Essay Doctorate 15,906 words

The Effects of Ecommerce on Business

Last reviewed: September 27, 2015 ~80 min read

¶ … E-Commerce on Retail Trade 20/09/2015

E-commerce has gone on to alter the way retail was done for centuries. Many facets of retail trade have been changed. The influence of e-commerce is undeniable and unreversable especially on retail trade. However there is much scope for further advancement of e-commerce into the retail industry. In this paper we will look into the aspects of e-commerce that have influenced retail trade. We will also look into the factors of e-commerce that affect the cost and productivity in retail industry and the impact that e-commerce has left and the factors of e-commerce that impact the cost structure in the retail industry.

The survey had closed and open ended questions for the retailers and the questionnaire were self-filling where the respondents answered the question themselves. The Likert scale was used that allowed to uncover degrees of opinion on the topic and had ranges on both sides of a mean. Questionnaires are designed in the written format with a set of questions that have possible answers, sometimes in multiple choice formats, for the purpose of collecting data from the interviewees. For expressing trends in answers, for example through percentage representation of a similar type of answer among the total respondents, the statistical data then collected were transformed into other forms.

The research found out that there has been transformation of the most basic of business transactions -- buying and selling which has also included retail trade. Pricing, product availability, transportation patterns and consumer behavior in retail trade have been affected and continuous to undergo changes and shifts on a continuous basis due to the influence of e-commerce. Aided by e-commerce, small retail companies are now able to access various markets and the customers therein without being physically present in the markets and without investing virtually nothing on promotional and advertisement cists in the traditional media of the foreign markets.

E-commerce has enhanced the scope for streamlining and automation of production lines and systems. The cost of business operations as well as the costs of products is lowered by e-commerce. The cost structure of online retail stores is affected by the flow of digital information to and from the customers, the costs for searching for products and services on the internet and the changes in the dynamics on the supply-side.

Contents

Executive Summary 2

Chapter 1: Introduction 4

1.1: Introduction 4

1.1.2: Economic drivers of e-commerce 6

1.1.3: E-commerce and Retail 8

1.2: Purpose of the Study 9

1.3: Significance of the Study 9

1.4: The Research question 10

1.5: Aims and Objectives Statements to answer the research questions 10

1.6: Conclusion 10

Chapter 2: Literature Review 11

2.1: Introduction 11

2.2: The Emergence and Growth of Electronic Commerce 12

2.3: Globalization and E-Commerce 14

2.3 E-commerce & Retail Trade 16

2.4: The Global Retail e-Commerce Scenario 18

2.5: E-commerce and Changing Retail Business Strategy 18

2.6: E-commerce and Cost structure of Retail Industry 20

2.7: Conclusion 24

Chapter 3: Research Methodology 26

3.1: Introduction 26

3.2: Approaches to Methodology 27

3.3: Outline of research Method 28

3.4: Data collection 29

3.5: Sample selection and Size 30

3.6: Questionnaire Design 31

3.7: Obstacles in Research 31

3.8: Data Analysis 32

3.9: Ethical Considerations in Research 32

3.10: Limitations of the study 33

3.11: Conclusion 33

Chapter 4: Results and Analysis 34

4.1: Introduction 34

4.3: Conclusion 47

Chapter 5: Discussions 48

5.1: Introduction 48

5.2: Deduction from Secondary Data Sources 48

5.3: Deduction from Primary Data Source 52

5.4: Conclusion 54

Chapter 5: Conclusions and Recommendations 55

5.1: Conclusions 55

5.2: Future Research Scope 57

References 58

Appendix A 63

Figure 1 63

Figure 2 64

Figure 3 65

Appendix B 66

Chapter 1: Introduction

1.1: Introduction

Some economic activities and the surrounding social environment can be changed by the introduction of electronic commerce or e-commerce. This is considered to be the new way of conducting business. Even though this form of conducting business is relatively very new compared to the centuries old additional business processes and methods, e-commerce has already made a significant impact on the way business is done and has altered economic activities and the social environment.

E-commerce has had the most impact on large sectors like communications, finance and retail trade which altogether comprise about 30 per cent of global Gross Domestic Product (GDP). Econo0mic activities in areas like education, health and the government sector, that account for nearly 20 per cent of the global GDP, are also affected by e-commerce (Rasmussen, n.d.).

E-commerce has certainly left an undeniable impact on the more obvious business process like customized products and the elimination of middlemen as well as on the less visible, but potentially more pervasive, routine business process like ordering office supplies, paying bills and estimating demand.

The evolution of e-commerce has been aided by a host of regulatory reforms and rapid technological innovation to the state it is at present. The liberalization of the telecommunications sector and the innovations that have helped in very significant measures the expansion of the volume and capacity of communications such as optic fibres, digital subscriber line technologies and satellites have helped the advent and popularization of e-commerce. The introduction of the internet through the World Wide Web is seen as the first step in the evolution of e-commerce (McCloskey and Leppel, 2010).

The advancements in telecommunication and the internet have eliminated the barrier of distance in business and as a result buying and selling have become much easier for both buyers and sellers. In the initial days of the advent of e-commerce, it was perceived to be the province of the large firms and was mostly custom-made, complex and expensive. However in the age of rapid technological advancement and the ever reducing costs of technology and the internet, virtually every firm can reach millions of consumers world-wide with just a few thousand dollars which can enable any firm to become a merchant (Gasson, 2003).

While in the older days, retail trade and business was primarily the face-to-face engagement of the seller and the buyer, e-commerce has enabled the trade to undergo a sea change where involve vast numbers of individuals who may never physically meet. E-commerce, though conducted through a complex set of operations and involves complex web-based commercial processes, for the end user -- the buyer and the seller, the combined process is as simple as buying something over the counter. In this sense it can be said that the internet has converted a once expensive and out of reach of the common traders, e-commerce into affordable, usable and easily available alternative means of conducting business in a way similar to what Henry Ford had done in the automobile industry (Tian, Zhang and Guan, 2013).

1.1.2: Economic drivers of e-commerce

With the concept and emergence of e-commerce about a decade ago and its subsequent rapid spread, the impacts of internet-based business conduction model have left some very important and critical impact on established and traditional business models.

The Effect on the Marketplace

In the few years that e-commerce has existed, it has significantly impacted and changed the marketplace and the way business is conducted. E-commerce has managed to replace the traditional intermediary functions and has made possible the development of new products and markets resulting from the elimination of physical market boundaries and the development of new and far closer relationships between the seller and the buyer has been created by e-commerce (Motiwalla and Khan, 2003). E-commerce has also changed the organization of work by the creation of new channels of knowledge diffusion and has opened up human interactivity in the workplace. The non-physical nature of e-commerce has created a more flexible and adaptive framework for business conduct and has necessitated new functions and skills for workers (Allen, Clark and Houde, n.d.).

