The Effect Of Online Shopping

On The Physical Storefronts

Word count: 1331

Student’s name: TRUONG VAN THANH HAI
Class: DE2
Teacher’s name: Eleanor Young
Date: 04/5/2016
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On the new trend of shopping and the proliferation of modern technology, it is likely to think
that personal services and goods in branches and stores is diminishing because of online
shopping and digital services. It has been stated that ‘retailers are enduring difficult times.
The recession, government regulation and the rise of the internet all mean that cost and
competition are rising but turnover is not’( Molenaar, 2010 ). This essay will evaluate why
online shopping impacts the physical storefronts in the era of internet and cutting-edge of
technology in businesses recently. The research will research on three main factors effects on
the changing of consumers buying behaviour : price competition, information efficiency, and
shopping convenience, which online shopping uses as the tools to drive their customers. After
that, some effective solutions would be taken into account to help these physical stores
survive and stand on the high competence of the retail market in business activity. Through
the paper, retailers will aware of the challenges of online shopping in the near future and also,
they will think deeply into these challenges and take action to come up with better strategies.

It is undoubted that online shopping has many effects on traditional stores in retailing
activity. To consider these effects and to understand the market desires or needs, it is
important to get insight into customers buying behaviour. There are many factors that
contribute to online customers behaviour, the first factor that is price competition. Price or
cost play an important role in marketing mix strategy because it determines the business’
profit and therefore, it is the business’ survival. According to Katawetawaraks and Wang
(2011), online customers are usually given more chances to see a variety of the price
comparisons of products and services, which can be easily found in many different online
stores and websites on the internet. As a result, they can also find the same products at lower
prices than the others in local stores. Generally, many customers tend to be easily attracted by
these cheaper products in online stores and therefore, they may make their buying decisions
in favor. If the traditional retailers reduce the prices to compete with e-retailers to survive,
their business’ margins will be decreased and this may lead to some negative effects on the
businesses in the long term.

A feasible solution could help traditional stores overcome and succeed in this situation is that
they should focus on the quality of services and products rather on the price reduction. For
example, a shoe shop can position itself by selling high-quality products, or its designer

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products that can not find anywhere else. Riddell ( 2013) claimed that ‘the boutiques and
smaller retailers never position themselves as competing on price. They’re competing on
services’.

This mean, to run retail businesses successfully in this situation, retailers should pay more
attention to the groups of loyal customers and build their position on the market by providing
high-quality products and customers services to gain more and more profits. Doing this due
to the fact that the customers databases might be smaller, however, the profit on each
purchase would be higher. In many cases, loyal customers believe that there is a wide gap
between quality services and price, and the better quality of services and products will always
accompany with a higher cost (Hyttinen, 2014). Therefore, it is important to gain the
customers trust as well as build a loyal customer base. To do this, besides selling the high-
quality products, retails should consider providing more after sale services such as repairing,
maintenance, and insurance services as well as home delivery services with friendly staffs.

Another factor has the major contribution to change online consumers behaviour should take
into account is information efficiency. In the internet environment, online retailers tend to
provide a lot more information about their products and services to their customers rather
than traditional retailers do. In this way, they can easily persuade their customers, who need
get more product information and few chances to touch and feel the products, to make their
buying decisions. Furthermore, when searching on the web stores and finding information on
the internet about the products that fit the needs, online users can also take a lot of
advantages from the recommendations and reviews of products by other customers. As a
result, these advanced pieces of information can motivate them to buy these products online.

In order to remain attractive to customers and increase the competition with the web retailers,
it is obvious that the traditional retailers need to change and adapt the ways they interact with
customers. They not only wait for customers come to the shop in the trading hours, but also
be able accessible at any time when the customers want to be. Thus, the need for retailers to
present online to make them available for searching is the essential emergency of survival. It
is believed that ‘retailers can not ignore the internet. It allows business all shape and sizes

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new and different opportunities to communicate with customers’ ( Varley, 2006 ). There are
some ideas that storefronts and company could consider to sustain their appeal and tackle the
obstacle which mentioned above such as: to join into social networks media, to create their
own ‘My Maps’ on Google’s location search map, to build the websites which contain
information about their company and feature of products listing. Riddell (2013) argued that
‘when customers browse online and then go into the retailer’s bricks-and-mortar location,
they end up spending about 20% more’. Therefore, it is necessary for retailers to be presence
online to provide a better in-store experience.

It is undoubted that there is more convenience to shopping online instead of shopping at

physical shop in-person. First, customers can take less effort because they can buy any
products and services from their home instead of taking a walk to the door of shops . Second,
by using the internet, online users can shop any time of the day whether during business
hours or not because most of the e-stores include online customer services 24 hours a day.
Finally, it seems to be time saving because customers can only take a few minutes to get the
things they want to buy on web stores rather than taking hours when they buy things in the
shops with basing on traffic conditions or time wasting for finding a car parking.

There is a way can approach to help traditional shops to give more sense of shopping
experience. It is worth that shop should change into places like shopping centres with their
own parking facilities, where there not only are more and more hospitality functions but also
include featuring entertainment such as cinemas, game halls, fast-food restaurants. As a
result, this change aims to make customers more sensible and entertaining when they go
shopping at stores in person. Molenaar (2010) stated that ‘shops will fulfil a new role: a
social role, a role as a social meeting place, a ‘feel at home’ role’.

In conclusion, it is clearly seen that online shopping has many effects on the physical
storefronts and when technology has been developing and the internet is bursting, these
effects become clearer. This essay has clarified three factors of e-stores that make a major
contribution to consumer buying behaviour as well as affect the development of traditional
stores in the past and near future.These are price competition, information efficiency, and

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shopping convenience. Through the essay, traditional stores will gain deep insight into these
factors and then they can be able to use some possible solutions such as: located themselves
on high-quality services and products, providing and maintaining many more after sale
services, to be appearance more on the internet via company website and social network
pages, self-located on Google’s map with ‘My Map’ or by giving more sense of shopping
experience with entertaining combination. If these solutions are done correctly, they can help
the traditional stores adapt and operate their business successfully.

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REFERENCE LIST

Molenaar, C 2010, Shopping 3.0: shopping, internet or both ?, Gower, Surrey, pp. 1-4.

Varley, R 2006, Retail product management, 2nd edn, Routledge, New York, pp. 241-242.

Katawetawaraks, C & Wang, C 2011, ‘Online shopper behavior: influences of online

shopping decision’, Asian Journal of Business Research,vol. 1, no. 2, pp. 66-72.

Hyttinen, K 2014, Internet stores or brick and mortar – consumer business is changing,
viewed 29 April 2016, http://www.sn4.com/en/blog/2014/11/internet-stores-or-brick-and-
mortar-consumer-business-is-changing

Riddell, C 2013, How bricks-and-mortar shops can compete in an e-commerce world, viewed
29 April 2016, http://business.financialpost.com/entrepreneur/how-bricks-and-mortars-shops-
can-compete-in-an-ecommerce-world

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