1. Name Justice Nxumalo
Student No: A00184382
Subject “Is The Future of Sales Online?”
Date Submitted 16.05.2016
Words 3315
Course Masters In Business- Advanced Business
Practice
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2. Contents Page
Page 3…………………………………………………………………..............Introduction
…………………………………………………………………......……..….Abstract
Page 4.………………………………………………………….…………... History of Sales
Page 5………………………………………………………………………...History of Sales
Page 6…………………………………………………………………...Mobile Ecommerce
Page 7………………………………………………………Future of Sales in Smartphones
……………………………………………………………Tackling Challenges ahead
Page 8…………………………Tackling Restrictions of Physical Shopping through RFID
Page 9………………………………………………………………. Benefits of Ecommerce
Page 10………………………………………………………………Benefits of Ecommerce
Page 11.....................................................................................................................Conclusion
Page 12…………………………………………………………Bibliography & Referencing
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3. Introduction
As the global age is moving towards technology and becoming less dependent on traditional
patterns that would have guided our cultural norms in society for decades. With this transition
in mind, we have to ask ourselves” Is the future of sales online? “The paper will dissect this
thought provoking topic and use dependant and independent research, through journals,
newspaper articles books, websites in essence to prove if we are in the process of a
technological evolution in relation to our shopping trends.
Abstract
The analysis done on this topic leaned towards sales moving to an online platform. It's
becoming apparent that corporate entities along with supermarkets and businesses are
transitioning to making online imprints with effort to increase market share. The World
Wide Web is an immensely influential platform. It allows a variety of websites to be on
display at a click of button for potential customers. The internet is used on a daily basis by
hundreds of millions of people around the world. Many of these people are looking to buy a
particular good or service. Shopping online is rapidly increasing with each year that goes by.
As our lifestyles become more and more busier, convenience seems to be at the top of the
shopping list for most consumers. By selling online marketers can deploy various techniques
that are tailored towards increasing user experience and encourage customers to “browse”
and purchase more. Such techniques range from recommended products based on your
searches or previous purchases.
History and Evolution of Online sales
The Electronic business which is commonly known as e-Commerce has transformed
businesses from real time to a digital age. The majority of businesses today have some
element of online connotation as part of their strategy whether its advertising or online
transactions. Ecommerce, has managed to eliminate any political and physical restrictions,
allowing the wider audience to have the same opportunity in the market.
Over the last twenty years we saw great deal of changes in the market and consumer norms.
The introduction of the internet has sparked an increase of online shopping. As time goes by
it is becoming apparent that online shopping is becoming a substitute for the traditional
market place.
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4. Ecommerce, is normally thought of the birth place of the world wide web however in reality
it is the by-product of “The Web”.
As a result of everyone being connected to the internet Online shopping has improved and
evolved with B2B and also with B2C. Technology has not remained in a state of transience
and it is because of this that Ecommerce is at a stage where there’s a constant battle of the
market share which is being dominated by big players such as Amazon and EBay. When we
step back and observe the bigger picture from when online shopping stated to where it is
now. We really have to appreciate the research that was undertaken to make this a reality as
Ecommerce is present in all our daily lives despite out feelings towards it. As a new market
was erupted in such a short space of time, makes the feat even more astonishing. As we no
longer have to drive in to town to buy a book, online reviews and online purchases are at the
comfort of our own couch and have conveniently created an emotional attachment to online
shopping for most people.
It is no secret that technology has rapidly improved in the last 20 years giving a spark and rise
to E Commerce. We will now undertake the journey of its evolution.
1979
Research had been done earlier on Videotext on its supply of textual information to users.
Majority of the research done on videotext was in the UK, it was a communicative system
which was designed to exchange information between two parties. This gained significant
interest of “Many Companies” However Micheal Aldrich the entrepreneur and founder of
videotext turned this concept in to teleshopping known as online shopping.
1982
Minitel replaced Videotex by providing online selling. Minitel even allowed for the telephone
directory as part of its service. This is by far the most impressing service prior the discovery
of the world wide web.
