Consumer benefits and drawbacks of shopping online

Consumer benefits and drawbacks of shopping online In the following essay I attend to track the recent growth on the web/e-retail sales and analyse, compare and critique the consumer benefits and drawbacks of shopping online compared to conventional store from the perspective of consumer behaviour, brand marketing and the application of the seven Cs of retailing. The business of e-retail has been defined as the sale of goods and services via Internet or the other electronic channels for personal or household use by consumers (Dennis 2002). The explosive growth of the Internet has revolutionised many aspects of daily life (Routledge, 2000). Since the development of the Internet in the early 90s and its relevance in e-commerce the Internet has allowed effective new communications channels, easy access, flexibility and the potential to upload a huge amount of information to a global audience. Online shopping has evolved with the growth of technology. Online shopping has had a dramatic impact and become very popular, however it still carters to middle and upper class. A significant feature in consumer attitude towards non-store shopping is exposure to technology, since it has been established that amplified exposure to technology increases the probability of developing favourable attitudes towards new shopping channels (Bigne, Enrique.2005). Growth of the web The occurrence of the Internet has already had a remarkable impact on society, there are more people online than at any other point in history and online retailers have seen tremendous increase in their online earning potential. PricewaterhouseCoopers predict that by 2014 the UK entertainment and media business will be worth an estimate  £56 billion (video on nile week 4 uk entertainment media). The rapid growth of the Web and Web development has been the result of many innovative advances in Web technology, Feather calls this the webolution. Everyday more and more people are integrating the internet into their daily lives due to the flexible opportunities on offer. Feather forecasts that a vast rapid growth on the Internet will concur over the next ten years transforming all aspects of society. Feather argues that half of North America will be living a web lifestyle in which they will also be connected to the internet and be able to control their homes, automobiles, work and lesse n the need to commute to a remote work site. Developed countries that have been offering e-commerce have shown impressive improvement in their respective economies (Javalgi et al., 2005) however the Gulf Area seem to be struggling to keep up with the western world. While consumers from the western world take for granted Internet banking and Internet shopping the Arab world are struggling due to major obstacles mainly poor infrastructure, under investment and slow connection speed. Another major concern that is contributing to their lack of slow growth is the insufficient and compelling amount of content in Arabic; only 0.2% of websites are in Arabic. However the Gulf area presents a huge potential market with over 30million web users but organisations feel its an expensive process to translate. On the other hand the new deregulation has allowed competition to enter, before only one ISP company was available to the masses but now with an increase of ISP companies they have started to push the limit on service. This new competition has driven down prices because the Internet has become more accessible and affordable for users. Video(nile of BBC Middle East Business Report: Internet Growth in the Middle East video on nile week 4) The huge growth area though, is in mobile internet access (appendix). Mobile Commerce has been defined as follows: Mobile Commerce is any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated and/or completed by using mobile access to computer-mediated networks with the help of an electronic device (Tiwari, R.; Buse, S. (2007) Mobile is literally how consumers live in todays worldwide society and businesses have already seen this change in the way consumers connect to the internet. Businesses have realised the new trend and due to the improvement on browsing on smart phones this is set to increase rapidly. (Ebay appendix) Customer benefits and drawbacks To most consumers important attributes of online shopping are convenience and accessibility (Wolfinbarger and Gilly, 2001). Online shopping is becoming more and more popular each year as consumers take advantage of the convenience, wide variety of products and low prices available when shopping online. Over the years the Internet has become a great source for bargain hunters for good reason, there are many great buys online with price comparison companies that help consumers find the best prices, shipping and tax advantages, and the convenience of not having to leave home. However sometimes the deal that looks like a bargain may fall short of what has been advertised. Being able to walk into a physical store and able to see, feel, try, easily ask questions and compare different products side by side with ease makes for a strong case to why brick and mortar shopping is more of an engaging experience. One major benefit of brick and mortar shopping is its organisation. Its straight-forward layout allows consumers to easily locate the right department and the right products effortlessly. Online sites offer similar organisations layouts by providing search capabilities and well designed websites with easy navigations. Another factor could be the relationship between attitudes of attractiveness of alternatives. The consumer although might have a positive attitude toward online shopping, lead by the strong attractiveness of the