Critical Analysis of Retailer Adoption of the Internet by Cathy Hart, Doherty, and Ellis-Chadwick - Coursework Example

?Critical Analysis of “Retailer adoption of the Internet Introduction The advent of computers has caused revolutionary changes in almost all fields of life. The mode of businesses has also changed significantly due to the integration of information management systems and the inception of internet. Much research has been done regarding the impact of internet on the retailing business and its level of acceptance among the masses. The chosen research paper also addresses this aspect of the modern field of business and researches the level of growth of the internet in the retailing business in UK. The paper has been written by Cathy Hart, Neil Doherty and Ellis-Chadwick. The two main aims of the paper are: To investigate the role of internet in the retailing business in UK and the different services that can be offered via the internet. To investigate the current size and scale of online retailing, along with the potential growth in the future. 2. Critical Analysis The research paper includes an extensive research study on the respective topic. The authors provide the readers with relevant research findings from available literature and the results of their own research regarding numerous UK retailers’ websites. The authors have based the success of online retailing on a diverse range of factors that shall be evaluated individually in the paper. They have also repeatedly compared the online retailing trends with those present in US; such comparisons seem futile due to the differences of culture and market segments. The concern about different demographics between both the regions has also been mentioned by the authors but it doesn’t cease the continuous comparisons with the respective region. In the beginning of the paper, the authors include useful research findings about the views of other researchers regarding the acceptance level of internet in the domain of online retailing. Shirky (1997) stated that the quality of experience of the customer plays an important role in the degree of acceptance of online retailing. They included an important research conclusion of Ernst and Young (1999) that many US consumers utilize the online retailing services to develop their decisions on the basis of product and price comparisons but are witnessed to buy the product via the phone, fax. This notion by Ernst and Young shows that customers tend to prefer the traditional modes of retailing over the newer ones. This research finding is interesting but cannot be used to portray the current trends of consumer behaviour since it reflects the patterns which are more than a decade old. Hart, Doherty and Chadwick (2000) quoted the research findings of Nua Ltd., (1997) who stated that there exists a lack of techniques for the measurement of online customers, functions and services offered through retailers on the internet. The authors of the chosen paper agreed with the lack of availability of such techniques and proposed a ‘pro forma website assessment document’. With the help of this document, the internet functions were categorized into the three following categories; Registration: The availability of a “uniform resource location” (URL) is considered to be a sign of online activity and presence of the retailer on the web. Information Provision: refers to the type of information that is provided on the websites by the retailers for their customers. The types of information had been divided into three categories; products, financial and other information. Products information contained prices, descriptions, product comparisons etc. Financial information contained company reports, annual reports etc. Other information may include store locators, environmental information, press releases etc. Interactivity: refers to the level of functionality that is present on the website; it may be present in various forms like online ordering and payment solutions. These classifications formed the basis of evaluation of the retailer websites for the survey that was conducted by the authors of the research paper. The pro forma document was a good approach since it contained detailed information about the retail companies who had their presence online. It included the category of products and services that were offered by each retailer, along with the number of retail stores owned by the retailer. The number of stores of each owner proved to be helpful in devising the relation between the size of the organization and the level of internet activity (that shall be explained later). However, the criterion of information provision seemed to be incomplete without the consideration of quality of the data. Product information might be present but the quality and depth of the information also bears great relevance. Product comparisons are only valid when the important aspects of products are compared like life of the product, price and features of the product rather than less important aspects of colors and dimensions. The depth and quality of the content of the websites should have been included since it also affects the adoption rate of the technology by the consumer. Another important aspect that has been ignored by the authors is the need to have updated data on the websites. Older product details and specifications prove to be irrelevant and thus will not be appreciated by the customers. The retailers need to update their information on a regular basis to improve the customers’ experience which eventually increases the cyber retailing adoption rate. If the customers do not increase their usage of the retailer websites then the future cannot be expected to hold great opportunities for the retailer companies. The sample of the websites was collected in a structured and detailed process. A website was not only chosen on the basis of its origin from UK, rather careful examination was done regarding each website on the basis of the criteria in the pro forma document. Only the registered websites were chosen from the list of websites and then, each one was evaluated for its active status. The inactive websites were disregarded. The content, functions and services were recorded for each website to deduce accurate results about the level of integration of internet in the retail industry in UK. The products and services were categorized by the authors in the following manner; grocery, electrical, toys, DIY, home shopping, sports, alcohol retailers, books and music, clothing, furnishings, jewelry, mixed stores, convenience stores, footwear, news, health and beauty and specialty foods. The categorization has been done with careful analysis and can prove to be referenced by other researchers as well. The results of the chosen sample of websites revealed that grocery retailers had the maximum number of registered URLs since they amounted to 79%. The largest number of websites that excelled in the information provision criterion was recorded as the electronics retailers at 33%. The interactive services results were far lesser than the number of websites that provided information to their consumer. These results devised the relation that grocery, electrical and mail order sectors possess a greater probability of having a registered URL and offering transactional facilities than other sectors. The survey included research about the types of information services that are offered on the web by the retailers. Much variation was witnessed in this area. 7% of the retailers offered email system for direct communication with their customers. 