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Negative Impact on Small Retailers

University: Regent College

  • Unit No: 9
  • Level: Undergraduate/College
  • Pages: 8 / Words 1961
  • Paper Type: Assignment
  • Course Code: R/508/0486
  • Downloads: 791


Technology and smartphones have transformed the way of doing business. It has made it easy for consumers as well as businesses to operate in different markets at the global level. In the recent era, there has been a significant increase in E-commerce companies. Due to this, the entire market condition has changed (Saunders and Bezzina, 2015) The major impact of the E-commerce industry is on physical business. It has forced them to develop products so that more customers can get attracted. Apart from this, changes in shopping trends have modified the customer experience and behavior. This is the main reason why most people prefer online shopping rather than going to markets. Moreover, shopping is a social ritual. It is just like that we go to a restaurant to eat food. The concept of physical shopping offers an opportunity to satisfy deep human needs for social interaction. For example – people who stay outside the Apple store just to buy the latest iPhones or iPad. They could buy it online in the next few days. But they want to feel the experience for which they visit the store. The entire retail business is changing. There has been a decline in sales and profits in physical markets.

E-commerce continues to evolve at a rapid rate. Companies just need to maintain pace with the latest online new trends in order to remain to survive in the market. It seems like the physical market of retail has almost diminished from the market ( Sessler and Imrey, 2015) There is very little and slow growth. It is because e commerce industry has created a negative impact on small retailers. The Internet has forced people to follow the concept of sit and shop.

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Main Body

In the recent era, smartphones have transformed lives of people. It has provided them a platform through which data and information can be accessed to a great level. The way consumer thinks and expects products is very challenging. Due to the emergence of E commerce industry, the retail sector is highly affected. E commerce industry has restricted the growth and development of retail sector in physical market. They way retail industry has changed the business operations is very interesting. People are now considering to shop online rather than going to the market. Shrivastava, Shah and Navaid, 2018 said that E commerce has provided a large variety of products to choose from. Besides this, it has also enabled companies to increase their product portfolio so that a large number of customers can be attracted. Moreover, companies are expanding their operations in a wider area by using by developing their own websites.

According to Clark and Woolner, 2017 there has been already a lot of innovation in how retailers are seeking to meet the expectations of people. It is because; there has been frequent change in the tastes and preferences of customers. They are demanding more as their income level is increasing. Smartphones have provided a large touchscreen to browse and purchase items anytime and anywhere. As elucidated by Totawar and Prasad, 2016 E commerce companies are taking advantage of technology. Online technology offers consumers to buy products at any moment. On the other hand, physical store offers customers to expectations and fall in love with the brand. As per the views of Niaz and Rivas, 2016 in the future, there will less distribution at physical retail stores. It is because of less involvement of people physically with the product while buying. 

Concept of E-commerce

According to Sessler and Imrey, 2015 E commerce is a platform through which people and business are connected to each other. It is an online way of doing business. Internet has provided a platform through which products and services can be sold and purchased. The reach of internet has made it easy to retain business to grow and expand their operations worldwide. This is the reason why retailers are focused on generating huge revenue from e commerce.

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Impact of E-commerce on retail industry

As per the views of Carlsson and Walden, 2015 the major impact of E commerce is on retail sector. This is because of variety of products available to people on a single platform. By using technology, people can access data and information very quickly and easily. Retail sector includes are like grocery, clothing, etc. According to Chauhan, Semwal, and Semwal, 2015 companies are investing a huge amount on providing goods and services to people in an effective manner. This is done to increase their satisfaction level and retain them. Besides this, rise in E commerce in every country has affected market conditions. It has enabled them to gain enough competitive advantage in the market. E commerce industry is dominating the retail sector and world’s economy. As said by Gherissi and Benzarti, 2016 the change in trend of shopping has given shape to retail industry. E commerce has combined the products of many retail companies in a box. Now if any customer opens that box, there are variety of products and information available to them. From this, they can choose the best one.

In a research done by Pearson, Albon and Hubball, 2015 e commerce industry is giving a tough competition to retail sector. This has made it difficult for retail business to survive in the market. It has also reduced their sales and profits. Furthermore, it can be said that it has transformed the buying behaviour of people. As said by Saunders and Bezzina, 2015 youth are highly attracted towards e commerce. It has saved their time as well as cost. Moreover, it has allowed them to know the worth of a product before purchasing it.