1987
Swreg which were a software developing company and managed to get a market online in
which they sold using “Merchant account”. As a result, online shopping began for the people
in software market.
1990
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5. Tim Berners-Lee discovered the Worldwide Web allowing the browser to view the web
which is still ongoing.
1992
Revolutionary book by J.H. Snider and Terra Ziporyn namely; Future Shop: How New
Technologies Will Change the Way We Shop and What We Buy. St. Martin’s Press
1994
Netscape went on to release Navigator browser; this was introduced to Secure Sockets Layer
encryption. Pizza Hut began selling online, later introduced Secure Sockets Layer (SSL)
encryption for secure transaction.
1995
The introduction of Amazon revolutionised online selling. The Ecommerce giant began
selling everything online. Jeff Bezos the owner and founder of Amazon later introduced a
strategy which guaranteed 24-hour delivery, this is the premium package. At this time
Internet only radio stations were introduced which were designed for a commercial platform.
Radio stations such as Radio HK and NetRadio began broadcasting. As a result of this major
companies such as Dell and Cisco began using internet in all their online transactions.
1998
The U.S began using Electronic postal stamps, which meant these stamps could be purchased
online and be downloaded for print.
1999
The Acquisition of Business.com by eCompanies in US $7.5 million. Napster launchers it’s
the peer-to-peer software
2000
The dot-com industry that we are familiar with today did not happen in a day. There was
speculation for a long time (approx. 1995-2000) where just the prefix “e-” or “.com” in
names could make stock prices rise at great rates. As result many companies rose and fell.
Entrepreneurs invented ground breaking plans and most received pretty “generous” venture
capitalists, the majority of these organisations started working on the principle “expand the
market and later profits will cover all present debts and losses.” This speculation saw the
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6. market rise taking the NASDAQ a to a peak of 5132.52 points on March 10, 2000. After this
date the market goes down along with the over speculating ones.
2002
PayPal the company that to offer a different way payment (through internet) from cash or
check payment was bought by eBay for $1.5 billion. CSN Stores and NetShops were founded
with the concept of domain specific commodity and shot up g with many online companies.
2003
On the product lifecycle online shopping hits its maturity displaying this to the market as
Amazon.com posted first yearly profit and thus again making presence on the stock market
2007
Acquisition of Business.com by R.H. Donnelley for $345 million, allowing bigger players in
technology domain to prosper.
2008
The US E Commerce market experiences immense growth with sales figures of $204 billion,
which was a decent 17% rise from the previous year.
Mobile E Commerce
It was not that long ago when mobile devices such as smartphones and tablets were viewed as
browsing and research gadgets to improve the shopping experience for the user. Last year the
industry experienced great world changes influenced by rapidly evolving consumers’
shopping patterns, technological advancements led to the official rise of the mobile
consumer.
Looking at some key stats that simply confirm the mobile future of online shopping.
1)64% of U.S. customers today own a smartphone according to Pew Research and 80% of
smartphone owners now use their phone for online shopping.
2)Consumption of digital media through mobile (51%) is now significantly higher than
desktop (42%).
3) The Last Cyber Monday was the largest online sales day in U.S. history as shoppers spent
$3 billion online, and 30% of those sales were mobile sales.
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7. 4) On April 21st last year google deployed a “Mobile-friendly” update encouraging website
owners worldwide to make their sites work better on mobile devices, thus showing the
importance of the growth of mobile phones in the market. Mobile commerce makes up 25%
of US ecommerce sales this year alone.
The future of shopping is in Smartphones
For years now, smartphones have been used mostly as pocket devices to search store
locations, product reviews, making informed purchasing decisions, accessing coupons to
avail get better offers and share consumer experiences with the audience. However, mobile
devices will have more definitive role starting this year, acting as payment devices (Apple
Pay)
The Increase of millennials, their entry into the workplace and mobile trends, as well as
retailers sorting out ways to for amalgamate the digital and physical industry (omnichannel
marketing) focusing on availing of the advantages of each shopping channel. This factor that
will increase mobile spending. Just this year alone worldwide mobile spending is expected to
triple and reach $290 billion, however are businesses willing to this risky opportunity?
