Online Retailing versus in-Store Retailing - Assignment Example

Online retiling versus in-store retailing (Institution) (Student’s Name) (Student’s number) (Course) (Module number) (Instructor’s name) (Date of submission) Introduction Invention of the computer and World Wide Web has revolutionalized business and the manner in which corporations carry out their processes. Marketing, retailing and advertising have evolved phenomenally; marketers use the internet as a market place, consumers’ access and choose goods and service on the internet, firms use the internet as an advertising medium. Not long ago, buyers would make enquiries or order goods and services through mail but now it is even more convenient through online purchasing. Online retailing involving general household merchandise has been the most affected. Discount retailers and supermarkets in general such as Wal-Mart have taken to online stores in addition to the traditional stores. However, there are exclusively online stores such as Amazon.com and eBay. The service industry has also taken up online retailing of their services best displayed by the tour, travel and hospitality industry. In analyzing the use of e-commerce, this paper will analyze two industries, consumer retailing and the tour, travel and hospitality industry. Under the consumer retailing industry, the paper will analyze Lastminute.com and Thomas Cook. Under the consumer retailing industry, the paper will analyze eBay, Amazon and the online arm of Wal-Mart stores. In this analysis, the paper looks at the suitability of these websites for online shopping and assess whether they meet the standard requirements for a good website according to mainstream literature on a standard e-commerce website. Online retiling versus in-store retailing There exists a lot of information on standard effective web designs with varying factors and considerations to be made. The industry in which an e-commerce firm operates basically determines the web design layout and the needed inclusions. Elliot and Speck (2005) say that “as the expectations of online shoppers rise, their satisfaction with online retailers has declined” (p.1). This alone indicates the need to develop more effective websites that will attract shoppers and are easy to locate through key words on search engines. Elliot and Speck (2005) add that there are five major factors that web designers should keep in mind in order to make a website more attractive and user friendly. These are; ease of use, product information and display, entertainment/ambience, trust and currency. Jones (2010) on the other hand says that there are six major qualities of a good website namely; template, content, meta tag and title, internal navigation, broken links and search box. Palmer (2002) conducted a study on a number of websites in 1997, 1999 and 2000 and observed that “website success is significantly associated with the website download delay (speed of access and display rate within the website), navigation (organization, arrangement, layout design and sequencing), content (amount and variety of product information), interactivity (customization and interactivity and responsiveness (feedback options and FAQs)” (p.151) A website template is the basic format, layout or physical appearance of a webpage onto which contents of the website are added. Most companies strive to develop a unique website template though Jones (2010) claims that some organization stand accused of copying existing templates used by other companies. He says that this is risky since some functions may not fit in the chosen template. He thus advises that companies should always seek the services of a professional web designer of a company in developing an effective website template. Of the five websites under review, none have similar web template. However, all the four websites except for Wal-Mart display their company name on the top left hand corner in visible colors that greatly contrast the web page color. Wal-Mart has its company name displayed on the left hand corner just below an advert banner. This in line with what Nielsen says that “Web users spend 69% of their time viewing the left half of the page and 30% viewing the right half. A conventional layout is thus more likely to make sites profitable.” Therefore, all companies prefer web users to first recognize at which website they are in by placing the name and logo of the company at the most convenient place. Nonetheless, given that the website is not primary a source of information about the company, the product information as suggested by Elliot and Speck (2005) is given maximum space and attention. Palmer (2002) however argues that availing the products through vivid display without information through links is inadequate. He thus makes clear that a website should first attract a user through vision and then supporting that with relevant information. In all the websites, new products or prevailing offers and discounts are the most visible and conspicuous. Although other items are displayed on the home page, Amazon gives most attention to the Amazon Kindle which is centrally located on the website with a big image of the product. Wal-Mart on the other hand places an advert banners at the top of the website of various products each day. Products on offer at the Wal-Mart website are also highlighted and place in a box centrally located. As of writing this research, there was an outdoor cooking pack, an outdoor living pack and outdoor play pack for kids which take turns in being displayed with a larger image at approximately two minutes each with price tags vividly displayed. All the five websites have clearly displayed price tags of their products except for Amazon which does not display the price tag of its Amazon kindle. Apart from the products on offer and discount, all other products are displayed separately with price tags. To allow ease of accessibility to all the products and services, all the websites have categorized what they have to offer. For instance, Amazon has twelve main categories namely; Books, Movies, music and games, Kindle, Computer and office, Electronics, Home and Garden, Grocery, health and beauty, Toy, kids and baby, Clothing shoes and jewelry, Sports and out doors and Tolls, auto and industrial. Each of these categories has been further subdivided into smaller categories. To complement this categorization is