The catalytic role

The new era of business conduct has been defined by the reform of regulations, the establishment of electronic links between businesses (EDI), the globalization of the world's economic activities and the demand for higher-skilled workers. E-commerce itself being very technical in nature, requiring new skills to be operated and eliminating the physical boundaries of markets, have hastened the wide ranging changes that were brought in with globalization. Many sectoral changes and innovations like electronic banking, direct booking of travel and one-to-one marketing have also been hastened by the advent and popularization of e-commerce (Ramcharran, 2013).

The Impact on Interactivity

The interactivity in the economy has been vastly increased by e-commerce over the internet. While these linkages have been able to bring the buyer and the seller together, it has also enabled the household to be included in the fold and has reached out to the remotest corners of the world. The development and ever increasing popularity of the smart phone and the availability of cheap internet has enabled a shift from the relatively expensive personal computers to cheap and easy-to-use telephones and other devices.

These elements aided by the internet have enabled people to effectively and more easily communicate between themselves and e-commerce has only enriched the level of communication between buyer and seller and between individuals (Muller-Lankenau, Wehmeyer and Klein, 2006).

Openness of Electronic Commerce

E-commerce is not a single entity that has remained confined in itself. It has necessitated and hastened the development of the huge industry that has evolved to support it due to the non-proprietary standards and open nature of widespread adoption of the internet as a platform for business. New standards are opened up due to economic power that follows a firm joining the large network developed by e-commerce and the internet. As a business conduct model, e-commerce has thrived on open platforms as many of the most successful e-commerce ventures have thrived through partnerships with millions of sellers by granting business partners status and consumers wide spread access to the inner workings, databases and personnel (Wang et al., 2005).

This aspect of e-commerce has created a shift in the role of consumers as they are now considered as partners in product design and creation process of business.

1.1.3: E-commerce and Retail

The exchange of goods or services against money happening in a store or a transaction between two or more people is known as commerce. While this had been the business model over centuries, things changed after the advent of the internet and since business began to be conducted over the net. Since the 1990s, the way two or more people conduct business and transactions take place changed forever. A new form of trading and commerce -- e-commerce, emerged and has almost taken over the business world in a short while.

E-commerce has had the greatest impact on retail trade. E-commerce has helped people to conduct business and make transactions without having to leave the home. The face of retail business was changed by e-commerce with presenting the ability to the customers to make a purchase solely online and allowing sellers conducting business without having to open a brick and mortar store.

Retail trade has also broken the constraints of place and time. Sellers can reach millions of customers worldwide -- perhaps a million times more than was earlier possible through a brick and mortar store and through every mode of traditional advertising. The retail sellers are able to present more brands and offer more virtual products through e-commerce than ever possible. The costs of business have reduced for retailers as well. With limited overhead costs of establishing and running a brick and mortar store, the retailers are also able to offer competitive pricing and make larger profits.

For consumers, e-commerce has changed the way they conduct retail shopping. E-commerce has grated customers the luxury and ease of shopping from their homes. With the increasing popularity of smart phones and related mobile apps, consumers can make a host of purchases even while they are on transit or busy with some other work (Cao, 2014).

The impact of e-commerce has also left a mark on the job market. The new form of business conduction has necessitated the creation of new positions in areas such as data entry, website creation and maintenance, credit card processing, internet security and inventory management among the many.

While specialized e-commerce websites and very large global e-retailing companies dominate the retail e-commerce market, large, small and medium firms are with brick and mortar stores also join the e-commerce bandwagon by opening up an online platform for business in addition to the brick and mortar stores.

Retail services and business and other things that drive the economy have changed due to electronic commerce. The way companies sell and market their products would be further changed by e-commerce as well as significantly impact the way consumers choose to make purchases in the many years to come.

1.2: Purpose of the Study

The study is aimed to gain insight into the impact that e-commerce has created in retail trade and retail business. The study will also look into the aspect of what are the factors of e-commerce that impact business cost and productivity for retail traders as well how e-commerce affects the cost structure of retail business through the reduction of costs of business conduction. The study would also attempt to identify how the relation of retailers and value added service providers is affected by the reduced costs of business conduction through e-commerce and the way this modern form of business reduces cost of customer and after sale services

1.3: Significance of the Study

The way people conduct business has changed by e-commerce. The new form of business has changed the concept of markets and eliminated the physical barriers. E-commerce has changed the way retail trading is done by allowing more products and variety to consumers. The reduced costs of operation and the increased markets have also allowed retailers to bid for competitive pricing. This has resulted in a change in the cost structure of retailers.

The consumers too have been impacted by --ecommerce. Ease of purchase, wider variety and competitive pricing have also put the consumers in a position of advantage. In short, e-commerce has changed many of the aspects of traditional business and this has increased the importance of understanding how these impacts have happened and continue to happen (Doherty and Ellis-Chadwick, 2006).

The study assumes importance as it would identify ways and means in which e-commerce would be able to further affect retail trade and empower both buyers and sellers.

1.4: The Research question

The study would attempt to get answers to the following research questions:

What factors of e-commerce that impact business cost and productivity for retail traders?

How reduced costs of business conduction through e-commerce affect the cost structure for retail traders?

How e-commerce reduces cost of customer and after sale services?

1.5: Aims and Objectives Statements to answer the research questions

The aims and objectives of the research are:

To identify the factors of e-commerce that impact business cost and productivity for retail traders

To understand the impact of reduced costs of business by adoption of e-commerce on the cost structure for retail traders

To understand the way reduced costs of business through e-commerce impacts the relation between retailers and value added service providers

To identify how e-commerce reduces cost of customer and after sale services.

1.6: Conclusion

The section stated above details the reasons and the scope of the study and investigations into the impact of e-commerce in retail trade. The next section would deal extensively with the studies that have already been done on this aspect and those that are present in the public domain. Through extensive and critical review of the related literature the next chapter would bring out facts and understanding about the impact of e-commerce on retail trade.

Chapter 2: Literature Review

2.1: Introduction

This chapter would deal with the critical analysis of the research and published work that has been done in regards to the issue of the impact of e-commerce on retail trade, specifically with respect to reduction of costs and increasing of efficiency and the emergence of a new cost structure for the retail industry (Demirer and Sahin, 2013). The chapter will go through published research works, books written on the subject, articles published in credible magazines and newspapers, journals, government reports, reports by various organization, official company reports and data available in the public domain, published papers by colleges and universities websites and e-journals. Such data was accessed either form written materials or from the internet or both to the greatest possible. The nature of the collection of data would be critical as the data collected would take into account all possible views on the topic and try and include all the relevant issues related to the topic of study. Special emphasis was given to selection of data sources based on a framework that stressed on elements like authority, seminal, currency and relevance. Authority element entails the using of such data that are published by authorized agencies like reputed universities, books published by reputed publishers and journals of well-known organization. Seminal element means such work that has improved research on the topic in a significant manner (Mohd Roslin and Rosnan, 2012). Currency refers to the works published in recent times. Secondary data for this research was collected from published works that were not more than 6 years old. Relevance elements means the data that was collected was topical and useful for the research and was collected from sources that were linked to the topic.

