Dennis Caleb Owuor Madara (Essay Sample)

DENNIS CALEB OWUOR MADARA
RESEARCH PAPER
23 DECEMBER 2014
TOPIC:
BRICK-AND-MOTOR SHOPS WILL BE REPLACED BY ONLINE RETAILERS
Outline
The idea of shopping is an exciting activity. In our day-to-day course of life, we purchase commodities of different kinds, shapes, and sizes, to enable us meet our needs. For a long time, shopping was associated with going to the shop, identifying the right commodity at the affordable price, and purchasing it. The advent of technology in retail shopping was a latter-day development that began with the introduction of electronic cash registers in 1974. Three decades later, the emergence of internet began to reshape the idea of shopping (National Retail Federation, 4). In this paper, my objective is to show that the subject-matter stated hereinabove is ripe for serious consideration by brick-and-mortar retailers to embrace technology. To address the subject adequately, I have organized this paper into four sections. In the first part, the introduction, I set the tone of the paper and highlight the three key research questions that I have set out thereunder. These three questions attempt to highlight the situation of retail trade in the present day technology era, each of which is a part of the sections of this paper. I provide a conclusion as the final section in which I state that time is running out for brick-and-mortar retailers who have not embraced technology.
Introduction
The advent of technology has made the world a global village in which physical presence of persons and physical facilities play second fiddle to technology. By technology, the world has become a small place and so have business transactions. Retail trade, as has always been known, is also on the revolutionary path on account of technology. In this article, I examine the subject matter based on three questions. These questions are:
1 Are brick-and-mortar retail traders taking cognizance of the changes brought about by technology?
2 Has consumer buying habits changed in line with technological advancement?
3 Is it the end of retail trading?
1 Are Brick-and-Mortar Retail Traders Taking Cognizance of the Changes brought about by Technology?
At the center of technological advancement affecting retail business are factors such as convenience, speed, cost, efficiency among others. These factors have reinforced the consumer as the boss in decision-making. A survey done in UK on consumer online retail transactions revealed a number of some results. One, that "…the highest ranking reasons for online purchasing were convenience, better value for money and access to greater product range (Oates, 3)." The entertainment segment posted the highest online transactions "with 50 per cent of responders buying more online than off (Oates, 3)." However, brick-and-mortar retailers consider the ‘personal touch’ as a stand-out merit over online trade. Personal interaction of one-on-one between the trader and the consumer in a store setting creates a rapport between them. This therefore enables an understanding by the trader of the customer needs and specifications for products such as clothing. In the face of online purchasing, brick-and-mortar retail traders are taking up technology to personalize customer service to give shoppers a superior experience when shopping. These efforts are geared towards leveraging the technological evolution by making retail stores customer-friendly and emotionally engaging (Pricewaterhouse Coopers, 3). Accordingly, retailers must endeavor to give value to the consumer through personal experiences that will have lasting impressions on them. Therefore, "personal interaction offers opportunities to expand and enhance the strengths of the brick and mortar to attract customers into the store to encourage more purchases and build customer loyalty (KPMG, 3).”
2 Has Consumer buying Habits Changed in line with Technological Advancement?
Convenience is considered a major driving force for online shopping as it enables the consumer to shop 24/7 and be able to compare prices between the shops. In addition, it enables the consumer to avoid overcrowding associated with shopping during holiday seasons such as the present Christmas period (Nelson and Leon, 11). In the days gone by, the purchasing decision was markedly a private affair informed by manufacturer driven information. However, the technology age has ushered in a period in which consumers have a say on their preferred brands before buying. Debbie Oates has stated that this is more pronounced for group commodity purchases in which consumer reviews play a key role in the manufacture of their brands (4). That consumers engage the web before going to stores goes to show that technology has impacted retail trade not only in purchase, but also in identifying the right commodity. A research done by Forrester Research returned a finding that about 49.5 percent of all US retail sales are driven by the internet. Of this, about 8.4 percent pursued a full course of online trade. This is to say that the consumers search and bought the commodity online. The rest, about 41.3 percent of the sales, involved online search before purchasing the commodity in retail stores (National Retail Federation, 4-5). The online-search and-store-buying phenomenon has been described as one of the key activities of multichannel/Omni-channel shopping. Multichannel/Omni-channel retail shopping "means customers can shop for and purchase the same items across many different channels in a retail store, on their home or laptop computers (Motorola Solutions, 3)." The effect of multichannel shopping therefore is that online research of a commodity by consumers leads to purchases by other sales avenues. It remains to be seen how long brick-and-mortar retailers are prepared to match online retail trade.
3 Is it the end of Retail Trading?
The US’ National Retail Federation have predicted, in the US alone, an exponential e-commerce growth of $262 billion in 2013 to $371 billion by 2017 accounting for 10 percent of all retail trade. The impact of internet on consumer has been described by as three-fold thus:
Online shopping has opened up huge new choices for consumers, not just in terms of what they buy, but how they buy it. The internet has empowered the consumer in three ways: during the decision-making process leading to the purchase; at the actual moment of purchase; and throughout the product ownership period, including product delivery, maintenance, and return (Pricewaterhouse Coopers, 7).
Buoyed by a var...