Evaluate the use of e-commerce in a brick and click organisation
Evaluate the use of e-commerce in a ‘brick and click’ organisation
Brick and click indicates that business has shops (brick means physical presence) and also deals online (click means internet presence. My chosen organisation is Asda as they operate online and in store. Asda is a private limited company and provides goods and services which customers require in their daily life. Asda started online in 1998 and has now expanded all over the UK. Asda provide many services including grocery, general products and financial services with over 140,000 employees. ASDA’s headquarter is based in Leeds, UK. And has 532 retail store locations within the UK. Asda's operating profits increased by £51m to £857m on sales of £21bn in 2015. There are many reviews from third party sites which show mixed reviews for the online store, some include:
By bringing e-commerce into Asda has many great effects on the company but also has many negative. Having ecommerce in Asda will affect the customers because they will then be able to sell everywhere in the UK and Ireland which means they can target a larger audience. Another, advantage of online trading is that Asda would be able to target the customer who are disable or don’t have time to visit local store. Again it helps Asda to increase their customers. Without e-commerce Asda will only be able to sell goods to a customer near their store’s location. Another advantage is 24/7 trading, it means that Asda can sell their products 24 hours a day and 7 days a week. So again its flexible selling time enhances sales as customers can buy product whenever they want. This has an advantage over their brick stores because they will close at certain times whereas its 24/7 online. However, delivery services are not 24/7 like online so it does limit the convenience of it.
However on other hand Asda has to face competition from companies all over the world. Not only have that, Asda also had to advertise on the internet to make sure that customers know that Asda sell their goods online. There is advantage of global marketplace but on other hand it has disadvantage for Asda and especially for small retailer how may not sell their products online because of huge price competition from large companies. Large organisation can also advertise and can use promotion methods to attract online audience, while small retailer cannot bear expensive of the advertisement on internet. So Asda has to advertise a lot to increase their online sales. Competition, advertising and promotes tend to be similar to a brick store as they also need to compete with other supermarkets that sell their products in brick stores. Although, Asda do have promotions that are specifically online only which will attract more people to visit there online store and buy their products which is a huge advantage.
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In addition, online trading is very easy to start off and requires less money to start and maintain. Asda do not need to buy a very big store and get shelves for all their products which means they don’t need to buy all these things and hire staff like security to keep all items safe. Operating online arises a lot of security issues like hacking, viruses and identity theft. Therefore, it’s very important that Asda abide by acts like the Data Protection act to make sure that customers information is safe and to make sure that there is enough security methods in place to make sure nobodies hacks the site. This may cost a lot of money and customers may feel uncomfortable putting their details on the website knowing the risks. This wouldn’t happen in a brick store, the only security risks they have are usually theft or violence which can easily be solved and prevented with security guards. Technological security issues are a lot more complex. Also regarding technology, the site may experience a lot of issues with their site such as payment methods not working or certain buttons not working. The website also may be responding slow or crashes which will need to be resolved by specialists which is annoying for the customer. Additionally, Asda has to be aware of law and regulation about data handling. If in case Asda provided their customer’s data to 3rd party may have to pay a lot of fines. So Asda has to keep customer’s personal data safe and only can use when it is required.
ASDA has to arrange training for the employees to make sure that they know the laws and regulations about online data records and make sure there are IT professionals that will be required to keep website maintaining and running. The employees will be less and will need less training than those in a brick store which is more cost effective. In a brick store there will need to be staff for checkout, customer service, stock, cleaning and much more and all these people need to be trained; this must happen in all 532 stores which will be costly for the company. Their click store is one central place which means multiple people are not needed to be trained for different areas of the country which means click stores are better in terms of staff and training.
In a brick store all the items Asda sell need to be arranged in a certain ways such as the clothing in one area of the shop and frozen in another section. This is similar to a click store. On Asda’s website their website structure is very easy to use as it has drop down menus of different categories including. Fresh & Chilled, Food Cupboard, Frozen Food and many more; these then have sub menus. It is relatively easy to navigate around a store but it’s much easier online as you can search for the specific item in the search bar which you cannot do in a store, you have to find it yourself. However, brick stores do have an advantage for their layout. In addition, customers may prefer to pick items that have the longest expiry date or the freshest fruit and vegetables, this cannot be done online, someone does it for you. This may lead to complaints by the customer for not being suitable to what they wanted. Similarly, a lot of issues arise when items are not available and when they are delivered they may be given a refund for that item; this is frustrating for the customer and in a brick store, if the item wasn’t available they would find an alternative.
Although online there is a promotions section, in brick stores, as the customer is browsing looking for the items they need they will see certain promotions that you won’t see online due to only searching what you need. This means, in brick stores they may gain more sales due to promotions being in view to the customers. Additionally, alike to other online businesses like amazon who have warehouses for their products, Asda just use their brick stores to collect the items for delivery. This reduces the cost of space and other overheads that a warehouse would have.
Another disadvantage is being able to trust customers. Trusting customers continues to be a problem in online business because when customers commit to buy a product, there is no guarantee that customers will pay you or will send payment into your account promptly. Sometimes customers do not have enough money in their debit card and payment is made by a bank and then later on when the goods are dispatched the amount is snatched back by the bank automatically if customer doesn’t insert money into their bank account. This would not happen in a brick store, if you do not have the money you will not be able to pay for the items. Similarly, brick stores have more payment methods than a click store which is beneficial. Online you can only pay for items using a debit or credit card compared to brick stores where you can pay by cash and card. Some customers may prefer to pay but cash and therefore will not shop online.
Moreover, delivery issue is a very common problem in e-commerce. Goods are mostly delivered between office working hours. So the goods usually are brought back if customers are not at home to pick up the delivery. Usually then there is delay of 12 to 48 hours and then customer’s goods will be redelivered, which is really frustrating for customers. Additionally, large and glass product may get broken during the process of transportation. Then Asda have to pay extra fee for spending new product again to customers. In a brick store you get the item then and there which may be more convenient for the customer.
E-commerce also enables Asda to provide fantastic customer service. Websites allows customers to find the products quickly and create free accounts and receive emails with promotional offers. Customer can also share the information of the products to their family members electronically from website. However, if a customer has a problem with their delivery that they want changing, they will have to phone customer service and it will take a long time. In a brick store you can get help within minutes and the problem is resolved which provides and advantage over a click store.
In conclusion, after evaluating all the advantages and disadvantages to a click store and comparing them to brick store I believe that click stores are a great way to get more revenue to the company. They are more convenient and easier to use especially for those who cannot get to a store or live in remote areas. However, I do consider that click stores especially for supermarkets will have an advantage and will be where most of the profits are made.