The
reasons for such high inclination are many. The first and foremost is round-the-clock
services. Customers can reach to the customer support in case of any query or doubt. In
addition to this, there is a large number of service providers and customers can compare their
services and choose the best that suits their budget and requirement. Furthermore, these
service providers provide the customisable services that help in fulfilling the demands of the
customers. Since these are directly a B2C service, there is no mediator in the final deal. This
reduces the budget and any discrepancies in the tour package. In addition to this, these
service providers offer great incentives on tour packages to the customers for gaining
customer loyalty. Moreover, customers enjoy great freedom in paying the prices. They can
pay as per their own convenience via different sources. There are many travel websites
providing free information to travellers. There are many benefits they get while doing so. The
main benefit is to increase customer footfall on the website. This would attract other
businesses to post their advertisement and promotional campaigns, thereby serving as a
source of income for the website owners.
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5. Compare the advantages and disadvantages of distributing digitisable products
electronically versus physically.
There are two primary ways of selling a product, namely physical store and online retailing
store. Each of them has its own advantage and disadvantage. Talking about the online
retailing of products, the advantages are:-
 It is very convenient as customers can shop from anywhere at any time.
 It saves a great number of efforts, cost, and time of the service providers and
customers.
 It offers unlimited scalability (Kawaf and Tagg, 2012).
 There are a large variety of products and they can be easily compared based on their
characteristics.
 Customers get large discounts and cashback for every item they purchase.
 Customers can have detailed information about the product.
The disadvantages are:-
 The service quality is very poor as the item purchased takes time to get delivered.
 Lack of information about physical characteristics, quality, material, etc.
 It lacks the value and experience of traditional shopping
 There are many ethical issues, such as lack of security and personal data might get
lost or stolen
Talking about the physical high street store purchase, its advantages are:-
 Customers can be able to test the quality, material, and other characteristics
 It can assist in selling services and products that are difficult to sell online
 It promotes and ensures higher customer loyalty
Disadvantages are:-
 They are less convenient as one has to visit the store for any purchase
 Customers have limited options available and they are not able to compare different
options
 Items cannot be purchased at any time (Kawaf and Tagg, 2012).
 They are a bit more expensive than those available online.
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References
 Blázquez, M., 2014. Fashion shopping in multichannel retail: The role of technology in
enhancing the customer experience. International Journal of Electronic
Commerce, 18(4), pp.97-116.
 CBS This Morning (2014). Amazon to open its first brick-and-mortar store in New York
City. [vedio] Available at: https://www.youtube.com/watch?v=dcKuPg5rqF0 [Accessed
18 Mar. 2019].
 Fox Business (2017). Has brick-and-mortar stores lost the battle against e-commerce? (.
[video] Available at: https://www.youtube.com/watch?v=zZU2hEghTGc [Accessed 18
Mar. 2019].
 GfK (2015). Young Shoppers expect brick-and-click retailing. [Vedio] Available at
http://www.youtube.com/watch?v=geMoByjd0so [Accessed 18 Mar. 2019].
 Kawaf, F. and Tagg, S., 2012. Online shopping environments in fashion shopping: An
SOR based review. The Marketing Review, 12(2), pp.161-180.
 Klaus, P. and Nguyen, B., 2013. Exploring the role of the online customer experience in
firms' multi-channel strategy: An empirical analysis of the retail banking services
sector. Journal of Strategic Marketing, 21(5), pp.429-442.
 Lieber, E. and Syverson, C., 2012. Online versus offline competition. In The Oxford
handbook of the digital economy (p. 189). Oxford University Press Oxford, UK.
 Ofek, E., Katona, Z. and Sarvary, M., 2011. “Bricks and clicks”: The impact of product
returns on the strategies of multichannel retailers. Marketing Science, 30(1), pp.42-60.
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