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In the retail industry, the concept of online shopping is an emerging trend that most business organizations are adopting to facilitate their sales. The rapid growth in eCommerce is caused by the advancement in digitalization whereby consumers and business owners have access to technologies that enable them to view various merchandise posted by sellers. During the period of COVID-19, most companies opted to digitalize their operation as a way of increasing their operation following the strict measures placed by governments. The sudden shift from in-store purchases to internet buying presents both retailers and consumers with a number of opportunities as well as challenges. In the case of enterprises, the platform enables them to display their products including prices and features on the website where consumers can view them. On the side of clients, customers have the ability to compare different commodities before opting to buy. While online shopping provides many positive effects to the consumer and businesses, it creates significant disruption to traditional shopping including, reduced revenue, limited job opportunities, and declining income for the retail space leasing company.
Generally, online shopping saves consumers a significant amount of time in stores. Through the approach, customers usually check the products on the internet and compare them accordingly based on prices and qualities. Upon satisfaction with the products, the clients then place an order for the respective commodities without having to visit the stores in person. Even if the buyer opts to pick the items directly from the shop, already they have the necessary information about the product thus they do not spend time in the store looking for additional details (Vakulenko et al., 2019). The practice thus makes consumers spend less time unlike purchasing goods traditional way.
Furthermore, online shopping allows consumers to easily compare various brands of products before choosing to buy. Customers are capable of accessing different websites of business organizations and obtaining relevant information about the products and services being offered by the respective firm (Micu et al., 2019). The platform thus makes it convenient for buyers to compare and contrast various models based on price, quality, and other features. The facet enhances the consumers decision-making concerning the product that can serve their needs.
For the cases of businesses, online shopping increases customers reach. In most cases, especially in traditional brick and mortar, enterprises had limited customers because they only relied on the clients who could visit the stores. The aspect made it challenging for the sellers to increase their sales (Vakulenko et al., 2019). However, with the use of the internet, many consumers can easily access the online store of such entities hence increasing chances of buying the products. In addition, the businesses have the potential to display a significant amount of products on their website thus attracting more consumers to purchase from their stores.
Moreover, online shopping has enabled business organizations to reduce operational costs. For instance, firms may opt to display the products they do not have in the store and only restock them once a customer makes an order for such commodities. The approach allows sellers to require less space to keep their inventories thus making them reduce rent expenses. Similarly, traditional shops require a significant number of attendees to ensure the items are arranged in order and customers are serviced accordingly. However, in the case of an online platform, there is a catalog that clients can follow to locate the items of their choice. In other words, corporations do not require an employee to direct the buyer where to obtain the commodity. The practice enables business firms to reduce their workforce thus lowering costs.
Despite the benefits that consumers and retailers derive from online shopping, business trends present several challenges to the industry. For instance, the increase in buying through the internet has resulted in a significant decline in on-store employment. Previously, business organizations had to hire shop attendants ranging from customer care to cashiers in order to facilitate operation processes. Furthermore, most well-established entities were forced to have a large number of sales and marketing personnel to market the products and increase awareness of the brand. However, with the adoption of online stores, companies no longer require the workforce to assist in sales and managing customers queries. Instead, the firms have customized their product catalog in a manner that customers can access the necessary details through the business website ( How is online shopping affecting retail employment, 2021). The aspect has made the majority of employees lose their jobs across the retail industry. Therefore, as companies advance and embrace online shopping, job opportunities in the industry are declining disproportionately.
Similarly, the increasing trend of online shopping is negatively affecting the leasing business in the retail industry. Generally, in a normal economic climate, retailers usually rent physical spaces to store and sell their products. However, with a surge in eCommerce, most of the sellers have adopted the trend of stocking a few products in their stores and displaying varieties on their websites to attract customers. Once a consumer has placed an order, the retailer then sources the commodity and ships it directly to the client. The approach has made most of the entities reduce the physical stores. In other words, the vendors do not have to lease a store for storage or display purposes. Therefore, it is a challenge for businesses conducting leasing operations in the market. The organizations thus face limited leases making their business decline as well as forcing the agencies to restructure the rent agreements with potential firms ( Impact on retail leasing from online sales LeaseInfo, 2021). In the process, the leasing companies are experiencing a decline in income following a decrease in rents.
Furthermore, the emergence of online retailing is reducing traditional brick-and-mortar stores. According to Dyason et al. (2022), the increasing online retailing especially during the COVID-19 period significantly impacted the operations of physical stores. The authors iterate that following the strict measures imposed by the government, most consumers adopted online shopping which prompted the sellers to venture excessively into the trend. Following the change in business operation, traditional stores are finding it a challenge to compete in online retailing since buyers find eCommerce convenient and reliable for them. Therefore, business organizations using the brick-and-mortar system are currently unable to provide the shopping experience that consumers drive from purchasing through the internet. The aspect is making the number of physical stores decline following their less competitive nature in the industry that is shifting to a digital platform.
