How Online Shopping Affects Retailers

How Online Shopping Affects Retailers

Online shopping refers to a kind of electronic business that permits consumers to directly purchase services and commodities from the sellers through the internet. Online errands have gained enormous fame in the contemporary world. This is mainly because most of the people see it as more suitable and easier to purchase products while at home or even in the office compared to shifting from one shop to the other in pursuit of the products they need. Some of the most renowned stores found in India include; Flipkart, Amazon, Homeshop, Myntra, and Snapdeal. Retail, on the other hand, denotes the process of selling services and goods to consumers through various distribution channels. Different types of retail stores being affected by online shopping include; Discount stores, Departmental stores, Malls, and Supermarkets. Online shopping enables customers to choose a wide range of products in a single place; it is also offering an excellent mode of payment compared to retailers. Hence, it creates a significant impact on retailers.  The essay is going to explore the effect of online shops on retailers.

One of the significant factors that have facilitated the popularity of online errands to traditional retailers is the issues of convenience. According to Saha (2015), online shopping offers a considerable benefit concerning time and place. Online shopping saves customers from spending time in malls, especially in crowded malls. In the case of traditional retailers, customers have to travel to find the mortar shops, brick, and jostle; this makes the customers encounter various difficulties such as finding the parking spaces, paying for parking fees, and paying for the transportation fees (Frederick, 2015, p.63).

Offline retailers also have a specified opening and closing time. Hence, most of the customers tend to view it as a less convenient mode of shopping compared to the online errands. In the case of online errands, customers tend to purchase their products while they are at home or their office, thus avoiding various challenges encountered with the offline retailers such as transport fees and the parking fees (Kennedy and Coughlan, 2013, p.518). Online shopping does not have a specified closing or opening time; hence most of the consumers tend to opt online shopping compared to offline retailers. A shift of the customers from the retailers to online shopping tends to hurt the retailers. Consequently, retailers suffer from a limited number of consumers, thus lowering their profit margin.

According to An OFT Study (2007), suggested that most of the consumers view online shopping to be impressive compared to the retailers to its convenience. The study found that over twenty million consumers in the UK conducted online shopping in 2005. The study found out that 56% of the online shoppers spent $500 each per annum. The study also found out that a total of over sixty-two thousand (62, 000) businesses in the UK were retailing their commodities via the internet. The study concluded that most of the consumers tended to undertake online shopping since it is more convenient compared to offline shopping. Online shopping enabled the customers to have a wide range of products to choose from; they also had a chance to undertake the comparison of various products and choose the products with the least price (Shrivastava,2013, p.24). Hence most of the consumers tend to go for online shopping compared to offline/traditional retailing; this, in turn, hurts the traditional retailing system.

According to Zhou (2007), Shopping online plays a vital role in enhancing customer satisfaction. It permits the consumer to quickly gain knowledge regarding product availability, quality, prices, and product specifications. Hence consumers can make intelligent purchasing decisions compared to traditional shopping. Dobbs stated that most of the online shops, such as Amazon, tend to market themselves through the use of low prices compared to conventional retails (Soopramanien, 2015, p.76). Consequently, it attracts a massive amount of consumers; a massive shift of the customers to the online errands tends to hurt traditional retailers. Most of the conventional retailers state that consumers are constantly demanding for discounts on the goods they purchase to match the price being offered in the online shops (Soopramanien, 2015, p.76). Hence, this, in turn, hurts traditional retailers since it tends to lower their profit margin. Additionally, most of the traditional retailers are forced to reduce the price of the products and services to match the competition they face from online shopping. Consequently, they suffer from a lower profit margin.

In conclusion, online shopping tends to have a considerable impact on retailers. Most of the consumers view online shopping as a more convenient mode of shopping compared to traditional retailers. Thus, most of the customers shift from traditional retailers to online shopping in search of lower prices and convenience shopping mode. The lower price being offered by online shopping stores tend to hurt conventional retailers since they are forced to lower their price to match the price offered by online shopping platforms such as Amazon.  The existence of a variety of the products offered in the online shops tends to attract a vast amount of consumers. Consequently, this tends to have a significant impact on traditional retailers since they are forced to offer a diversity of the products provided on the internet to attract a considerable amount of consumers.

 

 

 

Work Cited

Frederick, Dr. Hannah. “Online Shopping – a New Shopping Trend (an Opinion Study).” Indian Journal of Applied Research, vol. 3, no. 11, 1 Oct. 2015, pp. 60–62, 10.15373/2249555x/nov2013/18.

Kennedy, Aileen, and Joseph Coughlan. “Online Shopping Portals: An Option for Traditional Retailers?” International Journal of Retail & Distribution Management, vol. 34, no. 7, July 2013, pp. 516–528, 10.1108/09590550610673590. Accessed 7 Mar. 2020.

Saha, Amit. “A study on the impact of online shopping on retail trade business.” IOSR Journal of Business and Management 2.4 (2015): 74-78.

Shrivastava, Dr. Kavita. “An Approach of Shopping in the 21st Century: Online Shopping.” The SIJ Transactions on Computer Science Engineering & Its Applications (CSEA), vol. 01, no. 04, 9 Oct. 2013, pp. 23–25, 10.9756/sijcsea/v1i4/0104560401. Accessed 19 Sept. 2019.

Soopramanien, Didier GR, and Alastair Robertson. “Adoption and usage of online shopping: An empirical analysis of the characteristics of “buyers,” browsers,” and “non-internet shoppers.” Journal of Retailing and Consumer Services 14.1 (2015): 73-82.

Zhou, Lina, Liwei Dai, and Dongsong Zhang. “Online shopping acceptance model-A critical survey of consumer factors in online shopping.” Journal of Electronic commerce research 8.1 (2007): 2-4