7% of the retailers used their websites for marketing purposes, whereas only 3% offered recruitment features. An interesting finding has been witnessed in this survey; only 3% of the retailers provided online transaction facility to their customers. This figure clearly denotes that the internet has minimal impact on the retailing industry in UK. Another variable that was chosen by Hart, Doherty and Chadwick (2000) to devise a relation with the adoption of internet in the retailing industry was the number of retail outlets owned by the company. The results of the survey revealed that there exists a significant relation between the numbers of retail stores and the level of adoption of internet by the retailer. The retailers that consisted of 20 or less number of stores had very less probability of having a registered URL or transactional services. The companies that had more than 100 but lesser than 300 stores, had chances of possessing registered URLs but would not offer complete transactional facilities for the clients. The large retailer companies with more than 300 stores have chances of possessing a fully functional transactional website. Therefore, an important relation was devised by the authors that the number of retail stores has an effect on the adoption of internet by the retailer. The authors have conducted an effective research on the degree of adoption of internet by retailers in UK and have successfully cleared many misconceptions, for instance, it was proposed by Auger and Gallaugher (1997) in their research that small companies tend to opt more for internet marketing and payments due to their flexibility and desire to reach a bigger market segment. The respective research has proven, with the help of an extensive survey, that small companies have more probability of not possessing registered URLs and transactional services. During the discussion of the results of the survey, they quote a research of Griffith and Krampf (1998). This research provided the authors with the level of internet adoption in US, which is quoted as 64%. This seems to be an incomplete basis for comparison since the factors of this internet adoption are not discussed in the paper. If Griffith and Krampf (1998) chose the same parameters (like information provision, interactive service and registered URLs) as the authors of the paper then it can be compared with the results from their survey, otherwise it seems ambiguous. Overall, it can be considered as a useful research that involved careful examination of websites with the aim to approximate the level of internet adoption in UK retailers. The research did not conclude very promising results regarding the adoption of internet in the retailing industry in UK therefore it will not be wise to predict that the concept of cyber retailing will replace the conventional modes of buying in the following years. However, it has been revealed that retailers tend to integrate their marketing activities with the internet so that their online business, as well as retail outlets business can be benefitted. The authors advise the retailers to develop innovative websites so that the concept of cyber retailing can progress to a greater level. 3. Information Useful for Retailers The classification of the internet services (namely information provision and interactive services) can prove to be useful for the retailers to get guidance about what should be included in their websites to increase their productivity. Product description, price information and product comparisons facilitate the decision making of the customers. Other part of information provision included financial information; it refers to company reports, annual statements and investor’s information. This type of information should be available on the website so that the customer can feel assured about the status of the company. Promising annual statements will earn a good image for the company and consumer will feel confident about establishing a long term business relationship. Other services can include store locators and event diaries; this kind of information provision is a good idea for the retailers so that additional information can be communicated about the company. However, as pointed out by the authors, the provision of information has to be coupled with the quality of information. If the content has no quality or depth to it then it will not seem appealing to the consumer. The authors highlighted an important point about the retailers possessing the biggest advantage in the supply chain, as compared to the marketers and suppliers. They stated that retailers have the advantage of possessing the data of consumer buying trends that can be used to make effective decisions and formulate strategies. Customer loyalty can be gained by establishing a long term relation with them via direct marketing and promotional activities. After the establishment of good relations with the customer, the company should launch their transactional services on the web. The authors proposed a useful solution for the retailers; retailers should adapt a “hybrid” approach in which the online selling should be aimed for the routine and standard items, whereas retail stores should be marketed on the website for the purchases that require the individuals to feel, touch and see the product in reality. This approach can provide an edge over the retailers that only have an online presence. Upon the provision of online selling facilities, the retailers should realize that the traditional rules of retailing do not apply to the domain of cyber retailing. New features of products can be highlighted in a better manner by means of online retailing. It should be understood by the retailers that not all visitors are actually going to initiate the online transaction since some might just come to the website to browse through products and evaluate the company during the process. Enough information should be available for them to make their experience fruitful, inform them about the activities and vision of the retailer; for example, it can serve as a good medium to communicate the promotional campaigns, corporate social responsibility endeavours of the retailer, standards that are followed by the company for the production or supply of the products. The research in the chosen paper can make retailers aware about the level of incorporation that is prevailing in the current markets. This realization can urge the retailers to expand their own businesses on the web and offer effective services for the convenience of the customers. It should be realized that the endeavours of the retail industry can only be successful on the web if they have a reciprocating response by their customers. Therefore, customers’ needs should be catered and reliable transactional facilities should be provided to them. References Auger, P, Gallaugher, JM 1997, ‘Factors affecting the adoption of the Internet-based sales presence for small businesses’, Information Society, Vol. 13 No.1, pp.55-74. Ernst and Young 1999, The Second Annual Ernst and Young Internet Shopping Study, New York. Griffith, DA, Krampf, RE 1998, ‘A content analysis of retail Web sites’, Journal of Marketing Channels, Vol. 6 No.3/4, pp.73-86. Hart, C., Doherty, N., Chadwick, F 2000, ‘Retailer adoption of the internet’, European Journal of Marketing, Vol 34, No. 8, pp 954-974 Nua Ltd 1997, How many on-line?, Nua Limited, Vol. 1 No.11.4, Shirky, C 1997, ‘Attention strategy suggestion’, Communications of the ACM, Vol. 40 pp.24. Read More