Analysis: Online Retail's Impact on Traditional Retail Stores

This professional project report analyzes the significant impact of online retail stores on traditional retail businesses. It begins with an executive summary outlining the report's objectives, which include a detailed literature review and analysis of empirical findings. The report explores the challenges faced by traditional retailers due to the rapid growth of online shopping, emphasizing the need for effective marketing and branding strategies. It examines the historical context of e-commerce, the shift in consumer behavior, and the rise of online giants like Amazon. The methodology includes a critical literature review and secondary data analysis, revealing the decline of traditional stores and the growth of online sales. The report discusses consumer perceptions, the influence of technology, and the importance of adapting to the changing market. It also includes recommendations for traditional retailers to compete effectively, such as building brand value and establishing an online presence. The report concludes with a summary of findings and suggestions for future research, offering valuable insights into the evolving retail landscape.

Running head: PROFESSIONAL PROJECT REPORT
PROFESSIONAL PROJECT REPORT
Name of the Student:
Name of the University:
Author Note:

PROFESSIONAL PROJECT REPORT 1
Executive summary
The aim of the report is to come up with the detailed analysis on the impact of the online
retail stores on the traditional retail stores. A detailed literature review and analysis of the
empirical findings will be carried on in the report based on which the interpretation will be
made. As a result of the increasing impact of the online retailing in an unprecedented pace,
the challenges for the traditional retail stores have increased to large extent. In fact, the
traditional stores have been found to come up with better marketing techniques in order to
promote their products and compete with the online retailer giants. In doing so, many
organisations have been found to go bankrupted as well. It is important to build a brand value
of a company in order to create good image of the company among the consumers. In order to
do so, it is recommended that proper marketing and promotional strategies are to be
undertaken to create a high value of the products among the consumers. Apart from this,
these retailers should also consider making its presence online so that the businesses of these
companies do not get hampered.

PROFESSIONAL PROJECT REPORT 2
Table of Contents
Project title:................................................................................................................................3
Introduction:...............................................................................................................................3
Research rationale:.................................................................................................................3
Research aim:.........................................................................................................................4
Objectives of the study:..........................................................................................................4
Critical literature review:...........................................................................................................4
Methodology of the research:.....................................................................................................6
Findings from the secondary data analysis:...............................................................................7
Discussion of findings from previously reviewed literature:.....................................................9
Conclusion and recommendations:..........................................................................................10
References:...............................................................................................................................11

PROFESSIONAL PROJECT REPORT 3
Project title:
An analysis of the effect on retail marketing as a result of rapid change in the trend
of using online store
Introduction:
In the view point of Dai, Forsythe and Kwon, (2014), traditional retail marketing is
broken in the recent time with the advent of the online retail marketing. Traditional retailers
are struggling in the current state to cope up with the challenging market situation as more
and more online marketers are entering in the retail market. The advent of the technology
along with the easy navigation system of shopping and retail experience has also resulted in
the increased use of the online retail stores by the consumers. The aim of the report is to
come up with the detailed analysis on the impact of the online retail stores on the traditional
retail stores. A detailed literature review and analysis of the empirical findings will be carried
on in the report based on which the interpretation will be made.
Research rationale:
The advent of the online stores has been more than 22 years from now. The e-
commerce sites like Amazon, eBay, Alibaba have given the secured option of online
transactions and have created a situation when the actual brick and mortar retail stores are
found to lose their relevancy (Hong et al., 2016). As a result of the increasing impact of the
online retailing in an unprecedented pace, the challenges for the traditional retail stores have
increased to large extent. In fact, the traditional stores have been found to come up with better
marketing techniques in order to promote their products and compete with the online retailer
giants. In doing so, many organisations have been found to go bankrupted as well (Zhang,
Liang & Yin, 2018). In fact, the present traditional retailers are also moving to the online
platform and creating scope for the consumers to buy their products product keeping the

PROFESSIONAL PROJECT REPORT 4
various things into consideration like time saving, easy accessibility, home delivery and other
positive factors. All these factors have created a threat for the existence of the traditional
online retailers and there has been a decrease in the sale and profitability of traditional
retailers (Pauwels & Neslin, 2015). The aim of this study is to critically analyse the impact of
the online retailers on the traditional retailers. This would help to understand the present
scenario of the traditional retail business activities and would also help in recommending
better solutions for the traditional retailers to create greater domination in the market.
Research aim:
The aim of the research is to evaluate the effect of the traditional retail stores as a
result of the increasing online retailers.
Objectives of the study:
1. To evaluate the present business situation of the traditional retail stores as compare to
the online retail stores
2. To find out the perception of the consumers to select online retailers over the
traditional retailers
3. To recommend better ways that can be adopted by the traditional retailers in order to
improve their business activities and compete with the online retailers.
Critical literature review:
As stated by Verhoef, Kannan and Inman, (2015), e-commerce is the means of buying
and selling of goods or any other service online. There has been an increase in the use of
internet and so the electronically using business activities have been increasing as well due to
the technological impact. It is by the means of e-commerce activities, different businesses
have gained the opportunity to increase their sales and to maintain a direct contact or
relationship with the consumers. Online shopping has given the consumers the opportunity of