2.2: The Emergence and Growth of Electronic Commerce

The practice, timing, and technology of conducting business in B2C segment has been altered by e-commerce and major areas of business like transportation patterns to consumer behavior have been affected. The most basic of the business transactions -- buying and selling are undergoing transformations due to the impact of development of electronic commerce and the impact is significant in the manner in which companies and firms, both retail and large, have had to make changes to their business process and functions.

The impact of e-commerce can be noted in the B2C business format -- typical of a retail trade, where pricing, product availability, transportation patterns and consumer behavior have been affected and continuous to undergo changes and shifts on a continuous basis. This trend is evident both in the developed and the developing economies and in almost all the markets where there is an abundance of internet accessing devices such as computers and laptops, mobiles and tablets with a ready availability of the internet (Brown and Goolsbee, 2002).

The impact of e-commerce on retail trade can be gauged from the volume, in terms of money, of global e-commerce business that is conducted and the projected volume of trade that is expected in the next few years. According to eMarketer, a research firm that researches into internet business and e-commerce across the globe and various regions, the global B2C sale volume is expected to grow at 17.7% to reach a total volume worth U.S.$1.771 trillion in 2015. The volume of sale online and through the various e-commerce channels in retail is expected to grow further and reach around $2.3 trillion by 2017 (Emarketer.com, 2015).

The driver for the rapid growth of both B2B and B2C trade on ecommerce platforms has been accorded to the rapid expansion of the internet and use of expanding use of mobile devices in the emerging markets coupled with the sold goods reaching faster thanks to advanced shipment methods and the advanced and secured online payment methods that have been developed along with the development of e-commerce.

A closer look at the emerging trends in the growth of e-commerce, according to Bagley and Dauchy, (2008), even as regions and advanced markets like the North America, including the U.S. and the Canada markets, are growing in terms of sale through e-commerce, the growth is not as much as the growth in sales in terms of volume and money in the emerging markets like in the Asia-Pacific region.

Brazil, Russia, India and China -- the BRIC countries are the leaders in terms of the growth rate of e-commerce, according to Ratnasingam, (2008), where China alone accounts for a huge section of the growth and is slated to surpass the U.S. in terms of e-commerce sale in 2015.

E-commerce has given a fillip to cross border trade where products that are not available in a particular market or are in short supply are provided for by an adjoining market. Here the cross border trade between the U.S. and Canada is a classic example where thousands of products are shipped to Canada from the U.S. This outreach of companies and firms as well as retailer into new markets would not have been possible but for e-commerce (Zappala? and Gray, 2006).

E-commerce has also made it possible for firms and companies smaller in size to be able to get access to even greater global markets and cater to the market demands which includes the growth and development of e-commerce in the developing markets.

According to a study by eMarketer, the agency found out that while 96% of the respondents who participated in the study had made an online purchase, more than 40% of them had purchased some goods r the other from another country (Emarketer.com, 2015).

The impact of e-commerce can be gauged form the fact that this new form of business has virtually diminished and eliminated all the hindrances and barriers to cross border trade and has almost mad the world a single global market.

Canada, the UK and Australia are the biggest U.S. cross-border growth engines where global retailers based in the U.S. are selling their products. However the BRIC countries and the Asia-Pacific region present significant chances for firms and companies to utilize e-commerce to do good business in these markets.

2.3: Globalization and E-Commerce

A global economy would refer to the combined output of all the economies of the world and is generally used in reference to globalization. Globalization is defined as the worldwide exchange of goods and services irrespective of the national boundaries. Globalization has become a common term after the 1980s and has become very popular after the 1990s. The four basic principles of globalization, as identified by the International Monetary Fund, are trade and transactions of goods and services, movements of investments and capital for business from one country to another, migration and movement of people and workforce between countries and the dissemination of knowledge ( Moschella and Weaver, 2013). Activities like business and work, economics and natural environment are affected by globalization and consequently these forces also have an effect on globalization.

Globalization has also given rise to international trade and business majorly linked to economic activities. When economic and business activities like private sales, investments, logistics, and transportation happens between two or more regions or countries that transcends the political boundaries, it is termed an international trade (Spero and Hart, 2010).

According to Mehrotra, (2007), the internationalization of business is the dream and the aspiration for every firm. While in the traditional methods of trade and commerce, internationalization of business was very tough with loads of rules and regulations to follow in order to gain permission to enter new markets and access the customer base in foreign countries (Mehrotra, 2007).

However globalization has presented a chance to virtually every firm to instantly go international and spread their business all across the globe. Apart from the relaxation in the rules and regulations in business and trade by many countries in the last few decades that has fostered and given rise to international trade and made globalization of business a possibility, the rapid spread of e-commerce has enabled companies and firms to go international and even global without much hindrances or the traditional problems of political boundaries between countries and markets (Brynjolfsson and Smith, 2000).

Companies can now reach out to innumerable customers all across the world and in varied markets with a variety of products without being physically present in the markets and without investing virtually nothing on promotional and advertisement cists in the traditional media of the new markets. This has not only impacted the market reach of companies but has also affected the bottom line of companies and firms and reduced costs and increased profits.

Recent researches have shown that the average order value of products that are sold across borders is U.S.$120 across all types of goods which indicate that there is a lot of demand for lower value goods. This is especially true for international markets that are relatively close by -- for examples sending of goods from the U.S. to Canada, compared to markets at greater distances as the costs of shipping is relatively cheap.

Other factors that have let e-commerce leave an impact on globalization is the low duty threshold for foreign goods in some markets and the existence of bilateral trade agreements and free trade zones -- some of the basic reasons for the creation of global markets. For example, the duty threshold for foreign goods to enter the Australian market is of $1,000 Aussie dollars which is low compared so the tariffs of in place in some other countries and hence firms and retailers can make use of e-commerce to ship products from their countries to Australia. This low threshold often makes it cheaper and more practical to get goods across borders even with the prices of shipment taken into account (Clay et al., 2002).

Firms and companies engaging in international trading through e-commerce however would have to keep in mind a number of factors that include:

Shipping costs and tracking visibility

Clarity about the duties and taxes applicable in cross-border fees at the time of purchase

Delivery of products within a reasonable period of time

Security of the data that is provided by off-shore customers as it is among the top concerns within a number of markets (Morton, Zettelmeyer and Silva-Risso, 2001).

2.3 E-commerce & Retail Trade

An online survey conducted by Accenture in November 2013 found that 78% of respondents reported "webrooming," before heading to a store to make a purchase. This indicates the impact of e-commerce in retail trading and business.

