Understanding Retail - Essay Example

?Understanding Retail Status of E-Tailing in the Past Five Years Internet retailing is known to be the most revolutionary and challenging innovation in the last two decades. There has been a significant rise in e-tailing in the last five years within the western countries; however, e-tailing is still in an infancy stage in other parts of the world. Companies in first world countries have quickly picked up e- tailing and it has been to their benefit. On the other hand, countries from underdeveloped region are yet to keep up with this trend retail. Well established e- tail companies including Amazon.com have enjoyed massive success since their inception, however, sceptics argue that the profits generated from such ventures are inadequate. E- Tailing companies such as Onsale, @home, Webvan and Boo.com have experience their fair share of failures and were eventually closed down (Caroll and Casey, 2004:2). This goes ahead to prove that not all e-tailing companies have been successful in business. High street retailers have been in existence for a long time and have substantial loyalty and a wide customer base in the global market (Shepherd, 2007:66). They have strong brand names that are easily recognised by the consumers and this makes it easy to sell their merchandise on their online stores. Renowned fashion lines, mobile companies, food joints have a well established online business that contributes to a considerable amount of their income. New entrants have a hard time competing with these high street companies. High street companies have a competitive advantage since they have more resources, state of the art technology and better customer loyalty. It can be noted with a lot of concern that e- tailing is a relatively new concept in some parts of the world. However, they are slowly catching up with the spread of the internet across different parts of the world. Owing to increased globalisation, the world can be termed as a global village with the increased exchange of information and ideas (Mohapatra, 2012:63). This has contributed immensely to the rapid growth of e- tailing across the world. Third world countries have lagged behind in terms of innovation and technology and this explains why internet retailing in the infant stages in such parts of the world. In conclusion, although e-tailing has grown rapidly in some parts of the world including the UK, US and some parts of Asia, there are those that that are not aware of the concept. It entails a wide array of businesses ranging from auction sites, entertainment sites and consumer based sites. In addition to, e- tailing facilitates the electronic usage of goods and services between buyers and sellers and helps bridge the language barrier (Cuthbertson, 2012:57). Recent studies reveal that e- tailing has opened new opportunities for companies from various parts of the world. It has helped companies reach a high number of shoppers from all over the world and has been shopping to be a fast and hustle free experience. This has led to a considerable increase in revenues gained by high street companies. Retail Internalisation Nearly thirty years ago, every retailer in the global scene was a pure nationalized firm with an irrelevant share in the international market. Currently, retailer internationalisation is one of the most momentous trends that have accelerated immensely in the past two decades. It can be argued that retail internationalisation is much more than the opening of stores abroad as it includes a wide range of issues (Wrigley et al., 2005:440). A close look at the 200 top global retailers reveals that they operate numerous countries and have established a remarkable capacity in the global market (Hanf and Pall, 2009:2). In fact, many retail companies earn a considerable share of their revenue from foreign markets. There are various companies that have established their subsidiaries in the international market and failed miserably. This goes ahead that there is much more to retail internalisation than open stores in various parts of the world. Internalisation in retailing is described as the most imperative evolutions in the global economy. Businesses no longer operate in segregated markets and this has given to the rise of the concept of retail internalisation (Hanf and Pall, 2009:3). Retail internalisation is defined as the process which involves change of attitudes at the company to promote the process, commitment of resources and increased operations at the cross national level (Hanf and Pall, 2009:3). There are important requirement that business must attain to qualify for retail internalisation. Retail internationalisation calls for businesses to balance between the different markets with regards to production and consumption (Pearce, 2006:52). Businesses should ensure that consumers from different markets can access their products at all the time. Secondly, retailers should be able to balance between the time and season differences (Hanf and Pall, 2009:7). Since global retailers operate in different parts of the world, it is important for them to take the differences between seasons in various for the world and align this with production and supply of their products and merchandise. Global companies should also ensure that they are able to produce the required level of goods as demanded by the large number of consumers (Zentes et al., 2007:34). Finally, the retailers should ensure that they align the production and consumption patterns. In other terms, they should know the actual quantity demanded by customers in various markets and their preferences. In a nutshell, retail internalisation is a business practice that calls for a more than just expansion of the business into the foreign markets. It requires investment of a massive amount of resources, commitment and strategic management decisions by the management (Zentes, 2007:16). Companies aiming to take their business to the international level should be ready to face numerous challenges including increased competition, language barrier and exposure to pre increasing global financial pressures. Alternatively, retail internalisation presents numerous opportunities to companies including a large customer base and a diversified market. Customers are able to access quality goods and services at competitive prices. Achieving Competitive Advantage Using Technology The 21st century has presented increasing problem to retailers worldwide (Brans, 2003:11). This is because businesses are not only competing with conventional rivals but also with multinational companies with vast economies of scale, technology and a wide pool of resources. International retailers must arm themselves to effectively compete with these changes in the global market. Additionally, companies operate in a market in a market with numerous players therefore they need to develop a strategy to stand out among their competitors (Grecia). They need to establish distinct features that will attract a high number of customers. The best way to gain competitive advantage over other key players is through the use of technology. Most firms undervalue the essence of using their websites to gain a competitive advantage in their respective industries (Margarit). Managers should view technology in the light of the marketing mix. With regards to distribution, companies