the inclusion of search tabs where web users can search for products that they want. General information on these products is included along them. Players in the tour, travel and hospitality industry in the larger service industry are faced with a higher task in marketing their services as they have little information to give such as features, warranty, refunds etc on other services. A look at the two websites on the travel and hospitality industry shows that they have used images to help web users to conceive an image of what the service product is like. For instance, Thomas Cook displays images of a seemingly executive swimming pool, a comfy hotel room, a couple on the beach and view of New York City. In the product search, two players discussed here in the travel and hospitality industry allow web users to create products for themselves whereby the website calculates the price and gives a feed back. For instance, shoppers at Lastminute can choose to arrange the number of days/nights they wish to spend at a particular destination, timing and type of hotel (cheap or luxury) they want. This allows the websites to create product in real time on demand. As such, these kind of websites need to be first in order to give shoppers quick feedbacks on the availability of the products that the shoppers create. However, not all is perfect with these websites. Wal-Mart for instance does not seem to own the website. The name and logo of the company appear second place to adverts on their home page. Web users need to be shown and reminded on which website they are in by a big title and logo as is the case with Lastminute. This is because many online shoppers prefer to make price comparisons on various products from different websites hence the need to be reminded which website is offering which price. On this note, eBay needs to display price tags more accurately and precisely where they exist and place them on products that do not have. For instance, the highlighted and displayed fashion wear has no price tag at all. Again, the Garmin GPS systems displayed at eBay’s website has no accurate price tag but goes “for under $200” (eBay 2010). This might be attributed to the fact that electronics have very diverse models and versions developed within a very short period of time in order to keep in touch with rapidly changing technology. Electronics shoppers are thus more aware of the specification of the devices that they need and the technology involved. This presents a very huge problem to online retailers of electronic gadgets as some clients insist on physically testing the device and making a purchase (Palmer 2002). Other gadgets may require demonstration in order to explain and showcase different features in a particular gadget. Given that this is not possible through online selling, online retailers have to go to an extra mile and provide adequate information by detailing all the features. Furthermore, once a purchase is made, customers will require or demand after-sale services such as free maintenance within a specified period after date of purchase. This places online retailers of electronic products as a disadvantageous point compared to the traditional stores. A number of manufacturers tend to favor traditional stores over online stores in order to offer technical assistance to shoppers on their products. For instance, since 2007, Dell Computers has been stocking their electronic products such as computers and desktops at various stores such as Wal-Mart (Dilworth 2007). At these stores, shoppers are likely to trust and feel comfortable dealing with Dell employees rather than just store attendants in the belief that they are more knowledgeable and have the capacity to convince shoppers to make purchases through their knowledge in the technical aspects of the product. Store operators on the other hand do not sit back and relax; they have gone to great lengths to make shopping an emotionally satisfying experience for their customers. NNaa observes that many people combine shopping trips with holiday trips especially to foreign countries. This explains why tour, travel and hospitality industries offer some products for sale as a travel and tour accessories. Online retailers of services are not well placed to offer such accessories to their customers. Ambience and location also play a very big role in advancing the marketability of in-store retailers. Traditional stores have been known to decorate and create very attractive ambiance in their stores to attract more customers. Music, color, flowers, mascots etc have shown to have a high impact on consumer decision. The Christmas holiday season is for example alight with lights, bells and Santa Claus bunnies or robots in major supermarkets and department stores. Although the e-tailers create the same mood in their websites, the effect of a decorated webpage is not the same as an actual store in triggering a customer into a spending mood. The problem for e-tailers is that they cannot display everything on webpage as compared to a department store that spreads thousands of square feet. While the e-tailer may try to create more space through more links, a web user will click it if he chooses to. Contrarily, shoppers at supermarkets cannot limit their vision and hence are more likely to note products on offer or just be persuaded by the ambience to shop. Nonetheless, e-tailers also bear some advantages over other traditional stores especially in customer care service and public relations. Customer feedbacks and queries are importance elements in the delivery of customer care which is imperative in any marketing initiative. Majority of online retailers seek to preempt the problems of queries through experience by having a frequently asked questions section (FAQs) which as aforementioned by Palmer (2002) is an important part of a good online retailing website. Therefore, online retailing is best suited for product that retailers suspect will require a lot of consultation from the consumer. Sahey (2008) however thinks that online retailing is best suited for small items which would be uneconomical for shoppers to go and fetch from supermarkets and stores. He argues that since delivery vans from e-tailers serve customers by region, then it is more economical and keeps the overall cost down. Spivak (2001) is of the opinion that online retailing is one of the best ways that retailers can work