The report also suggests that in 2015, despite a 15.5% growth in the digital spending on goods and services excluding travel -- with total value reaching $304.1 billion in the U.S. in 2015 compared to 2013, the percentage of electronic retail trade compared to total offline U.S. retail sales is miniscule -- just 6% (Emarketer.com, 2015). The report further predicts that the percentage of e-retail sales as a percentage of the total retail sale would reach 9% after consecutive years of double digit growth.

This indicates that while e-commerce has had and continuous to exert a significant impact on retail trade, there is huge scope for improvement. The growth and the differences in growth in e-retail in the U.S. are shown in figure 1 in the Appendix. The figure indicates that even is the growth in total retail sales hovers around the 4% mark throughout the forecast period the situation would remain the same.

However experts and researchers like C. Norris, (2010), the sale figures are not indicative of the actual influence and impact of e-commerce on the retail trading industry. Experts are of the opinion that even if the consumers do not make purchases online all the time, a significant number of them surf through digital channels on a constant basis. They are of the view that though digital surfing and shopping do not always lead to an immediate conversion into purchase, the influence of the activity of surfing and digital shopping is exhibited throughout the process of purchase (Norris, 2010). Therefore e-commerce impacts by exerting an influence on how consumers shop and make purchases for retail products apart from the increasing trends of online purchase.

E-commerce has also impacted the cost of products. It is common knowledge that many of the consumer goods that are available online and on the e-commerce websites are significantly low priced compared to the same products in the brick and mortar retail stores. There are several factors that affect the final price of products in e-commerce.

The first factor is the reduction in the cost of business processes and business running. A typical offline retail store would have to make regular expenses towards establishment and maintenance of the brick and mortar structure that makes up the retail outlet. There are a number of overhead costs that also have to be incurred on a regular basis including salaries of employees, electricity and promotions and advertisements in traditional advertising media. These are costs that do not have to be incurred when doing business online or through e-commerce models (Gaukler, 2011).

Moreover, a manufacturer can directly sale its products through e-commerce and hence the existence of the middlemen are eliminated. This also reduces the cost of a product significantly when selling through the e-commerce platforms.

This lowering of prices allows retailers using e-commerce to engage in competitive pricing which ultimately is beneficial to the customer.

2.4: The Global Retail e-Commerce Scenario

The spread of e-commerce has not been universal. While some of the developed economies have traditionally been strong contenders for the top spot in the global e-commerce scenario due to their size and strength of their economies, many smaller yet promising economies are emerging that are slated to exhibit significant growth in e-commerce in the future years.

In 2015, developed economies like the U.S., China and the UK have shown dominance in the retail e-commerce industry while smaller economies like Mexico are emerging the countries to look out for as far as retail e-commerce is concerned. (Refer Figure 2 in Appendix)

Across the globe the retail sale through e-commerce has grown by more than 20% in 2014 to touch the figure of $840 billion. This growth was fostered by the expansion of online retails entering new market through the e-commerce channel. The reflection of the popularity of e-commerce is evident from the skyrocketing values that e-commerce companies have managed to gain in the various stock markets. The highlight of the above phenomena was the record setting $25 billion initial public offering by e-commerce giant Alibaba in September of 2014 which raised the value of the Chinese company to $170 billion.

2.5: E-commerce and Changing Retail Business Strategy

The growth of the retail e-commerce industry shows some significant changes in the business strategy that have been adopted by retailers engaging in e-commerce.

Internationalization:

Even without physical footprints, large companies engaged in e-retailing have managed to find possibilities of growth in new international markets. The opportunity has been created as more and more shoppers are buying online and are often suing their mobiles to make the purchases. The payment systems in online trading and retail e-commerce have become more secure and have installed confidence in the minds of the consumer as well as the retailer.

Products from international brands reach customers the fastest through e-commerce in some fast growing and emerging markets. With large shipping companies engaging in specialized shipment for retail traders and the retail industry, the state of international shipping and fulfillment is also developing. Some of the shipping companies take care of a multiple functions like currency conversions, customs and return issues which have made delivery of foreign products much easier (Luo, Hongxin Zhao and Du, 2005).

These factors have encouraged several brick and mortar retailers to enter the e-commerce bandwagon. An example is the upscale houseware retailer Williams-Sonoma that has embraced e-commerce to spread to more than 100 countries with 44% of their sale coming from the e-commerce platform. UK-based clothing company, Mars and Spencer is another example of a company investing $1.5 billion in logistics, IT and systems in order to embrace e-commerce.

The Rise of IPOs:

The impact of e-commerce in retail trade has been marked by the number of retail e-commerce companies opting to float IPOs in the various stock exchanges of the word (Atkearney.com, 2015). The case of Alibaba's IPO floating has already been mentioned. Other notable IPO floations by e-retailers include the U.S. based Zulily which floated IPO in 2013 worth $2.6 billion and Chinese e-retailer JD.com that floated an IPO in May 2014. Among the European companies, Zalando floated an IPO in October of 2014 worth $6.7 billion and Cnova which floated IPO in November 2014 worth $200 million, were the notable ones.

The Continuously Connected Consumer:

E-commerce and other forms of the internet, including the social websites, have given the retailers to stay connected with its customers and probable consumers almost all the time no matter where they are placed. Internet surfing has become a habit especially among the youth with the advent of the internet enabled smart phones which has eliminated the necessity of sticking to a desk top or a lap top to access the internet.

Studies and surveys have shown that at least 40% to 50% of the youth who have a smart phone and are connected to the internet access the net at least once every hour and hence they are said to be continuously connected to the internet. Therefore retail companies also have the chance to stay continuously connected to their customers. This has resulted in increased purchase of retail products through e-commerce. The most commonly purchased products through retail e-commerce include electronics, fashion, services, books and tickets. (Refer to Figure 3 in Appendix)

The Omnichannel Need:

While e-retailing is gaining popularity, we have already seen that just 65 of all retail purchases in the U.S. are made through-commerce. This indicates that most people still prefer the brick and mortar stores for retail purchases as they have a look and feel of the products before they buy which is not possible in e-commerce. However the importance and the influence of e-commerce platforms cannot be over looked. Retailers are therefore now looking at multiple channels to market and sell their products -- through the brick and mortar stores as well as through e-commerce. Omnichannel strategies seek to maximize customer satisfaction and profitability by seamlessly, efficiently and securely enhancing customer experience from bricks to clicks (Piotrowicz and Cuthbertson, 2014).

2.6: E-commerce and Cost structure of Retail Industry

Since the last decade, there has been rapid development of internet and consequently e-commerce. Since it is an established fact that in terms of both its sale channel and costs, e-commerce is different from traditional retailers, hence it is important to understand and study the completion between traditional retailers and e-commerce retailers, especially through a framework that defines the way costs are structured in both the formats and how e-commerce has managed to affect the cost structure in retail trading for those who have either completely shifted to e-commerce or for those who have adopted a hybrid structure involving both e-commerce and traditional retail. This section will also look into earlier studies that have been conducted in this aspect (Emre, Hortacsu and Syverson, n.d.).

