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Q: E-Commerce Vs Retail - Business Case ( Answered 4 out of 5 stars,   5 Comments )
Question  
Subject: E-Commerce Vs Retail - Business Case
Category: Business and Money > eCommerce
Asked by: saeed1-ga
List Price: $80.00
Posted: 29 Aug 2004 07:15 PDT
Expires: 28 Sep 2004 07:15 PDT
Question ID: 394119
I am doing a business plan for a new business selling sports (cricket)
goods.  The presentation will be to a number of very large brands who
I am seeking to allow me to be a retailer of their products - i.e.
they will supply me at trade price. I need to provide some research on
the benefit of E-Commerce over and above Retail.  Some case studies,
statistics (e.g. on comparison), advantages of E-Commerce, and any
well substantiated points are necessary as well as existing succesful
business utilising this model.  The business I am seeking to
set up is in the UK and relates to sale cricket goods - so any
specific information will be even better.

This is of great importance as the suppliers policy is generally to
only supply to businesses with retail outlets whereas my business plan
entails having an e-commerce site and warehouse to store the goods -
operating from business from home.

It is going to be difficult to convince them that this approach is
acceptable, however it is vital to enable me to stock a broad range of
recognised brand names.  Please contact privately to view sample of site prototype.

Cricket equipment - especially bats - are items which one may seek to
inspect to look at the quality.  One argument I need to put forward is
how this model can work without users being able to inspect the goods.
 Anything in the info that helps me put this argument forward will be
very useful. For example, our site will include customer reviews which
one cannot obtain in a visit to a store selling these goods etc.
Answer  
Subject: Re: E-Commerce Vs Retail - Business Case
Answered By: jbf777-ga on 30 Aug 2004 10:29 PDT
Rated:4 out of 5 stars
 
Hello -

Thank you for your question.  If you require any clarification on the
research below, please do not hesitate to ask.

Below are several articles on this topic.  Please visit the actual
links, as I've only included a brief snippet from each.

With regard to your question as to whether online shopping is a viable
alternative to "in-person" shopping vis-a-vis the "touch and feel"
element being lost online:  You can see how an increase in sales at JC
Penney would indirectly tell you how traditional "in-person"
consumables like clothing are taking off in the online setting despite
this.

Clicks doing the trick
http://www.thestandard.com/article.php?story=20040227170214945
For now, though, Freed says that e-retail enjoys a wide lead over
traditional retail (75) because of its convenience and consistency of
service. "One of the major challenges facing traditional retail is the
quality of the sales associates," Freed says.

E-retailing insiders feel better about their industry, says new survey
http://www.internetretailer.com/dailyNews.asp?id=12494
...More from Freed...

Why online retailing is booming so fast in Britain 
http://www.economist.com/printedition/displayStory.cfm?Story_ID=2373237
SIZE for size, Britain has overtaken America as an online retail
market. And?though the Swiss are coming up fast?it is ahead of any
other west European country: just in front of Germany, but miles ahead
of the other big three, Spain, Italy and France. So says Forrester
Research, an American-based technology consultancy.

Shoppers and buyers will keep coming online, eMarketer projects
http://www.internetretailer.com/dailyNews.asp?id=12434
The number of online shoppers and buyers hasn?t reached its limit yet,
projects eMarketer Inc. in its latest B2C E-Commerce in the U.S.
report, just out. EMarketer projects that 74% of the Internet
population over the age of 13 will shop online this year, up a tad
from 73% last year and 7 percentage points from 2001. That equals
115.1 million consumers over 13, up from 82.3 million in 2001. In
2007, 77% of the online population over age 13?131.3 million
people?will shop online, eMarketer projects.

E-Commerce Customer Satisfaction Levels Surpass Traditional Retail,
Says Report Sponsored by ForeSee Results, University of Michigan, ASQ
http://www.internetretailer.com/pressReleaseDetail.asp?id=7612
Overall satisfaction with online retail is higher than traditional
retail. Online satisfaction earned a score of 77 vs. traditional
retail?s score of 74.8. All scores are on a 100-point scale.

Online retailers - reeling in the online shoppers
http://www.wheel.co.uk/news/newsarticle.aspx?id=38
Barely noticed in the shadow cast by the dotcom crash over each of the
past few years, online retailing has virtually doubled as shoppers
have turned to the net to make their purchases...

Q2 Internet sales at Williams-Sonoma rise 60% year-to-year
http://www.internetretailer.com/dailyNews.asp?id=12728
Second-quarter Internet sales at home furnishings retailer
Williams-Sonoma Inc. rose 60.2% year-to-year to $111 million from
$69.3 million, as web sales grew to 29% of total net sales from 21%,
the retailer said today. Q2 total net sales increased 13.5%
year-to-year to $380.7 million from $335.3 million. Comp store sales
rose 5%.

Online revenues rise 15.9% at 1-800-Flowers for year ended June 27
http://www.internetretailer.com/dailyNews.asp?id=12575
Web sales continue to be the driving force at 1-800-Flowers.com Inc.,
where Internet transactions produced a 15.9% year-to-year increase in
online revenue for the year ended June 27, to $307.5 million from
$265.3 million, compared to a 6.8% increase in total revenue, to $604
million from $565.6 million, the retailer said today.


