The Impact of E-Business on the Retail Market

E-business, the process of doing business over the Internet, has had a major impact on the retail industry in a variety of ways. This paper will focus on the major activities that consumers and businesses can now perform, it will distinguish the types of customers who are more likely to participate in e-business, and it will include a prediction of the future success of e-business.

Activities

E-business has created new activities and features that consumers and businesses alike can participate in. These activities include: shopping twenty-four hours a day, seven days a week, from the comfort of your home; gathering information to be a more informed consumer; visiting a variety of "stores" to see who has the best price; creating the appearance of a relationship with the customer; and stream lining business to business ordering to reduce prices for the consumer.

The activity people are the most familiar with is online shopping. Online shopping is the process of purchasing goods or services from a website and having it shipped to either a local store location or having the product or service delivered directly to the consumer themselves. One example of this is JCPenny's. A consumer can find products on their web site, purchase the item, and then have it shipped either directly to their home to the nearest JCPenny's store. If a consumer would like to buy books, they can shop at Barnes and Nobles stores from the comfort of their home any time of the day or night. They do not have to worry about whether the store is open or not. Consumers can search for videos and music and more at Amazon.com.

A second activity that consumers are familiar with is the ability to gather large amounts of information that may not have been easily accessible prior to the emergence of e-business. The ability to gather information changes the consumer from a less informed shopper to a much better informed shopper. The consumer can find information about different models of an item, doing their comparisons before leaving the house. This means they will know what they are looking for when they enter a store and not spend the time deciding in the store. They can also visit web sites like the Consumer Product Safety Commission's and review safety and recall information for items before purchasing them. While much of this information was available prior to the e-business boom, it took more time and energy to compile it.

Another advantage of the emergence of e-business is the ability for consumers to comparison shop from home. They no longer have to physically drive to several stores to compare the prices of items they plan to purchase. They can log onto a companies web site and check the prices, then move on to the next company to see how they compare. There are several sites out there that are designed with this comparison shopping in mind. For computer retailers, there is a site called Pricewatch. Companies register items with the web site and the site displays the items to the user based on price and other search criteria. In the travel industry, there is Priceline that performs a similar function.

A marketing feature that companies can use to wow the consumer is the customized home page. When a consumer logs into the web site, the consumer's preferences for what information they would like to be displayed are loaded. This gives the consumer the impression of a relationship with the retailer and provides the consumer with the bulk of the information they are looking for up front.

An area of e-business that is little known to the average consumer is when companies order products and supplies from other businesses. Especially for the larger companies(Walmart, Ford, United States Steel, etc), much of this information is sent electronically using forms of EDI, web services, or other technologies. By using e-business means to order from suppliers, companies are able to lower inventories, reduce costs, and save the consumers money by lowering prices.

Participation in E-business

From the company standpoint, medium to large size businesses are the most likely to participate in e-business. These companies are the ones that tend to have Information Technology staffs that have the resources to participate in the business-to-business (B2B) and business-to-consumer (B2C) areas. Some smaller businesses that have the resources will also participate in these areas of e-business. The small mom and pop stores usually will not participate in the e-business arena because of cost constraints. These small businesses will sometimes have a web site that has basic information on it and will occasionally sell some items on it, but normally the sites are informational only.

From the consumer standpoint, the most likely people to participate in e-business are those that are comfortable with computers and technology. This primarily comprises the younger generations below approximately 60 years of age. These are the people that have worked around and/or grown up with computer technologies. People who are on the go with work, school, and home life are also more likely to participate in e-business methods because of their existing time constraints. It is hard for them to make it to stores during normal working hours without losing time elsewhere.

Outlook

E-business, while still young, is here to stay. The Internet has become a standard in the consumer's way of life and very few people in the USA have not been on the Internet at one point or another. As Internet access speeds continue to advance with the adoption of broadband technologies, the activities possible on the web and beyond will only increase. Like most markets, this one is driven by the consumer. Today's consumers want more flexibility in the way they do business with companies. If a brick and mortar company does not have e-business capabilities, it is limiting its ability to effectively compete with other companies.

Conclusion

It can be seen that e-business has had a tremendous impact on the retail industry. Retailers have had to adapt to new technological demands from users to allow them to participate in the e-business realm. Companies responded to these demands by providing web sites that could not only display information, but which could interact with their inventory systems and allow them to take orders over the Internet. The most common users of these new web sites are consumers that have grown up around computers and are comfortable using them. E-business is not just for business-to-consumer markets, but is also widely used in business-to-business markets to streamline processes and reduce costs. Finally, while e-business is still a young technology, it will continue to improve and increase in usage for a long time to come.

References

Amazon. http://www.amazon.com

Barnes and Noble. http://www.barnesandnoble.com

Consumer Product Safety Commission. http://www.cpsc.gov/

Ford Motor Company. http://www.ford.com

JCPenny. http://www.jcpennys.com

Priceline. http://www.priceline.com

Pricewatch. http://www.pricewatch.com

United States Steel. http://www.uss.com

Walmart. http://www.walmart.com