During the initial years of the advent of e-commerce, studies were conducted by both empirical research approach and by employing a theoretical framework analysis. By focusing on the comparison of price of the same products between traditional and e-commerce, research conducted during the initial period of e-commerce era yielded conflicting results.

For example, in 1996- and 1997, J.P. Bailey compared the prices for books, CDs and software products that were sold through the conventional offline model and on the internet channels. Bailey noted that the prices in the online channels were higher compared to offline models (Guo, 2013). In another study however, F. Ancarani and S. Venkatesh found lower prices for books and CDs that were sold online in Italy were 4% to 6% lower than those sold through traditional retail (Pan, Ratchford and Shankar, n.d.).

On the other hand Clay et al. (2002) did not find any significant differences in the two channels for books and noted that the prices in both the online and physical books stores were the same during the study period of the week of April 19, 1999 (Clay et al., 2002).

This prompted the researchers to look to establish a model that would be able to explain the conflicting results exists. To this end a strategic analysis of the competition that existed between the traditional store and the e-commerce formats were considered and focus was pin pointed on the role of information and market coverage by Balasubramanian (Balasubramanian, 1998). Other researches by Bakos (Bakos, 1997) and Harrington (Harrington, 2001) used a circular city model in order to analyze the relation between search costs and product price in e-markets.

Researchers have shown that when e-commerce spreads in an industry, it not only the equilibrium prices that are affected. Due to the significant reduction in the costs for consumer search that e-commerce can bring, market shares also undergo changes and hence the actual price advantage of any firm should be calculated by multiplying in terms of market-share gains.

Depending on the situation of a firm with respect to a cost advantage or disadvantage relative to their competitors, there can be differential impacts on firms by higher cross-price elasticities. It is also assumed in the studies that some firm might be forced to exit the market due to the market changes due to drastic market share change.

However new entry in to the market can be possible due to the market expansion brought in by the lower search costs induced by electronic commerce. Since e-commerce raises the return to being efficient -- gaining the capability to produce high-quality goods, there are chances that the new entrants would differ on average from industry incumbents. Therefore in terms of markets and market costs, the entry and exit of retail firms are also impacted by e-commerce.

The success of e-commerce also depends on the use that consumers make of the facility. In markets such as retail markets, where there are firms that operate either through the traditional brick and mortar system or through e-commerce or both, the relative attractiveness of the options available to the consumers is important. In general the consumers would decide on the use of one of the above mentioned retail selling formats depending on the availability of the option as well as the cost of the choice. Research finds that consumers are inclined to adopt the less costly one.

The use of e-commerce by consumers can be affected by the offline price and the local availability of offline outlets (Prince, 2007). The market structure sometimes decides whether firms are able to engage in this type of behavior. Research has also pointed out that the level of local competition in the market also plays a role in the ability of a firm to adopt efficient cost structures and deliver quality.

The cost structure of a retail company is impacted directly by e-commerce. According to Lambrecht, Seim and Tucker, (2011), e-commerce reduces the marked up costs for an item that is sold on the internet. This reduction in the number of middle trades reduces the costs of online products in a significant manner when compared to traditional retail stores (Lambrecht, Seim and Tucker, 2011).

E-commerce also helps direct retailers or manufacturers in making hefty profits by selling their products at relatively reduced costs compared to traditional retail outlets as they sell directly from the factory without any necessity of the middle men. Moreover since the e-commerce stores are made out of bits instead of stone the recurring costs of long networks of physical stores is also eliminated.

The cost structure of online retail stores is affected by:

Digital Information:

The data or the information that is analytical in nature and that is available to both consumers and sellers' increases value of the available material. Though some degree of fixed costs are involved in the gathering, analysis and distribution of digital information along with nearly zero marginal costs and therefore the resultant average costs are lower which gain tend to decline as output increases. Therefore digital information sharing gives significant scope for economies of scale for retailers.

Moreover, it is correctly assumed that the fixed costs for providing information for the internet would continue to decline as and when there is improvement in technology. Hence the cost structure is affected in the costs that are involved in making customers aware about products and services being offered by retailers on the internet through e-commerce compared to the traditional retail stores without internet usage.

Search Costs:

The eradication of the geographical constraints that limit their options in traditional retailing is another major advantage for e-commerce. This is also true for consumers. The brick and mortar retailers have to depend on the decision of customers who are willing to expend the resources necessary to visit their physical stores. On the other hand retailers are able to maintain an expansive customer base given the easy access to the internet in the modern days and the reduced costs of providing information on the internet is the same irrespective of the geographical location of customers. The time necessary for searching and the variety that is available on the internet are cost effective compared to the traditional retail store format and hence the overall costs of e-commerce retail is reduced in retail trading (Walter, Gupta and Su, 2006).

The ease of search is another aspect that has impacted the retail industry with the advent of the internet and e-commerce. The search engines that help to simultaneously allow many queries to be processed for online stores has reduced the time for search and the enhanced the convenience of searching from the customer's perspective. Compared to this the trouble that a customer has to take to visit a physical retail store and the costs that are involved and the tie taken are much more than in e-commerce retailing. Moreover the search options also allow customers to switch brands and products and surf from one virtual store to another with just a click of the mouse has created a huge impact in the shopping habits of consumers (Sankaranarayanan and Sundararajan, n.d.).

Supply-Side Perspective:

It is assumed that the internet markets are places for perfect competitive environment given that the internet allows for adequate information flow and has no transaction costs. this is not the case with traditional retail trade set up. A near perfect competitive environment means that the costs of operations are reduced, efficiency is increased and costs of products are reduced. Retail e-commerce provides chance for retailers to enter the perfect competitive market environment and hence is affected by the cost implications.

The other cost impacts of e-commerce on retail trading in terms of the supply side include free entry and exit and marginal cost pricing which impacts the cost structure of retailers engaged in e-commerce.

2.7: Conclusion

Companies and firms, both retail and large, have had to make changes to their business process and functions due to the impact of development of electronic commerce -- especially in the most basic of the business transactions -- buying and selling which are undergoing transformations.

The projected volume of trade that is expected in the next few years and the volume, in terms of money, of global e-commerce business that is conducted gives an idea about the impact of e-commerce on retail trade.

Market research has shown that the global B2C sale volume is expected to grow at 17.7% to reach a total volume worth U.S.$1.771 trillion in 2015. The volume of sale online and through the various e-commerce channels in retail is expected to grow further and reach around $2.3 trillion by 2017

Cross border trading has been enhanced by e-commerce especially in regions and countries where products are not available in a particular market or are in short supply.