Sharper Image?s Q2 web sales, up 14%, lag total sales increase of 20%
http://www.internetretailer.com/dailyNews.asp?id=12698
Internet sales at Sharper Image Corp. increased 14% to $20.4 million
in the second quarter from $17.9 million in last year`s second
quarter, the company reports. Total company revenues increased 20% to
$149 million from $124.7 million in last year`s second quarter. Store
sales increased 17% to $86 million from $73.2 million in last year`s
second quarter, while comparable store sales increased 1%.

Q4 Internet sales at eGames rise 20% as total sales decline 8%
http://www.internetretailer.com/dailyNews.asp?id=12604
Though still a tiny part of its sales, the web accounted for the only
increase in sales at eGames Inc. for the fourth quarter ended June 30,
rising 20% year-over-year to $54,000 from $45,000, as total sales fell
8% to $1.72 million from $1.88 million, eGames said today.

Web sales at J.C. Penney rise 40% year-over-year in first half
http://www.internetretailer.com/dailyNews.asp?id=12668
Internet sales at J.C. Penney Co. Inc. rose 30% for the second quarter
and 40% for the first half ended July 31, contributing to the
retailer?s surging operating profits, J.C. Penney said today.

eTail 2003 Show Wrap-Up Report: Metrics, Search Marketing & Targeted
Email Raise Sales 27%
http://www.marketingsherpa.com/sample.cfm?contentID=2275

Online Retailing in 2005
Part 1: Traditional Retailers Should Dominate
http://retailindustry.about.com/library/weekly/01/aa010327a.htm

Computer Q&A: The online revolution ongoing
http://www.post-gazette.com/pg/04155/326105.stm
Four years later, we still talk about the dot-com bubble bursting.
Perhaps it was so sudden and scared us all so much that it left an
indelible mark on our brains. Or maybe it is because there is really
no better data point to use as a comparison...

E-tailers ring up a big year
http://att.com.com/E-tailers+ring+up+a+big+year/2100-1023_3-5134849.html
The online retail sector experienced significant growth during 2003
due to record holiday sales, a strong travel market and increased
consumer confidence, according to a new report.

Sites lag as shoppers throng online
http://att.com.com/Sites+lag+as+shoppers+throng+online/2100-1025_3-5133320.html?tag=st.rn
Calling it a "perfect online shopping storm," a survey of major
retailers reported that events have conspired this season to send
hordes of shoppers to the Internet, slowing major sites to a crawl.

How REI Scaled E-Commerce Mountain
http://www.cio.com/archive/051504/rei.html
REI demonstrates how its website functions as a sales channel that
complements its physical stores.

What is the Role of E-commerce in Economic Growth?
http://www.scholars.nus.edu.sg/sep/students/ecom/p11.html
 The purpose of this case study is to examine and deduce how the
nature of the goods and services provided by the respective companies
affect the performance of the company. The effectiveness of e-commerce
will also be illustrated by the financial performance of these
companies. The business strategies employed by these companies will
illustrate how they have utilised e-commerce to their advantage.

Web-to-Store Winners: Wal-Mart Gets More Lift Than Target
http://itresearch.forbes.com/detail/RES/1085826690_76.html
Retailers like Wal-Mart and Target spend big on their Web sites to
grow sales, attract new shoppers, and retain their best customers.
They justify investments by pointing to Web sales, but they also seek
proof that their Web visitors provide a lift to their brick-and-mortar
locations. We electronically 'followed' nearly 2,000 households'
offline credit and debit purchases from February to April 2004, to see
where they spent their shopping dollars, as well as tracked their
online traffic for the same period.

Global Online Retailing -- a large report by Ernst & Young 
(This report is from 2001, but it may have some pertinent insight) 
http://www.ey.com/global/download.nsf/International/Global_Online_Retailing_-_Special_Report_2001/$file/GOR_2001.pdf

Various case studies (older)
http://www.ecommerce.ac.uk/content/case.html



Search Strategy
????????????????????????????????????????
  "online retail" "traditional retail"
  "online retailers are" 2004
  ecommerce effectiveness
  "online retailing has"
  eretail "case study" OR "case studies"
  etail "case study" OR "case studies"
  ecommerce "case studies" OR "Case study"

Request for Answer Clarification by saeed1-ga on 30 Aug 2004 14:23 PDT
Many thanks for your detailed response.  Some of the articles were
excellent but the majority were on the US market.  My target
demographic will be the United Kingdom (England) market and in this
response I would be grateful if there is any further more specific
detail you could give on the development of E-commerce on the UK
market (I have been through all articles you posted and picked out
some good points but most articles were US related). Also anything in
particular to clothing or sports good would be very useful (there were
some points I picked from your response already).

Clarification of Answer by jbf777-ga on 31 Aug 2004 07:48 PDT
Hello saeed1 -

Sure -- I will further research this today and get back to you by 12 AM EST.