brick-and-mortar alternative. Therefore, he will choose to shop offline, despite his positive attitude toward shopping on the Internet. Online stores recommend certain products over others, while all websites offer descriptions for each product, it may not always be the best thing because the descriptions can be either too general or too detailed, making it difficult to compare two or more products on their features. A negative aspect of shopping online is the communication dissatisfaction because consumers miss that face to face link, not having an informed person available to provide an immediate answer. However websites now provide independent reviews by customers who have brought each product and display their own personal opinion which in the long run is beneficial to consumers because it helps strengthen their decision on whether or not to purchase a product. Other advantages and disadvantages for shopping online include: (see appendix) Perspective of consumer behaviour Retailers and researchers have been aware that shopping is not just a matter of acquiring tangible products but also about experience, enjoyment and entertainment. In the e-shopping context, experience and enjoyment originate from consumers interactions with an e-retail site. Factors can influence a consumers decision when shopping online, these include the following: Image: Traditional retailers with strong images have long been making the running in e-retail. According to Kimber (2001) instore and online shopper loyalty are linked. Image is the significant perception from the eyes of the consumer to build up their overall evaluation or rating, in such a way to guide their decision making process. Consumers are more likely to buy from a store that they consider to have a positive image e.g. price, brand or customer service. For example Tesco is recognised as having a positive image both instore and online, being the UK grocery market leader in both channels and the worlds largest e-grocer. Social: One social interaction is reference groups. These are groups that serve as a point of reference for an individual. They are perceived as credible and powerful can change consumers attitude and behaviour (see table1 appendix major consumer reference group pg332). When having doubts about obtaining accurate information about products or services, consumers are more likely to communicate with like-minded people who can be important motivators that influence decisions. Consumer related reference groups include the following: (see appendix book page 334) Opinion leadership unofficially influence the actions or attitudes of consumers who may be opinion seekers or purely opinion recipients. Opinion leaders are highly credible sources of information because their intentions are perceived as being in the best interest of the opinion recipient because unlike commercial endorsers, opinion leaders do not actually represent the interests of one company and receive no compensation for their advice. Comparisons of opinion leaders and receivers (appendix pg 506) Product characteristics: Consumers decisions whether or not to shop online are also influenced by the variety of products or services available. In essence some product categories are more suitable for online shopping than other categories, the lack of physical contact and assistance in shopping on the Internet is one factor that influences this suitability. Kare Silver (2001) created the electronic shopping test to measure a product to calculate the chances that it will be purchased online. Three factors affected the potential sell for products: Product Characteristics Familiarity and Confidence Consumer Attributes More information + example of electronic shopping test (appendix) Brand marketing Brands are ever more important on the internet with further competitors due to the global presences; brands are the link to maintaining the relationship between e-retailers and consumers. Consumers have a variety of choices and are more liable to choose e-retailers they know who represent value and are trustworthy. Brand elements are the point of contact between the brand and consumer which is intended to mirror the wanted look and feel of the brand and what it represents. For the brand to succeed all elements must be implemented correctly, however branding a company as something they do not represent is worse than no branding at all because it raises consumer expectations about the quality of what they will receive. Lindstorm (2001) dictates both trust and interactivity are the main factors when shopping online. Consumers perception of e-brands are driven by their total experience on the website, making trust a significant long-term barrier because there is no personal interaction buying on the internet offers potential risks e.g. security transactions. E-retailers can interact and build trust with consumers in a number of ways (appendix model of e-branding pg 176). E-retail mix assists e-retailers to achieve designated objectives. Prices and advertising remain a key element but online e-retailers benefit from using banner ads, pop ups and affiliate marketing. Difference forms of retail mix and e-retail mix (appendix) Loyalty marketing strategies, including communication and two-way dialog, rewards, effective customer service and service loyalty schemes and are an important aspect of brand building (Cuthbertson and Bridson, 2006). One way Adidas use the e-mix effectively is to allow consumers to create accounts to make their shopping experience easier. They offer exclusive deals/discounts on products, able to keep track of orders and personalised homepage when signed in makes consumers feel the brand are paying great attention to their needs, help build and maintain a relationship.