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viewing the goods virtually and making purchase decision on the go. As commented by
Hasan (2016), this is a comfortable and an easier means of the commerce and any person
would like to select the e-commerce activity over the traditional means of shopping. Online
shopping can be done by any person from any point of time without any hassle and it is
neither time consuming. In addition to this, the online shopping also gives the opportunity of
viewing the review of the product and then making the decision on the purchase of the
product (Guimarães, 2018). Thus, there remains a level of transparency in the product that is
being sold. In contrary to this point, Melis et al., (2015) stated that in the technological era,
the online marketers are often found to manipulate their marketing activities and portray their
product as the best product available in the market which at times might not be true. This is
the reason that the traditional retailers or marketers enjoy the privilege of providing the right
product to the person and thus in a way created a platform of more authentic and reliable
products to be available to the consumers that the online retailers might not be able to
provide.
Cao and Li (2015) came up with the TAM model while considering the impact of
online retail stores over the traditional stores. Cao and Li (2015) pointed out that the online
shopping stores actually allows the consumers to get the right knowledge and details of the
product that actually decreases the risks that are associated with the new form of shopping
experience. However, it has also been pointed out that the increase in the number of online
shopping experience is not only due to the easy availability of the service it is the easy
navigation and other technological services that are being available for the online marketers.
In the journal, Gallino and Moreno, (2014) compared the experience of the traditional
marketers and the online marketers and it has been found that online shopping gives the
option of comparing a variety of things with the costs, variety of options in terms of designs
and colour or other variables. This availability might be very limited in case of the traditional

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retailers and this is one of the reasons that the consumers are shifting their preferences from
the traditional marketing to the online retail marketing (Da Silva & Friberg, 2017).
Pauwels and Neslin, (2015) came up with the comparative and significant growth in
the online retailers and found out that there have been significant instruments used as an
analysis to understand the evolution of the changing pattern of the shopping experience. The
e-commerce activities also have an impact on the mode of payment. There always remains a
dilemma among the consumers when it comes to the payment option that is being made
online because there is always a risk associated to the payment technique when one is not
making payment in person. In this regard, Verma, Sharma and Sheth, (2016) commented that
the online retailers have also given the opportunity of safe and secure payment option by
introducing innovative and popularised payment techniques used for the mobile e-commerce.
In the research paper, based on understanding the competition between the online and the
offline retailers, Wang, Malthouse and Krishnamurthi, (2015) pointed out that both online
and offline retailers are finding ways to make corrections in their marketing activities in order
to expand their marketing activities. It has been concluded that the online marketers have
been successful in establishing the business as retailers without the need of the brick and
mortar (Verhoef, Kannan & Inman, 2015). There has been an increase in the competition
between the online and the offline retailers and examining the factors like time effectiveness
and the cost attributes, it has been found that the online retailers have been successfully
expanding its business whereas the traditional retailers are still finding out ways to fight
against the changing attitude of the consumers towards the online shopping.
Methodology of the research:
The study is completely based on the secondary sources of data. In order to
understand the impact of the online retail stores over the traditional retail stores a critical
literature review has been conducted that has helped in understanding view points of various

PROFESSIONAL PROJECT REPORT 7
authors on the impact and the recent changes in the retail industry. In order to investigate the
issue in details, positive interpretivism research philosophy has been used that has helped in
understanding the topic critically and deal the issue in a more critical and logical way (Smith
& Osborn, 2015). The descriptive or the analytical research design had been used in order to
understand the various theoretical concepts undermined by the authors while carrying out the
literature review. There have been no use of any kind of primary data for carrying out this
study and the discussion is completely based on the secondary empirical data collected from
the various sources.
Findings from the secondary data analysis:
It has been found that many retailers went bankruptcies in 2017; to name a few are
Penny, RadioShack, Macy’s and others. The numbers are more than 100s and several apparel
and retail stores in UK, America have been found to shut down as they were not able to reach
their profit margin or earn their desired revenue (Thompson, 2017). The foremost reason
could be easily considered as the increasing impact of the online retailers among the
consumers. For instance, it has been seen that the between 2010 and 2017, Amazon’s sale in
North America alone quintupled to more than $80 million from $16 million that clearly
signifies the increased consumers of the online retailers and subsequently the decrease of the
sale of the traditional retailers (Thompson, 2017). The young people and the active users of
the smart phones are the ones who are the primary consumers of the online retail stores.