Thanks,

jbf777

Clarification of Answer by jbf777-ga on 31 Aug 2004 21:02 PDT
Will post by 2 AM.

Clarification of Answer by jbf777-ga on 31 Aug 2004 22:11 PDT
Here are several more articles.  Please let me know if you need any
further information.  Thank you.

IMRG e-Retail Sales Data Survey
http://www.imrg.org/e-christmas_report_2003.doc
Very detailed report on e-tail in the UK with quantitative analysis.

E-commerce growth slows but sales diversify
http://news.zdnet.co.uk/internet/ecommerce/0,39020372,39115511,00.htm
Online retail sales are expected to post annual double-digit gains
until 2008, with sales of sporting goods and food and beverages
growing fastest, according to a report released on Tuesday.

UK etail Xmas sales top 2.5bn
http://www.theregister.co.uk/2004/01/20/uk_etail_xmas_sales_top/
Online sales during the busy Christmas period topped a festive 2.5
billion as shoppers shunned the high street in favour of the
convenience of etailers...

So what's new, pussycat?
http://www.wheel.co.uk/news/newsarticle.aspx?id=37
High-end fashion at high-end prices sounds like an unlikely offering
on the web, but with netaporter soon to break even there's clearly
demand for its service. Report Sean Hargrave Revolutionising
distribution was always one of the Internet's major promises and this
is what Netaporter founder Natalie Massenet saw as the medium's
biggest impact for the fashion industry...

Online sales rise benefit retailers
http://www.infomaticsonline.co.uk/news/1155556
UK online sales have more than doubled since last year, according to Visa.
The credit card company says ecommerce sales rose 123 per cent in the
first quarter of 2004, compared with the same period last year.

Web shopping boom: the top presents
http://www.ladlass.com/archives/001185.html
As retailers complained of low numbers of shoppers in the run-up to
Christmas, online sales were predicted to be taking up the slack.
Ellen Connolly reports on online shopping's "biggest year so far". 
Online shopping scored an unprecedented success this Christmas as
Britons opted to snap up presents from the comfort of their swivel
chairs.  The trend was echoed worldwide with amazon.com, one of the
world's biggest online retailers, setting a single-day record of more
than 2.1 million products ordered, or 24 items per second, worldwide.
saeed1-ga rated this answer:4 out of 5 stars and gave an additional tip of: $20.00
Thank you for your hard work in doing this research.  I realise this
was not an easy area to research as I did attempt to do many searches
myself on the topic.  There were some very useful sets of research
which will help me to complete my business plan.

Comments  
Subject: Re: E-Commerce Vs Retail - Business Case
From: jbf777-ga on 01 Sep 2004 07:26 PDT
 
saeed1 -

Glad to hear.  Thank you for the kind words and tip!  Please stop by again.

jbf777
Subject: Re: E-Commerce Vs Retail - Business Case
From: kingway-ga on 05 Sep 2004 15:31 PDT
 
You may want to consider combining "clicks and bricks" in the
following ways: 1) Open a retail store in order to obtain the brands
you want easier. Run the website as your primary profit generator and
your main business focus. But having a retail storefront adds
credibility to both vendors and customers. And, you can often find 
non-prime retail space roughly equal to the cost of decent warehouse
space. If you have to store the goods for sale, why not stack them
high and offer them for retail sale at the same time? 2) You may also
find warehouse space that fronts a busy street that also allows
signage, you can have a retail shop in front and the web warehouse in
the rear. This may help you get the brands you want with a lot less
trouble as well as having the additional source of revenue from
walk-in business.
Subject: Re: E-Commerce Vs Retail - Business Case
From: saeed1-ga on 11 Sep 2004 05:26 PDT
 
Hi Kingway/jbf777,

Good news is that one of the major suppliers has agreed to supply us
and I am hopeful that the others will follow suit.  This is a major
achievement and is contrary to the normal policy.

Thank you for the advice.  Ideally I would like to use the approach
you mentioned but at the moment this will be a family run business.  I
work full time myself so will not be involved in the day to day
administration.  The current set up has the advantage of not having to
have a store manned full time.  I'm not sure where you live but I live
in London, England.  Even non-prime retail space here is about 20,000
per annum and another 15,000 for the salary of an employee, not to
mention rates and bills.  This is capital we don't have and also makes
it a lot more difficult to man the shop as my parents will be running
the business from home despatching deliveries from the unit within the
warehouse.  I will have a look around and may find something which
fits the description you mention.

In the meantime I think we have made some major breakthroughs.

Thanks again to all.
Subject: Seek copartner
From: bbend-ga on 18 Sep 2004 08:14 PDT
 
I have a handbag store in Chinese. I want to begin international
business. But I am not good at sell on line. I want to seek a
copartner in an English country. She/He can find the buyer and I can
supply the products at a lowest prices for her/him. My website is
http://www.bag1218.com
Subject: Re: E-Commerce Vs Retail - Business Case
From: jbf777-ga on 18 Sep 2004 11:43 PDT
 
Glad to hear!  I wish you all the best in this endeavor.

jbf777

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