UKCBC Research Project: Impact of E-Commerce on Business Activity

This report investigates the impact of e-commerce on business activity, focusing on the retail industry and the challenges faced by traditional businesses. It examines the advantages and disadvantages of e-commerce, its growth in the retail market, and its effects on traditional business activities, using Toys “R” Us as a case study. The research employs managerial interviews and employee survey analysis to understand how e-commerce has intensified market competition, driven down prices, and necessitated doorstep deliveries. The report also explores the themes of investment in e-commerce, customer reach, competition, debts, profits, loss, and adaptability. The study concludes with recommendations for businesses to adapt to the digital landscape and improve their performance in the face of e-commerce challenges. Desklib provides access to similar solved assignments and past papers for students.

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

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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

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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?

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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

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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

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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