However there is tremendous scope for furthering the impact of e-commerce in retail trade as was evident from the fact that the growth of e-retail in U.S. is expected to by 15.5% but has till now only manage dot capture only 6% of the total retail sale in the country.

The existence of the middlemen is eliminated as retailers engaging in e-commerce can directly sale their products. This also reduces the cost of a product significantly when selling through the e-commerce platforms.

This creates a condition where engagement in competitive pricing is possible by retailers using e-commerce which ultimately is beneficial to the customer.

E-commerce directly affects the cost structure of a retail company. E-commerce also helps direct retailers or manufacturers in making hefty profits by selling their products at relatively reduced costs compared to traditional retail outlets as they sell directly from the factory without any necessity of the middle men.

Another cost effective measure enabled by e-retailing is the elimination of the geographical constraints that limit their options in traditional retailing. Retail e-commerce provides chance for retailers to enter the perfect competitive market environment and hence is affected by the cost implications. Other aspects of retailing business like free entry and exit and marginal cost pricing that impact the cost structure of retailers are other impacts of e-commerce on retailers.

The next chapter deals with the research methodology used for the study.

Chapter 3: Research Methodology

3.1: Introduction

Methodology is defined as the process that is used by researchers to collect information and data about an issue or a topic so that the research can be concluded and the researcher can arrive at a decision. Both primary and secondary research methods are included in research methodology. However other forms of gathering and collecting information can also be undertaken (International Journal of Social Research Methodology: Theory & Practice, 2012).

The process of systematic and theoretical application and analysis of data is also called methodology. Analysis of the methods and the principles that are used in a study of a particular issue or a field of study forms the basis of research methodology. Methodology is comprised of issues like the paradigm of a subject or an issue, the possible models of theories and the approach to quantitative and qualitative techniques (Denk, 2010).

Methodology explains the approach that is taken for a research. Methodology can comprise of a single method or a conglomeration of a number of methods. The best method or a combination of methods that can be best suited for a research is identified by methodology and helps a researcher to pin point the best method.

Methodology differs from method as the former cannot be used to achieve and solution. Rather methodology provides idea about the method or a number of methods working together that should be used for a research. Methodology helps identify the best practice method for a particular research which can be applied.

3.2: Approaches to Methodology

There are two basic approaches to research methodology - quantitative and qualitative approaches.

Quantitative approach: this is defined as the research approach that takes the help of the paradigm concept of positivist and post-positivist approach. The basis of quantitative approach is also based on the post-positivist view. The primary format of this approach comprises of the physical collection of primary and secondary data with the aim of converting those data into the statistical forms. Statistical and mathematical methods are then used to analyze the data thus collected to arrive at a conclusion (P and Bellamy, 2012).

The personal behavior or attitude of the researcher does not create bias in the data collection or in the analysis of the data collected is necessary for this approach to research is ensured by the maintenance of objectivity during the data collection period as well as during the analysis.

Qualitative approach: the use of the social constructivist concept that focuses on the reality which is socially constructed as the prime basis of a research is described as qualitative research. This approach to methodology is primarily aimed to understand the human behavior and the experiences that the human have undergone. Apart from statistical data evaluation, this approach uses active consideration of the human emotions and behavior (Creswell and Plano Clark, 2007).

This approach also attempts to understand the complex nature of the human behavior while attempting the unraveling the complexities associated with human emotions. No scope for unraveling and expressing the emotions of the respondents is left by the use of statistical data and analysis in quantitative research approach. On the other hand a greater degree of freedom to express their emotions is allowed to the researchers by the qualitative approach.

3.3: Outline of research Method

The research is conducted with the aim of finding out the qualitative impact of e-commerce on retail trade through understanding of some qualitative matrices like cost impact and cost structure on retail traders. This information defines the extent to which retail trade is affected by expansion of e-commerce.

The quantitative method would be used for the collection of primary data about how retailer financials are affected by e-commerce as well as how costs are reduced for retailers. This quantitative aspect would be undertaken through a survey among a section of the retailer who comprise of those who use the internet and e-commerce.

Professional survey tool would be used for the survey through a set of questionnaires that was sent via e-mail.

The positivist philosophical position formed the basis of the selection of the quantitative research approach to objectively find out about the influence of e-commerce on retail trade.

The study used both deductive and inductive approaches to the research:

Deductive Approach: a deductive approach for a research is defined as a study that starts with a general point-of-view and then goes on to analyze data from secondary sources to arrive at a particular point-of-view.

Secondary information was gathered and collected from various literary sources available in the public domain forms the basis of the approach. By logically following the available facts in the public domain, the research aims to (Welman et al., 2005).

Inductive Approach: a result is obtained through empirical observations in this approach. The data generally collected from primary sources through interviews and face-to-face interactions or surveys form the data and the information that are analyzed to arrive at a conclusion. Data is analyzed to arrive at the conclusion and forming of a theory in this approach after information is gathered through generalized observations.

The study used commonly available statistical tools to assimilate and analyze data that was gathered from the survey. The data was then represented in statistical forms of graphs and charts to better understand the qualitative aspect of the numerical values taken in relation to the impact of e-commerce on retail trade, specifically in terms of finances.

3.4: Data collection

Both primary and secondary data collection methods were employed for the research. Analysis of primary and secondary data was done to arrive at a result in the research and the research used and paid equal importance to secondary and primary data and their analysis. Primary data was collected through surveys of retailers using e-commerce either on common platforms or as additional business models to their brick and mortar stores.

There were also open ended questions that tried to bring out a qualitative aspect form the respondents.

Various research papers, published work and surveys already done on the subject that are available in the public domain were used to collect secondary data. The internet was used to collect such secondary data about the issue. Data was also collected about how the consumers viewed e-commerce had impacted retail trade and how they had benefitted from the new form of business as found in various surveys (Bryman and Bell, n.d.).

Reputed universities, books published by reputed publishers and journals of well-known organizations were selected for collection of secondary data for authorized information as these are considered to be credible and authoritative sources. Such data were collected that have been useful in increasing knowledge about the issue of transfer of learning and data that were of recent nature. Relevance to the issue was also kept in focus while selecting secondary data sources.

3.5: Sample selection and Size

Sampling is the method that is adopted to select a group of elements from a larger target population to do a survey. Many different techniques are used for sampling. A questionnaire is often used for a sample survey for the sampled people to answer. After a target sample is selected, there are also different ways of doing a survey. The aim of sampling is to reduce cost and the time of survey as sampling is to represent a larger target group. The results of the sample survey can be extrapolated to represent the characteristics of the entire target group since a sample is usually representative.

The stratified random sampling method was used for the research where the researcher divided the population into strata based on the age, location, usage of e-commerce media on mobile etc. and selected respondents accordingly. This method was chosen to highlight a specific subgroup within the population and to ensure that representation of each of the subgroups were made in the sample. This allows the representative sampling of the users of e-commerce by retailers and through this method the rare extremes of the given population were reached. This technique gave the research higher statistical precision compared to simple random sampling (Sapsford, 2006).

