The latest results from the IMRG Capgemini e-Retail Sales(2010) Index reveal that British shoppers spent a total of £4.8 billion online during September (year-on-year growth of 24%), equivalent to £791 per person and bucking the recent fall in sales on the high street. And let’s have a look at the past years. In 2008 over a billion users of theq internet ,the global online market estimate-￡250(IMRG,2009), and consumers in the UK spent ￡22.9 billion online in the first six months of 2009 and an overall of ￡50 billion was spent online in 2009,a figure expexted to increase by over 10% in 2010(IMRG,2010)
From the data,we can easily find out that the e-retailing industry is booming.
The new phenomenon appeal with this development:
1) the power of online buyers is increased since they have a wider choice and prices are likely to be forced down through increased customer knowledge and price transparency.(Potter,2010)
2) internet technology enables faster introduction of products and service.(Potter,2010)
3) the internet facilitates to move to the global market, increasing the number of competitors. (Potter,2010)
with these phenomenon, retailers are facing more threats. Chaffey(2007) analyzed the threats in 3 aspects:
·competitive threats
1) Threat of new e-commerce entrants.
For the traditional ‘ bricks and mortar’ companies this has been a common threat for retailers selling products.
2) Threat of new digital products.
3) Threat of new business models
This threat can also occur form established or new companies
·Sell-side threats
1) customer power and knowledge
2) Power of intermediaries
A significant down stream channel threat is the potential loss of partners of distributors if there is a channel conflict resulting from disintermediation.
· Buy-side threats
1) power of suppliers
It can be considered as an opportunity rather than a threat.
2) Power of intermediaries
“business-to-business exchanges are arguably less than those from sell-side intermediaries, but risks arising from using these services should be considered’(chaffey,2010)
With so many threats,e-retailing still develop very fast, in this case retailers should make more effects to offer special services to make the added value.Rajgopal(2000)made 5 dimensions to help retailers build up the competitive power.
1).Ease of use (EASE): it relates with the load speed, website design and also the navigation.
2)Customer confidence (TRUST): The novelty of the Internet creates pervasive uncertainty among buyers and sellers, which in turn, increases the importance of trust in mediating commercial transactions among them (Weigelt & Camerer, 1988).
3)Onsite Resources (SELECTION): This dimension of the ranking process measures the range of products and services that the ranked firm carries. presenting products in a attractive and hedonic way is significant, which could direct lead to the purchase action.
4)Relationship Services (REL): This dimension measures ask for the relationship with consumers and also ask for the customer loyalty. High demand in build up a community, with could spread information as well as communicate directly with consumers.
Cost (COST): The cost dimension rates the cost competitiveness of purchasing a typical basket of goods or services sold on a site. value.(Rajgopal,2000)
HIGH POTENTIAL ·Electronic catalogue ·E-commerce system ·Customer intelligence and CRM systems | STRATEGIC ·Procurement system ·Stock control system ·Distribution systems |
SUPPORT ·HR system ·Finance systems | KEY OPERATIONAL ·Production line systems |
LOW HIGHT
According the table above, I think retailers should pay more attention to the high potential area.
For electronic catalogue, they could think about navigation, product viewing, image and search classification.
For e-commerce system, e-promotion could be more discussed, like mail promotion, Advertising ect.
For customer intelligence and crm systems, social media could be wildly used to enticing communications and build up brand loyalty.
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