Tackling the Challenges ahead
Ecommerce has completely changed the playing field for traditional retailers. They need to
go back to the drawing board and change the current way of physical retail shopping, perhaps
omnichannel could be the answer. We have to remember that the nature of consumers has
changed, customers now are guided by “I want it all “This leaves retailers with the new
reality of evolving to suit the new breed of customers.
There are four main challenges that retailers need to account for when moving forward in
coming up with a solution to hit back at Ecommerce.
1. Movement to A Friendly Mobile Web. Consumers nowadays expect businesses to have
mobile- websites that are friendly. Customers now more than ever are doing their homework.
They carry out an information search not only on the product but also the company that is
selling that product This is the new norm. Just a few tips to make your online presence more
friendly. Concise writing is a must, use less pictures, Design short/strong headlines, load the
most gripping content at the front page and use short paragraphs If a business does not have a
friendly online presence, they have lost the battle already.
2. Usability for a Multi-Screen World. Welcome multi-screen as the way forward when
presenting information to the audience using smart devices. Present information clearly, This
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8. will allow customers to find exactly what they are looking for without much effort.
Customers do not like to think so do not make them!!
3. Reinvent the Customer Experience through Mobile. In order to get the audience to use and
pay with their phones, it is imperative to gear up the retail commerce experience to the next
stage by making a direct link to mobile wallets. Mobile wallets are becoming the status quo
on new smartphones and more retailers are begging to accept them as form of payment.
Apple Pay, Android Pay and Samsung Pay to name a few.
4. Mobile-ready Workforce. Consistent training and development of your workforce,
especially staff in sales and customer service is crucial. With omnichannel customers expects
to be that your frontline and backline staff will know the product/service as well as if they
designed it themselves. It is important to teach the audience how to use mobile/digital
technologies and new payment methods, Enhance the shopping experience by enabling them
the new redesigned patterns of shopping.
To quote Jeff Bezos, CEO of the largest online retailer in the world, is to remember that “In
business, what’s dangerous is not to evolve.”
Tackling Restrictions of Physical Shopping through RFID
The invention of RFID could be the breakthrough that retailers needed to spark the fight back
against online shopping. Although there have been many failed attempts, the elusive RFID
based shopping-cart is now in the pipeline of being a reality. Not only is the technology now
in our grasps but also the methodology exists, which will make for cost effective tags that
have enough range to be read as the cart passes through an RFID reader. The following need
be addressed in order to overcome limitations of RFID Cost, Size, and power need to be
reduced to enable practical use of RFID in shopping outlets.
A new device that allows RFID shopping-cart checkout to be reality is now available. The
idea behind the concept is to have small dimensions in the antenna whilst achieving a one-
meter transmission range with low transmission power. This breakthrough invention limits
the amount of current to less than one tenth of comparable quadrature, which reduces the
power that is used by RFID Tags.
By keeping the Signal-to-Noise Ratio small on the receiver the dimensions of the antenna can
be maintained to a small size and use up less power to achieve considerable distances that
RFID currently does with much bigger antenna dimensions and high power. As a result, this
new technology will transmit ten times further than the current RFID technology, extending
prohibitive to fifteen centimetres.
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9. This invention will allow for shopping-cart checkout and also the technology will grant the
receiving of inventory instantaneous A serious amount of overall cost will be reduced
because if the new technology for example, because of the automated check outs from RFID,
the queues will be significantly reduced in some cases even eliminated.
In order for retailers to jump on the band wagon that is revolutionising customer traits
andshopping trends many things must happen. A model that needs to meet the criteria’s
addressed above needs to be taken in to production to given online retailers a chance of
survival.
Benefits Of Ecommerce
Geographical Obstacles
With a physical shopping outlet, you are restricted by the region as to whom you can serve.
