The Increasing Popularity of E-Commerce and the Effectiveness of Online Retail

Topics: Electronic commerce, Retailing, Online shopping Pages: 7 (2271 words) Published: April 5, 2011
The Increasing popularity of E-Commerce and the effectiveness of online retail

The increased usage and awareness of E-Commerce and online retail has greatly affected the way in which products are bought and sold in today’s society. For this assignment I will be researching the effectiveness and efficiency of offline and online retail environments of clothing products. I will be using Porter’s Value Chain Analysis to evaluate how value is created in e-business and I will then suggest significant improvements which I feel can lead to increased consumer use of online purchasing.

There are many differences between the online retail environment of clothing and offline retail environment clothing. The main differences between the two can be seen through their placement; presentation; security; merchandise and audience size; payment methods; and fulfilment. There are many advantages and disadvantages of both environments. Regarding placement, offline retail usually involves stores situated on the high street, towns, shopping malls, market stalls, and even big supermarkets such as Tesco. This environment is usually referred to as “Bricks and Mortar”. It involves a physical presence of the products and the physical presence of an agent or a seller. It involves face-to-face interaction, which a lot more people trust in comparison with buying clothes online. Online clothing retail involves customers visiting websites of clothing stores or online auction sites such as E-bay and buying and paying for the items over the internet. The clothes are then delivered to the customers or in some cases can be collected at a certain location by the customer. With regards to security, shopping for clothes in-store eliminates the risk of fraudulent activity that sometimes occurs when shopping online such as; goods not physically being the same as what they have been described as online; clothes brands being fake; payment scams; or in some cases the products not even existing. This risk is eliminated when shopping offline for clothes as the customer can view the clothes, they are tangible objects thus they can get the best idea of the quality of their potential purchases. Another advantage for in-store clothes shopping is that people can try on the clothes to see what sizes and styles suit and fit them. This decreases the need for the hassle involved in returning or getting clothes refunded. People also feel more confident paying for their products in-store with cash or a credit card than they would online as there can be security risks and fraud involved in online payments. Overall people still enjoy the experience of going shopping for clothes, people go clothes shopping offline because they enjoy the “retail therapy” they enjoy the experience of window shopping, and being able to evaluate a product completely before they make a decision and buy it. The main disadvantage some people may see with offline clothes shopping is the opening hours of stores. People who have 9-5 jobs usually miss out on the shopping hours during the week and can often be too busy or tired at the weekend to start manually shopping for clothes. They therefore may see the online option as more convenient and appropriate to the lifestyle they lead. Another disadvantage of shopping in-store only is that they often do not have as broad of a clothing range and are not updated with new ranges and styles as often or as quickly as online stores. Bay Trading, a ladies fashion clothing company, have only recently set up their online store and already have claimed that new styles have often been updated to their website before they have even hit the high street.- The offline and online retail environments each offer two completely different shopping experiences to the customer. Online shopping is becoming increasingly popular and with some work on the security issues could almost make it as popular as manual “retail therapy”.

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