E-commerce, also known as electronic commerce, refers to the use of internet technology to buy and sell goods and services online. E-commerce is transforming the business sector in many ways. For entrepreneurs, e-commerce is preferable because it has a lower startup cost and it can reach a wider customer base. For the buyers, e-commerce is convenient, time-saving, and safe. However, there have been major concerns regarding the effect of e-commerce on the businesses in local high streets. The mass inflow of shoppers to online buying is a major concern for the local physical stores in the streets (Puri, 2017). The high adoption rate of e-commerce has had a negative effect on local high street businesses which will continue as more customers flock to online platforms.
Literature Review
Looking forward to the future of technology, the real fate of local high street shopping seems uncertain. According to Eastin (2002), internet penetration around the world stands at 55% while in the United States it stands at 78.2%. The current trend automatically makes the internet the next big thing in business (Eastin, 2002). Internet penetration is the main reason e-commerce is outshining local high street shopping. According to Eames et al. (2014), e-commerce shopping represents 9.5% of the total retail sales in the United States as of 2018. The statistic palls in comparison to the United Kingdom, which stands at an astounding 18.5% even though the rate of growth is still slow (Eames, Berkhout, Hertin, Hawkins, and Mackerron, 2014). According to Puri (2017), e-commerce shopping dominates in the category that is called GAFO. GAFO encompasses the retailers who deal with goods such as general merchandise, furniture, home furnishings, electronic appliances, clothing and accessories, office supply, and stationery. The second category in e-commerce shopping is the motor vehicle and parts sales, which is approximately 3.5% of the total sales (Puri, 2017). However, there are still some areas that will continue to enjoy the liberty of physical sales. Some of these sectors include gasoline, and food and grocery. As for gasoline, e-commerce sales stand at zero percent. The food and grocery sector is expected to see only 9 percent of its total sales done online. The use of e-commerce has been increasing at approximately 10% annually, which is four times the growth rate of the local retail industry. According to Burt et al. (2017), if the current trends continue, a third of the department store dollars will be spent online as of 2020. About 39 percent of local high street shop visitors also visit online shopping sites frequently (Burt and Sparks, 2017). Such a trend is alarming for local high street businesses because it means that making money in the future will be a hard task if more customers prefer shopping online.
The biggest challenge for local high street businesses is that the challenge is a multidimensional problem that requires different solutions for the many problems it poses. The retailers are forced to review their merchandising strategies, customer store experience, as well as to navigate the demands of operational excellence to match those of e-commerce shopping (Burt and Sparks, 2017). For instance, e-commerce is taking advantage of the big data to create a unique customer experience never seen before which puts local high street businesses at a disadvantage. The online stores offer personalised promotions using the data from frequent customer feedback, something not available in local shopping centres. The business-customer relationship also improves in e-commerce as opposed to local shopping, especially over time as the e-commerce store can continuously personalise its service. As retail evolves, customers are seeking richer experiences and deeper connections to brands, which can only be achieved using the current technology (Martinsons, 2008). According to Boschma et al. (2008), local high street businesses will have to rethink their operations. One option is to integrate their business with e-commerce to get to more customers and to increase their experience (Boschma and Weltevreden, 2008). For example, some major retail stores have been forced to launch their online shopping platforms to diversify their brand. The platforms enable them to manage customer feedback to help tailor their marketing strategies. The current estimate is that half of the local high street stores that will not have integrated modern technology into their business model might have to close shop as of 2030 especially in the developed countries (Akhlaq and Ahmed, 2015).
Customer demands are what drive business in the contemporary world. Unlike local high street shopping, e-commerce offers convenience as one can buy something just by clicking on his or her tablet. However, according to Dennis et al. (2010), online shoppers get to spend more on the same type of goods and services. For instance, online shoppers in the United Kingdom spend 19 percent more than infrequent online shoppers. In addition, the click and collect shoppers spend 37 percent more than non-users (Dennis, Morgan, Wright, and Jayawardhena, 2010).
Additionally, women often show a greater preference for online shopping, particularly via social media. Therefore, it is surprising how online shopping has gained more support than local high street shopping. The logical explanation here is that the customer is not looking for cost effectiveness but rather a richer customer experience. The extra cost incurred in making online transactions is compensated by the time saved in sealing the deal. The time factor affects the local high street businesses, which are often affected by external factors such as geographical location, traffic and long driving hours (Khalil, 2014).