3.6: Questionnaire Design

Questionnaires are designed in the written format with a set of questions that have possible answers, sometimes in multiple choice formats, for the purpose of collecting data from the interviewees (Montero-Marin and Garica-Campayo, 2010).

The deductions of critical literature review formed the basis of preparation of such questionnaire (El-Agamy, Morimoto and Tsuda, 2013).

In this research, the first part of the questionnaire attempted to provide a definition of e-commerce I retail trade as understood by the respondents which was based on definitions derived from study of literature. The defining of the term would enable the respondents to have a clear idea about the legal definition of e-commerce.

Demographic details like duration of business, nature of business, income slab of the business, etc. comprised the second part of the questionnaire. These questions were done to be able to provide a possible background and some logic behind establishment of a trend among the respondents.

The thirds and the last part of the questionnaire were designed on the basis of the closed format. The five probable answers-agree, strongly agree, neither agree nor disagree, disagree, strongly disagree, were given points for analysis purposes. The questions were designed to bring out the respondent's attitude to various aspects related to e-commerce in retail trade.

The coding of the answers gave the researcher the advantage to tabulate and analyze the data.

3.7: Obstacles in Research

The prime obstacle in the research was the sample size was very big and largely undefined. Since the sample size is very large therefore it was not possible for the researcher to reach out to one and everyone. Hence a representative sample, based on the judgment of the research, of 200 respondents was chosen for the research. Also there were many among the chosen respondents who later refused to participate citing busy schedules and hence there was need to look for more respondents to complete the survey.

3.8: Data Analysis

The research used two methods of data analysis- quantitative analysis technique for the survey and the qualitative method for the analysis of the secondary data. The qualitative data that was collected through the survey was transformed into statistical form for better understanding. Each of the questions had several values attached to them. The analysis took note of the value for each answer from a particular respondent and converted into statistical data by combining it with all similar questions from all the respondents.

For expressing trends in answers, for example through percentage representation of a similar type of answer among the total respondents, the statistical data then collected were transformed into other forms. In order to relate certain aspects like the cost impact of e-commerce, the efficiency impact of e-commerce on retail trade, the impact on retail price and the pricing structure change due to change in prices caused by e-commerce, some cross tabulations were utilized.

Qualitative analysis-this analysis was primarily done from the data that was collected through the literature review. The qualitative aspects that would be derived from the data was used to identify the emotions that are associated with retailers utilizing the e-commerce platforms for conducting retail trade and well as the price impact and the impact on price structure of companies using e-commerce.

Reliability: this aspect of research methodology deals with the accuracy of the procedures and research techniques and about whether the process can be replicate din the future. The research methodology as so designed and chosen that by using data from secondary and primary sources and the use of inductive approach makes this study reliable and replicable. The research tried to minimize bias by following statistical analysis techniques that were based on numbers and hence devoid of personal opinions of the researcher.

Validity: the research design has been chosen in a manner that helps achieving the aims and objectives of the research and answers the research questions. The results of the study can also be transferred to other situations. The empirical evidence coupled with established evidence from previous research grants validity to the sturdy.

Generalizability: The findings from the research are replcable and can be used in other research settings. This is so because the theory that has been established through this research can be used to apply to other populations also -- for example in case of studying the effect of e-commerce on B2B situations.

3.9: Ethical Considerations in Research

Some norms and regulations and ethical considerations need to be followed for every research work. These are norms that have been developed over the years for research (Pimple, 2008).

The respondents had participated voluntarily and were requested to answer the survey through e-mail for the survey. The respondents were assured in writing that the information that was gathered from the survey would not be used in any other form except for the research and the respondents were allowed to end the interview whenever they wished.

Proper credit was given to publish and non-copyrighted works available in the public domain and all data protection norms for internet sources were maintained for secondary research data collection. Appropriate information was given to the concerned agencies and publishers about their work being used in the research wherever needed.

3.10: Limitations of the study

The factors that arise from the research design or methodology and which have the tendency to influence the outcome and interpretation of a research are termed as the limitations of a study or research. Both internal factors as well as external factors are responsible for limiting a research work.

In this research the limitations were:

The sample size: the choice of the sample for primary data was one of the most important considerations as the results can be affected by the disadvantages associated with the method of sample selection. It is generally argued that too small a sample cannot be representative of the entire population (Kalof, Dan and Dietz, 2008).

Personal Bias: there can be limitations to the study arising from the personal bias of the researcher. However all possible measures in this research were taken to ensure that there was no personal bias in involved.

3.11: Conclusion

Both the inductive and deductive approaches were utilized for the study. The research onion was used for effective and efficient conduct of the research in order to guide the researcher throughout the research work.

Both primary and secondary sources were used to collect data. 50 retailers engaged in e-commerce were involved in the primary data collection. Published works and the data and information available about the issues formed the secondary sources for the study. Library and internet sources were used.

The sampling technique for the survey and the formation of the questionnaire was given due importance. Adequate ethical considerations were taken.

The next chapter would deal with the revelations of the findings from the primary and the secondary data and information collected and the critical analysis of the data.

Chapter 4: Results and Analysis

4.1: Introduction

This section would deal with the tabulation of the results that were derived from the survey that was conducted among 50 retailers who have online business and their views about the impact that e-commerce has had on their business. This section would primarily tabulate the findings from the survey with respect to the questions that were placed before the respondents and the answers that they provided. All the answers to the questions were closed answers and hence the analysis of the results of the survey was done quantitatively.

4.2: Results and analysis about Respondent's Business

Age of Respondent's Business (in years)

Age

Respondents

0-2

02-05

above 05

The above chart shows that the maximum number of respondents (50%) has been running their business for more than two years bit less than 5 years. This means that most of the respondents were new age entrepreneurs or had newly entered the business market. This also indicates that these entrepreneurs had starred their business when internet revolution was at its peak and the e-commerce concept had very well developed. Just a small percentage of the respondents had business t hat were 5 years or older and this hints that these were probably the ones who started off with a brick and mortar retail outlet and later adopted the e-commerce format.

Type of Business:

Type

Respondent

e-retail only

e-retail & Brick-and-Mortar

This bit of information is very important for the analysis. This shows that 90% of the respondents were engaged only in the e-retail business format and did not have a brick and mortar format of retail trade. This also shows that the ones who had a dual business format -- e-commerce and brick and mortar, were probably those who had staretd their business more than 5 years ago.

Estimated Annual Earnings (in million $)

Turnover

Respondent

$0.1 to $0.5

$0.51 to $2

>$2

The above bar graph shows that among the respondents, the majority (54%) has an annual earning between $0.5 million and $2 million. On the other hand a sizeable number of the respondents engaged in e-commerce (30%) have the highest earnings of more than $2 million. The percentage of respondent with the lowest earnings is also the lowest at just 16%. The above figures indicate that most of the firms (84%) are doing pretty well in terms of annual earnings.

