the whole essay---Eddie

Topic: Should e-commerce replace physical store?

The last two decades have seen a considerable increase the internet use in the world, so it is the internet which has a big impact on people’s lives and companies operation at the present time. It can be seen that the majority of people rely on the internet excessively. If these people do not have use the internet in the day, they feel that they cannot do anything even cannot live. Besides, multinational companies utilise the internet to make a conference which knows companies’ operation policy. Due to technological progress, companies have the latest method to sell their products to consumers. In this decade e-commerce has grown rapidly in the marketplace, adopting this distribution channel to increase the company’s business volume and market share. The definition of e-commerce is “buying and selling processes supported by electronic means, primarily the internet”. (Gary Armstrong and Philip Kotler P485) A minority of people consider that buying goods on a physical store is better than buying on the internet. However, from the long term conception of e-commerce might replace physical store in the future. This essay I divide into three parts to discuss the e-commerce. First of all, I will describe the history and situation of e-commerce. The essay will then examine the advantage of e-commerce. After this, it will be the drawback of e-commerce. Finally, there will be an analysis of the new distribution channel.

It is apparent that e-commerce has a big impact on consumers’ purchasing habits. Due to the emergence of e-commerce, some people have changed their way of purchasing. They consider that purchasing goods on the internet is more convenient than physical store. It is widely recognized that the emergence of e-commerce was in 1970s. In the early 1900s, the use of the internet was rapidly growth, therefore the commercial website first appeared during this time. The internet was invented more functions to bring advantages to companies which could help to establish e-commerce system in1995. After that, this system was extensively utilized in the US and Western Europe corporations to provide their services to consumers in the world. In 1999, e-commerce changed from B2C (business to consumer) to B2B (business to business) and in 2001 from B2B to B2E (business to exchange). It can be seen that e-commerce will still change its function consecutive in the future. According to the credit card company Visa report, it can be found that e-commerce was staggered growing because Visa’s consumers purchased goods from the internet approach 13 billion US dollars in 2000. (Gefen, 2000) Nowadays, Amazon, Dell and eBay are the most famous and most successful internet retailers by using this distribution channel which can help consumers to purchase goods convenience and increase their market share.

It can be seen that e-commerce has brought some benefits for companies and consumers. First of all, it is clear that consumers can save their time to buy goods. Ten years ago, people wanted to buy goods, they must go to physical stores. A majority of people always compared the product’s price, so they must go to different physical stores in order to compared the price and then decided whether or not to bought the product. However, with e-commerce is utilised by some internet retailers who establish this purchasing platform, consumers can surf the internet to purchase commodities at home. By surfing this distribution channel, customers get the information about a product such as selling price and product’s quality. When buyers decide to buy a good, they just use their credit card or transfer the money to the seller’s bank account. Then buyers wait some days to receive their good. The second advantage of e-commerce is companies can enter the market easily and reduce the operation cost. Due to globalisation, companies would like to expand their market in the world. The traditional way is opening a physical store enters the market in different countries thus increasing the operation costs. Sometimes companies might meet some problems to enter the market, because the government makes regulations and laws to restrict companies’ operation in the local area. Conversely, companies utilise the e-commerce distribution channel to enter the global market which is much easier. The first reason is companies put their goods on this distribution channel, people get the product’s information easier than before. The second reason is this distribution channel is hardly ever monitored by the government which compares to opening a physical store.

On the contrary, it can be found that there are some the limitations of e-commerce, leading to consumers are hesitant to buy some products online. First of all, consumers’ personal and private information would be disclosed from the internet. Due to purchasing goods from the internet, consumers must fill in their personal information such as name, age and address. At the present times, there is some the internet hackers steal consumers’ information to make use of in the illegal way, causing identity fraud and credit card fraud problems. Therefore, it can be found that people do not sufficiently trust paperless and faceless transactions from this reason. Secondly, it is also interesting to note fact that some customers like to feel and touch products. Traditionally, people want to purchase commodities, they have to go to a shop to buy it because they can see the product and touch it which gives people sense of security. Thus, this conception of purchasing has gradually implanted in people mind. Owing to the emergence of e-commerce, companies provide a new distribution channel to make people convenience to buy products. Yet, some people cannot accept to buy goods from this distribution channel because they cannot touch products to know about their quality. Even though the product is displayed its relevant information, some consumers are still afraid of purchase bad quality commodities. It is obviously that this is an unsteady potential factor for buyers, leading to some customers are not willing to buy product on the internet.

To sum up, e-commerce was extensively used in the middle of 1990s, so it has had a big influence on companies and consumers. It is generally agreed that from customers’ perspective, they consider that time-saving, information sharing and convenient are the most outstanding characteristics from e-commerce. In addition to this, from the conception of companies, by adopting this distribution channel, they can enter the global market much easier than using the traditional method which spends a lot of time and costs entering the new market. Likewise, people still are concerned about their personal and private information which would be disclosed from the internet. However, Federal Trade Commission makes policies to protect consumers’ right and asks companies to comply with the rules in case this incident happens again. Moreover, some people still reject this new purchasing way, companies may be reach customers’ requirement as soon as possible to solve their misgiving. However, this new distribution channel still improves its function consecutive in the future to bring more benefits to business and people. The abovementioned the advantage and improvement of e-commerce could let consumers feel relieved to use this new distribution channel and increase companies’ market share. Thus, I personally believe that e-commerce might replace physical store in the future.



Reference:
Gary Armstrong and Philip Kotler (2005) Pearson Prentice Hall 7e, Marketing: an introduction P485

David King, Jae Lee, Dennis Viehland (2004) Pearson Prentice Hall, Electronic Commerce: A Managerial Perspective P8, P16~P20

Elias M. Awad (2003) Pearson Prentice Hall 2e, Electronic Commerce: From vision to fulfillment P12~P19, P53~P58

David Gefen (2000) E-commerce: the role of familiarity and trust
http://csz.csu.edu.tw

J.Ben Schafter, Joseph Konstan ,John Riedl (1999) Recommender System in E-commerce
http://portal.acm.org/citation.cfm?id=337035&coll=GUIDE&dl=GUIDE&CFID=89465764&CFTOKEN=29706309&ret=1#Fulltext

Raymond R.Burke (Sep,2002) Technology and the customer interface: What consumers want in the physical and virtual store
http://www.springerlink.com/content/c13308q6h14k7u83/

Stephen S. Standifird (2001) Reputation and e-commerce: eBay auctions and the asymmetrical impact of positive and negative ratings
http://jom.sagepub.com/cgi/content/abstract/27/3/279