Research Objectives
The main objective of this research will be:
To determine the extent to which e-commerce has affected businesses in local high streets.
Other objectives of the research will be:
To discuss into detail what e-commerce is and how it has transformed the customer experience regarding the shopping experience.
To explore why there are claims that e-commerce has affected the normal operations of the local retail industry.
Finally, the research will offer insight on how e-commerce shopping has affected the local businesses in high streets.
The main question of the research will be:
Has e-commerce shopping affected businesses in local high streets?
Other research questions are:
How has e-commerce shopping changed the customer’s experience for local shopping?
How has e-commerce shopping affected local street shopping?
Methodology
For this research, the qualitative research methods will be used. Lewis (2015) defines qualitative research as exploratory studies that seek to understand the underlying reasons, opinions, and motivations behind a certain claim (Lewis, 2015). The method provides insight into particular problems or hypotheses for potential quantitative research. However, qualitative research does not use numerical data to make conclusions on claims. The method focuses on the why rather than what of any social phenomena and it relies on basic human experiences.
Qualitative research falls into various subgroups. For this research, the chosen method is the case studies method. According to Lewis (2015), case studies are the most commonly applied qualitative research method. A case study typically involves a deep understanding of the utilization of multiple types of data sources. Case studies are often exploratory, explanatory, or descriptive (Lewis, 2015). This research will utilise peer-reviewed case studies about e-commerce to drive its conclusions. The research will source materials from online libraries and other internet platforms.
Conclusion
E-commerce shopping is the use of the internet to buy and sell goods. Due to the recent advancements in the technology sector, internet penetration is at the highest with 55% worldwide and 78.2% in the United States and will only keep increasing. This has led to the rapid growth of e-commerce shopping over local high street shopping. The reason for the rapid growth is that customers are looking for richer experiences that are available in online shopping. E-commerce shopping offers a lot of advantages such as time-saving, personalised convenience promotions, and good customer relations which do not exist in local retail shopping. These advantages have led to a decline in business for the local high street enterprises causing most of them to close shop or revert to e-commerce. The purpose of this research will be to determine how e-commerce shopping has affected businesses in local high streets.
References
Akhlaq, A. and Ahmed, E., 2015. Digital commerce in emerging economies: factors associated with online shopping intentions in Pakistan. International Journal of Emerging Markets, 10(4), pp.634-647.
Khalil, N., 2014. Factors affecting the consumer’s attitudes on online shopping in Saudi Arabia. International Journal of Scientific and Research Publications, 4(11), pp.1-8.
Boschma, R.A. and Weltevreden, J.W., 2008. An evolutionary perspective on Internet adoption by retailers in the Netherlands. Environment and Planning A, 40(9), pp.2222-2237.
Burt, S. and Sparks, L., 2017. E-commerce and the retail process: a review. Journal of Retailing and Consumer Services, 10(5), pp.275-286.
Dennis, C., Morgan, A., Wright, L.T. and Jayawardhena, C., 2010. The influences of social e-shopping in enhancing young women's online shopping behaviour. Journal of Customer Behaviour, 9(2), pp.151-174.
Eames, M., Berkhout, F., Hertin, J., Hawkins, R. and Mackerron, G., 2014. 2 E-topia? Scenarios for e-commerce and sustainability. Digital Futures: Living in a Networked World, 39.
Lewis, S., 2015. Qualitative inquiry and research design: choosing among five approaches. Health Promotion Practice, 16(4), pp.473-475.
Martinsons, M.G., 2008. Relationship‐based e‐commerce: theory and evidence from China. Information Systems Journal, 18(4), pp.331-356.
Eastin, M.S., 2002. Diffusion of e-commerce: an analysis of the adoption of four e-commerce activities. Telematics and Informatics, 19(3), pp.251-267.
Puri, R.D., 2017. A study on impact of online grocery stores on local stores and vendors in India. [Online] Available at: http://ir.inflibnet.ac.in:8080/jspui/bitstream/10603/198085/5/05_%20abstract.pdf [Accessed 7 Nov. 2018].
