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You are expected to write a report on business topics. In this report you need to critically analyse the issues presented in this business topic and support your arguments with various secondary data or information.

Case study of a high street retail company and issues due to online retailing

Technology has helped in making the life of the individuals Bette but at some point of time, it has also led to various issues. People can get all the facilities at home without even stepping out of home. Starting from talking to people, buying things and paying bill, technology has made things easier is every possible aspect. While people are shifting their preferences and starting to adopt technology, the traditional way of life and the people who are making business from the traditional method are being hugely affected. The biggest example that could be seen is in the retail industry. With the sudden boom in the technology, the total face of the retail industry has taken a different turn. People are shifting from the normal retail stores and are preferring to buy the products online. People who used to make living from the normal stores are also being hugely affected by the sudden growth in the online industry. People have shifted their preferences and the businesses of the normal stores have drastically fallen. In the initial days of the online business, customers were sceptical about the online stores but gradually the online business has been able to win the trust of the people. The online stores are giving similar facilities as the customers used to get the normal stores. Starting from the payment, return and exchange until the trial, the customers can ask for anything and everything from the online stores. In addition to this, the customers can get all types of products online along with the delivery at home. In a time, when everybody is working and leading a busy life the online stores have been helpful to a huge extent. They would not have to go out of the house and get everything wherever they want. The clothing industry is one such industry that was highlighted the most. Even though, the people could not see the material before buying but ‘trial before buying’ is one such phenomenon that has helped removing the doubt from the minds of the people. However, technology has certain disadvantages. It can go wrong anytime and then the entire business fails. As people are becoming over-dependent on technology, they are forgetting to keep a track of the information offline. Hence, technology failure lead to huge data loss.

The report will discuss the opportunities and issues of technology in the retail industry. The shops at high street of the United Kingdom have been hugely hit due to the advent of the online stores. The businesses have failed due to the growth of the online stores. The employees are leaving, as they are not getting proper pay. The report will discuss the issues faced by the normal stores of high street and evaluate the way in which they can survive in the competitive market. On the other hand, along with opportunity the online stores are facing issues with the technology. The opportunities as well as the issues will be discussed in the report to get better idea about the retail business both online as well as offline.

Strategy that can be applied

The fight of the high street retailers with the online stores is never-ending. There has been a growth in the sales but the degree of growth is not worth mentioning. The feeble growth could be seen from the mid-2014. Since then the trade group and the sales growth has been slowing down. The first blow the retailer faced was during the recession.  Since is biggest dip in the year, 2009 until the year, 2015 the sales of the store has been the poorest.

The people who suffered a lot due to the poor sales are the employees of the store. The attrition rate among the employees has risen. As the online stores are rising, who do not need any direct employees and are able to give the products to the customers at a cheaper rate. As the Fashion HQ is not able to get a good amount of customers to the online stores, they have to let the employees go. The employees who were working at the retail stored were shifting to other industries where they can get permanent jobs and the online industry will not affect the business of the organization. Many of the employees are also switching the countries to get better job opportunities. The retail owners of the high street are not being able to expand the business, as they do not have proper human resource to carry out the promotional activities.

Advertising and retaining the customers have been another issue for the retailers. Earlier, advertising used to be easier. They used but the best space to advertise about their products so that the customers can see the products easily. The idea of buying the best space has been converted for the online stores as well. The online stores can highlight the products with the help of paid search. The online retailers pay a certain amount of money to the social marketing websites so that the name of the company comes on the top of the timeline of the users. As more number of customers are present online, buying space online is helping the online stores are attracting more customer and retaining them is even easier as most of the time they are favoring online transactions only. Thus, for Fashion HQ, attracting the customers and retaining them is becoming tougher. As most of the customers are present online, they are introduced to the online discount and sales most of the time. Even if a normal retailer advertises with the help of the hoardings, it would not help them to draw the huge amount of customers as drawn by the online stores.

Marketing theory to implement the strategy

Building expertise in one type of products

The customers can get variety of products online. Starting from the women, men and kids until the household good, online is the one stop for every customer. In addition to this, the types of products also vary accordingly. The online stores are the places where the customers could get everything. However, the biggest setback of the online stores is that the customers can touch the product and check the quality of the products. When in one hand, the online stores are giving a number of choice, the brick and mortar stores should stick to one type of product and excel in that. if the brick and mortar stores follow the same strategy as the online stores then there will be no difference between the two. As a result, the stores should think about doing something different from just repeating the things the online stores give. They either choose one type of gender or one type of product or deliver the best to the customers. If the customers are happy and satisfied with the product, then they should not mind coming down to the stores and the buying the products t from the expert retailer.