As I have I stated earlier customers purchasing decisions are heavily influenced by
convenience. With an E Commerce website, you are restricted to the boundaries of a physical
shop, as organisations are now in a position of using the whole world as their target market.
Attracting New Customers
Websites work using Search Engine Optimization, the highly ranked websites that are
displayed on the first page of search engine receive more traffic. This is vital source of
attracting new customers nationally and internationally.
Lower Costs
The most convincing element of an e commerce website is cost. Advertising for a physical
outlet typically comes in the form of traditional media, whether it's through newspaper,
magazine, radio or tv. This form of advertising is the most expensive.
Whereas online advertising for an Ecommerce website is much more cost effective.
Facebook, Twitter, SEO are only a fraction of the advertising costs compared to traditional
methods.
Additionally, with a physical outlet there are admin cost such as salaries for staff, rent of
premises, maintenance costs. However, a website automated checkouts, fewer employees,
management of stock, billing all of these a much more cost effective and easier to manage for
an on an online platform.
Locating Products
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10. Locating products is more is now simpler than ever, consumers no longer have to surf for
hours for what they are looking to buy. The addition of search box, online catalogues, Cart
( online ) it is now easier than ever to locate products online, which is not only convenient but
also saves a lot of time.
Provide Information
There are restrictions to the level of information which can be placed in a physical store.
Although employees can be well trained to respond promptly to customer queries, the reality
is that not even the frontline staff possess all the information of all various products in the
store. Ecommerce websites have the option of displaying an abundance of information
regarding their products which is accessible to customers.
Monitoring Customer Searches.
Using details provided by the customer when signing up and also monitoring his or her
purchases their information is decoded by cookies on the computer. This can be used to send
the customers potential or similar products that could be of interest to them based on their
previous searches. This feat would be more than a mountainous task to undertake in a retail
store.
Online Retail is open 24/7365
E Commerce website is open all year around from the point of view of the customers
therefore there is no closing time which prevents customers from placing their orders, thus
making it more convenient when compared to a physical store.
With more research, it is becoming more evident that shopping by E Commerce is taking the
world by storm. With that said in order to guarantee sales from an online platform there are
ingredients that need to be embedded in E Commerce to make it successful. These are the
following when executing an online store as part of your business
Conclusion
From the research was undertaken to write this paper it is evidently clear that retail
companies such as lidl, Aldi, Tesco, have been at the fore front of onsite purchasing for
decades. Analysing the most successful retail giants in this sector will give a better idea as to
the magnitude of this industry. In 2013 Walmart which is the highest valued retail chain
raked in a jaw dropping $334,302,000 with a 1.7% growth in the US alone. Globally the retail
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11. conglomerate took in nearly $500,00,000 doing so with 4779 stores worldwide under its
ownership. Although these figures may appear impressive, it is only when we put them
against online selling websites that we can truly recognise the gaping margin between these
two selling platforms, with physical shopping sales falling overwhelmingly short of matching
those of online Selling. Amazon, which is ranked first in the most profitable online selling
websites brought home a staggering $107 Billion in sales and advertising which is its total
revenue for 2015. To further clinch this stat, Amazon makes $3392.94 per second. In
comparison, Walmart’s total revenue does even crack the top ten of online selling. Infect the
total revenue of this multinational conglomerate is equivalent to the 28th top grossing online
sales platform which is a Stuhub a website that specializes in selling tickets for concerts,
matches, and entertainment. Figures/numbers tell a very comprehensive story without words,
in this case they have told a tale that we all familiar with. Online Sales is replacing Onsite
selling. As a result, the retail industry is at a very vulnerable position, a position that is facing
the retail to undergo drastic steps of evolution in a short matter of time to remain trending.
Whether or not the retail industry is up for this challenge only time will tell.
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Forbes
Financial Times
Philip Kotler, Kevin Lane Kotler- Marketing Management 12 edition
Global Marketing- An Interactive Approach- Gillespie
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