More consumers are drawn to e-commerce retail trade

Answers

Respondents

strongly agree

Agree

Neutral

Disagree

Strongly Disagree

A wide majority of the respondents (92%), comprising of e-retailers, believe that the e-commerce format of business is able to attract the attention of more customer than traditional retial trade format. There were very few who though otherwise. This is one of the factors that the retialers feel draws mor etraffic to the e-commerce sites -- the attractivenesso fthe presentation of the virtual retail stores.

Compared to Brick-and-Mortar retail, e-retail gives better opportunity to communicate and share information with customers.

Answers

respondent strongly agree

Agree

Neutral

Disagree

Strongly disagree

Nearly 3/4th of the e-retailers were of the opinion that e-commerce platforms allow the retailers better opportunities to communicate with the customers. This communication could is primarily in the form of product information. E-commerce platforms also allow for tow way communication in the form of feed backs from customers and hence are useful for retailers.

Consumers use e-commerce to compare prices answers respondents strongly agree

Agree

Neutral

Disagree

strongly disagree

This is one of the advantages for customers that e-commerce provides. Almost all the respondents (90%) believed that the e-commerce platforms offer opprotunities to customers to compare proices across various horizontals and hence this gives rise to competitiiveness. There were just a hadnfull (10%) who did not seem to agree with this aspect of e-commerce.

Consumers are influenced by prices on e-commerce websites

Answers

respondent strongly agree

Agree

Neutral

Disagree

strongly disagree

This is one of the aspects that researchers have claimed is an added influence of e-commerce on retail trading. Previous research has shown that even if consumers who visit e-commerce websites do not make purchases, the information -- including prices, which are available on the websites influence the purchasing behavior of consumers. 64% of the respondents believe that e-commerce websites influence by the prices mentioned in on the e-commerce websites. However 18% of the respondents said that there was no influence of the e-commerce websites on the consumers while a similar number did not want to comment on the issue.

E-retail allow flexibility in business operations

Answers

respondents strongly agree

Agree

Neutral

Disagree

strongly disagree

The above bar chart shows that a large number of the respondents (70%) either strongly agree or agree with the proposition that e-commerce offer flexibility to their business. However 20% of the respondents thought otherwise and 10% of the e-retailers did not want to comment on the topic.

E-retail impacted total sales

Answers

respondents strongly agree

Agree

Neutral

Disagree

strongly disagree

74% of the e-retailers surveyed said that the e-commerce had indeed helped in increasing their business out of which nearly 45% believe that their business was significantly impacted by e-commerce in terms of increasing revenue. 20% of the retailers probably did not want ot disclose facts about this aspect of their business and choose to remain neutral while just 6% said that there was no significant impact of e-commerce on their overall revenue.

E-commerce gives greater profitability answers respondents strongly agree

agree

neutral

disagree

strongly disagree

50% of the retailers surveyed said that they strongly agreed with the concept of greater business flexibility while 25% strongly agreed. This means that 70% of the retailers were of the view that e-commerce had allowed them to flexibility in the business processes. 14% disagreed while 16% remained neutral to the concept proposed in the survey.

E-commerce has increased profit % with respect to operational costs answers respondents strongly agree

agree

neutral

disagree

strongly disagree

Among the 50 e-retailers surveyed, 70% were candid in accepting the fact that their profit percentage with respect to their cost of operations had increased since they had adopted e-commerce and even after adopting e-commerce. 20% did not want to disclose this aspect of their business while 10% said that their operational profits were not affected by e-commerce.

E-commerce has helped your company gain market share answers respondents strongly agree

agree

neutral

disagree

strongly disagree

The graph clearly shows a majority of the e-retailers (60%) were of the view that their market share had increased after adopting e-commerce and even while they were into using e-commerce. 20% of the respondents were neutral while 20% of the retailers said their market share had not been impacted by e-commerce.

E-commerce has helped to gain new customers answers respondents strongly agree

agree

neutral

disagree

strongly disagree

The above graph shows how the respondents felt about e-commerc ehelping them acquire new custmers. An oeverwhelming majority (90%) of the e-retailers were of the viewt hat they had managed ot gain new customers iwh the help of e-commerce while just 10% either remained neutral or disagreed ot the concept.

E-commerce has enhanced productivity of your company answers respondents strongly agree

agree

neutral

disagree

strongly disagree

From the bar graph it is clear that a majority of the respondents (62%) agreed that e-commerce had helped them enhance their productions. While 18% said that there had been no significant change in the production of their companies, 20% chose to remain neutral to the query.

E-commerce has enabled better customer service answers respondents strongly agree

agree

neutral

disagree

strongly disagree

The above analyzed data shows that a good majority of the respondents (64%) were of the view that they were able to serve customers better through the e-commerce platform. While 16% of the respondents had a negative view on the topic, 20% of the respondents chose not to comment.

E-commerce has induced competitive pricing answers respondents strongly agree

agree

neutral

disagree

strongly disagree

In this pie chart above, that denotes the breakup of the respondents with respect to the answers given about e-commerce inducing competitive pricing, an overwhelming 66% agreed while 30% disagreed and a negligible number (4%) chose to remain non-committal on the issue.

E-commerce has been able to alter your company's cost structure answers

Respondents

strongly agree

agree

neutral

disagree

strongly disagree

The above data indicates that 62% of the respondents agreed that the cost structure of their company was impacted by e-commerce. While 22% of the respondents disagreed to the concept, 16% remained neutral to the question.

4.3: Conclusion

In this chapter we enumerated and represented the data gathered from the survey in appropriate formats that were understandable and comprehendible. In the next chapter we will discuss the implications of the data analyzed from the survey as well as the data gathered from secondary sources and compare the two conclusions drawn from the information gathered and analyzed from the two sources.

Chapter 5: Discussions

5.1: Introduction

In this section we will discuss the analyzed data from both the sources -- primary and secondary. The empirical data gathered from the survey would be discussed to discover trends and traits about the impact of e-commerce on retail trade. Secondary data that was collected from critical review of literature would be discussed. We would try and establish a link between the analysis of the empirical data with the established facts and data obtained from previous researches obtained from secondary data sources.

5.2: Deduction from Secondary Data Sources

From the secondary data collected through extensive review of literature sources and research work already done on the issue, it is clearly evident that there has been substantial impact of e-commerce on retail trade. Be it sole standing e-retail companies or companies engaged in both brick and mortar retail trading and e-commerce platforms.

Major areas of business like transportation patterns to consumer behavior have been affected by e-commerce apart from the practice, timing, and technology of conducting business in B2C segment which includes the retail segment.

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