As elucidated by Sessler and Imrey, 2015 rise in e commerce companies is a concerning issue. It has negatively affected the retail sector. Due to this, their growth has been restricted in a particular area. Along with this, it has changed the customer experience and their behaviour. They are not getting proper quality product in stores. Shrivastava, Shah and Navaid, 2018 elucidated that a major amount of market share has been captured by e commerce. This has resulted in decrease in revenues of physical business and markets. Also, now there is no more tough competition in between them. This is the reason why many businesses have started providing products and services online. However, business has to make a lot of efforts to sustain for long term in the market.

On the contrary, it is said by Clark and Woolner, 2017 that there are several number of positive impacts of E commerce in retail sector. This can be analysed in a way that it has provided both efficiency and satisfaction to customers. Apart from this, due to availability of vast number of data and information, it has made it easy for people to select the best product. As per the views of Totawar and Prasad, 2016 e commerce has provided a variety of products. Not only this, it has also provided some extra services that have given ease while purchasing. Moreover, due to rise in number of e commerce businesses, country’s development is taking place. According to Niaz and Rivas, 2016 there has been significant increase in revenue of e commerce companies. They have almost covered the entire market in every country. Furthermore, it can be observed that customer are experiencing change in their shopping patterns. Sessler and Imrey, 2015 said that e commerce are accepting change in taste and preference in customer very easily. This is continued their progress in retail sector. Also, technology has helped in e commerce to identify their needs easily.

According to Carlsson and Walden, 2015 customers are mostly benefited in e commerce business. As there has been greater access of data and information they are able to search for more products. It has allowed them to know about other products. With this they can easily buy them. As per the view of Chauhan, Semwal, and Semwal, 2015 e commerce has provided 24 * 7 access to customers. It has enabled them to purchase from anywhere, anytime. Other than this, products are available at cheap prices. This is because retail companies are directly connected to e commerce. So there is no need to store products. They are directly delivered to customers. Apart from this, another advantage e commerce has given is timely delivery of products. They are delivered within 24 hours. People do not have to go outside to buy.

In the opinion of Gherissi and Benzarti, 2016 the business to business trend has helped in growth of both the retail brand as well as e commerce companies. The collaboration between them has resulted in decrease in cost and providing timely delivery of goods. Besides this, e commerce industry is booming in different developing countries. It has contributed a huge part in GDP. Moreover, customer information is easily accessed by companies. Due to this they are able to retain them by offering discounts, coupons, etc. according to Pearson, Albon and Hubball, 2015 it has enabled them to recognise what current trends are prevailing in the market. It has made it easy for e commerce companies to earn stable profits. Also, due to reach of internet in remote areas' industry is planning to start providing services. However, customer satisfaction is increased as their needs are met effectively and on time.

As per the view of Sessler and Imrey, 2015 the future of e commerce and retail sector will be very competitive. It will allow every popular brand to create their own website so that it can generate more revenues. Also, focus will be on improving distribution channel so that goods can be delivered in proper time. Moreover, it is estimated that almost 30% of total sales in retail sector will belong to e commerce. Best assignment help from experts.


This can be concluded from the above literature review that E commerce has positively affected the retail business rather than negatively. It has provided a major benefit to customers in buying products. Due to this there has been significant changes in buying behaviour. It has highly affected physical business. There has been a high downfall in sales and profits. But the customer who only prefer to go for shopping are involved with brands. It is concluded that youngsters have shifted their mindset. They use websites for shopping. It is because they get vast information of products on website only.

It is expected that there will many change in trends of online shopping. It is because people will be focusing on getting high quality product at low price. With this it is expected that many new small business will emerge in e commerce industry in retail sector. This will lead to intense competition among them. With this there will be introduction of new tools and equipments to attract and retain customers. It will make it easy for e commerce companies to grow and expand their operations in different markets. Apart from this , the concept of physical shopping has diminished. It has contributed a huge part in GDP. Moreover, customer information is easily accessed by companies. Moreover, it is estimated that almost 30% of total sales in retail sector will belong to e commerce. Due to this they are able to retain them by offering discounts, coupons, etc. it has enabled them to recognise what current trends are prevailing in the market. It has made it easy for e commerce companies to earn stable profits. 

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