should improve their distribution networks by provide faster access of goods and services to the customers, create new marketing channels and boost logistics. However, it is important to take well established players into consideration when coming up with the mode of technology to adopt (Margarit). Businesses are advised to look into innovative and creative ways of marketing by using technology that is offered by social sites including Face Book and Twitter to reach a higher number of people. Promotion and advertising have been proven to be the most effective tools of increasing consumer awareness thus boosting a company’s sales and revenues (Margarit). Firms that have been existence for a longer time have been known to have a higher level of interconnectivity and have a competitive advantage over newly formed firms. There has been credible evidence of business success resulting from internet advertising demonstrating that businesses should advertise their products and services online so as to reach a high number clientele. One way of cutting on a company’s operational costs is by using technology in the production process (Margarit). As a result, the company is able to reduce the price of goods and services and this creates a competitive advantage for the goods and services produced in the company. In addition to, online retailing has made transactions more effective and cheaper for the company and the customer. Companies should ensure that they apply the latest technology to enable them produce quality goods and services that can compete in the international market (Michael and Salter, 2006:45). When companies adopt state of the art technology they are able to produce quality goods at a lower price. In conclusion, technology is seen as the most appropriate way for companies to gain a competitive advantage over their competitors in the current times characterised by increased competition and ever changing customer needs. Businesses should keep abreast with the latest technology so as to compete well with other global players. Store Design and Merchandising and Customer Satisfaction and Loyalty for Kids Clothing Retailers In this age of self service and e-tailing and increasing demands from customers, store design and visual merchandising have become ever more important concepts in increasing customer satisfaction. They can used to generate customer satisfaction thus generating customer loyalty. Kids clothing shoppers are a complicate bunch with diverse and ever changing needs. Customer loyalty is a strategic competitive advantage in this age of increasing competition and globalisation (Magenta). Customer allegiance is of great importance since if one takes into account the amount of money spent by a single shoppers, they would be impressed by how much money a single customer can spend in a certain store. All this can be attributed to customer loyalty. For clothing line retailers, earning customer loyalty just the first step as they have to maintain it throughout the lifetime of the business (Magenta). Moreover, businesses have to ensure that they deliver on their brand promises. Shoppers want to feel a sense of connection to the brand and this maximises on their satisfaction. Merchandising and online store design should be done according to the customers’ needs and this helps to boost their satisfaction thereby remaining loyal to the business (Magenta). It is important to customer satisfaction that buyers navigate the store with ease and convenient. It has been observed that if shoppers have a hard time while finding their way through the store, they are frustrated and look for better options (Farfan). On the other hand, if the store design dominates them, their shopping experience is boring and cumbersome and this keeps the customers at bay. Kids clothing retailers focus at ensuring that the shoppers spending quality time viewing their merchandise and make impulse purchases for increased productivity for the store (Farfan). A well managed store design attracts a higher number of customers since they can easily locate what they fancy to buy. Therefore, if customers spend too much time locating the items they want, they tend to go for options whose designs are easy to follow (Margarit). Visual merchandising entails all operations relating to sales, marketing and advertising (Farfan). Furthermore, it involves taking charge of the general outlook of the merchandise and the online store itself. An impeccably done online store attracts a high number of customers and they are more likely to choose the store over other players in the market. In the present times, creative visual merchandising including creative emotional themes, music and attractive colours are used to attract more attention to kids online retail stores thereby improving customer satisfaction. Generally speaking, shoppers want information that is brief and straight to the point. In other words, they should be able to get basic information including price, size and number of years at a glance. In a move to avoid information overload, details concerning the merchandise should limited but informative (Ebster and Garaus 2011:46). This saves them a lot of time while shopping thus improving their shopping experience and this increases the level of customer loyalty. It is important to combine texts with pictures so that shoppers from all over the world can process the information (Ebster and Garaus 2011:47). In summary, visual merchandising and store design if properly done by kids clothing retailers can be used to increase customer loyalty and satisfaction. References Brans, P. (2003) Mobilise your enterprise: achieving competitive advantage through wireless technology, Prentice Hall Professional, pp. 1- 34. Caroll, W. & Casey, R. (2004) ‘The impact of e-commerce industry turmoil on amazon.com: a strategic perspective’ The Internet Business Review. Cuthbertson, C. (2012) Retail strategy, Routledge, pp. 32- 63. Ebster, C. & Garaus, M. (2011). ‘Store design and visual merchandising: Creating store space that encourages buying’ Business Expert Press, pp. 45- 62. Farfan, B. ‘Retail career job profile - Visual merchandising associate’, viewed 04 Aug 2013 from . Grecia, A. ‘How to use technology to gain a competitive advantage’, viewed 04 Aug 2013 from . Hanf, J. H. & Pall, Z. (2009) ‘Is retailing really unique? Insights into retail internationalisation using business theories’, viewed . Magenta, G. ‘Earning and keeping loyalty = customers for life’, viewed 04 Aug 2013 from . Margarit, A. ‘Using web technology as a means to strengthen competitive advantage’, viewed 04 Aug 2013 from . Michael, A. & Salter, B. (2006) Mobile marketing: achieving competitive advantage through wireless technology, Routledge, pp. 45- 67. Mohapatra, S. (2012) E-commerce strategy: text and cases, Springer, pp. 63- 69. Pearce, R. ‘Globalisation and development: An international business strategy approach’ Transnational Corporations, vol. 15, no. 1, pp. 45- 65. Shepherd, J. (2007) How to start a home-based online retail business, Globe Pequot. pp 66- 68. Wrigley, N., Coe, N.M. & Currah, A. (2005) ‘Globalising retail: Conceptualizing the distribution-based transnational corporation (TNC)’ Progress in Human Geography, vol. 29, pp. 437–457. Zentes, J., Morschett, D. & Schramm-Klein, H. (2007) Strategic retail management, Gabler Verlag. Read More