Fashion HQ can make use of the Ansoff’s matrix to understand the area where they need to develop to win over the online retailers.

 

Figure 1: Ansoff’s Matrix

Source:

As per the Ansoff’s matrix, a company can explore four areas if they want to enhance their business.

They can give new look to the existing product and promote the product to the existing market. The customers will be same and so is the market but promotion of the products will be different. The customers will be presented with the same products but in a different manner so that they get attracted towards the products. Either the look of the product will be the changes or some of the features will be added so that the customers will feel that they are getting a different product but from the same company. As the company knows about the market conditions and tastes of the customers hence, they will know the exact way to launch the products and promote them among the customers.

Not all products are made for all types of market. The customers may not be made for that particular type of market. If a company is not able to attract the customers, they should look for the markets where the footfall of the likeable customers will be more. Proper market research should be done, so that the new market development provides fruitful for the company. The business owners should chose proper market conditions for the launch of the products.  In this way, the business will also be enhanced amid the right customers.

Some of the products cannot survive long in the market. The products either fails to attract the customers or there is too much competition in the market. The strong competitors in the market make it difficult for the existing product to survive. Hence, the marketers should look after the right type of the product that will help in attracting the customers from the market. Developing new product that is different from the existing products can help the business owners to gain the customers. They can promote the products in the existing market will help of the information they can collect from the market and the taste of the customers who are present in the market.

Diversification is that type of marketing that is most risky out of all types of marketing. Not only the product but also the market will be new. The marketers will have to know about the new market, the existing companies and the customers. Based on the taste and preference of the customers in the new market, the new products need to be developed. In addition to this, the economic conditions and the strength of the competitors should also be taken into account while developing the new products.  There is a high chance that both the product and the market will be a failure. On the contrary, both the products and the market can be successful altogether. However, the marketer will have to be very careful while implementing the diversification as the new marketing strategy.

For Fashion HQ, product development will be the best-suited way to enhance the business. The retailer of the high street is already suffering loss. The diversification of the market and the product will not only be risky but will also demand a huge amount of expenditure. When the business is not going well for fashion HQ, it might not be right to take a huge risk by opting diversification. As fashion HQ is a brick and mortar shop, they have to stay in the existing market. Even if they want to open a new shop, it will not be cost effective. Hence, the new market development will not be the right option for them. As there are number of competitors present in the high street marker, hence developing a new type of promotion might not help the company. Hence, there is only one option left for fashion HQ and that is developing a new product or giving launching an old product but giving the shape of a new product. The online stores give a huge range of products to the customers. Fashion HQ should look for the products that should be able to attract the customers. They can focus one type of product and choose female fashion clothing but by using natural fibres while manufacturing the clothes. Once they will use natural fibres, they will be able to manufacture the clothes at a cheaper rather than contributing a huge amount of money for buying chemicals to manufacture the clothes. If the customers get clothes that are made up of natural products they would not mind coming down to the store. In addition to this, clothes made of natural fibres will be cheaper. They would be saved from having any skin disease that might arise from the synthetic products.

There is no need to bring a huge change in the organization structure to the new strategy that could be implemented by fashion HQ.  They have to hire new employees in the organization. Functions of the employees will be altered based on the requirement of the new employees in the organization. They have to hire employees who has the knowledge of the making the clothes that are based on natural fibres. In addition to this, they need personnel who will help the employees to learn the use of natural fibres to make the clothes. Employees who are present in the organization used to make clothes that are made up of synthetic. A company should make the effort so that the present employees could be taught the new ways of manufacturing the clothes. Some of the changes are needed in the organizational structure by adding an extra department for training.  The trainers have to look after the employees who will be able to understand the technicalities for the manufacturing of the clothes. In addition to this, they have to look for promoting among the customers. The need to hire a trainer who will have good knowledge about the natural fibres so that they not only able to teach the employees of the manufacturing process but also will help the marketing department to sell the products. In the initial stage, they have to make the employees of the manufacturing of the products. Later the employees of the marketing department will be taught about the products so that they are able to market the products well.

The marketing department need to identify various ways of marketing styles that will be able to attract the customer. The shops may not sell the products online but can promote the products online. They can give away online coupons and promote the products through personalised mails. The customers can use the coupons and make the purchase while they come to the stores. They can also promote the products with the help of the applications that give discounts for various shops. The customers can make the purchase by buying the discount coupons from those applications. In this way, they will be able to carry out their traditional way of selling the goods but will be able to promote products with the help of the benefits of online promotion. Promoting the products in various events and promotional activities will also help the retailer gain a huge amount of footfall. If any of the events is directed towards promotion of nature then that should be given most importance by Fashion HQ. Promoting the products at the events will help in gaining a strong foothold in the market in spite of the tough competition with the online stores. The marketing department will have to be proactive in promoting the products in the market. They have to keep a check with the online stores to assess the styles of the clothes and bring the changes accordingly.