on their corporate image and improve on their customer service if they manage it well. Moment (2007) argues that “customer relations …has made customer service so much cheaper, faster and profitable.” Spivak (2001) specifically points out the issue of making deliveries of purchased product and states that on time delivery is part of customer care and after sale service (especially where the retailer pays for the freight charges). Incase of delayed delivery, e-tailers should have a valid answer but should never lie to the customers. He adds that the actions of one online retailer have the potential to affect the whole industry. Moment (2007) also advises e-tailers to have a FAQ section on their web site, automate everything on the website, provide real time support with VoIP, outsource customer service and use of social websites and blogs. According to Spivak (2001), many e-tailers are subject to making ethical blunders resulting into bad publicity. Honesty is a paramount issue in online trade (Palmer 2002) which supports the industry. Given that consumers give out their personal information, such as credit card number over the internet, e-tailers are charged with protecting such information from hackers. Consequently, etailers ensure that they secure their websites which are highly protected (Sahey, 2008). Additionally, e-tailers have been at the fore front in pressing for strict cyber laws that discourage cyber crime which is a big threat to e-commerce (Elliot & Speck 2005). Placing of orders or availing personal information through emails is no longer safe. To enhance internal communication within an organization and protect information from internet hackers, most firms prefer to use intranet which is a localized internet. The use of the internet has changed means of communication within an organization from fro example printed memos and notes to emails. The internet also facilitates video conferencing thereby eliminating the costs and inconveniences of face to face meetings especially in urgent matters. Again, the internet has made organizational information more accessible to investors and learners alike. Financial reports and media releases are made available on organizations website. Previously, interested parties would have to request for such information by mail from organization which was not always forth coming as it was viewed as an added expense to the organization. Such openness has also been beneficial to organizations themselves in terms of attracting investors for added capital through the stock exchange market. Firms also benefit in that they are able to handle their supply chain and distribution processes more effectively. Most importantly, the internet is an efficient advertising and marketing place. Conclusion Conventional supermarkets and department stores have their unique advantages that can not be replicated by online stores and vice versa. Therefore, it is upon individual players in each category of retailing to identify their strengths and key success factors and work on them for sustainability. While traditional stores are moving towards e-tailing, it is important to note that their traditional stores remain their top revenue earners. This underscores the fact that driving to the mall loading you cart with goods and trying on clothes, witnessing demonstrations of some products holds a sentimental value that online retailing does not possess. References Dilworth, D. (2007). Dell to sell computers in Wal-Mart and other retail stores, Retrieved on 04/21/2010 from http://www.dmnews.com/dell-to-sell-computers-in-wal-mart-and-other-retail-stores/article/95724/ Elliot, M. & Speck, P. S. (2005). Factors that affect attitude toward a retail web site Retrieved on 04/21/2010 from http://www.sahidnugroho.com/pdf/EM/em3_speck_elliot_2005.pdf Jones, J. (2010). Six Qualities of a good websit. Retrieved on 04/21/2010 from http://www.articleclick.com/Article/Six-Qualities-of-a-good-website/1015836 Moment, R. (2007). Seven tips for improving your internet customer service. Retrieved on 04/21/2010 from http://carolinanewswire.com/news/News.cgi?database=columns.db&command=viewone&id=369 Official eBay website http://www.ebay.com/ Palmer, J. (2002). Website usability, design and performance metrics. Journal of Information Systems Research 13(2) 151-167. Sahey, S. (2008) Critical Success Factors in Online Retail – An Application of Quality Function Deployment And Interpretive Structural Modeling. International Journal of Business and Information. 3(1); 144-163 Spivak, W. (2001). How Important Is Customer Service On the Internet?. Retrieved on 04/21/2010 from http://www.crn.com/it-channel/18836385;jsessionid=E2LJDDGLXKTMPQE1GHPSKH4ATMY32JVN Bibliography Amazon. Retrieved on 04/21/2010 from http://www.amazon.com/ Chaffey, D.. Internet marketing and E-business Expertise, Research & Articles. Retrieved on 04/21/2010 from http://www.davechaffey.com/ Dilworth, D. (2007). Dell to sell computers in Wal-Mart and other retail stores, Retrieved on 04/21/2010 from http://www.dmnews.com/dell-to-sell-computers-in-wal-mart-and-other-retail-stores/article/95724/ Elliot, M. & Speck, P. S. (2005). Factors that affect attitude toward a retail web site. Retrieved on 04/21/2010 from http://www.sahidnugroho.com/pdf/EM/em3_speck_elliot_2005.pdf Jones, J. (2010). Six Qualities of a good websit. Retrieved on 04/21/2010 from http://www.articleclick.com/Article/Six-Qualities-of-a-good-website/1015836 Last minute. Retrieved on 04/21/2010 from http://www.lastminute.com/ Moment, R. (2007). Seven tips for improving your internet customer service. Retrieved on 04/21/2010 from http://carolinanewswire.com/news/News.cgi?database=columns.db&command=viewone&id=369 Official eBay website http://www.ebay.com/ Palmer, J. (2002). Website usability, design and performance metrics. Journal of Information Systems Research 13(2) 151-167. Sahey, S. (2008) Critical Success Factors in Online Retail – An Application of Quality Function Deployment And Interpretive Structural Modeling. International Journal of Business and Information. 3(1); 144-163 Spivak, W. (2001). How Important Is Customer Service On the Internet?. Retrieved on 04/21/2010 from http://www.crn.com/it-channel/18836385;jsessionid=E2LJDDGLXKTMPQE1GHPSKH4ATMY32JVN Thomas Cook Retrieved on 04/21/2010 from http://www.thomascook.com/ Wal-Mart, Retrieved on 04/21/2010 from http://www.walmart.com/ Read More