PROFESSIONAL PROJECT REPORT 8
Fig: Online sales growth compared to retail
(Source: Strategyand.pwc.com, 2017)
The growth of the mobile shopping has also been a major reason on the increasing
online retailing. There have been more than 1,200 malls full of retail stores today but the sale
rates in those malls are too low compared to the increased online retail. Similar situation has
been seen in the countries like Germany and UK (Raman, 2017). However, these malls have
definitely resulted in the employment of many people as many people are found to be
working in these malls as sales representatives. The traditional means of shopping is
definitely creating new boundaries in the recent time as a means of the increasing impact of
the online retailers.
It has been found that the e-commerce sales of the US retail stores accounts for at
least 7.2% in 2015. This is a 2.8% hike from that of 2006 (Singh, 2015). Every year the
online retail stores have been increasing and as a result creating an eclipse on the actual brick
and mortar store. As the products are not passed through a number of mediatory, this result in
the lower price of the product and the consumers preferred this and opting for the online

PROFESSIONAL PROJECT REPORT 9
purchase rather than trusting on the traditional retail stores where the products are found to be
expensive (Bronnenberg & Ellickson, 2015). In contrary to increasing issues related to the
decreasing sales of the traditional retailers, it has been found that the retail giants like the
Wal-Mart has been able to sell just one-sixth of the revenue of the product as that of Amazon
(Kahn, 2018). The expense ratio of these retailers have reduced to as low as 1.23%.
According to the statistics of the national Retail Federation, the online stores have increased
its sales growth from 3% to 7% in 2015 (Mason, 2015). All these factors directly give us the
hint that the online retail stores is gaining much importance in the recent time and that the
traditional stores are facing massive decline in their sales and performance.
Discussion of findings from previously reviewed literature:
The detailed critical literature review has helped to understand the impact of
increasing numbers of the online retailers on the traditional retail stores. It has been identified
that due to various advantages that the online shopping provides and the positive experiences
that the consumers get when they do online shopping, the impact of the online shopping has
increased to a large extent. The already established big retail stores are going to the online
platform in order to increase their profitability and the sales. This is why it can be rightly said
that the traditional retailers are at a greater threat and it might happen that there would be a
complete shift in the online retailing platform with the increase use of the smart phones and
the advancement of technology. During the 1990s after the great recession people were found
to buy lots of things from the retail that included clothes, furniture and anything and that
helped in increasing the retail sector but eventually in the recent time, it has been found that
compared to the previous state of retailing, there has been a considerable decrease in the
entire retail operation and that has created a great challenge for the existing retail stores
(Blitz, 2016).

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Conclusion and recommendations:
A detailed discussion on the impact of the online retailers on the traditional retailers
has been carried on in this report. It has been rightly understood that there has been an
increased in the demand of the online retail products and so the online stores are gaining
importance among the consumers. On the contrary, the traditional retailers are equally
suffering to cope with the competition both in terms of the price offered by the online
retailers and also in terms of the fast services. As a result of this many stores have been found
to end its operation and closed the stores in various places. It has also been found that the
choice and preferences of the people have also changed to the large extent and they are
depending more on the innovation and the technological changes that the online retailers are
providing. As a result of this the traditional retailers are suffering and the situation has
created an alarm for the retailers to take certain steps to overcome the issue faced in the
recent time.
In the technological era and the time when the consumers find it difficult to get
enough time to actually visit a retail store and make purchase, it is really challenging for the
traditional retailers to be active and provide satisfactory services to the consumers in the
recent time. However, certain valuable recommendations can be made in this respect. For
instance, it is important to build a brand value of a company in order to create good image of
the company among the consumers. In order to do so, it is recommended that proper
marketing and promotional strategies are to be undertaken to create a high value of the
products among the consumers. Apart from this, these retailers should also consider making
its presence online so that the businesses of these companies do not get hampered. It is also
recommended to come up with new and fresh schemes and offers like loyalty program and
the business cards could also be of help in order to attract repeated customers.

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References:
Beck, N., & Rygl, D. (2015). Categorization of multiple channel retailing in Multi-, Cross-,
and Omni‐Channel Retailing for retailers and retailing. Journal of Retailing and
Consumer Services, 27, 170-178.
Blitz, A. (2016). Beset by the digital revolution successful retailers embrace technology that
enhances customer value. Strategy & Leadership, 44(6), 16-24.
Bronnenberg, B. J., & Ellickson, P. B. (2015). Adolescence and the path to maturity in global
retail. Journal of Economic Perspectives, 29(4), 113-34.
Cao, L., & Li, L. (2015). The impact of cross-channel integration on retailers’ sales
growth. Journal of Retailing, 91(2), 198-216.
Da Silva, T., & Friberg, A. (2017). A Literature Review of the Field of Social Media in
Retail.
Dai, B., Forsythe, S., & Kwon, W. S. (2014). The impact of online shopping experience on
risk perceptions and online purchase intentions: Does product category
matter?. Journal of Electronic Commerce Research, 15(1), 13.
Gallino, S., & Moreno, A. (2014). Integration of online and offline channels in retail: The
impact of sharing reliable inventory availability information. Management
Science, 60(6), 1434-1451.
Guimarães, P. P. C. (2018). The Transformation of Retail Markets in Lisbon: An Analysis
through the Lens of Retail Gentrification. European Planning Studies, 1-21.
Hasan, B. (2016). Perceived irritation in online shopping: The impact of website design
characteristics. Computers in Human Behavior, 54, 224-230.