¶ … E-Commerce on Retail Trade 20/09/2015 E-commerce has gone on to alter the way retail was done for centuries. Many facets of retail trade have been changed. The influence of e-commerce is undeniable and unreversable especially on retail trade. However there is much scope for further advancement of e-commerce into the retail industry. In this paper we will look into the aspects of e-commerce that have influenced retail trade. We will also look into the factors of e-commerce that affect the cost and productivity in retail industry and the impact that e-commerce has left and the factors of e-commerce that impact the cost structure in the retail industry.

Both primary and secondary data collection methods were employed for the research. Analysis of primary and secondary data was done to arrive at a result in the research and the research used and paid equal importance to secondary and primary data and their analysis

The survey had closed and open ended questions for the retailers and the questionnaire were self-filling where the respondents answered the question themselves. The Likert scale was used that allowed to uncover degrees of opinion on the topic and had ranges on both sides of a mean. Questionnaires are designed in the written format with a set of questions that have possible answers, sometimes in multiple choice formats, for the purpose of collecting data from the interviewees. For expressing trends in answers, for example through percentage representation of a similar type of answer among the total respondents, the statistical data then collected were transformed into other forms.

The research found out that there has been transformation of the most basic of business transactions -- buying and selling which has also included retail trade. Pricing, product availability, transportation patterns and consumer behavior in retail trade have been affected and continuous to undergo changes and shifts on a continuous basis due to the influence of e-commerce. Aided by e-commerce, small retail companies are now able to access various markets and the customers therein without being physically present in the markets and without investing virtually nothing on promotional and advertisement cists in the traditional media of the foreign markets.

E-commerce has enhanced the scope for streamlining and automation of production lines and systems. The cost of business operations as well as the costs of products is lowered by e-commerce. The cost structure of online retail stores is affected by the flow of digital information to and from the customers, the costs for searching for products and services on the internet and the changes in the dynamics on the supply-side.

Contents

Executive Summary 2

Chapter 1: Introduction 4

1.1: Introduction 4

1.1.2: Economic drivers of e-commerce 6

1.1.3: E-commerce and Retail 8

1.2: Purpose of the Study 9

1.3: Significance of the Study 9

1.4: The Research question 10

1.5: Aims and Objectives Statements to answer the research questions 10

1.6: Conclusion 10

Chapter 2: Literature Review 11

2.1: Introduction 11

2.2: The Emergence and Growth of Electronic Commerce 12

2.3: Globalization and E-Commerce 14

2.3 E-commerce & Retail Trade 16

2.4: The Global Retail e-Commerce Scenario 18

2.5: E-commerce and Changing Retail Business Strategy 18

2.6: E-commerce and Cost structure of Retail Industry 20

2.7: Conclusion 24

Chapter 3: Research Methodology 26

3.1: Introduction 26

3.2: Approaches to Methodology 27

3.3: Outline of research Method 28

3.4: Data collection 29

3.5: Sample selection and Size 30

3.6: Questionnaire Design 31

3.7: Obstacles in Research 31

3.8: Data Analysis 32

3.9: Ethical Considerations in Research 32

3.10: Limitations of the study 33

3.11: Conclusion 33

Chapter 4: Results and Analysis 34

4.1: Introduction 34

4.3: Conclusion 47

Chapter 5: Discussions 48

5.1: Introduction 48

5.2: Deduction from Secondary Data Sources 48

5.3: Deduction from Primary Data Source 52

5.4: Conclusion 54

Chapter 5: Conclusions and Recommendations 55

5.1: Conclusions 55

5.2: Future Research Scope 57

References 58

Appendix A 63

Figure 1 63

Figure 2 64

Figure 3 65

Appendix B 66

Chapter 1: Introduction

1.1: Introduction

Some economic activities and the surrounding social environment can be changed by the introduction of electronic commerce or e-commerce. This is considered to be the new way of conducting business. Even though this form of conducting business is relatively very new compared to the centuries old additional business processes and methods, e-commerce has already made a significant impact on the way business is done and has altered economic activities and the social environment.