Future developments in technology and its impact on the retail industry

The impact of technology on the online retrials has seen various colours. It has made the lives of the individuals easy and comfortable.

Earlier when people had to buy things from the normal stores, they had to carry cash and make the payment in the stores. Later with the evolution of technology, the people could use the credit or debit cards for purchasing goods from the stores. However, to make use of the credits cards, they have to use certain machines to swipe the cards. However, with the advent of technology things have changed inside out. Earlier many people used to doubt the products from the online stores and hence the online stores introduced the cash on delivery services. The customers can check the products once they arrive and then make the payment accordingly. There is no need of extra machine to swipe the debit or credit cards. The numbers on the cards along with the pin and on time passwords are enough to make the payments. The facility of net banking is also an added advantage. The customers can easily link the payment with the online banking system. The online stores will deduct the amount of money as per the cost of the clothes. The customers are being saved for handling any cash.

Technology has helped the online retailers to give the experience of normal shopping to the customers. Earlier, they used to shop from the stores, they could exchange the products easily. With the advent of technology, the online stores have also launched the idea of returning and exchanging the clothes online. If the customers are not satisfied with the products, they can easily file for the return as well as exchange. The customers would not have to go out of their house for doing any kind of purchasing activities. The company will come to the house to deliver the products as well as the pick up the products. They can also order the clothes through computers and mobile and they would not have to step out of the house for buying purpose. The idea of trial room has also been introduced by the online retailers The customer might complain that in normal shop they are able to try the clothes before buying. If they chose the option of trying before buying then the online stores send the clothes and the  delivery person will wait. If the outfit does not match the size, then the customer can get another size of the same outfit. Hence, it can be seen that for the normal stores they have to go for trial room but for the online stores they can try the clothes at home.

The customers can get to know the estimated time of delivery of the goods once they place the order for the products and their choice of address. Technology has also helped in keeping a track of the customers with the delivery of the products and they a keep a track of the products. Starting from the order being placed, until the time the person receives it, they can track the products. In addition to this, the customers are always given the name of the companies that are handling the package mid way. In this way, the supply chain companies are been helped by the online stores also get proper recognition. Technology has helped the customers to understand the time that is required in each of the phase.

Technology has helped the customers to cancel the products if they change their mind. Within a certain time limit, the customers are being given the choice to cancel the products if they want to. They would not be charged anything extra for the cancellations. Even if the customers forget to cancel in the given time limit, they can always return the product within the given time limit. The online stores also inform the customers about the products that are non-returnable. In this way, both the sellers and the customers are being saved from any further issue.

Technology has not limited the customers but also the sellers. They can get the feedback from the customers about their service. Earlier the sellers would have to contact the customers either over phone or meet the customers and keep a track of them to know whether they are satisfied with the products. Nowadays, they can get the feedback of the customers just by mailing them and asking for their feedback.

When on one hand, the consumers are liking the change in the retail industry as they are able to get the things easily. However, the consumers have seen the changes over a period and the changes have happened gradually. The most common problem that the retail industry is facing is that the things are going towards disruption. The consumers have seen changes happening over a period and now they need more. They are always in a lookout for ‘now what’. It might happen that the online stores have nothing else to give to the customers. However, the expectations of the customers are making it difficult for the retail industry to keep a track of the things. The online stores have already gained success over the normal stores with it unmatched technology and services. They might not have thought that the needs and demands of the customers will keep on rising and they will always look for things that are new in the market. The latest idea that the online retailers have thought about is the pre booking. The demands of the customers have risen to such a level that they are even ready to buy things without even looking at the products. Even before a mobile phone is launched in the market, it goes for sale in the online stores. They are pre booking the products so that they are first to get the product. The idea has been quite successful for the mobile phone industry. However, for the clothing industry it has not been tested yet. Due to the urge of getting something new, the customer are not staying loyal to any one company. If they are not getting one product from one online store, they will be moving to other stores as well.

The margin for profit is diminishing day by day. The global economy is not certain. In addition to this, the demands for the customers are changing in a daily basis. As the days are passing, they are looking out for new products and services. They have got products at a cheaper rate and now they want products that are cheaper that the previous ones. To meet the demands of the consumers, the online companies are finding it hard to bear the minimum shipping cost in the supply chain management. The competition is also rising and the online companies are trying hard to give the customers the products at a cheapest possible rate it can. While shipping the products, the companies will have to get the products from different places. In such a situation, the inventory cost is also rising. The products will have to be kept in the inventory and the company will have to pay the inventory charge to the inventory if they do not have the inventory of their own.