The increasing trend of online shopping is making shopping malls experience reduced sales. Before the emergence of eCommerce, many buyers preferred visiting shopping malls to purchase necessities. However, in contemporary society, consumers are shifting significantly to virtual buying whereby they order and pay for products through the companys website. The approach has made most departmental stores encounter a decline in sales since only a few individuals shop from them. Yan (2018) compares the relationship between the available shopping malls against the increasing rate of online retailing. Based on Yans finding, the number of malls is decreasing significantly as eCommerce retailers are thriving in the retail industry. Furthermore, Yan (2018) examined the progress of online retailers taking Amazon as an example and the result indicated improvement in their business operations. Therefore, it can be noted that the rising rate of online retailing in society is negatively affecting the performance and the existence of traditional shopping malls.
The need to transport the products from sellers to consumers has increased the truck movement on the reads. The aspect is making the available transportation network a challenge that requires an immediate solution. As many clients are ordering the products from the stores, sellers are forced to facilitate the shipment process which in turn becomes detrimental to public utilities such as highways. According to Adibfar et al. (2022), heavy use in the shipping of products can easily interfere with bridges and road structures. The authors argue that most of the roads were constructed in earlier years before the current trend making them unsuitable for the frequent movement of tracks.
In addition, online shopping has reduced the customer experience such as touching and feeling the quality of goods before purchasing. Generally, traditional stores allow customers to have direct contact with the commodities. The approach makes it easier for the buyers to determine the quality and texture of items such as clothing. However, when it comes to eCommerce, the shoppers do not have the ability to examine the mentioned aspect because the product can only be assessed on the companys website. Therefore, sometimes the consumer purchases a substandard commodity due to limited experience they would have prompted a change of mind. Furthermore, when clients move from one store to another view variety of products, and interact with other buyers creates memorable moments for customers. Such experiences are limited in online shopping thus making a gap between the firm and buyers.
The increasing online retailing has positively impacted business organizations as well as consumers. Through the companies websites, buyers are capable of accessing product information and making orders instantly without having to visit physical stores. Similarly, firms have been able to reduce the workforce since most of their operations are digitalized leading to reduced responsibilities to staff members. The approach is enabling entities to lower operational costs which is beneficial to the growth of a company.
Even though online retailing has proven effective in the retail industry, it is significantly affecting traditional brick-and-mortar businesses. Most malls are currently closing their doors following a decline in sales. The leasing businesses are too making losses due to a decrease in the number of firms renting physical space. In addition, on-store employees are losing their jobs since their roles have become insignificant to business organizations. Therefore, in order for the retail industry to be accommodative and competitive for online and offline retailers, there should be a proper balance between the two practices.
References
Adibfar, A., Gulhare, S., Srinivasan, S., & Costin, A. (2022). Analysis and modeling of changes in online shopping behavior due to COVID-19 pandemic: A Florida case study. Transport Policy, 126, 162-176. Web.
Dyason, D., Fieger, P., Prayag, G., & Hall, C. M. (2022). The triple blow effect: Retailing in an era of disasters and pandemicsThe case of Christchurch, New Zealand. Sustainability, 14(3), 1779. Web.
How is online shopping affecting retail employment? (2021). Liberty Street Economics. Web.
Impact on retail leasing from online sales LeaseInfo. (2021). Lease management software & systems in Australia. Web.
Micu, A. E., Bouzaabia, O., Bouzaabia, R., Micu, A., & Capatina, A. (2019). Online customer experience in e-retailing: Implications for web entrepreneurship. International Entrepreneurship and Management Journal, 15(2), 651-675. Web.
Vakulenko, Y., Shams, P., Hellström, D., & Hjort, K. (2019). Online retail experience and customer satisfaction: The mediating role of last mile delivery. The International Review of Retail, Distribution and Consumer Research, 29(3), 306-320.
Vakulenko, Y., Shams, P., Hellström, D., & Hjort, K. (2019). Online retail experience and customer satisfaction: the mediating role of last mile delivery. The International Review of Retail, Distribution and Consumer Research, 29(3), 306-320. Web.
Vakulenko, Y., Shams, P., Hellström, D., & Hjort, K. (2019). Service innovation in e-commerce last mile delivery: Mapping the e-customer journey. Journal of Business Research, 101, 461-468. Web.
Yan, X. (2018). Impact of online shopping on shopping malls. Web.
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