E-commerce has had the most impact on large sectors like communications, finance and...

Econo0mic activities in areas like education, health and the government sector, that account for nearly 20 per cent of the global GDP, are also affected by e-commerce (Rasmussen, n.d.).
E-commerce has certainly left an undeniable impact on the more obvious business process like customized products and the elimination of middlemen as well as on the less visible, but potentially more pervasive, routine business process like ordering office supplies, paying bills and estimating demand.

The evolution of e-commerce has been aided by a host of regulatory reforms and rapid technological innovation to the state it is at present. The liberalization of the telecommunications sector and the innovations that have helped in very significant measures the expansion of the volume and capacity of communications such as optic fibres, digital subscriber line technologies and satellites have helped the advent and popularization of e-commerce. The introduction of the internet through the World Wide Web is seen as the first step in the evolution of e-commerce (McCloskey and Leppel, 2010).

The advancements in telecommunication and the internet have eliminated the barrier of distance in business and as a result buying and selling have become much easier for both buyers and sellers. In the initial days of the advent of e-commerce, it was perceived to be the province of the large firms and was mostly custom-made, complex and expensive. However in the age of rapid technological advancement and the ever reducing costs of technology and the internet, virtually every firm can reach millions of consumers world-wide with just a few thousand dollars which can enable any firm to become a merchant (Gasson, 2003).

While in the older days, retail trade and business was primarily the face-to-face engagement of the seller and the buyer, e-commerce has enabled the trade to undergo a sea change where involve vast numbers of individuals who may never physically meet. E-commerce, though conducted through a complex set of operations and involves complex web-based commercial processes, for the end user -- the buyer and the seller, the combined process is as simple as buying something over the counter. In this sense it can be said that the internet has converted a once expensive and out of reach of the common traders, e-commerce into affordable, usable and easily available alternative means of conducting business in a way similar to what Henry Ford had done in the automobile industry (Tian, Zhang and Guan, 2013).

1.1.2: Economic drivers of e-commerce

With the concept and emergence of e-commerce about a decade ago and its subsequent rapid spread, the impacts of internet-based business conduction model have left some very important and critical impact on established and traditional business models.

The Effect on the Marketplace

In the few years that e-commerce has existed, it has significantly impacted and changed the marketplace and the way business is conducted. E-commerce has managed to replace the traditional intermediary functions and has made possible the development of new products and markets resulting from the elimination of physical market boundaries and the development of new and far closer relationships between the seller and the buyer has been created by e-commerce (Motiwalla and Khan, 2003). E-commerce has also changed the organization of work by the creation of new channels of knowledge diffusion and has opened up human interactivity in the workplace. The non-physical nature of e-commerce has created a more flexible and adaptive framework for business conduct and has necessitated new functions and skills for workers (Allen, Clark and Houde, n.d.).

The catalytic role

The new era of business conduct has been defined by the reform of regulations, the establishment of electronic links between businesses (EDI), the globalization of the world's economic activities and the demand for higher-skilled workers. E-commerce itself being very technical in nature, requiring new skills to be operated and eliminating the physical boundaries of markets, have hastened the wide ranging changes that were brought in with globalization. Many sectoral changes and innovations like electronic banking, direct booking of travel and one-to-one marketing have also been hastened by the advent and popularization of e-commerce (Ramcharran, 2013).

The Impact on Interactivity

The interactivity in the economy has been vastly increased by e-commerce over the internet. While these linkages have been able to bring the buyer and the seller together, it has also enabled the household to be included in the fold and has reached out to the remotest corners of the world. The development and ever increasing popularity of the smart phone and the availability of cheap internet has enabled a shift from the relatively expensive personal computers to cheap and easy-to-use telephones and other devices.

These elements aided by the internet have enabled people to effectively and more easily communicate between themselves and e-commerce has only enriched the level of communication between buyer and seller and between individuals (Muller-Lankenau, Wehmeyer and Klein, 2006).

Openness of Electronic Commerce

E-commerce…