Not only the technology but also the operation of the online industry is also changing and the retail industry is even more prone to changes as they have to keep up with the new styles and the new designs of the products. In such situation, the online stores will face issues with the changing market. They will have to keep up with the changes in the technology but also have to keep a check with any kinds of designs or products. The customers tend to buy the clothes online because they get clothes that are designer wears but can get them at a cheaper rate. Hence, they have to keep a check on the new designs as well as the designers who are introducing new clothes. The customers will also get attracted to the websites that are easy to use and provide different kinds of products at a cheaper rate. The online stores will look have to keep on upgrading the website so that it will be easier for the customers to operate the websites. In addition to this, they have to tie up with more companies so that they can give more amounts of clothes to the customers. The continuous changes should also be tackled with proper change management in the organization. The employees will have to work harder and new employees should be hired in the organization so that they will be able to bring business. The online stores will have to train the new employees as well as the old employees need to be trained, which might affect the flow of the business processes.

The IT department has the most important role to play in the online retail industry. The entire process is based on the information technology and one small problem can lead up to other issues. In fact, it might happen that he entire process of buying and selling will fail. Earlier, when IT department was only responsible for maintaining the websites is not responsible for carrying out the entire process. Starting from attracting the customers, main the look of the websites, helping the customers to buy the goods, payment systems, keeping the customers updated, keeping a track of the delivery and the after sales services, information  technology is everywhere. Even though the IT department has made the process easier, the online stores should be aware of the issues that they might face due to the over-dependency in technology. Technical faults will give rise to various issues. However, there can be other issues like breach of data. The details of the customers as well as the company are stored in the websites. In addition to this, the sales information is also stored in the websites. If any of the data is been hacked by a hacker, not only the company but the customers will be highly affected. The information of the customers, the bank account details are being are at times, stored by the websites. The online stores will face issues as they have to depend on the IT department for the entire operations and the process will be affected if the IT department is being affected in any manner.

Conclusion

The high street retailers are facing serious issues as the online stores are giving the products at a cheaper rate. The employees are leaving the companies, as they are not getting proper payment. They are looking for jobs that will give them permanent payments or will give them better job security. They are also thinking of going abroad. Advertising and retaining the customers is also coming out to be a big issue. The customers are mainly present online and they are aware of the products that are available online and the social media. In such situation, it is becoming difficult for the retailers to attract the customers, as they are more interested in the online media. They are not looking for the advertisement hoardings and are showing more interest in the online advertisements.

It has been concluded that the normal retailers will have to build a strategy where they can gain expertise to a new type of products. As the online stores are giving all types of products, the normal stores can concentrate on one type of product and promote that. The normal stores can use Ansoff’s matrix to understand the new area where they can develop to enhance their business. They can select products development and use natural fibers to manufacture the clothes. In this way, the customers will see that they are getting better products but a cheaper rate. The organizational structure need not be changed hugely but a training department needs to be incorporated where the trainer will train the employees to understand the new ways of manufacturing of clothes. In addition to this, they will look after the marketing department so that the marketing professionals to have thorough knowledge about the types of products. In this way,  the marketing professionals will be able to make the customers understand the importance of the natural fibers. Certain changes are required as far as the marketing activities are concerned. They can give online coupons and discounts, which the customers can redeem once they come to the stores. In addition to this, they need to be present in the events and promotional activities so that the customers will come to know about the products and will go down to the store.

The sudden growth in the technology has helped in making the business easy. Technology has helped in eradicating the gap between the normal stores and the normal stores. The customers are getting all types of facilities that they used to get in the normal stores. In addition to this, the customers are always informed about the delivery of the products and track the order at any point of time; they would not have to think about the delivery or the payment due to advent of technology.

However, it has been seen that when on one hand, the online stores are been able to attract the customers; it is also facing certain challenges. The customers are continuously asking for new things as they have got used to the continuous changes. They have even taken one step forward and are booking the product even if the product is launched in the market. As the competition is getting tougher, they are looking for new ways of marketing the products. They have to keep a check on the products as the environment is changing. To stay afloat  in the competition, they have to change their process on a regular basis. While adhering to the changes, they the business process needs to be altered. They will have to keep on changing the flow of business at a regular basis. Starting from the beginning of the business, until the end of the business are handled by the IT department. If the IT department fails then the entire business process will fail.

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